von Briesen Health Law Blog

August 31, 2011

CMS Releases its Electronic Prescribing Incentive Program Final Rule

Filed under: Records and Technology — Meghan O'Connor @ 4:42 pm

CMS announced today a final rule implementing changes to the Medicare Electronic Prescribing (eRx) Incentive Program. The eRx Incentive Program encourages the adoption and use of eRx technology by offering financial incentives to eligible professionals. Eligible professionals who are not successful electronic prescribers are also subject to a payment adjustment to the Medicare Physician Fee Schedule beginning in January 2012.

The final rule establishes requirements for successful reporting of the electronic prescribing measure for the 2011 eRx incentive. CMS announced that public comments to the proposed rule raised concerns that the eRx Incentive Program did not align with the Medicare and Medicaid EHR incentive program and needed additional significant hardship categories. In response, the final rule modifies the existing 2011 electronic prescribing measure to address uncertainties regarding the technological requirements of the Program. For example, the final rule provides that a qualified electronic prescribing system includes certified EHR technology. The final rule also provides additional significant hardship exemption categories and extends the deadline for requesting the exemptions to November 1, 2011.

The final rule also establishes program requirements that eligible professionals and group practices must satisfy to avoid the 2012 payment adjustment and established the following two significant hardship exemptions for purposes of the 2012 payment adjustment:

The eligible professional practices in a rural area without sufficient high speed internet access.
The eligible professional practices in an area without sufficient available pharmacies for electronic prescribing.

In order to request consideration for a payment adjustment exemption under one of the two hardship exemptions, the eligible professional must report the corresponding g-code on at least one claim.

Requests for significant hardship exemptions for the 2012 eRx payment adjustment must be submitted via a web-based tool and via a mailed letter for group practices. CMS will make instructions on how to request a hardship exemption using the web-based tool available at the following link.

Health Care Fraud Prosecutions Increase in 2011

Filed under: Fraud and Abuse — Meghan O'Connor @ 4:40 pm

New data from the Transactional Records Access Clearinghouse (TRAC) shows that federal health care fraud prosecutions in 2011 are on track to rise 85% over prosecutions from last year. TRAC attributes the increased prosecutions chiefly to stepped-up fraud enforcement efforts by the Obama administration, including the addition of health care fraud teams.

From January through August 2011, 903 people were prosecuted for health care fraud. According to TRAC, this is a 24% increase over the total prosecutions in 2010, when 731 people were prosecuted for federal health care fraud. The 2011 data also shows a 71% increase from prosecutions just five years ago. Trial convictions resulting from Medicare Fraud Task Force investigations have also increased significantly, with 24 trial convictions in the first eight months of 2011, as compared to 23 trial convictions in all of 2010.

Increased prosecutions have yielded increased savings. In 2010, the government’s health care fraud investigations resulted in $4 billion in recovery. In 2011, the Department of Justice announced its largest Medicare Fraud Task Force case, charging 111 people with falsely billing Medicare for more than $225 million. The Affordable Care Act may also have an effect on fraud and abuse savings. Medicare actuaries predict that over the next decade, $4.9 billion in savings may be available from fraud and abuse provisions in the Affordable Care Act.

CMS Announces its Bundled Payments Initiative

CMS Announces its Bundled Payments Initiative

CMS has announced its bundled payments initiative aimed at improving health and quality, while lowering health care costs. The initiative is based on the idea that bundling payments across a single episode of care will encourage doctors, hospitals and other providers to work to together to coordinate both pre- and post-discharge care. Under the bundled payments initiative, CMS is testing and developing four bundling models. As described further below, CMS is imposing deadlines for submitting a letter of intent and application.

Bundling Models

Three of the bundling models involve retrospective payment bundling, while the fourth bundling model involves prospective bundling. A summary of the four models follows:

Model 1 (retrospective): An episode of care would be the inpatient stay in the general acute care hospital. Medicare would pay the hospital and physicians separately. Medicare would pay hospitals under the Inpatient Prospective Payment System, but at a negotiated discount, and physicians under the Physician Fee Schedule. The hospital and physicians could share in any savings resulting from better care coordination.

Model 2 (retrospective): An episode of care would include the inpatient stay and post-acute care for a minimum of 30 days or 90 days after discharge. Providers would propose clinical conditions to target based on MS-DRGs. CMS and providers would identify a target payment amount for an episode of care, bundling hospital services, physician services, post-acute care, related admissions and other proposed services (e.g. clinical laboratory services). Participants would receive separate payment for their services at the usual rates. Medicare would compare the amount of total payments to the target price and pay the participants any “savings” (the difference between total payments and the target price) to share among themselves.

Model 3 (retrospective): An episode of care would begin at discharge from the inpatient stay and continue for a minimum of 30 days after discharge. Like Model 2, providers would propose clinical conditions, receive separate payments and share in any savings.

Model 4 (prospective): An episode of care would be the inpatient stay at the general acute care hospital. Providers would propose clinical conditions to target based on MS-DRGs. The hospital would receive a single, pre-determined bundled payment covering all services furnished during the inpatient stay, including physician/practitioner services. Physicians/practitioners would submit no-pay claims to Medicare and receive payment directly from the hospital.

Letter of Intent/Application Deadline

Applicants may participate in more than one of the four models. CMS has established the following deadlines for applicants to submit a LOI and application.

Model 1: The LOI is due by September 22, 2011. The application is due by October 21, 2011.

Models 2-4: The LOI is due by November 4, 2011. The application is due by March 15, 2012.

You may access more information and the application by clicking here.

August 17, 2011

HHS Proposed Rule Requires Insurers to Use Standardized Summary of Benefits and Coverage Form

Filed under: Legislation Watch — Meghan O'Connor @ 1:41 pm

Today, the U.S. Department of Health and Human Services (HHS), Department of Labor, and Department of the Treasury (the Departments) proposed a new rule requiring health insurers and group health plans to provide consumers with two standardized forms:

An easy to understand Summary of Benefits and Coverage
A uniform glossary of terms commonly used in health insurance coverage

The forms were developed through a process with the National Association of Insurance Commissioners (NAIC) and interested stakeholders, including health insurers, health care professionals, patient advocates, and consumer advocacy organizations. The proposed rule adopts the NAIC’s recommendations.

The Summary of Benefits and Coverage form includes a standardized policy comparison tool called “Coverage Examples,” similar to nutrition labels on packaged foods. The Coverage Examples will note what portion of care expenses a policy or plan would cover for three benefit scenarios – having a baby, treating breast cancer, and managing diabetes. HHS may add additional benefit scenarios to the form in the future. The glossary of terms applicable to all insurance plans and policies will be distributed by insurers and also made available to consumers via HHS’ healthcare website.

The new forms are scheduled for use as of March 23, 2012, when insurers must provide the forms to consumers upon request and before coverage purchases. Under the proposed rule, health plans and insurers must also provide at least 60 days notice before making significant modifications to plan or policy coverage during the policy year.

The proposed rule implements provisions of the Affordable Care Act that ensure access to forms that help consumers understand and evaluate health insurance choices. Additional information regarding the proposed rule is available via an HHS fact sheet. Once the rule is published in the Federal Register, the Departments will accept public comment on the forms for 60 days following the date of publication.

August 16, 2011

HHS Identifies HIPAA Audit Goals

Filed under: Records and Technology — Meghan O'Connor @ 1:33 pm

The Health Information Technology for Economic and Clinical Health (HITECH) Act mandates that the U.S. Department of Health and Human Services (HHS) conduct audits of covered entity and business associate compliance with HIPAA rules. HHS’ Office for Civil Rights (OCR) is charged with HIPAA enforcement responsibility and has awarded a $9.2 million contract to KPMG, LLP to assist in designing and carrying out the HIPAA audits.

In a recent webinar hosted by the International Association of Privacy Professionals (IAPP), OCR’s Deputy Director for Health Information Privacy provided key goals of a HIPAA audit, including:

Incident detection and response
Access log review
Secure wireless network
User access and passwords management
Theft or loss of mobile devices
Up-to-date software
Role-based access/lack of information access management

The first phase of the audits is expected to begin this fall and should conclude by the end of December 2012. OCR anticipates that it will visit to up to 150 covered entities during the first phase of audits. OCR and KPMG are currently working on a model for objectively selecting organizations for audit based on a number of risk factors including size, type of entity, and incidents. Selected entities should receive advanced notice before any audits.

New information regarding the HIPAA audits, when released, should be available via the OCR. The IAPP’s webinar is available to order here.

August 12, 2011

11th Circuit Court of Appeals Finds ACA Individual Mandate Unconstitutional

Filed under: Legislation Watch — Meghan O'Connor @ 3:12 pm

A divided Eleventh Circuit Court of Appeals panel ruled today 2-1 that the individual mandate provision of the Patient Protection and Affordable Care Act (ACA) is unconstitutional. Today’s decision affirmed part of a U.S. District Court ruling. However, the federal appeals court overturned the portion of the District Court Judge’s decision that voided the entire ACA. The Eleventh Circuit panel held that Congress exceeded its enumerated commerce power. The court analyzed Supreme Court jurisprudence relating to the commerce clause, noting that “What the Court has never done is interpret the Commerce Clause to allow Congress to dictate the financial decisions of Americans through an economic mandate.”

The Eleventh Circuit determined that insurance and health care are both traditionally state regulated industries, beyond the reach of Congress’ enumerated Commerce Clause power. The court also found the individual mandate to be overly broad. The court noted that it “regulates those who have not entered the health care market at all. It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future.”

The Eleventh Circuit is not the first federal appeals court to hear this issue. The Sixth Circuit upheld the ACA in Thomas More Law Center v. Obama, a 2-1 decision on June 29 earlier this year, ruling that Congress has a “rational basis” to impose an individual mandate. The Fourth Circuit heard oral arguments on the issue in May, but has yet to rule on the issue. With the Eleventh Circuit’s ruling creating a split among the federal appeals courts, the stage has been set for a Supreme Court determination of the constitutionality of the individual mandate.

The full text of the opinion is available here (pdf).

Thank you to Julie Bernard, Summer Associate, for her help in preparing this blog post.