On Monday, CMS finalized a new Medicare payment model for hip and knee replacements that grants more flexibility in the use of telehealth services, AHA News reports (AHA News, 11/16).
Medicare will only reimburse for telehealth services under certain conditions. For example:
- Office visits and consultations must be provided using an interactive, two-way telecommunications system with real-time audio and video;
- The originating site (where the patient is) must be in a Health Professional Shortage Area or in a county that is outside of any Metropolitan Statistical Area; and
- The originating site must be a medical facility, not the patient’s home (Infantino, iHealthBeat, 9/21).
Details of Final Rule
In the final rule, CMS waives the geographic and originating site requirements that limit telehealth payments (AHA News, 11/16).
CMS wrote, “Any service on the list of Medicare approved telehealth services and reported on a claim” using an accurate ICD-10 code “could be furnished to a [joint replacement] beneficiary, regardless of the beneficiary’s geographic location.”
CMS wrote that waiving the requirements will “allow the greatest degree of efficiency and communication between providers and suppliers and beneficiaries by allowing beneficiaries to receive telehealth services at their home or place of residence” (CMS final rule, 11/16).
Overall, the final rule aims to encourage hospitals to improve quality and lower costs. Under the rule providers will receive one flat fee for the procedures instead of multiple payments for each individual service they provide related to the replacements.
Hospitals that meet certain benchmarks for quality and cost measures will receive a bonus payment. Starting in year two of the program, hospitals can be penalized for a portion of their spending above a set target (CMS fact sheet, 11/16).
Lawmakers have until Dec. 11 to pass an omnibus bill for fiscal 2016, and with extra money made possible by last month’s budget deal, HHS and the National Institutes of Health could see extra funding.
If they cannot get an omnibus passed, there could be another continuing resolution agreement to keep funding for a period of time. Otherwise, the government will shut down.
Analysts said lawmakers will add riders to the bill that will be the focus of negotiations and familiar disagreements and could impede a final agreement.
The budget deal raised the sequester caps by $80 billion in the next two fiscal years. For fiscal 2016, $50 billion of that is available and half will go to defense spending.
David Reich, senior policy consultant with the Center for Budget and Policy Priorities, said a shutdown is possible but an omnibus agreement is also not an unreasonable hope. A continuing resolution wouldn’t solve much.
“It’s a problem for agency operations to not know what their budget is well into the fiscal year,” he said.
Ellie Dehoney, vice president of policy for Research America, said a path to repealing the medical device tax, although it has received some bipartisan support, has not been forged.
It could be tied in with efforts to repeal the “Cadillac” tax on high-end health insurance plans but nothing concrete is in the works for that yet either, she said.
Reich said the extra money could go to departments throughout HHS, but lawmakers may get stuck on issues such as financing for the Affordable Care Act, some research agencies and Planned Parenthood.
The House appropriations bill calls for rescinding past funding of the ACA and eliminating most new spending. It would get rid of Title X family planning funds and also essentially eliminates the Agency for Healthcare Research and Quality and the Center for Medicare and Medicaid Innovation, he said.
Those provisions would be mostly unpalatable for Democrats and the White House, Reich said.
Dehoney said the NIH is likely to get more money than in previous years and it will probably not be earmarked but be used to bolster ongoing research.
“I think it will lift all boats,” she said
The original House Labor, Health and Human Services Funding Bill would allocate $71.3 billion to HHS, which is a slight increase from the year before but about $4 billion below the president’s budget request for the agency.
It would also give $31.2 billion to the NIH, $7 billion to the Centers for Disease Control and Prevention and $6 billion to the Health Resources and Services Administration. It would provide $3.3 billion for the CMS, which is nearly $1 million below the president’s request.
Dehoney said the budget deal has changed the game, however.
“They’re definitely renegotiating all of this because they have extra money,” she said.
In 2013, a government shutdown over implementation of the ACA stalled medical research and FDA drug approvals.
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, 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.
The CMS says doctors tending to tens of millions of chronically ill Medicare patients aren’t taking advantage of federal dollars aimed at improving chronic care and reducing hospital readmissions and overall costs.
This year, Medicare began paying an average of $42 per patient per month for non-face-to-face chronic-care management services, such as consulting with other doctors caring for the same patient who might be dealing with dementia, heart disease or arthritis.
The CMS estimates 70% of Medicare beneficiaries—roughly 35 million—would be eligible, but CMS has only received reimbursement requests for 100,000 beneficiaries thus far, Kathy Bryant, a senior technical adviser in the Center for Medicare, said last week at an Advisory Panel on Outreach and Education meeting. She added that even that number may be too high as some could be duplicate claims.
One possible reason for the low interest is that doctors have to get permission from patients who are responsible for a 20% copayment each time their provider bills for the services.
“Getting bills for things when they haven’t seen a doctor is not something they are used to,” Bryant said.
Others said the CMS didn’t provide enough information on how to properly bill under the codes.
“Physicians are leery about using them because they don’t know if they are doing so correctly,” said Regina Mixon Bates, founder and CEO of the Physicians Practice S.O.S. Group, a healthcare consulting and education firm. Another reason could be the lengthy process on electronic health-record systems.
“There is a concern all this documentation, along with their regular workload, is not worth it for the money they would receive,” said Diane Calmus, government affairs and policy manager at the National Rural Health Association. “It’s just too many hoops they would have to jump through.”
A study from the Stanford University School of Medicine last month looked at how much chronic-care management could affect the typical primary-care practice.
The study found substantial increases in annual revenue, as much as $77,295 in year one, could be gained if they used registered nurses to conduct annual wellness visits and used other staff to handle more frequent management.
And a study released Tuesday by Smartlink found that less than 20% of 300 physicians interviewed are currently participating in the program. The vast majority of physicians who are participating in the chronic-care management program believe it is improving patient care.
The CMS hopes to raise awareness and interest among providers and beneficiaries, Bryant said.
The APOE suggested targeting nurses and case workers, as they would be the ones who would likely be billing under the codes. The panel also suggested engaging consumers through social media.
Some industry stakeholders believe that could help.
The American Academy of Family Physicians is also performing outreach on the codes, and is highlighting members who have successfully billed under it, according to Dr. Robert Wergin, board chair of the group.
Dr. Andrew Gurman, president-elect of the American Medical Association. said his group is educating medical practices on chronic-care management services, which he calls a “game-changer,” because doctors will be getting reimbursed for services they already provide.
And therein lies another rub, expert say. Many doctors and practices will have to inform patients that the case management they were doing for free will now cost patients a co-pay.
“Some doctors said they were concerned that their patients would be unwilling to pay the cost-sharing,” said Dr. Peter Hollmann, a Pawtucket, R.I., internist and member of the American Geriatric Society Board.
However, he said the biggest likely reason for the slow uptick is that this code is still relatively new.
“There is an expected delay in uptake of new codes, especially when the rules are complicated. This requires that a practice use an electronic record, get patient consent to bill, and have a written care plan in place. Then the practice needs to track the time in a calendar month. None of this is part of a practice routine and Medicare only has data on early months,” Hollmann said.
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.
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