Articles Posted in Michigan Healthcare News

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On January 26, 2015, the U.S. Department of Health and Human Services (“HHS”), for the first time ever, announced a timeline and corresponding goals to shift the basis of Medicare reimbursement away from the quantity of care provided towards the quality furnished to beneficiaries. With the passage of the Patient Protection and Affordable Care Act (“ACA”) in 2010, Congress created several new payment models, including Accountable Care Organizations (“ACOs”), primary care medical homes, and new models of payment bundling for care. These models all share the commonality that they incentivize physicians to coordinate care for their beneficiaries, maintain quality, and control costs. With the proliferation of these models that focus on quality over quantity, HHS was compelled to reform the Medicare reimbursement process.

Specifically, HHS announced its goal of tying 30 percent of fee-for-service Medicare payments to quality output through alternative payment models, like ACOs or bundled payment arrangements, by the end of 2016. Furthermore, HHS plans on increasing that amount to 50 percent by the end of 2018. If this goal is met, half of all payments to physicians and hospitals will be made through alternative payment models by 2018. Additionally, HHS set a timeline for tying 85 percent of fee-for-service, or traditional, Medicare payments to quality output by 2016 through the Hospital Value Based Purchasing and Hospital Readmissions Reduction Programs. This number is also set to increase to 90% by 2018.

To accomplish this, HHS has created the Health Care Payment Learning and Action Network (“the Network”). The Network is an organization made up of health care stakeholders including private payers, consumers, providers, employers, and state Medicaid programs. The Network, which will hold its first meeting in March 2015, plans to expand alternative payment models nationwide into all areas of health care. HHS hopes that the intensity exhibited by the Network will even surpass its initial goals for program expansion.

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On December 30, 2014, the Centers for Medicare & Medicaid Services (CMS) announced that they had awarded the Region 5 Recovery Audit Contract (RAC) to Connolly, LLC. CMS contracts with RACs to identify and correct improper payments. Connolly, which has been the RAC for Region C, was awarded the Region 5 contract which covers claims for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS), home healthcare and hospice providers. With the awarding of the new RAC contract focused on DME, home health and hospice providers, these provider types can expect increased scrutiny of their Medicare claims.

CMS also outlined a number of “improvements” to the RAC program that will take effect with each new RAC contract awarded, beginning with the Region 5 contract awarded on December 30, 2014.

One of the “improvements” brought by the new RAC program is that the CMS has reduced the RAC look-back period to 6 months from the date of service for patient status reviews where hospitals submitted the claim within 3 months of the date of service. Previously, the look-back period for RACs was from 3 years and hospitals had to submit a claim within one year from the date of service in order to comply with the timely filing rules, leaving hospitals with the inability to rebill denials from patient status reviews. Another improvement is that the CMS has established new Additional Documentation Request (ADR) limits based on a provider’s compliance with Medicare rules. Specifically, the ADR limits will align with providers’ denial rates (i.e., providers with low denial rates will have lower ADR limits), and ADR limits will be adjusted as a providers’ denial rates decrease.

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On October 31, 2014, the Centers for Medicare and Medicaid Services (CMS) released its CY 2015 Physician Fee Schedule Final Rule. The rule included several important changes as it relates to telehealth services. With respect to reimbursement rates, in the final rule CMS increased Medicare payments to telehealth originating sites by 0.8 percent.

In addition, the final rule provides seven new procedure codes that cover the following telehealth services:

  • Psychotherapy services (CPT codes 90845, 90846, and 90847);
  • Prolonged services in the office (CPT codes 99354 and 99355); and
  • Annual wellness visits (HCPCS codes G0438 and G0239).

For billing purposes, the originating site fee will be $24.83. CMS also introduced new CPT code 99490, which allows physicians to bill Medicare for chronic care management. The monthly, unadjusted, non-facility fee will be $42.60. Most importantly, CPT 99490 is considered a physician service and is, therefore, available nationwide and not restricted to rural-only telehealth.

Although these changes in the final rule have been received by many telehealth advocates and providers as welcomed developments, CMS did not eliminate the requirement for patients to be located in a rural area in order to receive telehealth services, despite suggestions from many commenters in response to the 2015 Physician Fee Schedule proposed rule to expand the reach of telehealth.

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On October 30, 2014, the Centers for Medicare and Medicaid Services (CMS) announced its final rule regarding changes to the Medicare home health care prospective payment system. The changes, which are set to go into effect in calendar year 2015, will reduce payments to home health agencies (HHAs) by approximately .30 percent, or $60 million. This decrease comes as a result of the 2.1 percent home health payment update percentage. Additionally, the decrease implements the second year of the four-year phase in of the rebasing adjustments promulgated by Section 3131(a) of the Affordable Care Act.

CMS stated that the final rule is one of several to be released for calendar year 2015 aimed at reflecting a broader strategy to deliver better care at lower cost by increasing delivery efficiency. Provisions in the final rule should transition the healthcare system into one that values quality over quantity by focusing on reforms such as helping manage and improve chronic diseases, measuring for better health outcomes, focusing on disease prevention and fostering a more-efficient and coordinated system.

The Medicare program reimburses HHAs through a prospective payment system that pays higher rates for beneficiaries with greater needs. Currently, all HHAs must provide relevant data from patient assessments, which CMS uses to annually determine payment rates. In order to qualify for the Medicare home health benefit, a beneficiary must be cared for by a physician, require physical therapy or speech-language pathology, require intermittent skilled nursing care, or continue to need occupational therapy. Additionally, the beneficiary is required to be homebound and receive services from a Medicare-approved HHA. Outlined below are changes that the final rule makes to various aspects related to the home health prospective payment system.

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On September 9, Linda Sanches, the Senior Advisor for the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) warned that Health Insurance Portability and Accountability Act (HIPAA) audits are forthcoming. Speaking at the HIMSS Privacy and Security Forum in Boston, Sanches cautioned attendees that the best defense to an audit is conducting periodic and comprehensive risk analyses focused on administrative and technical protections, as well as human error vulnerabilities. “The onus is on you to prove that you had the proper systems in place,” Sanches warned, advising providers to proactively perform risk analyses in advance of a HIPAA audit.

To attendees’ disappointment, Sanches did not unveil a start date for the HIPAA audits. Instead, Sanches explained that the OCR has postponed initiating HIPAA auditing to implement new technology with increased auditing capacities. Originally, the OCR intended to conduct a total of 400 desk audits. However, Sanches confirmed that now the OCR will likely perform fewer than 200 targeted desk audits and an unconfirmed number of on-site audits. A variety of providers across practice area, size, and geographic location should expect to be audited. Audited entities will be responsible for compliance with both the HIPAA Privacy Rule and the HIPAA Security Rule. In addition, providers should have available an updated list of business associates with contact information and services provided. Sanches warned that the OCR will use a provider’s business associate list to select business associates for HIPAA auditing.

Providers with patterns in reported breaches are more likely to face HIPAA auditing. Sanches emphasized that providers who fail to demonstrate compliance with the HIPAA privacy rule and HIPAA security rule may face hefty settlement fines based on the amount of harm and provisions violated. When discussing fines, Sanches stated, “It’s basic math. How many people were affected?”

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CMS recently announced that it will soon be adding additional star ratings to the Medicare.gov website by 2015. CMS has already implemented the star rating system to provide consumers quality and safety information regarding nursing homes and physician groups on a five-star scale. The system is supposed to allow consumers to make informed decisions about their provider, while giving providers something to strive for. CMS Deputy Administer for Innovation and Quality, Dr. Patrick Conway, stated that the star rating system is based on scientific standards of both accuracy and rigor. Because providers differ on the quality of care and services they offer to customers, CMS touts its star rating system as giving consumers a “snap-shot” of the care an individual provider offers. By 2015, CMS plans to add hospital groups and dialysis and homecare providers to the rating system.

While advocates of the consumer-oriented star-rating system are excited about the inclusion of more provider types, many providers are speaking out against the system. According to a recent article on Modern Healthcare, after being notified of dialysis and homecare providers’ inclusion, a spokesman for Kidney Care Partners–a coalition of dialysis providers–claimed that the star rating system compares apples and oranges. The spokesman argued that the inaccurate comparison results in confused patients not really understanding what the amount of stars mean. Proponents of the rating system try to rebut views like those expressed by Kidney Care Partners, by arguing that the health care community should stress transparency, rather than worry about the imperfections in the rating system. Echoing these sentiments, Dr. John Santa, the Medical Director for Consumer Reports, stated that no provider will score well on every rating system, but the abundance of ratings will eventually provide a clearer picture of providers’ quality of care and safety.

Although proponents of the star rating system continue to espouse its positive aspects, many providers remain concerned. Because providers can lose accreditation for scoring poorly on certain measures of safety and quality, and even face fines, these ratings are becoming more important. Several providers urge CMS to delay the inclusion of more provider types to the rating system until it can provide a more complete performance rating. They assert that the measurement differences may result in one provider scoring high in one program and low in another and, although the system does not have to be perfect, it must be reliable. Opponents say that to allow otherwise is to misguide patients and may potentially lead to unfair financial penalties on the entities.

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Since the passage of the Patient Protection and Affordable Care Act (ACA) in 2010, much of the media focus has been on individuals who were previously denied coverage because of preexisting conditions or financial barriers. Now, studies are focusing on the large group of individuals who, prior to the ACA, simply chose not to purchase health insurance. The reports demonstrate that due to the Individual Mandate portion of the ACA, which requires individuals to purchase health insurance, many more individuals are choosing to participate in their employers’ health plans.

The increased participation in employer health plans will inevitably cost employers. Most recently, Wal-Mart announced that a dramatic increase in employees signing up for insurance through the company will cost its stockholders $500 million — up from the company’s previous estimate of $330 million. Although Wal-Mart is experiencing the employer-based insurance shift on a large scale, many employers nationwide are expected to see a jump in participation in their health plans. Recently, the National Business Group on Health announced that large employers should expect to see a 6.5% rise in healthcare costs in 2015.

Although The New England Journal of Medicine and members of the Urban Institute both note a rise in individuals signing up for insurance through their employers, other analysts predict that employers’ costs will be too high, and that the employers will simply “dump” these employees into their state’s health insurance marketplace. Many experts, however, expect that if such dumping were to occur, it would come from small employers who merely cannot afford to offer adequate health plans.

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With the passage of the Food and Drug Administration Safety and Innovation Act (FDASIA) on July 9, 2012, Congress expanded the Food and Drug Administration’s (FDA) authority to safeguard and advance public health. Exercising such authority, on July 31, 2014, the FDA notified Congress of its plan to publish a proposal to expand its oversight of laboratory developed tests (LDTs). LDTs are diagnostic tests, which are designed, manufactured, and used within a single laboratory. Previously, LDTs certified under the Clinical Laboratory Improvement Amendments (CLIA) could exist without FDA oversight. This exception existed because LDTs were primarily used for rare diseases. However, advances in molecular biology allowed laboratories to produce a broader range of LDTs, applicable to more common illnesses. The former exception has been touted by some as fostering laboratory independence, allowing for exponential innovation and accuracy in diagnostics. However, others like Senator Edward Markey (D-Mass.) claim that the newly implemented FDA oversight has been “long-overdue.”

As a result of support from individuals like Senator Markey, more than 11,000 LDTs, housed in 2,000 different laboratories, may fall into the FDA’s expanded regulations. The FDA has cited LDTs for illnesses like Lyme disease and cancer, as justification for the new regulatory framework. By subjecting LDTs to such scrutiny, the FDA’s stated goal is to eliminate faulty tests that produce inaccurate diagnoses and cause patients to seek unnecessary treatment, or delay vital treatment. However, opponents of the new regulation contend that the prior independence allowed laboratories to diagnose and measure disease with far greater accuracy than ever before.

The FDA’s regulatory expansion will take place over nine years and will first be applied to what are deemed the riskiest LDTs. However, some tests will remain excluded from FDA regulations. Such LDTs include those which treat rare diseases and those for which there is no FDA-approved test.

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A bill amending Title XVIII of the Social Security Act will be proposed soon, marking the culmination of bipartisan efforts in the House of Representatives. Representatives Glenn Thompson (R-Penn.) and Mike Thompson (D-Calif.) are prepared to announce a new telehealth bill, titled the Medicare Telehealth Parity Act of 2014, which would reduce the Social Security Act’s current limitations on reimbursable telemedicine technologies.

Currently, the Social Security Act only permits reimbursement for telemedicine uses in rural health professional shortage areas (HPSAs) and non-Metropolitan Statistical Areas (MSAs). Not only are these qualifications limiting, they are also difficult to discern. For example, in the 2000s, the Health Resource and Service Administration (HRSA) eliminated the “rural HPSA” category from its designations, resulting in confusion regarding the correct application of the term. The forthcoming bill seeks to slowly resolve these reimbursement complications through a cost-effective, four-year plan:

  • Within six months of the bill’s passage, it would mandate that Medicare provide coverage for telemedicine in urban areas with a population of 50,000 or less. Additionally, the six month period would be used to increase care sites to include retail clinics.
  • Two years following the bill’s passage, Medicare coverage would expand to urban areas with a population of 100,000 or less. Furthermore, the bill would include home telehealth to the list of care sites, while expanding reimbursable services to encompass physical and speech therapy.
  • Lastly, after four years have passed, the bill would make telemedicine reimbursable across the United States.

In addition to the four-year plan, the bill seeks to officially add remote patient monitoring (RPM) to the Social Security Act’s list of reimbursable services. The bill defines RPM as “the remote monitoring, evaluation, and management of an individual with a covered chronic health condition . . ., insofar as such monitoring, evaluation, and management is with respect to such condition, through the utilization of a system of technology that allows a remote interface to collect and transmit clinical data between the individual and the responsible physician . . . or supplier.” By offering government reimbursement for RPM services, thereby expanding RPM use, the bill hopes to increase Medicare savings over time.

Also, the Representatives’ bill would task the Secretary of Health and Human Services (HHS) with developing standards for remote patient monitoring. Finally, the United States comptroller would be directed to conduct a study within two years of the bill’s passage, to determine the efficacy and estimated Medicare savings from the expansion of telemedicine applications.

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Last week, the Office of Medicare Hearings and Appeals (OMHA) announced the Statistical Sampling Pilot Program (Pilot Program). The Pilot Program offers Medicare providers an alternative route, along with the Settlement Conference Facilitation Pilot, to reach a final determination for claims pending at the administrative law judge (ALJ) hearing level without enduring the 2-3 year delay for hearing. Although the Pilot Program offers a time-saving and perhaps more efficient option for Medicare providers, engaging in the Pilot Program also comes with risks as Medicare providers may “put all of their eggs in one basket” and rely on a single ALJ to issue a decision that affects a large volume of claims. In some cases, the provider may know the identity of the ALJ prior to agreeing to statistical sampling, but in other cases the provider will not.

The Pilot Program is available to Medicare providers that have requested an ALJ hearing following a Medicare Qualified Independent Contractor (QIC) reconsideration decision. At this time, the ALJ hearing requests must either be assigned to an ALJ or must have been filed between April 1, 2013 and June 30, 2013 and it must meet all jurisdictional requirements, including that it was filed timely. In order to be eligible for the Pilot Program, the Medicare provider must have a minimum of eligible 250 claims and the claims must be one of the following: (1) pre-payment claim denials; (2) post-payment non-RAC claim denials; or (3) post-payment RAC claim denials from one RAC. In addition, claims that are assigned to different ALJs or were requested in different consolidation groups may be incorporated into the request for statistical sampling.

A Medicare provider that meets the eligibility requirements for the Pilot Program may request statistical sampling by submitting a “Request for Statistical Sampling” form that is available on OMHA’s website. The provider must also submit a spreadsheet, a template is also available on OMHA’s website, that provides detailed information about the claims requested to be included in the statistical extrapolation.