Washington Report – June, 2011
Bill Finerfrock, David Connolly, Nathan Baugh, Amal Elmi and Zhaneta Mansaku
CMS Releases Physician Fee Schedule Proposed Rule – SGR related cut announced
CMS Proposed Rescission of Lab Signature Policy
Campaign to Increase Preventive Health Care
Electronic Record Standardization Could Save $12 Billion
Supremes Say: “Stop! In the Name of Law”
MedPAC Report Recommends Reducing Imaging Pay
Obama Administration: Yes to IPAB; Physicians: No to Medicare?
Medicaid RAC program on horizon
Mystery ShopperStudy Draws G.O.P. Criticism, HHS Cancels Study
Senators Begin Investigation on Physician Owned Distributorships
Affordable Care Act Protects Consumerswith “mini-med” plans
CMS aims to expand e-prescribing exemptions
CMS Transmittals
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CMS Releases Physician Fee Schedule Proposed Rule – SGR related cut announced
On July 1, the Centers for Medicare and Medicaid Services (CMS) released a notice of proposed rulemaking (NPRM) outlining proposed changes for the 2012 Medicare physician fee schedule (MPFS).
Perhaps the most anticipated part of the announcement was the projected change in the update factor for the physician fee schedule. According to the notice, absent Congressional intervention, the Conversion Factor (CF) must be adjusted downward by 29.5 percent due to the Sustainable Growth Rate formula.
In making this announcement, CMS Administrator Donald Berwick, MD said, “This payment cut would have serious consequences and we cannot and will not allow it to happen. We need a permanent SGR fix to solve this problem once and for all. That’s why the President’s budget and his fiscal framework call for averting these cuts and why we are determined to pass and implement a permanent and sustainable fix.” It should be noted that although Dr. Berwick calls for a permanent fix to the SGR problem, the budget the President submitted to Congress only sought a two-year fix.
In addition to the fee schedule adjustment, the NPRM proposes to update other payment policies and rates for physicians and non-physician practitioners (NPPs) for services paid under the Medicare Physician Fee Schedule (MPFS) in calendar year (CY) 2012. More than 1 million providers –physicians, limited license practitioners and Non-Physician Practitioners – are paid under the MPFS. CMS projects that total payments under the MPFS in CY 2012 will be $80 billion.
CMSmust issue a proposed rule that reflects current law. Under current law, providers would face a steep across-the-board reduction in payment rates, based on the Sustainable Growth Rate (SGR) formula. Unless Congress intervenes to prevent this cut – which it has in the past – Medicare payment rates are projected to be reduced by 29.5 percent for services delivered on or after January 1, 2012.
This year, the NPRM shines a light on high volume and high dollar codes billed by physicians. CMS seeks to determine whether these codes are overvalued and if evaluation and management codes are undervalued. In the past, CMS has targeted specific codes for review that may have affected a few procedural specialties like cardiology, radiology or nuclear medicine but not taken a look at the highest expenditure codes across all specialties.
Other changes in the proposed rule include:
•Expanding the multiple procedure payment reduction to the professional interpretation of advance imaging services to recognize the overlapping activities that go into valuing these services.
• New criteria for a health risk assessment (HRA) to be used in conjunction with the Annual Wellness Visits for which coverage began Jan. 1, 2011.
• Expanding the list of services that can be furnished through telehealth to include smoking cessation services. CMS is also proposing to change the way additional services are added to the telehealth list that would focus on the clinical benefit of making the service available through telehealth. If adopted, this change would affect services proposed for the telehealth list in CY 2013.
• Updating a number of physician incentive programs including the Physician Quality Reporting System, the e-Prescribing Incentive Program and the Electronic Health Records Incentive Program.
• New quality and cost measures that would be used in establishing a new value-based modifier that would reward physicians for providing higher quality and more efficient care.
• Implementing the third year of a 4-year transition to new practice expense relative value units, based on data from the Physician Practice Information Survey that was adopted in the MPFS CY 2010 final rule.
The Patient Protection and Affordable Care Act requires CMS to make quality adjustments to certain Medicare physician payments beginning January 1, 2015, and to apply the modifier toall physicians by January 1, 2017. According to a press release issued by CMS, the agency intends to work closely with physicians to ensure that efforts to improve the quality, safety, and efficiency of care do not diminish patient access to care. CMS is proposing to use CY 2013 as the initial performance year for purposes of adjusting payments in CY 2015.
Individuals and organizations wishing to comment on the Proposed Rule must submit their comments to CMS by August 30, 2011. HBMA staff and GR Committee are reviewing the NPRM and will prepare and submit appropriate comments prior to the due date.
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CMS Proposed Rescission of Lab Signature Policy
On June 30th, the Centers for Medicare and Medicaid Services (CMS) announced their intention to rescind a previously announced policy requiring the signature of a physician or qualified non-physician practitioner on a requisition for clinical diagnostic laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS).
This proposed rule would retract the policy adopted in the calendar year 2011 Physician Fee Schedule final rule. Although the policy technically went into effect on January 1, 2011, CMS announced that due to stakeholder concerns, it would not enforce the policy “until further notice.” With this NPRM, CMS is signaling their intention to rescind the lab signature policy altogether and reinstate the prior policy that the signature of a physician or qualified non-physician practitioner is not required on a requisition for Medicare purposes for a clinical diagnostic laboratory test paid under the CLFS.
Unless serious concerns are raised by providers, suppliers or consumers, it is expected that CMS will finalize this rescission shortly after the August 29th deadline for the submission of public comments.
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Campaign to Increase Preventive Health Care
The Center for Medicaid and Medicare Services (CMS) released a report that suggests that 5 million (or 1 in 6) Americans on Medicare are taking advantage of “free” preventive care made available to them via the Patient Protection and Affordable Care Act. Although often referred to as “preventive” services most of the services described in the CMS report (i.e. routine mammograms and prostrate screenings) are actually diagnostic tests that permit health professionals to detect the onset of certain medical conditions earlier than would have otherwise been possible. Earlier detection can often lead to more successful outcomes and an improved quality of life for the patient.
However, unlike vaccines, which often do prevent an individual from contracting certain diseases, most routine mammograms or prostrate screenings do not “prevent” breast cancer or prostrate cancer, they only allow it to be detected sooner than might have otherwise occurred absent these diagnostic tests.
In an effort to make more people aware that these services (as well as free annual wellness visits) are available, CMS has launched a PR campaign which includes online ads, youtube videos and letters to providers urging them to remind their Medicare patients of these early detection measures. In addition, aSpanish version of the Medicare website was launched and now the website has a section on prevention for care-givers and other general information.
CMS encourages HBMA members to make their physician clients aware of these services so the physicians, in turn, can make their patients aware of these services.
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Electronic Record Standardization Could Save $12 Billion
On June 30, 2011, the Department of Health and Human Services (HHS) released an interim final rule which began to implement long-awaited Administrative Simplification provisionsoriginally mandated under the Health Insurance Portability and Accountability Act (HIPAA) of 1996. The new operating rules governing electronic claims status and health plan eligibility inquiries are estimated to save $12 billion over the next decade. These new electronic standards will allow billing company staffthat routinely track down eligibility or claims status inquiries to spend less time (and money) on these tasks. A study in the May 2010 issue of “Health Affairs” revealed that physicians spent almost 12% of the money they receive from patients to cover the cost of administrative complexity.
The interim final rule (IR) requires compliance by health plans, health care clearinghouses, and certain health care providers by January 1, 2013. The IR puts in place rules that will make it easier for providers to determine patient eligibility and the status of a health care claim submitted to a health insurer. Currently, billing company staff must use multiple systems for information requests for different insurers. If adopted, the new rules will allow providers/billing companies to use one uniform system that provides the level of detailed information billing companies need to properly handle patient collections. Failure to comply with the new standards could result in severe fines being imposed on health plans found to be out of compliance.
The standards CMS is proposing to adopt were originally developed by the Council for Affordable and Quality Healthcare’s Committee on Operating Rules for Information Exchange (CAQH CORE).
CMSintends to release additional standards and operating rules for electronic funds transfers, a standard unique identifier for health plans, a standard for claims attachments and requirements that health plans comply with Health Insurance and Portability Accountability Act rules in the not too distant future.
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Supremes Say: “Stop! In the Name of Law”
On June 23, 2011 the Supreme Court ruledthat patients cannot sue makers of generic drugs over the warning labels on their products. The Court’s ruling does not affect the ability of individuals
to sue the brand name manufacturer over their warning labels.
Federal law requires generic drug makers to maintain the “same label” as the brand name drug for which it is a substitute. If there is a problem with the brand name warning label, the generic drug maker has no choice but to replicate the problem or otherwise face federal charges for altering the labels.
Consumers who believe there is a problem with the warning label on a generic drug, must first sue the manufacturer of the brand name drug. If successful, any court ruling mandating a change in the brand name drug warning label would automatically flow to the generic drug warning label for the reasons stated above.
In a separate and unrelated case, the Supreme Court struck down a Vermont law banning the sale of health information to drug companies. According to the decision, healthcare data-mining companies have been buying non-Protected Health Information (PHI) from physicians (i.e. age and gender of patients but no names) and using that information as part of their marketing strategy. The Supreme Court ruled that because there was no PHI being shared, the Vermont law was an unjustified infringement of the commercial speech rights of the pharmaceutical companies.
The drug labeling decision was a 5-4split and the Vermont case was decided 6 – 3.
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MedPAC Report Recommends Reducing Paymentsfor Imaging
The Medicare Payment Advisory Committee (MedPAC) recommended in its June report to Congress that imaging services such as X-Rays, and MRIs, undergo fee reductions. The report also recommended that physicians who prescribe a higher volume of imaging services than their peers be subject to prior approval.
While the MedPAC report acknowledges that use of in-office ancillary imaging devices allows physicians to operate with greater speed and precision AND with greater convenience to the patient, the report cites “strong evidence” that physicians who own their own imaging equipment generate more service volume. In the end, MedPAC concludes that controlling rapid volume growth, which the Commission maintains contributes to Medicare’s growing financial burden, is more important than getting imaging results sooner and with greater patient convenience.
Physician organizations opposed these recommendations arguing that lowering the fees of imaging services will discourage coordinated care. An American Medical News article pointed out that MedPAC seems to be making recommendations on outdated data claiming that the volume of imaging services rose by 6.3% annually from 2004 to 2008 but by only 2% from 2008 to 2009.
Shortly after the MedPAC report was released, the Chairman of the Senate Finance Committee proposed to enact the MedPAC imaging recommendations and use the money “saved” by the fee reductions to offset the cost of providing “trade adjustment assistance” to workers who might lose their jobs as a result of the South Korean Free Trade Agreement. This proposal was roundly criticized and ultimately withdrawn before it came to a vote in Committee.
Physician organizationsargue that adoption of the MedPAC recommendation requiring high-use physicians to submit clinical information whenever they order advanced diagnostic imaging, would place an unnecessary administrative burden on providers. The AmericanCollege of Radiology and other physician organizations believe that there are better ways to promote the proper use of imaging services such as creating appropriate use criteria that would be less of an administrative burden on providers.
MedPAC believes that it will take years to develop anew payment system that better reflects the cost, quality and value of services and recommended that the following policies be adopted sooner:
1.The Secretary of HHSshould accelerate efforts to combine multiple discrete services into a single payment rate (i.e. bundled payments). The payment rates should reflect efficiencies in physician work and practice expense when two or more services are provided together.
2.Congress should direct the Secretary to account for efficiencies that occur when multiple imaging services are provided to the same patient by a single practitioner, thereby reducing the rate for the second and subsequent imaging services. (see article above regarding physician fee schedule proposed rule)
3.Congress should have the Secretary reduce the physician work component of diagnostic tests that are ordered and performed by the same practitioner
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Obama Administration:Yes to IPAB; Physicians: No to Medicare?
One of the more controversial provisions of the Patient Protection and Affordable Care Act (ACA) that is beginning to garner the popular media’s attention is the new Independent Payment Advisory Board (IPAB) mandated by the ACA. Although the majority of the criticism leveled at this new board has come from Republicans, several prominent Democrats are beginning to ask questions about the propriety of giving this new Independent Board powers and duties traditionally reserved to Congress.
Opponents of the IPAB argue that the Independent Board is unaccountable to the American people and will, for all intents and purposes, “create a system of rationing”. Supporters of the IPAB argue that a Board such as this is necessary because it will force Congress to make the tough decisions necessary to sustain the future of Medicare.
IPAB was created for the purpose of constraining growth in Medicare spending to specified targetlevels. The IPAB will be made up of 15 “experts”selected from such diverse backgrounds as physicians, health management, health economics, health finance and consumers. Individuals selected to serve on the IPAB will be full-time Board members, receive an annual salary from the federal government and serve a six year term on the Board. The Board is charged with making “recommendations” to Congress and submitting analytical reports with both short term and long term savings plans.
Proponents and opponents of IPAB do not agree on whether “recommendations” from the IPAB are truly recommendations.
Proponents of IPAB note that Board recommendations only have the potential to become law if the Board determines that long-term growth in Medicare spending will exceed targeted levels. Then, IPAB proponents argue, Congress has the authority to overturn any IPAB recommendation.
Opponents point out that if Congress does nothing, the IPAB’s recommendations have the force of law. In order for Congress to overturn an IPAB recommendation, the process is extremely difficult – some would argue it will be impossible for a future Congress to overturn an IPAB recommendation.