Bill Finerfrock, David Connolly, Lea Wink, Amanda Craig

Washington Report –July, 2010

Bill Finerfrock, David Connolly, Lea Wink, Amanda Craig

CMS/ONC Issue Meaningful Use Criteria

HBMATestifies Before NCVHS

Berwick Gets Recess Appointment to CMS Post

HHS issuesInterim Final Rule on Pre-Existing Condition Insurance Plan Program

HHS Launches New Consumer Focused Health Care Website:

CMS to hold Meeting on ACA Requirements for ICD-10 Crosswalk Revisions

Dispute Over findings of theMedicare Trustees Erupts

CMSReviewing PECOS Enrollment Process

Readyfor aMAC Attack?

StatesReceive Federal Matching Funds for Electronic Health Record Incentives Program

CMSTransmittals

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CMS/ONC Issue Meaningful Use Criteria

On July 13, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) release the final rule establishing the “meaningful use” criteria for providers to obtain the EHR incentive payments and the final rule outlining the certification criteria that EHR products must meet.

CMS has established a very useful website that provides up-to-date information on the EHR incentive program, changes to the program and regulatory or policy updates. To go to this new website, go to:

This officialweb site provides up-to-date, detailed information about the Electronic Health Record (EHR) incentive programs.

Supporters of the widespread adoption and use of EHRs maintain that the nation’s healthcare system is in the midst of a “transformation in an effort to improve quality, safety and efficiency of care, from the upgrade to ICD-10 to information exchanges of EHR technology.” EHR advocates maintain that the adoption and meaningful use of EHR will facilitate and hasten the streamlining process.

The Medicare and Medicaid EHR incentive programs will provide incentive payments to eligible professionals (physicians, NPs, CNMs and certain PAs) as theyadopt, implement, upgrade or demonstrate meaningful use of certified EHR technology.Providers will have to choose whether to receive EHR Medicare incentive payments or EHR Medicaid incentive payments. They will not be able to receive both – simultaneously. However, providers will have the opportunity to make a one-time switch from Medicare EHR incentive payments to Medicaid or vice versa. Both programs begin in 2011.

It should be noted that the EHR Incentive program is separate from other CMS incentive programs, such as the PQRI and e-Prescribing incentive programs; although the new meaningful use criteria will incorporate aspects of both the PQRI and e-prescribing programs.

The final rule issued on July 13th follows the proposed rule issued earlier this year. HBMA along with many other organizations submitted comments and made numerous recommendations on how to improve and streamline the EHR Incentive program. Not all of HBMA’s recommendations were adopted.

Below are links to various documents CMS has produced that will give more detailed information about the EHR incentive programs, the criteria for receipt of the incentive payments and other important EHR related information.

Fact Sheet: Medicare and Medicaid EHR Incentive Programs: Title IV of Recovery Act (June 16, 2009)
Press Release: CMS and ONC Final Rules to Support Meaningful Use of Electronic Health Records (July 13, 2010)
Fact Sheet: Final Regulations Define Meaningful Use and Set Standards for EHR Incentive Programs (July 13, 2010)
Fact Sheet: Electronic Health Records At-a-Glance (July 13, 2010)
Fact Sheet: Medicare EHR Incentive Program Final Rule Overview (July 16, 2010)
Fact Sheet: Medicaid EHR Incentive Program Final Rule Overview (July 16, 2010)
Fact Sheet: Meaningful Use Final Rule Overview (July 16, 2010)
Health IT Frequently Asked Questions

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HBMA Testifies Before NCVHS

On July 20th, a representative of the Healthcare Billing and Management Association (HBMA) was joined by representatives of the AMA, AHIP, Blue Cross/Blue Shield Association, the National Association of Insurance Commissioners and others to discuss the establishment of new operating rules for electronic insurance eligibility verification and claims status information.

The National Committee on Vital and Health Statistics (NCVHS) listened to various stakeholders, vendors and standard setting organizations over a 2 ½ day period in order to assist the NCVHS in developing recommendations for new HIPAA related standards. The NCVHS is the body identified by the Secretary of Health and Human Services (HHS) to advise the Secretary on all HIPAA related issues.

Jerry Killough, President of Clinix and a member of the HBMA ICD-10 Task Force presented HBMA’s testimony and responded to questions from the Committee.

Although enacted nearly 15 years ago, many providers and billing companies have failed to experience the Administrative Simplification benefits promised by HIPAA because the standards and regulations adopted in response to the HIPAA law were either inadequate or had so many “loopholes” so as to make the standards meaningless.

Part of the healthcare reform bill (the Patient Protection and Affordable Care Act) signed into law earlier this year by President Obama were new HIPAA related mandates calling for tighter and more effective electronic transaction standards. HBMA was a strong advocate for these more stringent standards.

In his formal remarks, Killough stated, “As we all know, we’ve been down this road of administrative simplification before and the mere fact that we are meeting here today to discuss “new” reforms 15 years after the original HIPAA administrative simplification reforms were enacted represents the formal acknowledgement of the failure of HIPAA to truly deliver the administrative simplification promised when it was signed into law by President Clinton.”

One issue before the NCVHS is who will be the standard setting organization for the new operating rules. Various existing Standard Development Organizations including the National Council for Prescription Drug Programs (NCPDP), X-12 and others presented their views on why their organization would be best-suited to take on this responsibility for the federal government.

One of the more interesting and informative presentations was made by the NCPDP, a non-profit ANSI accredited Standards Development Organization representing the pharmacy services industry. It was clear from the testimony presented and the questions from the Committee members that the NCPDP pharmacy program for eligibility verification and claims status is very robust and although developed specifically for pharmacy, could be replicated in the medical/health insurance arena.

NCVHS hopes to make recommendations to the Secretary in the next few months and will be conducting additional hearings over the next year on the development of other HIPAA related standards. HBMA will continue to be involved in this process and presenting the views of medical billing and practice management companies.

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Berwick Gets Recess Appointment to CMS Post

In early April, President Obama announced his intention to nominate Donald Berwick, MD to be the next CMS Administrator. If confirmed, Berwick would fill a vacancy at CMS that has existed since the Bush Administration. Although Berwick’s professional experience and credential are impressive, several GOP Senators expressed grave reservations about Berwick and his possible support for government supported healthcare rationing.

Fearful of a possible filibuster of the Berwick nomination, President Obama, in early July, made Dr. Berwick a “recess appointee” to the CMS position. The Constitution authorizes the President to appoint people to positions that otherwise require the “advice and consent” of the Senate if the appointment occurs during a time when the Senate is in recess. Although originally intended to allow the President to fill critical vacancies when the Senate would be away from Washington for long periods of time, the authority has been increasingly used by President’s of both parties to circumvent the Senate confirmation process. However, Dr. Berwick’s recess appointment is only valid through the next Congress. The Senate must act favorably on the Berwick nomination (which is still technically pending before the Senate) between now and the end of the 112th Congress (roughly November/December 2012), in order for him to continue in the position. If the Senate fails to act favorably on the Berwick nomination, his tenure as CMS Administrator would come to an end concurrent with the end of the 112th Congress.

Ultimately, Berwick’s fate may rest with the outcome of the Fall Congressional elections. If Republicans gain in numbers in both the House and Senate, they could use their new found political power to adversely affect the Appropriations bills – particularly CMS’s appropriations.

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HHS issues Interim Final Rule on Pre-Existing Condition Insurance Plan Program

The Patient Protection and Affordable Care Act (ACA) required that a temporary high risk health insurance pool program be established to provide affordable health insurance coverage to uninsured individuals with pre-existing conditions.On July 30th, the Department of Health and Human Services (HHS) issued interim final rules that establish the Pre-Existing Condition Insurance Plan (PCIP) program. The PCIP program is a temporary program intended to cover the time-period until insurance companies can no longer exclude on the basis of pre-existing conditions. The prohibition on pre-existing condition provisions goes into effect on January 1, 2014.

This regulation became effective on the day it was released - July 30, 2010.

The Department of Health and Human Services (HHS) may carry out the PCIP program directly or through contracts with either States or non-profit organizations.

An individual is eligible to enroll in a PCIP if he or she:

• Is a citizen or lawfully present in the U.S.;
• Has not been covered under creditable coverage for a 6-month period prior to their application date;
• Has a pre-existing condition; and
• Is a resident of the State falling within the PCIP service area.

The intent is to promote continuity of coverage for individuals who enroll in a PCIP until they are able to obtain coverage through a Health Benefits Exchange, which will also begin operation in January, 2014. If an individual eligible for participation in the PCIP moves out of the service area, he or she can immediately apply for PCIP in the new State of residence.

The benefits and excluded services parallel that of the Federal Employees Health Benefits Plan. A pre-existing condition is defined as a limitation or exclusion of benefits based on the fact that the condition was present before the date of enrollment in coverage or denial of coverage.

Premium rates are to be established at “a standard rate for a standard population,” which refers to the premium rates offered in the individual market in a given State. The rule provides that a PCIP established under this section must not offer enrollees premiums at a rate that exceeds 100 percent of the standard individual market rate in the PCIP service area. A PCIP must calculate the standard rate using reasonable actuarial techniques. Premium rates can vary on the basis of age by a factor of no greater than 4 to 1.

The interim final rule requires the PCIP to develop, implement, and execute operating procedures to prevent detect, recover over-payments, and promptly report to HHS incidences of waste, fraud, and abuse.

The interim final rule prevents insurer dumping. If it is determined that insurance issuers currently providing coverage to a high-risk beneficiary is discouraging those high-risk individuals from remaining enrolled in their coverage, the Secretary may bill the insurance company for any medical expenses incurred by the PCIP for such enrollees.

The ACA appropriates $5 billion dollars to pay the claims and administrative costs of the PCIP program. No more than 10 percent of the allotted funds may be used towards administrative expenses. Over time, spending under the PCIP program will be determined based on the actual enrollment and cost experience of the PCIPs across the country. Finally, the new law imposes a “maintenance of effort” requirement on states. In order for a State to enter into a contract to administer a PCIP, a State must agree not to reduce the annual amount it expended on the operation of an existing State high risk pool in the year preceding the year in which a PCIP contract begins.

If you would like to view the PCIP final rule, go to:

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HHS Launches New Consumer Focused Health Care Website

The U.S. Department of Health and Human Services has unveiled a new on-line tool that intended to help consumers take control of their health care by connecting them to “new information and resources that will help them access quality, affordable health care coverage.” According to HHS Secretary Kathleen Sebelius, HealthCare.gov is “the first website to provide consumers with both public and private health coverage options tailored specifically for their needs in a single, easy-to-use tool.”

In announcing the new website, Sebelius said, “For too long, the insurance market has been confusing and hard to navigate.HealthCare.gov makes it easy for consumers and small businesses to compare health insurance plans in both the public and the private sector and find other important health care information.”

According to an HHS press release, HealthCare.gov is the first central database of health coverage options, combining information about public programs, from Medicare to the new Pre-Existing Conditions Insurance Plan, with information from more than 1,000 private insurance plans.

The website is being marketed as a “one-stop-shop” for information about the Affordable Care Act as well as other health care resources.

In October, 2010, HHS intends to begin publishing price estimates for health insurance plans on the new website. It is not clear how this information will differ from information already available on commercial websites (i.e. e-health insurance) that aggregate benefit and estimated cost information.

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CMS to hold Meeting on ACA Requirements for ICD-10 Crosswalk Revisions

On September 15th, the Centers for Medicare and Medicaid Services (CMS) will host a meeting of the ICD-9-CM Coordination and Maintenance (C&M) Committee. The C&M meeting is a public forum for the presentation of proposed modifications to the ICD-9, Clinical Modification. In order to participate in this meeting, attendees must register ahead of time and space is limited.

The Affordable Care Act requires the C&M Committee to convene a meeting before January 1, 2011, to “receive stakeholder input regarding the crosswalk between the Ninth and Tenth Revisions of the International Classification of Diseases (ICD-9 and ICD-10, respectively),” for the purpose of making appropriate revisions to the crosswalk.The new law also mandates that any revised crosswalk be treated as a code set for which a standard has been adopted by the Secretary, and that revisions to this crosswalk be posted to the CMS website.

The C&M Committee will use the morning of September 15th to fulfill the ACA requirement. HBMA will be represented at this meeting. Anyone wishing to attend in person must register for the meeting. If you simply want to listen in by phone, registration is not required.

To register, go to

If you want to listen in on the meeting via phone, the call-in information is:

Participant Dial In Number (800) 837-1935

Conference ID # 88801009

For additional information, go to and click on the ICD-9 Coordination & Maintenance Committee link page on the left.

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Dispute Erupts Over Findings of the Medicare Trustees

On August 5th the Medicare Trustees released their annual report on the future of Medicare. The Report garnered some significant media attention and both CMS and the Obama Administration pointed to the report as evidence of the positive impact the Affordable Care Act would have on the future sustainability of the Medicare program.

Normally there are 7 individuals who serve as the Trustees of the Medicare Trust Fund. Three Cabinet Secretaries – Treasury, Labor and HHS, the Commission of the Social Security Administration and the Administrator of CMS and two Public Trustees. The Public Trustee positions are currently vacant. Therefore the signators to the report are:

Timothy F. Geithner, Secretary of the Treasury

Hilda L. Solis, Secretary of Labor

Kathleen Sebelius, Secretary of Health and Human Services

Michael J. Astrue, Commissioner of Social Security

Donald M. Berwick, M.D., Administrator of the Centers for Medicare & Medicaid Services,

According to the Trustees, in 2009, total Medicare benefits paid were $502 billion and total Medicare income was $508 billion. When you add in administration and overhead expenses, total Medicare expenditures were $509 billion in 2009 leaving an annual deficit of $ 1 Billion. The accumulated assets of the Medicare Trust Fund held in issue U.S. Treasury securities were $381 billion at the end of 2009.