Tag: Healthcare Legislation

Budget Deal includes Proposed Cuts to Medicare Payments

Providers and policy experts say that while doctors and hospitals are facing some cuts in the proposed two-year $80 billion budget deal being negotiated on the Hill, the industry largely dodged a bullet.

The not-yet-finalized plan announced Tuesday would include continued sequester spending cuts and limit future payment rates for hospitals that set up or buy off-campus facilities. It would also raise the federal borrowing limit and prevent a looming spike in premiums for about 30% of Medicare Part B beneficiaries.

Eric Zimmerman, a healthcare lobbyist and principal with McDermott + Consulting, said the budget deal would reduce incentives for hospitals to buy doctors’ practices, which has been a popular move to expand their networks and meet the Affordable Care Act’s push to coordinate care.

“This will definitely affect hospitals’ physician-alignment strategies,” he said, as the financial benefits will be fewer.

And although the sequestration will continue to be a drag on provider budgets, the healthcare industry in general seems OK with this agreement, he said. Still, the pay-for isn’t certain to remain the same and further negotiations this week will hash out details, Zimmerman added.

Chip Kahn, CEO of the Federation of American Hospitals, said cuts are always concerning, but the debt limit had to be raised and he applauds Congress for minimizing the effects to hospitals.

The change to the payment model for hospital outpatient departments, called OPDs, has been much discussed but wasn’t necessarily expected this year. It’s helpful to apply the change only to new outpatient departments set up by hospitals and to delay any implementation until 2017, Kahn said.

“It would have created an incredible mess if people had to figure out how to get into compliance,” he said.

The continuation of sequestration cuts to Medicare is also disappointing, but it’s an extension of the status quo. Kahn is glad to see no cuts to reimbursement of bad debt or enforcement of site-neutral post-acute care payments for inpatient rehabilitation facilities.

“That’s what’s really important here—what’s not here,” he said.

Stephen Zuckerman, co-director of the health policy institute at the Urban Institute, said the change in payment method to hospital OPDs is reasonable.

“I think it was sort of a flaw in the payment method that was being exploited,” he said.

Zuckerman said it’s not entirely clear how the budget deal would align with the permanent deal earlier this year that ended the need for an annual “doc fix” to increase physician payments.

The deal called for a 0.5% increase in payments for each of the next four years. With continued sequestration, however, it appears that doctors face a net decrease in compensation, he said.

“It’s a little surprising,” he said. “I’m not sure people have thought this through.”

Thomas Nickels, executive vice president of government relations and public policy for the American Hospital Association, called the Medicare cuts in the deal irresponsible and urged lawmakers to strike the site-neutral provision for outpatient payments.

“This untested idea may endanger patient access to care, especially among patients who are sicker, the poor, minorities and seniors who often receive care in hospital outpatient departments,” he said.

Medicare payments to OPDs have been a concern for years as prices for outpatient procedures continue to rise faster than other services.

A 2013 report from the  Medicare Payment Advisory Commission found that Medicare was paying 141% more for a Level 2 echocardiogram in an outpatient setting as opposed to one performed in a physician’s office.

“Payment variations across settings urgently need to be addressed because many services have been migrating from physicians’ offices to the usually higher paid OPD setting, as hospital employment of physicians has grown,” the authors wrote. “This shift toward OPDs has resulted in higher program spending and beneficiary cost-sharing without significant changes in patient care.”

Maggie Elehwany, vice president of government affairs and policy for the National Rural Health Association, said the Medicare cuts are particularly harmful for already struggling rural hospitals.

“Nationwide we are experiencing an alarming and escalating number of rural hospital closures, which is creating a patient-access-to-care crisis,” she said. “To propose further cuts is unthinkable and will certainly mean more rural hospital closures.”

Another part of the proposal would extend the Medicare drug rebate program, in which manufacturers provide an additional generic drug rebate when a drug’s cost rises faster than inflation.

Also, a large increase in premiums for the 30% of Medicare Part B beneficiaries who are not “held harmless” to rate increases higher than the cost of living adjustment would be avoided. The plan would create a new premium for those beneficiaries of $120, an increase of about $15 a month, which would be the amount paid by all beneficiaries if none were held harmless.

House Speaker John Boehner worked out this proposed budget privately with other congressional leaders, saying he wanted to push an agreement through before leaving the speakership Friday. Rep. Paul Ryan (R-Wis.), who is expected to take up the gavel, did not participate in the talks.

Hard-line House Republicans complained about being left out of the negotiations and said they may oppose the deal, but other conservatives and some Democrats voiced their overall approval.

“The bipartisan budget package unveiled last night represents real progress for hard-working families across the country,” said House Minority Leader Nancy Pelosi of California.

The budget side of the deal is aimed at undoing automatic spending cuts that are a byproduct of a 2011 budget and debt agreement, and the failure of Washington to subsequently tackle the government’s fiscal woes.

The legislation would suspend the current $18.1 trillion debt limit through March 2017. The budget portion would increase the current “caps” on total agency spending by $50 billion in 2016 and $30 billion in 2017, offset by savings elsewhere in the budget. And it would permit about $16 billion to be added on top of that in 2016, classified as war funding, with a comparable boost in 2017.

GOP defense hawks are intent on reversing the automatic cuts and getting more money for the military. A key priority for Democrats is to boost domestic programs.

Millennium Health to pay $256 million over allegedly tainted lab claims

Millennium Health, a San Diego based lab company, will pay the government $256 million to settle allegations it billed the government for medically unnecessary urine, drug and genetic testing and gave free drug cup tests to physicians in exchange for referrals.

U.S. Justice Department’s announcement of the settlement Monday came days after the company it had reached an agreement with a majority of equity holders, the CMS and the Justice Department on the terms of a plan to financially restructure the company. Millennium CEO Brock Hardaway said the agreement would help the laboratory reduce its debt and pay the settlement.

“While Millennium may debate some of the merits of the DOJ’s allegations, we respect the government’s role in healthcare oversight and enforcement,” Hardaway said in the statement issued Oct. 16. “At the end of the day, it was time to bring closure to an investigation that began nearly four years ago. Millennium Health is currently a very different organization than we were in the past.”

Millennium said it plans to begin soliciting formal votes on a restructuring plan from its lenders in coming weeks. The agreement allows Millennium to restructure through a Chapter 11 bankruptcy proceeding or outside of court.

A Millennium spokeswoman declined to comment further Monday.

The government alleged that Millennium prompted doctors to order excessive numbers of urine drug tests without individualized assessments of patients in violation of federal healthcare program rules. It also alleged that Millennium gave free urine drug testing cups to doctors on the condition that the physicians would return the urine to Millennium for hundreds of dollars of additional testing in violation of the Stark Law and anti-kickback statute.

Millennium also submitted false claims to federal health programs for genetic testing performed without individualized assessments of need, the government alleged.

Clinton Mikel, a partner with the Health Law Partners, called the $256 million settlement one of the larger ones he’s seen outside of those with pharmaceutical and medical device companies.

“I think it will send a message certainly,” Mikel said. “The government is cracking down on labs.”

Another lab company, Health Diagnostic Laboratory, recently filed for bankruptcy after agreeing to pay nearly $50 million to resolve allegations that it improperly paid doctors for blood samples. HDL denied wrongdoing as part of that settlement.

Federal investigators signaled their interest in Medicare payments to lab companies last year. A special fraud alert issued by HHS’ Office of Inspector General warned that certain types of lab payments to referring physicians for blood specimen collection, processing and packaging could be illegal.

“There just has been increased scrutiny of labs and many other areas of healthcare as well,” said Sarah Coyne, a partner with the law firm Quarles and Brady.

One reason the government is going after labs in particular is the large amount of money Medicare spends on them, Mikel said. From 2005 to 2010, Part B spending for lab services increased 29%, to $8.2 billion, even though enrollment increased just 10%, according to a 2014 OIG report.

“They’ve identified an industry that they think is taking more than its share of the pie,” Mikel said, adding that he often encounters anecdotal evidence that some players are taking their share through questionable means.

“We represent several national labs, and probably on a weekly basis they’re saying, ‘This is what our competitor is doing. Is this OK?’” Mikel said.

The allegations against Millennium were originally brought in several whistle-blower complaints. Under the False Claims Act, the whistle-blowers will share nearly $32 million from the government’s settlement.

CMS releases final rule on Meaningful Use for 2015

The Centers for Medicare & Medicaid Services (CMS) released final Meaningful Use rules that simplify requirements and add new flexibilities for providers to make, electronic health information available when and where it matters most and for health care providers and consumers to be able to readily, safely, and securely exchange that information. The final rules for 2015 Edition Health IT Certification Criteria (2015 Edition) and final rules with comment period for the Medicare and Medicaid Electronic Health Records (EHRs) Incentive Programs will help continue to move the health care industry from a paper-based system, where a doctor’s hand-writing had to be interpreted and patient files could be misplaced.

CMS heard from physicians and other providers about the challenges and burdens they face making this technology work well for their individual practices and for their patients. In recognition of these concerns, the final regulations make significant changes to current requirements by easing the reporting burden for providers, supporting interoperability, and improving patient outcomes. CMS is also encouraging providers to apply for exemptions if they had difficulty with or needed to switch their EHR vendor or experienced challenges due to the timing of the rules and EHR implementation. Additionally, the new rules will enable the development of user-friendly technology, allowing individuals easier access to their information so they can be engaged and empowered in their care.

Overview of Rule Provisions

CMS reviewed and considered more than 2,500 comments on the two proposed rules to create the final policies, with the opportunity for additional comment, for participation in the EHR Incentive Programs.  In recognition of the issues raised, CMMS made significant changes to ease reporting burden for all providers, supporting health information exchange, and improving patient outcomes. For example, the regulations:

  • Shift the paradigm so health IT becomes a tool for care improvement, not an end in itself.
  • Provide simplicity and flexibility so that providers can choose measures that use in their practices and report progress that are most meaningful to their practice.
  • Give providers and state Medicaid agencies more time – 27 months, until January 1, 2018 – to comply with the new requirements and prepare for the next set of system improvements.
  • Give developers more time to create the next advancements in technology that will be easier to use and more appropriate to new models of care and access to data by consumers.
  • Support provider exchange of health information and a more useful interoperable infrastructure for information exchange between providers and with patients
  • Give developers more time to create the next advancements in technology that will be easier to use and more appropriate to new models of care and access to data by consumers.
  • Address health information blocking and interoperability between providers and with patients.

For the EHR Incentive Programs in 2015 through 2017, major provisions include:

  • 10 objectives for eligible professionals including one public health reporting objective, down from 18 total objectives in prior stages.
  • 9 objectives for eligible hospitals and critical access hospitals (CAHs) including one public health reporting objective, down from 20 total objectives in prior stages.
  • Clinical Quality Measures (CQM) reporting for both eligible professionals (EPs) and eligible hospitals/CAHs remains as previously finalized.

CMS evaluated the current programs and identified areas where modifications could be made to align with the long-term vision and goals for Stage 3. CMS restructured the objectives and measures of the EHR Incentive Programs in 2015 through 2017 to align with Stage 3, and modified “patient action” measures in Stage 2 objectives.  These changes recognize the progress providers have made and realign with long term goals.

For Stage 3 of the EHR Incentive Programs in 2017 and subsequent years, major provisions include:

  • 8 objectives for eligible professionals, eligible hospitals, and CAHs:  In Stage 3, more than 60 percent of the proposed measures require interoperability, up from 33 percent in Stage 2.
  • Public health reporting with flexible options for measure selection.
  • CQM reporting aligned with the CMS quality reporting programs.
  • Finalize the use of application program interfaces (APIs) that enable the development of new functionalities to build bridges across systems and provide increased data access. This will help patients have unprecedented access to their own health records, empowering individuals to make key health decisions.

The Stage 3 requirements are optional in 2017. Providers who choose to begin Stage 3 in 2017 will have a 90-day reporting period. All providers will be required to comply with Stage 3 requirements beginning in 2018 using EHR technology certified to the 2015 Edition. Objectives and measures for Stage 3 include increased thresholds, advanced use of health information exchange functionality, and an overall focus on continuous quality improvement.

In addition, the final rule adopts flexible reporting periods that are aligned with other programs to reduce burden, including moving from fiscal year to calendar year reporting for all providers beginning in 2015, and offering a 90-day reporting period in 2015 for all providers, for new participants in 2016 and 2017, and for any provider moving to Stage 3 in 2017.

As part of today’s regulations, CMS announced a 60-day public comment period to facilitate additional feedback about Stage 3 of the EHR Incentive Programs going forward, in particular with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which established the Merit-based Incentive Payment System (MIPS) and consolidates certain aspects of a number of quality measurement and federal incentive programs into one more efficient framework. We will use this feedback to inform future policy developments for the EHR Incentive Programs, as well as consider it during rulemaking to implement MACRA, which we expect to release in the spring of 2016.

ICD-10 Transition, Payments Will Continue Regardless of Possible Government Shutdown, CMS Vows

Even the threat of a government shutdown will not stop the Oct. 1 switch to ICD-10, the Centers for Medicare & Medicaid Services says.

“In the event of a shutdown we will continue – and I want to be clear on this — to pay claims,” CMS Principal Deputy Administrator Patrick H. Conway, MD, told media during a telephone conference call on Thursday.

“We will continue to implement the ICD-10 transition. We do planning at any time when there’s the potential of a government shutdown [and] we will continue to pay claims. We will continue to be operational and we will make the transition to ICD-10.”

William Rogers, MD, CMS’s ICD-10 ombudsman, added that “the MACs will still be operating. They’ll still be accepting claims and claims will still be paid, and we are sure of that.”
If government is kept operational by a continuing resolution, Conway says nothing would change.

“We would continue to process claims, the MACs would continue to pay claims and we would execute the ICD-10 transition,” he says. “In terms of staffing we have the flexibility to ensure that core operations are operational and in effect and we say our payment systems are a core piece of the Medicare system that will continue to be fully operational.”

This is not CMS’s first experience with a government shutdown, so Rogers says they aren’t starting from scratch.

“We do think service around core customer service and provider service functions are critical, so we would prioritize those, whether it be ICD-10 or other areas,” he says. “Our goal is to have a smooth transition to ICD-10 both from a payment perspective and from the service around that payment.”

Rogers says it’s not clear if his office of the ombudsman would be considered a vital service during a government shutdown.

“We just don’t know,” he says. “It really is the different legal issues that have to be considered about what emergency operations and what aren’t. So, honestly we don’t know at this point. People who aren’t in this room are deciding what we can do and can’t do in case of a shutdown in terms of staffing here at CMS.”

On other issues related to ICD-10, Conway says it will take “a couple weeks before we have a full picture” of the transition.

“First off, very few providers file a claim on the day of the office visit, lab, or surgery. Most provider batch their claims and submit them every few days,” he says. “Generally speaking Medicare claims take a couple of days to process and can take approximately two weeks. The Medicaid claims can take up to 30 days to be submitted and processed. For this reason we expect to have more detailed information after a full billing cycle is complete.”

“We recognize that this is a significant transition and we have set up processes and operations to monitor the transition in real time assess our systems and investigate and address issues as they come in through the ICD-10 coordination centers.”

Conway says that providers having problems with claims submissions should first contact their billing vendor or clearinghouse. If problems persist, they can contact their Medicare administrative contractor, or the ICD-10 ombudsman at CMS.

Although physicians’ associations have expressed dread at the looming transition, Rogers says he believes the switch to ICD-10 will be relatively smooth.

“Most smaller practices just use a Superbill,” he says. “It requires an expansion of the number of diagnoses on the Superbill but they can easily crosswalk their ICD-9-based Superbill to an ICD-10 Superbill. Once they’ve done that it’s business as usual in the office. I expect that small practices should have little or no expense involved.”

Half of states aren’t switching workers’ compensation claims to ICD-10 on Oct. 1

While the CMS says Medicare contractors are ready to switch their claims processing to ICD-10 coding on Oct. 1, about half of state workers’ compensation claims payment systems are taking a pass.

According to the Workgroup for Electronic Data Interchange, a not-for-profit healthcare industry trade group that promotes computerization in healthcare, only 21 states have adopted the Oct. 1, 2015 deadline for switching over their workers’ comp systems to processing physician and hospital inpatient and outpatient claims to ICD-10. Another four states have pending ICD-10 regulations for workers’ compensation claims.

States Adopting ICD-10 for Workers’ Compensation Systems for Physician Billing for October 1, 2015:
New Mexico
New York
North Carolina
South Dakota
U.S. Dept. of Labor
Government regulations require ICD-10 conversion for Medicare and Medicaid covered entities such as hospitals, physicians and other providers. But the rules don’t apply to state workers’ comp programs.Devin Jopp, president and CEO of WEDI, said some states will voluntarily switch their workers’ compensation programs from ICD-9 to ICD-10 on Oct. 1, but others will not.

Meanwhile, WEDI also released a list of websites for state Medicaid programs where providers can check for ICD-10 updates. State Medicaid programs must switch to ICD-10.

WEDI isn’t tracking their progress. “I don’t know what I don’t know with Medicaid,” Jopp said. “I’d hate to speculate where states are.”

On Thursday, the CMS reported 87% of the organizations passed its third round of end-to-end testing of Medicare claims. It pronounced provider claims processors are ready for Oct. 1.

Telemedicine enters the 2016 US presidential primaries

During a campaign stop in Iowa this week, former Secretary of State Hillary Clinton touted the importance of telemedicine, Politico reported this morning. The entire speech is available online, but here’s the relevant passage:

“And we also need to do better on health care. Decades ago, I led a commission on rural health in Arkansas that worked on increasing access in remote parts of the state,” she said. “Today, our health care system has changed dramatically, but it’s still too difficult for families in rural America to find quality, affordable health care. And I know many families here in Iowa are worried about even more rural hospitals closing. Telemedicine can help  — and we should streamline licensing and explore how to make that reimbursable under Medicare. Here in Iowa, you just won an important victory, stopping efforts to prevent Planned Parenthood from providing telemedicine services to women who might not be able to make it to a larger city. Thousands of women in Iowa have used these services in recent years. This shouldn’t have to be said, but how can anyone be advocating for denying women access to healthcare?”

In recent years digital health, and telemedicine especially, has crept in to various speeches made by President Obama. Most notably, perhaps, Obama made a somewhat similar remark to Clinton’s above during his 2011 State of the Union Address: 

“This isn’t just about — (applause) — this isn’t about faster internet or fewer dropped calls,” the president said at the time. “It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.”

In 2013 Obama gave a speech about his management agenda, which included plans for open data initiatives and their importance to kickstarting innovation in various industries. It marked the second high-profile speech by Obama that included a reference mobile or digital health.

“So there is a company called Opower that has used open government data on general energy trends and weather to help families save more than $300 million on their energy bills,” he said at the time. “There’s another company called iTriage, founded by two emergency room doctors, that is using freely downloadable data about healthcare providers from the Department of Health and Human Services to help more than 9 million people find the closest doctors and hospitals that meet their needs. The list goes on. These companies have now hired hundreds of people and they’re still hiring. Millions of people have already used these applications that were created as a consequence of releasing this data.”

In recent months, Obama has also proven to be something of a wearable fitness tracker fan. In February of this year he told Re/Code founder Kara Swisher that he was looking to test out a Fitbit device and an Apple Watch once it came out.

“I don’t have a Fitbit yet, but I work out hard,” he told Swisher. “Word is these Apple Watches might be a good companion for my workouts. So I’m gonna see, I’m gonna test it out.”