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.

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

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.


CMS Proposes Updates to Medicaid Managed Care Organizations

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: before the deadline of July 27, 2015.


Telemedicine & Licensure – Will the Law Allow Changes to the Way Medicine is Practiced in the 21st Century?

By Jason E. Lopata, Esq.   There can be no question that the internet has changed the way most of society operates, from our homes and offices, to each and everyone’s smart phone located in their pocket or purse.  Medicine is not immune from the use and development of technologies to bridge the gap in physical distance between two non-electronic parties.  We may have to soon get used to the idea of a physician on one end of teleconferencing or video technology, and a patient on the other end.  Whether that physician is at a video screen at his office desk or holding a hand held device while vacationing in another part of the country, a physician’s office can be boundless in today’s world.

But how does a physician know that he is properly licensed to practice medicine by way of these new technologies?  Does the location of the doctor or the patient (or both) dictate what jurisdiction is relevant to any licensure questions?  While telemedicine has the potential to overcome barriers of distance and improve access to needed health care services, the current state-by-state licensure laws pose an obstacle to achieving this goal.  Requiring licensure in each state where patients may receive care is a disincentive to utilize the new technology and provide specialty care to rural and underserved areas of the country.  As a physician, one must stay informed of your jurisdiction’s regulations, as well as any neighboring states where your patients may be traveling to receive your care and treatment.

With limited exceptions, most states still require full in-state licensure for out-of-state telemedicine providers.  But in New York, like many other jurisdictions that do not specifically address the practice of telemedicine, there are some exceptions that allow out-of-state practice.   These may be applied to telemedicine, such as a physician who is either (1) licensed in a bordering state and who resides near a border of this state, provided such practice is limited in this state to the vicinity of such border and provided such physician does not maintain an office or place to meet patients or receive calls within this state, or (2) Is licensed in another state or country and who is meeting a physician licensed in this state, for purposes of consultation, provided such practice is limited to such consultation.  Most current regulations allow for this doctor to doctor contact, but do not address doctor to patient relationships in the consultation or specialty realm.

On the other hand, states such as Illinois, Mississippi, and Texas all have regulations specifically to deal with the practice of telemedicine, giving specific guidance as to what constitutes telemedicine. An example is Illinois’ definition that  “telemedicine”” means the “rendering written or oral opinions concerning diagnosis or treatment of a patient in Illinois by a person located outside the State of Illinois as a result of transmission of individual patient data by telephonic, electronic, or other means of communication from within this State.”  When regulations exist, specific requirements are spelled out for out-of-state physicians to treat their in-state population.  Physicians who practice telemedicine “without a license” risk criminal and civil penalties, state disciplinary proceedings, and denial of coverage under medical malpractice insurance policies which generally require licensure as a condition of coverage.  This occurs despite the fact that most state licensure procedures have become fairly uniform from jurisdiction to jurisdiction.

The American Bar Association (ABA), in a August 2008 report on telemedicine, believes that the most straightforward method to reduce such barriers to telemedicine is to institute a system of mutual licensure recognition whereby a physician with a current, valid and unencumbered license in any state could file a single application which would permit the physician to practice telemedicine in some or all other states.  The physician would be subject to continuing compliance with those states’ licensure fees, discipline, and other applicable laws and regulations, and adherence to professional standards of medical care.  The ABA further recommends any federal legislation set a uniform definition of “out-of-state telemedicine practice” (e.g., that the physician does not set up an office, appoint a place for meeting patients, or routinely receive calls within the state), the requisite procedures for telemedical licensure, and a requirement that the telemedicine provider must agree to the jurisdiction of the patient’s home state for medical malpractice actions.  But even amidst all the federal legislation affecting the health care industry, uniform telemedicine licensure issues have not yet been proposed.

While a good idea, I don’t yet see a federal standard evolving, as states are going to maintain their regulatory control of the industry.   So as a physician, one must still be prepared for these licensure and liability questions to emerge as you start to adopt technologies that widen the scope and “footprint” of your practice.  Physicians should consult an attorney with any questions whether borders are being “virtually” or literally crossed for purposes of your licensure.

Fraud & Abuse News for Your Practice

By Jason E. Lopata, Esq.

Received a take-back letter recently or had a claims audit by an RAC?  Amid the changes found with health care reform laws passed earlier this year are new fraud enforcement powers that have the potential for impacting all medical practices, big and small.  Recently, President Obama took steps to target Medicare and Medicaid fraud and cut down on wasteful healthcare spending.  On August 26, 2010, his administration outlined new federal enforcement efforts to combat healthcare fraud, stating that fraudulent conduct is costing taxpayers billions of dollars each year.  During a healthcare fraud summit in California, Attorney General Eric Holder Jr. and Health and Human Services Secretary Kathleen Sebelius said their agencies were jointly targeting fraud in the federal Medicare and Medicaid programs.

The government initiative, originally launched in May 2009, had so far produced more than 580 criminal convictions and recovered more than $2.5 billion in fraudulent proceeds.  However, while $835 million in questionable Medicare payments were identified by private contractors in 2007, the government managed to recover only $55 million (7 percent) according to a recent report from the Office of the Inspector General.  Congressional investigators found that the average investigation lasted 178 days, long enough for many cases to go cold, making it hard to identify the individuals involved or recover money owed taxpayers.  The Obama administration said it is now reorganizing contracts with private investigators and trying to help them coordinate better with claims processors and law enforcement.

As part of the recent efforts, The Centers for Medicare and Medicaid Services (CMS) expects to transition from some previously used private investigators to zone program integrity contractors (ZPICs) to solve many of the over-spending problems identified.  Two ZPICs became fully operational in February 2009, and all program safeguarding work will be transitioned to the remaining five by the end 0f 2010. The goal is to consolidate all Part A, B, C and D fraud-fighting activities under the ZPICs.   With the transition to more ZPIC enforcement, and the increased use of Recovery Audit Contractors (RACs), CMS is taking multiple avenues toward combating fraud and abuse.

But you’re a good doctor – not engaged in any fraudulent conduct.  How might this still affect your practice?  According to the new legislation, government overpayments must be reported and returned within 60 days of identification.  So constant monitoring for overpayment situations in your office is a must.  Further, since all government payments can be suspended by CMS pending a “credible allegation of fraud,” make certain that you are taking steps to not let the appearance of impropriety arise.  Lastly, HHS’ Office of the Interior General now has greater and broader subpoena power in the event of a government audit, where failure to timely reply to requests for information could be penalized up to $15,000 per day.  So should CMS request supporting documentation from your office in the event of an audit, take immediate measures to collect the data and submit it in a timely fashion.

Other steps your practice can take to prevent fraud include understanding and complying with all state and federal laws.  It sounds simple enough, but make sure that you are staying on top of all regulatory changes that may take place in your jurisdiction.   Also, create a culture of compliance in your office, making it a part of all partnership and staff meetings that take place, as well as employee training and education.   Part of that culture allows for the self-disclosure of any overpayments that are received from Medicare or Medicaid.  Another benefit of such an environment is that your practice does not have to fear for “whistleblowers,” since disclosure of misconduct is encouraged and addressed properly.  Practices that self-disclosure overpayments of government proceeds have more success working with CMS in resolving payment problems.

GINA Regulations – How to Handle Genetic Information Privacy

by Jason E. Lopata, Esq.

Effective in November 2009, new regulations are in place under the Genetic Information Non-Discrimination Act (GINA) that effect all businesses with 15 or more employees.  Originally enacted to prohibit the use of genetic information for the purpose of making employment-related decisions, the recently effective legislation now extends to restricting employers from acquiring or disclosing genetic information and more broadly defines what continues genetic information.  Most relevantly, GINA prohibits health plans and employers from offering financial incentives or rewards for participating in health risk assessments (HRA) that request information about family medical histories.

While such HRAs have been used in trying to incentivize employer-led wellness or disease- management programs (and in turn, better rates or premiums from insurers), such rewards must immediately cease.  However, sponsors or administrators may still obtain and use results of genetic tests to aid in payment determinations as long as they request the minimum amount of information necessary to make that determination (as set forth in the HIPAA Privacy Rule).  In such an instance, such medical information about an individual employee MUST be kept separate from the employee’s personnel file, as such information is protected under the medical confidentiality provisions of the ADA.  This is due to the fact that the laws prohibit the use of any type of genetic information for the purposes of making employment decisions.  Failure to abide by the new regulations can lead to fines upwards of $500,000 for the violation, which includes even an inadvertent disclosure or use of such genetic medical information.  So even an “innocent” mistake can be quite costly to your practice!!

So how might these new regulations affect your practice?  If you are using any type of HRA for your own employees, or are asked to complete such an assessment for a third-party, review those assessments and eliminate any mandatory acquisition of the newly protected information.  Such revised HRAs should only contain questions about the individual’s own medical history, and nothing about the individual’s family medical history.   Practices will want to review and make the necessary changes to not only HRAs and the programs using theses assessments, but also to enrollment procedures and group health plan documents.  Taking just a few moments to review these documents and procedures can save your practice from an expensive misstep.

What You Need To Know About Meaningful Use

by Jason E. Lopata, Esq.

You’ve heard the term “meaningful use” being used – but what does it mean? The Centers for Medicare & Medicaid Services (CMS) have issued new regulations that are designed to lay the groundwork for physicians and hospitals to further implementation and use of electronic health records (EHR).  Specifically, the CMS has issued a proposed rule detailing what constitutes “meaningful use” of the new technologies available for the maintenance and protection of EHR.   These rules were posted on January 13, 2010 and will be open for public comment for 60 days before being finalized.  The first stage of the incentives program is scheduled to start in 2011.

As part of the American Recovery and Reinvestment Act of 2009, Medicare wanted to reward “meaningful users,” defined as any eligible professional who “demonstrates use of certified EHR technology in a meaningful manner.”  The regulations are designed to improve the quality of health care by promoting care coordination and the use of certified EHR technology.  Part of its intent is also to bring about standard formats for clinical summaries and prescriptions, as well as standard terms being used to describe clinical issues nationwide.  Lastly, it seeks to increase the security measures used to transmit personal health information over the Internet.

So why is this important now, if the incentives program doesn’t begin until 2011?  In a word…money!  Don’t wait until next year to have a plan in place.  The incentives currently are set at reimbursements (over a period of up to 6 years) totaling $44,000 under Medicare and up to $63,750 under the Medicaid programs (however, qualified professionals would not be able to receive monies under both programs).   Even if you’re not interested in working toward those incentive dollars (and frankly, why wouldn’t you?), eligible medical professionals will start being penalized, in 2015, for failure to meet the standards of “meaningful use.”  So as you can see, failure to “get with the program” will have a negative financial impact on your practice.

While the CMS is still defining what will constitute “meaningful use,” it currently has outlined 25 objectives for physicians (23 for hospitals) which will be measured starting in 2011.  These include the use of computerized provider order entries, having the ability for a 48 hour turnaround on patient medical record requests, and maintaining a certain percentage of clinical lab tests in electronic format.  Other criteria will include checking public and private insurance eligibility electronically, submitting claims electronically, and maintaining active medications lists.

Where do you begin to become a “meaningful user”?  If you already have an EHR system in place, an assessment should be done to see if it means the requirement of “meaningful use,” using as many of the criteria that the CMS has published.  If you do not yet have any form of EHR system in your practice, physicians should immediately start their due diligence on competent vendors able to bring EHR systems to their practices (and that also comply with all HIPAA rules and regulations).  In working with any EHR vendors, practices may consider having language placed in vendor contracts to include a “meaningful use” standard to help insure compliance with the relevant standards.

Either way, it is prudent to stay informed of the final regulations that come out later this year.  There is no turning back the clock on the use of EHR – so you must either get with the program NOW, or risk getting further behind in the coming years.  Even if your practices’ record keeping has “always been done that way,” it’s time to move toward a reliable, certified EHR system while the government helps offset the capital investment needed to do so.