Congress Temporarily Avoids Anothersgr Cut

Washington Report – February, 2012

Bill Finerfrock, Pam Jackson, Zhaneta Mansaku, and Hannah Tuke

Congress Temporarily Avoids anotherSGR Cut

IPAB Backin the Limelight

ASC X12 Decides Against Proposing Version 6020

So Much forthat ROI…

CMS Publishes Proposed Ruleson Reporting of Overpayments

Hearing Explores Doc-Payment Innovations

Many Physicians experience problems during 5010 Transition

Study says! CMS Measure To Ensure Hospitals Perform Appropriate Scans is…

WashingtonState Medicaid to quit paying for ER visits deemed “unnecessary”

Insurers Must Use Plain Language To Describe Health Plan Benefits and Coverage

Who are these People?

February CMS Transmittals

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Congress Temporarily Avoids another SGR Cut

On February 17th, by overwhelming votes of 293 Yeas to 132 Nays and 60 Yeas to 36 Nays, the House and Senate, respectively, approved legislation preventing a scheduled 27% reduction in Medicare physician fee schedule payments on March 1. Five days later, on February 22nd, President Obama signed that legislation into law.

The Congressional vote and subsequent Presidential signature is the 12th time in the past 10 years that the legislative and Executive branches of the federal government have enacted legislation preventing mandatory cuts in Medicare physician payments.

This latest “fix” extends the current Medicare Conversion Factor until the end of 2012 when, like clockwork, Congress will have to deal with the SGR problem again or avoid what is estimated to be a 32% cut in Medicare physician fee schedule payments on January 1, 2013.

Like a Crack Head just after his most recent “fix”, the Congress and the President swear that they will get off their addiction to these short-term SGR “fixes” and once and for all kick the habit and permanently resolve the SGR problem. So for the next 10 months Congress and the President will enroll in an SGR Rehab program, talk about their addiction, tearfully swear to family, friends, healthcare providers and patients they are ready to deal with their demons but, at the end of this 10-month outpatient program, find themselves once again smoking the SGR crack pipe by the end of the year.

While providers and patients can take some comfort in the fact that the 27% cut has been avoided, that comfort may be short-lived. Due to the Congressional calendar, it will be necessary for Congress to either deal with the next looming cut by the end of September or, failing that, try to enact another SGR “fix” during a post-election lame duck session.

Depending upon the outcome of the Fall elections, you could have a multitude of scenarios including a Congress that is majority Republican with a Democratic President, a Congress that is majority Democratic and a Republican President, a Congress that is majority GOP in one house but Majority Democratic in another and either a GOP or a Democratic President in the White House.

In other words, anything short of the American people electing a Congress and President in identical percentages to what exists before the election, will have a profound effect on the ability of the lame duck Congress to act on anything of substance during the weeks after the election but before the swearing in of the new Congress and the President in January, 2013.

HBMA President Don Rodden, in a letter to Congress on behalf of the HBMA membership, made these points and urged Congress to enact a longer-term “fix” if a permanent fix was not possible.

HBMA will continue to advocate for a permanent replacement for the SGR formula so that physicians will have long-term certainty on how their Medicare fee-schedule payments will be calculated and what they can expect in the way of Medicare reimbursement moving forward.

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IPAB Back in the Limelight

When the Patient Protection and Affordable Care Act (PPACA) was enacted back in 2010, there was considerable debate about a provision in the final bill establishing the Independent Payment Advisory Board or IPAB.

Due to the process by which the PPACA became law (i.e., the Senate basically wrote the bill), there was little opportunity in the House of Representatives – where there was strong bi-partisan opposition to the IPAB – to coalesce around an alternative.

For those who may not remember, IPAB will be an independent 15-member panel composed of experts including doctors, consumers and patient advocatesappointed by Congress and the President. Their charge will be to make “recommendations” reducing health care spending when Medicare spending exceeds certain target levels. The Board will have significant power to change Medicare payment policy with little or no Congressional input. Indeed, the whole impetus behind the creation of the IPAB was a desire by some Members of Congress to remove Congressional influence from the Medicare policy making process.

Supporters of IPAB felt that Congress was too susceptible to public pressure when it came to making tough decisions about Medicare spending and what we needed was an independent board that could make the “right” decision devoid of public pressure.

Repealing the new Board has been a major objective of the GOP majority in the House of Representatives since they were elected in 2010. Equally important, the GOP opponents of IPAB have been joined by a number of influential House Democrats in this effort.

On February 29th, the House Energy and Commerce Health Subcommittee voted 17 -5 to abolish the Independent Payment Advisory Board. Joining all 15 Republicans on the Subcommittee were the Ranking Democrat, Frank Pallone (D-NJ) and Ed Towns (D-NY).

Under the law creating the IPAB, the Board’s recommendations for reducing Medicare spending are binding unless a super majority in Congress votes to overturn the policy and in turn also votes in favor of other changes in Medicare spending that would produce savings equal to the amount identified by the Board. Under this scenario, it was deemed highly unlikely that Congress would ever be able to enact such legislation thereby making the Board’s “recommendations” virtually binding.

It is highly likely that the legislation abolishing IBAB (H.R. 452) will pass the House with strong bi-partisan support. Its fate in the Senate, however, is far less certain. The strongest advocates for the IPAB are in the Senate and they are expected to mount a spirited defense of the concept. At this point, it does not appear as though there are sufficient votes in the Senate to pass a bill abolishing the IPAB.

And even if the Senate were to pass the legislation, the White House has indicated that the President would veto the bill. This means that any effort to repeal the IPAB will not only have to pass the House and Senate, but pass with sufficient margins to be able to withstand an expected Presidential veto.

In a recent blog defending the new Board, White House Deputy Chief of Staff (and former CMS Administrator) Nancy-Ann MinDeParle published a chart showing that the IPAB was prohibited from making recommendations that would ration health care, increase premiums, increase beneficiary cost sharing or co-payments, or cut benefits. While this may come as good news for beneficiaries, one has to ask, what is left? It seems readily apparent that the only thing the Board can recommend will be cuts in provider payments.

Some opponents of the IPAB have referred to it as the SGR problem on steroids. Except that whereas Congress can step in to prevent the SGR cuts from occurring, it will be extremely difficult for Congress to step in and prevent the IPAB cuts from occurring. In a recent letter to the Congress in support of the repeal of the IPAB, AMA president Peter W. Carmel, M.D said, “Seniors and military families who rely on Medicare and TRICARE are already dealing with instability caused by a broken physician payment formula that Congress is struggling to eliminate. We have made it clear to Congress that the IPAB is another arbitrary system that could make the same dangerous type of overall cuts.”

Recommendations made by the Board are not binding until after 2015 so there is still time to abolish the Board before it can really do any damage.

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ASC X12 Decides Against Proposing Version 6020

The Accredited Standards Committee X12 (ASC X12) has announced that it will not propose Version 6020 for formal consideration as the next version of the EDI standard under HIPAA (the Health Insurance Portability and Accountability Act).

In a press release issued on February 7th, the Accreditation Standards Committee said,

“After meeting with health care industry stakeholders and assessing the current and planned health care industry initiatives, ASC X12 will not recommend its 6020 Type 3 Technical Reports (TR3s) to the Designated Standards Maintenance Organizations(DSMO) for consideration of adoption under the Health Insurance Portability and Accountability Act (HIPAA).”

ASC X12 went on to acknowledge that all of the changes occurring at this time in the healthcare industry may be overwhelming and said it “…believes the health care industry is better served at this time by a reassurance that the 5010 implementations will have time to mature before another version is recommended for adoption.

ASC X12 was quick to note, however, that even though it is not recommending 6020 for adoption at this time, the previously published 6020 standards will serve as the basis for the next version to be recommended for adoption. Therefore, stakeholders are encouraged to review and provide comments on 6020 so that the Committee can incorporate those comments into the next iteration.

ASC X12 is a non-profit organization, chartered by the American National Standards Institute, established to develop and maintain EDI standards. The membership of ASC X12 includes technologists and business process experts, encompassing health care, insurance, transportation, finance, government, supply chain and other industries.

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So Much for that ROI…

According to a letter from the Centers for Medicare and Medicaid Services (CMS) to Senator Tom Carper (D-DE), Chairman of the Senate Federal Financial Management Subcommittee, a $77 million computer system launched last summer by CMSto stop Medicare fraud before it happens, had prevented just one suspicious payment by the end of 2011 resulting in a savings to the taxpayers of $7,591.00.

When the program was launched in early 2011 in response to a new Congressional mandate, some estimated that as much as $60 Billion in fraudulent Medicare payments were being made every year and that this type of computerized pre-payment review system could prevent a large percentage of fraud from ever occurring. Carper, upon learning of the early results, said, “I wondered if Medicare had left out some zeros.”

The CMS letter was written in response to Congressional concerns about the slow pace of success of the new initiative. CMSDeputy Administrator Peter Budetti, the author of the letter, wrote that the software is “significantly changing” the way it (CMS) pursues fraud and has brought successes. Budetti went on to write, “Predictive analytics are now being used to review all Medicare Part A, Part B and durable medical equipment claims prior to payment. For the first time, CMS has a real-time view of fee-for-service claims across claim types and the geographic zones of its claims processing contractors.”

HHS Secretary Kathleen Sebelius has praised the program and CMS officials have said that it is just too soon to determine whether the program will be a success.

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CMS Publishes Proposed Rules on Reporting of Overpayments

On Tuesday, Feb 14th, CMSreleased a Notice of Proposed Rulemaking (NPRM) that would, if finalized, require providers and suppliers to report and return self-identified overpayments either within 60 days of the incorrect payment being identified or on the date when a corresponding cost report is due, whichever is later.

In addition to the 60-day reporting requirement, CMS is also proposing that providers retain medical records for at least 10 years in order to allow for a look-back for the identification of billing errors that may have occurred in previous years.

The announcement is one part in a series of steps Medicare is taking to “protect taxpayer dollars.” In addition to the overpayment reporting requirements, CMS is: using private auditors to identify so-called wasteful spending before it happens; expanding the use of Recovery Audit Contractors to the Medicaid program; testing changes to hospital billing systems to help prevent over-billing; and, changing the process for approving payments for durable medical equipment with historically high payment error rates.

The Proposed Rule identifies a Medicare overpayment as“funds that a person receives or retains under Medicare to which the person is not entitled.”The NPRM provides examples of overpayments in Medicare to include:

• Duplicate submission of the same service or claim
• Payment to the incorrect payee
• Payment for excluded or medically-unnecessary services
• Payment for non-covered services

Any failure to report and return the overpayment within the applicable time frame could be a violation of the False Claims Act. Providers also could be subject to civil monetary penalties or excluded from participating in federal healthcare programs for failure to report and return an overpayment.

The HBMA Government Relations Committee is currently reviewing the proposed rule and will be developing comments on behalf of the Association. If individuals would like to review and comment on the rule, they are able to do so.

The Medicare Over Payment Proposed Rule is available for public inspection. The link also provides instructions for how to submit comments.

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Hearing Explores Doc-Payment Innovations

It is difficult these days to find anyone in Washington, DC, prepared to defend the fee-for-service payment system that has been the foundation for Medicare payments to physicians for decades. Whether it is Accountable Care Organizations, shared savings, bundled payments or “episode of care” payments, there seems to be a never-ending supply of alternative payment methodologies that experts are urging Congress to adopt in lieu of fee-for-service.

Proponents for change maintain that the fee-for-service payment system only rewards providers for volume and not quality of care (although no one has yet to truly define what constitutes quality care). Many in Congress are anxious to learn more about alternative ways of paying for healthcare and a series of Congressional hearings have been undertaken to explore some of these alternatives to fee-for-service payments.

On February 7th, the House Ways and Means Health Subcommittee held a hearing entitled, “Programs that Reward Physicians Who Deliver High Quality and Efficient Care.” In his opening remarks Health Subcommittee Chairman Wally Herger (R-CA) said, “Our end-goal in all of this remains addressing the Sustainable Growth Rate formula through comprehensive physician payment reform done in a fiscally responsible manner.”

The subcommittee has heard testimony from private payers, physician organizations, economists and individual providers who are all engaged in efforts to develop payment systems that reward physicians who provide “high-quality and efficient care” to patients. A common theme of the hearings has beenhow all of these key stakeholders are collaborating in the private sector to improve care while lowering the cost of providing it.

Dr. Lewis G. Sandy, Senior Vice President for Clinical Advancement, UnitedHealth Group, identified what he described as four key lessons that help advance quality and cost-effectiveness in care delivery and suggested that these lessons be guiding principles for reforming government-run health care programs. The lessons are:

• Physicians benefit from meaningful feedback on their clinical performance to support their continuous professional development and their innate desire to provide the best care possible to their patients.

• Patients benefit from actionable information on delivery system performances, as well as coaching and other support services to help them make informed decisions.

• Meaningful improvement in quality and efficiency of care requires practice transformation through new models of care, built and supported by new tools and capabilities, such as health information technology.

• Transformation requires alignment of incentives for quality and cost-effectiveness across the delivery system, including incentives for both patients and doctors, all supported through new benefit designs.

Dr. Jack Lewin, CEO of the AmericanCollege of Cardiology (ACC), suggested that advancements with technology will allow for more accurate care to be provided with fewer mistakes and as a result, patients would spend less time in the hospital, reducing the cost of care by roughly 10% for Medicare patients. Dr. Lewin then suggested that the savings should be split between hospitals, physicians, and Medicare. With this process, he believes the cost will go down as the quality of care would increase with the use of technology.