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CMS May Delay MACRA

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By Jose Lopez, Senior Consultant, The Verden Group

In our most recent issue of ViewPoint Magazine, we provided some tips on how to prepare for the reporting requirements and shift to quality payment models under the proposed Medicare Access & CHIP Reauthorization Act (MACRA). MACRA was scheduled to take effect on January 1, 2017. However, after feedback and pressure from most of the professional medical societies and specialty membership organizations, Andy Slavitt, the Acting Administrator for the Centers for Medicare and Medicaid Services (CMS), recently indicated MACRA could be delayed from the proposed January 1 start date.

The final rule for MACRA is not expected to be released until November 1, 2016, only two months prior to the current proposed effective date of January 1, 2017. This would put unbelievable pressure on providers, particularly those in small practices, to scramble to meet the requirements of MACRA in a very short period of time. The Verden Group encourages CMS to delay implementation of MACRA, and for practices to fully understand, prepare for, and implement changes in their workflows to demonstrate the cost effectiveness and high quality of care they provide to their patients.

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Many State Medicaid Meaningful Use Attestations Delayed

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For Medicare providers, the deadline to attest for the 2015 reporting period with CMS was March 11, 2016. However, due to recent revised requirements, many states have not yet established a 2016 deadline for providers to attest for the 2015 reporting period with their Medicaid EHR Incentive Program. If fact, many states are only accepting 2015 reporting period attestations for adopt, implement, or upgrade (AIU), and Meaningful use Modified Stage 2 attestations are not yet available.

If you are a Medicaid provider, visit your State Medicaid EHR Incentive web site and subscribe to their Listservs to be kept informed if attestations or deadlines have been or will be set.

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CMS issues Final Rules for Stage 2 and Proposed Rules for Stage 3

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By Jose Lopez, Senior Consultant, The Verden Group

On October 6, 2015, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator (ONC) released the final rules (click here to view) for modifications to Stage 2 and 2015 reporting requirements, as well as proposed rules for the third stage of the Meaningful Use incentive program.

Meaningful Use Stage 2 Changes

As expected, CMS finalized the modifications for the 2015 reporting period and some Stage 2 requirements (see my earlier blog post about details on those anticipated changes). CMS says it is providing a simpler, more flexible set of stage 2 regulations for 2015 through 2017 as the meaningful use regulation era gives way to CMS’s transition to value-based compensation. In summary:

  • The rules also allow for a 90-day reporting period for providers in 2015, and new providers in 2016 and 2017.
  • Many of the measures of personal health engagement have been drastically reduced (patient portal and e-messaging requirements).
  • Clinical quality measures for both hospitals and providers will remain the same.

The Verden Group applauds the relaxation of these measures to reflect the real challenges that practices and hospitals are facing. More than 60% of hospitals and about 90% of physicians have yet to attest to stage 2!

Meaningful Use Stage 3 Measures

In spite of calls from most of the major medical associations to delay the onset of Stage 3, CMS also announced that Stage 3 will go on as planned and will not be delayed. In summary, major provisions pertaining to Stage 3 meaningful use include:

  • There will be 8 objectives for eligible providers and hospitals.
  • In Stage 3, more than 60 percent of the proposed measures require interoperability, up from 33 percent in Stage 2.
  • Public health reporting will include flexible options for measure selection.
  • Clinical Quality Measures (CQM) reporting are aligned with the CMS quality reporting programs.
  • Finalizes the use of application program interfaces that enable the development of new functionalities to build bridges across systems.

In short, CMS is attempting to address the two areas in Stage 3 that have been the primary barriers for successful Stage 2 attestation: interoperability and patient engagement. In 2017, Stage 3 requirements are optional, but providers who opt to start Stage 3 in 2017 will have a 90-day reporting period. Come 2018, all providers must comply with Stage 3 regulations using a certified EHR.

Industry Reaction

Despite a public outcry from the healthcare community to delay the onset due to the lack of successful Stage 2 attestation, Stage 3 is set to begin as an optional requirement for physicians and hospitals in 2017 and a requirement in 2018. The American Medical Association applauded CMS for allowing a hardship exemption for physicians who are unable to attest in 2015 but called the final rule, as a whole, “deeply disappointing.” The American Hospital Association urged CMS to delay the implementation of Stage 3 and focus instead on “ensuring that providers could easily and efficiently share health information to support care delivery and new models of care.” The American College of Cardiology says that the program requirements “remain difficult to implement.”

The final rule for Stage 3 includes a 60-day comment period, which is longer than is typical, suggesting that there may be additional modifications or delays. As such, the political fight to delay the onset of Stage 3 of meaningful use may not be over, and we expect many changes may be coming before the rule is finalized.

A Post-HITECH World

When Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), it essentially sunset the meaningful use payment adjustments (penalties for noncompliance) at the end of 2018. Instead, Congress has called for the establishment of a Merit-Based Incentive Payment System (MIPS), of which the meaningful use program will form one component. CMS will continue to consolidate its current incentive/adjustment programs under the umbrella of MIPS as it further transitions from encounter-based payments to value-based compensation. The Verden Group will continue to monitor industry reaction and comments submitted to CMS on the final Stage 3 rule in order to guide our clients through successful Meaningful Use Attestation and beyond.

 

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Adventist Health System Agrees to Pay $115 Million to Settle False Claims Act Allegations

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Recently, the Justice Department announced that Adventist Health System has agreed to pay the United States $115 million to settle allegations that it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians and by miscoding claims. Adventist is a non-profit healthcare organization that operates hospitals and other health care facilities in 10 states.

Officials from the Justice Department pointed to the underlying basis for the settlement, namely that unlawful financial arrangements between heath care providers and their referral sources raise concerns about physician independence and objectivity. They further underscored their position by stating   patients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physician.

The settlement announced a couple of days ago resolves allegations that Adventist submitted false claims to the Medicare and Medicaid programs for services rendered to patients referred by employed physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals to Adventist hospitals. Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.

Adventist-owned hospitals, such as Park Ridge, allegedly paid doctors’ bonuses based on the number of test and procedures they ordered.  The Justice Department took exception to this type of financial incentive as not only prohibited by law, but as also undermining patients’ medical care. They cautioned that would-be violators should take notice that the Justice Department will use the False Claims Act to prevent and pursue health care providers that threaten the integrity of the healthcare system and waste taxpayer dollars.

“Companies that financially reward physicians in exchange for patient referrals – as the government contended in this case – undermine the physicians’ impartial medical judgment at the expense of patients and taxpayers,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) in Atlanta.  “We will continue to investigate such wasteful business arrangements.”

The settlement also resolves allegations that Adventist submitted bills to Medicare for its employed physicians’ professional services containing certain improper coding modifiers, and thereby obtained greater reimbursement for these services than entitled.

The allegations settled arose from two lawsuits filed respectively by whistleblowers Michael Payne, Melissa Church and Gloria Pryor, who worked at Adventist’s hospital in Hendersonville, North Carolina, and Sherry Dorsey, who worked at Adventist’s corporate office, under the qui tam provisions of the False Claims Act.  The act permits private parties to file suit on behalf of the United States for false claims, and to share in any recovery. The whistleblowers’ share of the settlement has not yet been determined.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25 billion through False Claims Act cases, with more than $16 billion of that amount being recovered in cases involving fraud against federal health care programs.

Hospitals and private practices alike should make note of this recent settlement and carefully evaluate physician compensation arrangements so as not to run afoul of this complex area of laws and regulations. At the Verden Group, we recommend working with an experienced healthcare attorney to help you navigate through this issue as the penalties for violating the law are significant and could irreparably harm your practice if you are deemed non-compliant.

 

 

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CMS Proposes Updates to Medicaid Managed Care Organizations

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By Jose Lopez, Senior Consultant, The Verden Group

On May 26th, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule aimed at “improving the quality and performance of Medicaid Managed Care Organizations (MCOs).” The proposed rule is vast, with more than 650 pages of proposed reforms that attempt to align MCOs with existing regulations for other private and public payers. More than half of all Medicaid beneficiaries (at least 39 million individuals in 39 states and the District of Columbia) have coverage through MCOs.

Amongst the proposed provisions are:

  1. Application of a Minimum Loss Ratio (MLR) to Medicaid and CHIP. The most sweeping change is the application of a federal 85% minimum MLR to MCOs beginning in 2017. MLRs measure how much a managed care plan spends on the provision of covered services compared to the total revenue it receives in capitation payments from the state. Applying a common national standard for calculating MLR is intended to allow comparability across states, facilitate more accurate rate setting, and reduce the administrative burden on managed care plans that operate in multiple states or have multiple product lines.
  2. Greater transparency in how states determine plan payment rates. States will be required to give CMS enough information for the agency to understand the data and the reasoning for the rate.
  3. Apply minimum standards to screen and enroll providers.
  4. Increase Provider Network Access by decreasing time and distance limitations for beneficiaries, particularly from services for Pediatric CHIP providers, OB/GYNs, behavioral health providers, and dentists.
  5. Expanding health plans’ responsibilities in program integrity efforts through administrative and managerial procedures that prevent, monitor, identify, and respond to suspected provider fraud.
  6. Establish a Quality Rating System for Medicaid Plans, based on quality factors including clinical effectiveness, patient safety, care coordination, prevention, member experience, plan efficiency, affordability, and management.
  7. Strengthen encounter data submissions from managed care plans to states, and from states to CMS.
  8. Allow Long-Term Care Beneficiaries to change plans or cancel enrollment and move to standard Medicaid coverage if their preferred providers are out of the managed care networks.

The Verden Group applauds these much-needed reforms. The proposed rule will provide greater access for Managed Medicaid beneficiaries located in rural areas, especially for at-risk children enrolled in CHIP. With greater transparency and provider choice, patients will be able to select plans that include practices that have differentiated themselves through innovative and high quality programs.

The two trade groups representing insurers, America’s Health Insurance Plans and Medicaid Health Plans of America, are generally supportive of the regulatory modernization and the thrust of CMS’ proposals, except for the national 85% minimum MLR. However, there is little evidence to suggest it will negatively impact their profits as many states already mandate MLR requirements.

The Verden Group is concerned the MLR mandate may create difficulties for not-for-profit safety-net insurers, which usually cover large numbers of Medicaid beneficiaries with serious and chronic health issues. These plans have profit margins that vary year over year, meaning a large profit surplus one year could be needed to offset significant losses in another year. In addition, state Medicaid agencies may not have enough resources to implement the proposed regulations. As with all regulations, it is important that sufficient resources are provided to ensure the proposed rule does not become an unfunded mandate where the fiscal responsibility falls to those it is intended to help.

The Verden Group encourages our clients to share their thoughts on the proposed rule by commenting publicly at:

https://www.federalregister.gov/public-inspection before the deadline of July 27, 2015.

 

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