Washington Report – May, 2015

(Covers activity between 5/1/15 and 5/31/15) Bill Finerfrock, Matt Reiter, Nathan Baugh, Lasanthi Fernando and Carolyn Bounds

House Committee Advances 21st Century Cures Bill

White House Moves to Fix Two Key Consumer Complaints about the ACA

HCPLAN Moving Forward

HBMA Conducting ACA Survey – Your Input Needed!

Data from a variety of sources reveal strengths and weaknesses of quality based payments

OIG Releases Review of MAC Information Security for FY 2013

King v Burwell Decision Expected by End of June

GAO: Greater Accuracy Needed for Physician Work Component of Relative Value Units

EHR Developers Must Disclose User Costs Under ONC Certification Rule

DeSalvo to leave ONC if confirmed for new HHS post

Small Percentage of Medicaid Enrollees Account for Most Spending

OIG Examines Medicare Place of Service Coding Errors

CMS Making Changes to Computer System Access

Healthcare Cyberattacks becoming increasingly common

CMS Transmittals

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House Committee Advances 21st Century Cures Bill

On May 21st, the House Energy and Commerce Committee unanimously approved H.R. 6, the

21st Century Cures Act. The 21

st Century Cures Act is an initiative carried over from the

previous Congress. This is the first major health policy legislation considered by either chamber

since the passage of the permanent SGR repeal and replace bill earlier this year. The SGR bill

had consumed much of the oxygen in the health care space for the past several years and now

that it has been passed, stakeholders have been pushing to get other health care issues up for

consideration. The 21st Century Cures Act is the first of many health bills that could come up for

debate and consideration over the next few months.

The bill has two major provisions, first a significant increase in funding to the National Institutes

of Health for new research priorities and second, to streamline the Food and Drug

Administration‟s regulatory approval processes. However, the bill also includes many less-

publicized yet equally important operational health policy provisions including language to

improve electronic health record interoperability.

One of the main operational provisions is language that attempts to increase transparency for

local coverage determinations (LCD) made by Medicare Administrative Contractors (MAC).

The language would require MACs to post LCDs, in their entirety, online with explanations for

their rationale, the evidence considered, and responses to comments regarding the LCDs.

The bill also seeks to foster greater transparency for Medicare payments that vary depending

upon the site-of-service. Beginning in 2017, the bill requires HHS to create and annually update

a public website that displays estimates for the appropriate number of items and services,

anticipated costs to the Federal government, and estimated costs to the beneficiary for services

provided in both hospital outpatient departments and ambulatory surgical centers. The idea is

that if patients can compare prices, patients may gravitate to the less-costly site.

Another key provision in the 21st Century Cures bill receiving a lot of attention in the media is

language that defines interoperability with the intent of providing clarity to stakeholders. Under

the new definition, EHRs must have the ability to securely transfer the entirety of a patient‟s data

between all qualified EHRs; grant health professionals and other authorized users complete

access to EHR health data; and, bans information blocking practices. Finally, the bill requires

EHRs certified after January 1, 2018 to be both interoperable as well as to be able to support

third party software programs via an application programing interface (API).

Health professionals and hospitals would be able to qualify for a hardship exemption from

penalties under the EHR meaningful use incentive program if their EHR is decertified as a result

of this provision. This section adds a new $10 million federal standards advisory body to the

existing standards advisory board structure that would make recommendations on how to

improve interoperability.

As with most major pieces of legislation, the main obstacle to overcome on the pathway towards

Committee approval was how to pay for these reforms. The Committee-approved bill offsets the

entirety of the roughly $13 billion price tag for the bill through a variety of different means.

Most of the funding to pay for these reforms will come from selling oil from the strategic

petroleum reserve and making some relatively minor changes to Medicare Part D payments.

However, the committee also identified roughly $200 million in savings by reducing payments to

“outdated” traditional film X-ray imaging. Officially, the rationale behind this reduction was to

facilitate a transition to digital radiography. However an equally plausible explanation is that the

money being saved will be used to pay for another provision in the bill that rescinds, beginning

January 1, 2016, the multiple procedure payment reduction (MPPR) CMS has applied to the

professional component of certain imaging services since 2012.

Specific payment reforms in the bill affecting the Medicare Physician Fee Schedule:

Beginning in 2017, the bill reduces payments for the technical component of X-rays taken

using film by 20%

From 2018-2022, the bill reduces payments for the technical component of X-rays taken

using computed radiography technology by 7%

o Beginning in 2023, the bill increases the reduction in payments for the technical

component of X-rays taken using computed radiography technology to 10%

Under the Physician Fee Schedule, the bill instructs HHS to conduct an empirical analysis to

study and identify potential efficiencies within the Resource-Based Relative Value Scale

(RBRVS). Beginning in 2016, the bill eliminates multiple procedure payment reduction to

the professional component of imaging services until this study is completed.

Passage of the 21st Century Cures Act by the Energy and Commerce committee is an important

accomplishment but the legislation still has a long way to go before becoming law. The bill must

now go before another Committee, the House Ways and Means Committee before it can go

before the entire House of Representatives for consideration. The House hopes to vote on the bill

this summer. The Senate does not plan to take up its version of the bill until after the summer.

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White House Moves to Fix Two Key Consumer Complaints about the ACA

Two prominent complaints by patients since the ACA became effective have been inaccurate

provider directories and higher than expected out-of-pocket costs (premiums, copays and

deductibles) for the plans sold on the Health Insurance Exchanges.

In early May, federal health officials announced that beginning in 2016, they will require

Qualified Health Plans (QHPs) sold on the Exchange to update and correct their provider

directories at least once a month. Furthermore, plans sold on the Exchanges for the 2016 Plan

Year, will be required to provide an out-of-pocket cost calculator so individuals can have a better

sense of anticipated out-of-pocket expenses when selecting one plan compared to another.

Inaccurate or outdated provider/health professional directories are not unique to the Exchange

market, they exist for Medicare Advantage and Medicaid Managed Care plans as well. To

address Medicare directories, federal rules will require insurers to update their Medicare

directories each month, “with specific notations to highlight those providers who are closed or

not accepting new patients.”

Accurate provider/health professional directories are important because after premium cost, the

single most important factor in a consumer choosing one plan over another is the provider

network. Is “my” hospital or “my” physician in the plan‟s network is the typical question asked

by most consumers when trying to determine whether a Health Plans network is “adequate”.

Equally important, if a patient has coverage for a service but cannot get access to that service due

to inaccurate provider/health professional information, the patient faces unnecessary and

avoidable burdens when trying to obtain that service. Moreover, going outside the insurer

network typically imposes additional costs on the consumer that he or she might not have

expected because they believed the provider/health professional to be in-network.

The new Qualified Health Plan requirements are consistent with earlier efforts by the Obama

administration to mandate that insurers publish information on:

Health Professionals who are accepting new patients,

Physician specialty and medical group affiliation; and,

Up-to-date contact information

Insurers must also provide the data in a format that facilitates the creation of a consumers‟ check

to help consumers identify health plans their doctors participate in. Failure to comply will be met

with financial penalties.

The calculator mandated under this new policy will take into account the QHPs premiums,

subsidies, co-payments, deductibles and other out-of-pocket costs, as well as a person‟s age and

medical needs (including expected medical procedures such as childbirth).

Federal officials said that they might link HealthCare.gov to an out-of-pocket cost calculator

later this year.

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HCPLAN Moving Forward

Earlier this year, the Secretary of Health and Human Services (HHS) announced the formation of

the Health Care Payment Learning and Action Network (HCPLAN) as a means of advancing

reforms of our nation‟s healthcare delivery system.

The purpose of the group, according to Secretary Burwell, was to “help achieve better care,

smarter spending, and healthier people.” Through the HCPLAN, the Department of Health and

Human Services (HHS) will work in concert with the private, public, and non-profit sectors of

healthcare to “transform the nation‟s health system to emphasize value over volume.”

The HCPLAN is intended to bring together private payers, providers, employers, state partners,

consumer groups, individual consumers, and others to accelerate the transition to alternative

payment models.

The Health Care Payment Learning and Action Network will:

Serve as a convening body to facilitate joint implementation of new models of payment and

care delivery,

Identify areas of agreement around movement toward alternative payment models and how

best to analyze data and report on these new payment models,

Collaborate to generate evidence, share approaches, and remove barriers,

Develop common approaches to core issues such as beneficiary attribution, financial

models, benchmarking, quality and performance measurement, risk adjustment, and other

topics raised for discussion, and

Create implementation guides for payers, purchasers, providers, and consumers.

Because the HCPLAN is open to anyone, the size of the group can be unwieldy. At the

inaugural meeting of the HCPLAN, more than 2,000 individuals signed up to receive

information and over 100 people were invited to attend the inaugural meeting. It was decided

that HHS (working with a contractor) would appoint a “Guiding Committee” that would help

direct the work of the HCPLAN.

In early May, the individuals selected to serve on the Guiding Committee were announced and

on May 27th

, the MITRE Corporation (the HCPLAN contractor), convened the first meeting of

the Guiding Committee.

According to HHS, the 24 Guiding Committee members are “influential leaders in their fields.”

They represent health plans, purchasers/employers, providers, consumers/patients, and state,

regional, and federal representatives.

The Guiding Committee will begin its work by identifying priorities of the Health Care Payment

Learning and Action Network to provide practical assistance to the field that are achievable in

the next year and laying out a strategy for aligning members and achieving the Network‟s goals.

Co-Chair

Mark McClellan, MD, PhD

Senior Fellow and Director,

Health Care Innovation and Value Initiative

The Brookings Institution

Co-Chair

Mark D. Smith, MD, MBA

University of California, San Francisco

Previously President and Chief Executive

Officer California HealthCare Foundation

Reid Blackwelder, MD, FAAFP

Chair, American Academy of Family

Physicians Board of Directors

Patrick Courneya, MD

Executive Vice President

Kaiser Foundation Hospitals and Health Plan

William Golden, MD

Medical Director

Arkansas Medicaid

Charles Fazio, MD, MS

Senior Vice President and Medical Director

HealthPartners, Inc.

David Lansky, PhD

President and Chief Executive Officer

Pacific Business Group on Health

Michael Hales, MS

Deputy Director

Utah Department of Health

Nancy LeaMond, MA

Chief Advocacy & Engagement Officer

AARP, Inc.

Wright L. Lassiter, III, MA

President

Henry Ford Health System, Inc.

Elizabeth Mitchell

President and CEO

Network of Reg. Healthcare Improvement

Debra Ness, MS

President

National Partnership for Women and Families

Stephen L. Ondra, MD

Senior Vice President Health Care Service

Corporation

Samuel R. Nussbaum, MD

Executive Vice President

Anthem, Inc.

Lewis Sandy, MD, MBA

Senior Vice President

UnitedHealth Group

Frank Opelka, MD

Executive Vice President,

Louisiana State University Health System

Patrick Conway, MD, MSc

Deputy Administrator, Innovation and

Quality and Chief Medical Officer

Centers for Medicare & Medicaid Services

Angelo Sinopoli, MD

Vice President

Greenville Health System

Thomas Buckingham, BSN, MBA

Executive Vice President

Select Medical

Antonios (Tony) Clapsis, MA

Vice President

Caesars Entertainment Corporation

Carmella Bocchino, RN, MBA

Executive Vice President

America‟s Health Insurance Plans

Ann Boynton, MS

Deputy Executive Officer

CalPERS

Alan Balch, PhD

Chief Executive Officer

Patient Advocate Foundation

Roy Beveridge, MD

Senior Vice President

Humana

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HBMA Conducting ACA Survey – Your Input Needed!

The Patient Protection and Affordable Care Act (ACA) has been in place for a little more than a

year and its impact is being felt throughout the healthcare community. The ACA‟s impact has

been significant for everyone, including billing companies. As healthcare industry professionals

and business owners, you have a unique insight and perspective on the widespread impact of the

ACA.

The HBMA Publications Committee has created a survey that seeks to find out how the ACA has

affected the HBMA membership. The committee will publish key findings from this survey in a

future issue of Billing. HBMA intends to use the results from this survey to help educate one

another but also help educate elected officials and federal regulators about the impact of the

ACA on medical billing/practice management companies. Through this educational process, we

hope to help all make better, more informed decisions.

Act Now!

This survey will only be beneficial if we hear from all of you. Please take the time to complete

the survey so we can have the benefit of your insight and perspective.

The survey takes about 10 minutes to complete. Click on the following link to complete the

survey: https://www.surveymonkey.com/s/5JFPQT5

Please note that your responses to the survey are anonymous, and the committee will only

publish aggregate results of the survey.

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Data from a variety of sources reveal strengths and weaknesses of quality based payments

A report by Catalyst for Payment Reform (CPR), a nonprofit coalition of employer and health

care purchasers, found that 58% of Medicare payments to providers (hospitals, physicians,

skilled nursing facilities, DME, home health, etc.) went toward the traditional fee-for-service

model. Accordingly, 42% of the payments to providers were linked with efforts to boost the

value of patient care. The quality-based figure is in-line with the HHS‟s goal of 50% for value by

2018. Moreover, it is comparable to the commercial market in which 40% of every dollar was

flowing to a value-oriented program.

Of the 42% of payments made to improve quality (adjusted for overlap and double counting),

32.8% of the payments went toward the Hospital Value-Based Purchasing and End-Stage Renal

Disease Quality Incentives programs, 11.8% went to the Medicare Shared Savings Program and

1.9% went toward CMS Innovation Center‟s Pioneer ACO Model.

CMS also released data on their Pioneer ACO model. The Pioneer ACO model serves 600,000

people and is a shared savings payment policy with higher levels of shared savings and risks than

the Medicare Shared Savings Program. Hospitals and doctors are asked to closely monitor their

sickest patients and better coordinate their care to reduce wasteful spending.

Instead of the fee-for-service payment model in which there is a charge for every service, the

Pioneer ACO model imposes a fixed monthly stipend for individual patients (i.e. capitation).

Under the Pioneer ACO Model, providers can earn additional Medicare payments if they achieve

savings for Medicare and meet quality performance targets, but are penalized for poor

performance by having CMS recoup a percentage of payments if the ACOs spending is higher

than expected.

CMS reported that the Pioneer ACO program saved $384 million over the course of 2 years:

$279.7 million the first year and $104.5 million the second year. Though less was saved in the

second year, HHS reported that quality scores were higher in the second year. Additionally, there

were 32 Pioneer ACO participants in the first year but only 23 Pioneer ACO participants in the

second year. Nine participants dropped out because they could not thrive under the shared

savings framework.

Despite these less than robust numbers and declining savings in the second year of the program,

the Office of the Actuary at CMS concluded that the Pioneer ACO program has met the

Affordable Care Act's criteria to be expanded to a larger number of Medicare beneficiaries.

In a separate but related analysis, the Government Accountability Office (GAO) found that fewer

than half of the ACOs earned shared savings in 2012 and in 2013, although overall the Pioneer

ACO Model produced net shared savings in each year. Specifically,

Forty-one percent of the ACOs produced $139 million in total shared savings in 2012,

and 48 percent produced $121 million in total shared savings in 2013.

In 2012 and 2013 CMS paid ACOs $77 million and $68 million, respectively, for their

shared savings.

The Pioneer ACO Model produced net shared savings of $134 million in 2012 and $99

million in 2013.

It is not clear how or why the savings reported by the GAO were substantially different from the

savings found by CMS.

Additionally, CMS has begun investigating complaints made by both beneficiaries and providers

regarding the program. At the forefront are three complaints:

1) An ACO was placing limits on home health providers;

2) An ACO stinted on care and provided inadequate medical care; and,

3) An ACO pressured a SNF to participate in the ACO.

With regard to the first complaint, after the ACO demonstrated that it had procedures to avoid

restricting access to home health providers, CMS concluded that the complaint was

unsubstantiated. With regard to the second and third complaints, CMS is currently conducting

investigations.

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OIG Releases Review of MAC Information Security for FY 2013

The Department of Health and Human Services (HHS) Office of Inspector General (OIG)

produces an annual analysis and report evaluating the information technology security program

for each Medicare Administrative Contractor (MAC). These reviews were performed by

PricewaterhouseCoopers (PwC), and further analyzed by HHS in the OIG Report. These

information security requirements were established by the Medicare Prescription Drug,

Improvement, and Modernization Act of 2003.

HHS recently released the report examining Fiscal Year 2013 data and found that overall,

information security was adequate among the MAC program. The number of security issues

across MACs fell by 19% in FY 2013 however the audit still identified 119 security gaps across

all nine MACs. Additionally, 34% of the audit‟s findings were deemed “high-risk”, some of

which were repeat findings from FY 2012. “Gaps” were defined as instances where MACs failed

to implement federal security requirements, such as periodic risk assessments, system security

plans and security training.

The evaluations were required to address eight major requirements:

1. Periodic risk assessments;

2. Policies and procedures to reduce risk;

3. System security plans;

4. Security awareness training;

5. Periodic testing of information security controls;

6. Remedial actions;

7. Incident detection, reporting, and response; and

8. Continuity of operations for information technology (IT) systems.

The report notes that the most common security gap involved inadequate periodic testing of

information security controls as well as a lack of procedures to reduce security risks. The audits

included Medicare claims processing systems hosted at the Medicare data centers, which are

used for front-end claims processing as well as back-end issuing of payments after claims have

been adjudicated.

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King v Burwell Decision Expected by End of June

The US Supreme Court is expected to announce by the end of June its decision on whether or not

federal subsidies for health insurance purchased via the federal health insurance exchange are

allowed under the Affordable Care Act (ACA).

In March, the US Supreme Court heard oral arguments on King v Burwell, a case which

challenges the IRS‟ interpretation of the ACA on whether or not the law limits federal subsidies

for individuals purchasing insurance to only state-run exchanges or if subsidies are also allowed

for the purchasing of health insurance via the federal exchange. The ACA allows for states to set

up and run their own health insurance exchanges. If a state chooses not to operate the exchange,

the federal government will set up and run the exchange for that state (www.healthcare.gov).

Under the ACA, depending on income level, certain individuals qualify for federal subsidies to

make health insurance more affordable. The King v. Burwell case focuses on language in the law

stating that these subsidies are available for exchanges “established by the state.”

The Supreme Court must decide whether or not the IRS must follow the strict letter of the law or

if the legislation can be interpreted to allow for subsidies to be available for purchasers on either

type of exchange. This decision could mean that millions of individuals who purchased insurance

in a state that uses the federal exchange (the vast majority of purchasers) can no longer receive

financial assistance from the federal government to purchase health insurance.

If the court invalidates the federal subsidies, they could be restored with a legislative fix but the

political environment in 2015 is significantly different from the political environment that

existed in 2010 when the ACA was signed into law. Today, both the House and Senate are

controlled by the GOP whereas in 2010, the House and Senate were under the control of the

Democratic Party.

Republicans would likely try to use the ruling as an opportunity to make significant changes to

the law. Though there is no unified Republican alternative, it is widely assumed that Republicans

would attempt to repeal the individual and employer mandate as well as give states more power

to set standards on the way insurance is purchased and the types of plans sold in their state. The

GOP controlled Congress would likely pass a short-term fix to preserve subsidies for all

purchasers for some period of time (a one-year extension seems most likely). Then, during this

short-term fix grace period, figure out how to pass the reforms they want. Of course, the Court

could uphold the subsidies for insurance purchased on both types of exchanges in which case, no

changes would be made.

The Supreme Court does not issue any public notice on when a specific decision will be released.

However, it is expected that they will issue a decision by the end of June. The Court generally

saves high profile decisions, such as this, until the very end of the term.

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GAO: Greater Accuracy Needed for Physician Work Component of Relative Value Units

The Government Accountability Office (GAO) issued a report urging the Centers for Medicare

and Medicaid Services (CMS) to improve the process for determining the value of physician

work under the Resource Based Relative Value Based payment system used to determine

Medicare physician fee schedule payments.

CMS relies on the American Medical Association/Specialty Society Relative Value Scale Update

Committee (RUC) to make recommendations on how to value each medical service covered by

the Medicare program. The RUC sets Relative Value Scale Units (RVUs) for each service which

are then multiplied by conversion factor (CF) that is set in the annual Medicare Physician Fee

Schedule. The relative value units are comprised of three components: Physician Work, Practice

Expense (overhead) and Malpractice. The RUC factors these three components into each medical

service to determine how many RVUs a service is worth.

The (RVU) times (CF) equation determines the monetary value of each medical service.

In this report, GAO focuses on the process by which the Physician Work component is

determined and highlights a concern of overinflated Physician Work values. The Protecting

Access to Medicare Act of 2014 (the 2014 one-year SGR Patch) included a provision for GAO to

study the RUC's process for developing relative value recommendations for CMS.

GAO evaluated

(1) the RUC's process for recommending relative values for CMS to consider when

setting Medicare payment rates; and

(2) CMS's process for establishing relative values, including how it uses RUC

recommendations.

In preparing this report, the GAO staff reviewed RUC and CMS documents and applicable

statutes and internal control standards. The staff analyzed RUC and CMS data for payment years

2011 through 2015 and interviewed RUC staff and CMS officials.

The GAO Report found that the RUC‟s process for regularly reviewing work values is flawed

and in need of improvement. The RUC relies on surveys of physicians by specialty who have, in

the GAO‟s opinion, an inherent conflict of interest to overinflate values. Additionally, the RUC

surveys had low response rates, low total number of responses and large ranges in responses – all

of which are detrimental to survey accuracy. For example, while GAO found that the median

number of responses to surveys for payment year 2015 was 52, the median response rate was

only 2.2%, and 23 of the 231 surveys had under 30 respondents.

The GAO Report also takes issue with CMS‟ internal process for reviewing RUC

recommendations.

CMS is required to review all Medicare service RVUs every five years, however it does not keep

a database to track when a service was last valued or have a standardized process for prioritizing

its reviews. GAO does not consider CMS's process fully transparent because the agency does not

publish the potentially misvalued services that are required to be identified by the RUC, and thus

stakeholders are unaware that these services will be reviewed and payment rates for these

services may change. CMS also does not publish information on the methods it uses to review

specific RUC recommendations. The GAO report also points out that CMS accepts the majority

of the RUC‟s recommendations but participation by other stakeholders is limited.

While highlighting weaknesses of the RUC process, the report‟s recommendations focus on

action that can be taken by CMS, not the RUC. The report recommends that CMS improve

documentation and publication of its processes for reviewing RUC recommendations and

potentially misvalued services identified by the RUC. It also recommends that CMS should

develop a plan for using funds appropriated for the collection and use of information on

physicians' services in the determination of relative values.

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EHR Developers Must Disclose User Costs Under ONC Certification Rule

EHR vendors often impose expensive fees for data exchange and restrict their customers from

disclosing costs or contract details. These additional fees make it difficult to determine the actual

cost of adopting an EHR system to meet meaningful use program requirements.

In order to promote price transparency, the Office of the National Coordinator (ONC) for Health

IT's has proposed a certification rule that would require developers of EHRs to disclose all the

costs associated with implementing their system. The costs include performance costs associated

with tasks the system was certified to perform. For example, if the system is certified to encrypt

data but the encryption requires additional costs, those additional costs must be disclosed.

Organizations that have been empowered to certify EHRs will collect data from vendors to make

it available on the ONC‟s online database of certified EHR systems known as the Certified

Health IT Product List (CHPL). The goal of this database is to 1) make public information

regarding vendors, their products, and costs, and 2) clarify hidden/unclear costs and

complications of using EHRs. As a consequence of the information being made available, the

database should promote market competition. The database will be accessible to current and

prospective customers.

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DeSalvo to leave ONC if confirmed for new HHS post

The White House has nominated Dr. Karen DeSalvo to be Assistant Secretary for Health at the

Department of Health and Human Services (HHS). If confirmed by the Senate, DeSalvo would

leave her post as head of the Department's Office of the National Coordinator for Health

Information Technology (ONC).

DeSalvo, 49, was appointed to lead the ONC in 2013 shortly after the abrupt departure of former

ONC head, Dr. Farzad Mostashari, MD. Last year, DeSalvo was appointed “acting” Assistant

Secretary for Health (ASH) and tasked with helping the Obama Administration manage the

department's Ebola response. At the time, it was expected – and widely reported – that DeSalvo

would take the ASH position on a permanent basis and give up her ONC appointment. However,

that speculation was briefly put to rest when it was announced that DeSalvo would wear both

hats – ONC Coordinator and ASH – simultaneously.

Now, it appears that DeSalvo has decided doing both jobs is not ideal and has opted to serve

exclusively as the Assistant Secretary for Health

Prior to accepting the ONC position, DeSalvo was the Health Commissioner for the city of New

Orleans, where she was credited with deploying health information technology in innovative

ways to improve public health.

In fact, DeSalvo‟s experience implementing electronic health records (EHRs) in clinical settings

was a highly valued skill and it is hoped that her successor at ONC will have a similar level of

experience with Health IT implementation. ONC‟s Health Information Technology (HIT)

community was leading an EHR certification program (see previous story) that would provide a

seal of approval for EHR systems that allow providers to fulfill the government‟s requirements

for meaningfully using health IT.

Though the ONC first cited chief operating officer Lisa Lewis to be DeSalvo‟s successor,

objections by stakeholders leaves the position open. If history is any indication, many suspect the

successor will likely have a medical background.

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Small Percentage of Medicaid Enrollees Account for Most Spending

According to a new report by the Government Accountability Office (GAO) a small fraction of

Medicaid enrollees disproportionally account for a large fraction of spending. Although the

report itself is new, the information in the report is consistent with prior reports drawing the

same conclusion.

In each fiscal year from 2009 through 2011, the most expensive 5% of Medicaid-only enrollees

account for almost 50% of the expenditures. By contrast, the least expensive 50% of Medicaid-

only enrollees accounted for less than 8% of the expenditures. About 12% percent of enrollees

had no expenditures.

Though children make up the largest group of Medicaid-only enrollees (50%), they only

accounted for 16% of the high-expenditure group. By contrast, individuals enrolled in Medicaid

due to a disability make up less than 10% of Medicaid-only enrollees but represent 64% of the

high-expenditure group.

The report did not make any recommendations.

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OIG Examines Medicare Place of Service Coding Errors

In a report issued this month by the Department of Health and Human Services (HHS) Office of

Inspector General, place-of-service coding (POS) errors were found to have accounted for $33.4

million in potential Medicare Part B overpayments to physicians between January 2010 and

September 2012.

POS categories are intended to ensure that physician reimbursements reflect the overhead

required to operate the facility in which the service was provided. Medicare reimbursement for

“physician services” are generally higher when services are performed in the physician‟s office

because the payment assumes the physician is incurring the overhead costs directly.

When a service is provided in a facility location Medicare reimburses the physician for the

“physician service” only and excludes the portion of the payment that would have been attributed

to “overhead”. Instead, Medicare makes a separate payment to the facility to cover the facility‟s

overhead expense. Physicians are required to identify the place of service correctly on the claim

forms that they submit to Medicare Administrative Contractors (MACs). The correct POS code

ensures that Medicare correctly reimburses the entity that incurs the overhead portion of the

service.

Specifically, the report identifies “non-facility” location codes (typically the physician‟s office)

being used when the service was actually performed at a hospital, ambulatory surgical center

(ASC) or other facility. The report indicates that these coding errors were mistakes rather than a

fraudulent billing practice, likely resulting from confusion among billers and coders regarding

the various POS categories. The report also cited the MACs for not conducting enough post-

payment reviews to find these coding errors.

The $33.4 million in potential overpayments consisted of:

$7.3 million in potential overpayments for incorrect non-facility place-of-service billing

for services performed in ASCs;

$7.1 million in incorrect non-facility place-of-service billing for services performed in

hospital outpatient locations (87 physicians agreed that some claims had been coded

incorrectly and agreed to refund the overpayments);

$800,000 in potential overpayments for the services of 33 judgmentally selected

physicians who stated they were not responsible for the incorrect billing, who did not

agree that some claims had been coded incorrectly, or who did not respond to our

inquiries; and

$18.2 million in potential overpayments for the services of the remaining unselected

hospital outpatient location-based claims.

OIG recommends that the Centers for Medicare and Medicaid Services (CMS) recover all of the

overpayments such as the $7.3 million identified in potential overpayments for services

performed in ASCs and continue to monitor physicians who have admitted to incorrect POS

coding. It also advises CMS to continue to educate physicians and billing personnel on correct

POS coding practices.

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CMS Making Changes to Computer System Access

Effective July 13, 2015, CMS is retiring the Individuals Authorized Access to CMS Computer

Services (IACS) system for obtaining a user ID to access many online CMS applications,

including some for the Physician Quality Reporting System (PQRS). All existing IACS accounts

will be automatically transitioned to another existing CMS system called Enterprise Identity

Management (EIDM).

Existing PQRS IACS users, their data, and roles will be moved to EIDM and will be accessible

from the „PQRS Portal‟ portion of the CMS Enterprise Portal at http://portal.cms.gov. Users will

then access the PQRS Portal to submit data, retrieve submission reports, view feedback reports,

or conduct various administrative and maintenance activities.

New PQRS users will need to register for an EIDM account.

CMS is urging providers with IACS accounts to log in and make sure that it is active and up to

date in order to facilitate a smooth, automatic transition to EIDM.

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Healthcare Cyberattacks becoming increasingly common

In a May 7, 2015 article produced by Bloomberg news, Rising Cyber Attacks Costing Health

System $6 Billion Annually, cyberattacks were reported to have cost the U.S. health-care system

$6 billion a year and compromised the health records of 88.4 million people. Just days after the

Bloomberg report, CareFirst which serves Maryland, the District of Columbia and portions of

Virginia, reported a cyberattack that occurred in June 2014.

According to the Bloomberg article, the frequency of attacks has doubled in the past 5 years. In

fact, almost 90% of health-care providers had some sort of cyberattack in the past 2 years.

According to security experts, the regularity in which these attacks happen does not come as a

surprise as half of the health-care organizations surveyed by Ponemon (an IT security firm) said

they didn‟t have sufficient technology or technical expertise to prevent or quickly detect a

breach.

The recently announced CareFirst cyberattack compromised information from about 1.1 million

current and former policyholders. The attack was on a database that had information on

members‟ names, usernames, birth dates, e-mail addresses and subscriber identification number.

The attack was discovered by a CareFirst security contractor - Mandiant – a leading

cybersecurity firm.

The database that was hacked did not include passwords used to access insurance information; as

such, Social Security numbers, medical claims, employment, credit card and financial

information were not compromised in the attack. Regardless, affected members received a letter

from CareFirst instructing them to create new usernames and passwords. To ameliorate the

effects of the attack, CareFirst will provide affected members with free credit monitoring

services for two years.

Though CareFirst‟s cyberattack did not compromise SSN, medical claims, or credit or financial

information, previous cyberattacks have sold those credentials on the dark web for 20 times the

price of a stolen credit-card number (transacted in Bitcoin). Once the information has been

seized, it can be used for a variety of reasons from taking out a loan, to opening a line of credit

and to obtain free medical care.

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CMS Transmittals

Centers for Medicare & Medicaid Services uses transmittals to communicate new or changed

policies or procedures that will be incorporated into the CMS Online Manual System. The cover

or transmittal page summarizes and specifies the changes.

Transmittal

Number Subject

Effective

Date

R3272CP Claim Status Category and Claim Status Codes Update 2015-10-05

R3276CP

Instructions for Downloading the Medicare ZIP Code File

for October 2015 2015-10-05

R3277CP

July Quarterly Update for 2015 Durable Medical Equipment,

Prosthetics, Orthotics and Supplies (DMEPOS) Fee

Schedule

2015-07-06

R3268CP Corrections to the 2015 Home Health (HH) Pricer Program 2015-10-05

R3271CP Common Edits and Enhancements Modules (CEM) Code 2015-10-05

Transmittal

Number Subject

Effective

Date

Set Update

R3269CP

Quarterly Update of HCPCS Codes Used for Home Health

Consolidated Billing Enforcement 2015-10-05

R3275CP

Quarterly Update to the Correct Coding Initiative (CCI)

Edits, Version 21.3, Effective October 1, 2015 2015-10-05

R3270CP

Implement Operating Rules - Phase III ERA EFT: CORE

360 Uniform Use of Claim Adjustment Reason Codes

(CARC) and Remittance Advice Remark Codes (RARC)

Rule - Update from CAQH CORE

2015-10-05

R140SOMA

Revisions to Appendix C-Survey Procedures and

Interpretive Guidelines for Laboratories and Laboratory

Services

2015-05-29

R182NCD NCD20.30 Microvolt T-wave Alternans (MTWA) 2015-06-23

R3265CP NCD20.30 Microvolt T-wave Alternans (MTWA) 2015-06-23

R3267CP New Waived Tests 2015-07-06

R3264CP

July 2015 Integrated Outpatient Code Editor (I/OCE)

Specifications Version 16.2 2015-07-06

R1507OTN

HIGLAS Release 12 (R12) Upgrade and Organizational

Transitions for A/B MACs - R12 Upgrade 2015-09-30

R3263CP

Inpatient Prospective Payment System (IPPS) Hospital

Extensions per the Medicare Access and CHIP

Reauthorization Act of 2015

2015-07-06

R595PI

Comprehensive Error Rate Testing (CERT) Program

Treatment of Power Mobility Device (PMD) and Repetitive

Scheduled Non-Emergent Ambulance Transport Claims in

the Prior Authorization Model

2015-06-23

R1505OTN

Analysis for Inserting a Pre-printed Sheet of Paper in

Medicare Summary Notice (MSN) Envelopes 2015-06-23

R1504OTN

ICD-10 Conversion/Coding Infrastructure Revisions/ICD-9

Updates to National Coverage Determinations (NCDs)--2nd

Maintenance CR

2015-06-22

R1502OTN

Analysis - Procedures for Undeliverable Medicare Summary

Notices (MSNs) 2015-10-05

R3257CP

July Quarterly Update for 2015 Durable Medical Equipment,

Prosthetics, Orthotics and Supplies (DMEPOS) Fee

Schedule

2015-07-06

R3259CP

Quarterly Update to the Medicare Physician Fee Schedule

Database (MPFSDB) - July CY 2015 Update 2015-07-06

R3258CP

July 2015 Quarterly Average Sales Price (ASP) Medicare

Part B Drug Pricing Files and Revisions to Prior Quarterly

Pricing Files

2015-07-06

Transmittal

Number Subject

Effective

Date

R1503OTN

Health Insurance Portability and Accountability Act

(HIPAA) EDI Front End Updates for July 2015 2015-07-06

R3262CP

Manual Update to Pub. 100-04, Chapter 1, to include Claims

Submitted by Multiple DMEPOS Suppliers 2015-07-06

R592PI

Update of Provider Enrollment Instructions in Chapter 15 of

Pub. 100-08 2015-06-08

R118DEMO

Updates to the Model 4 Bundled Payments for Care

Improvement (BPCI) Initiative to Clarify the Payment

Calculation to Include New Technology Add-On Payments,

Validate Only Claims with Medicare as Primary Payer,

Allowing Medical Necessity Denial Claims to Process

Effectively, and Correct Processing of Claims Submitted as

Model 4 for Beneficiaries Determined to be Ineligible.

2015-10-05

R1499OTN

Section 504: Implement National Medicare Summary

Notices (MSNs) in Alternate Formats 2015-10-05

R1496OTN

Modification to Telehealth Originating Site Facility Fee

Billing Requirements for Rural Health Clinics (RHCs) and

Federally Qualified Health Centers (FQHCs)

2015-10-05

R1498OTN

Modifications to the National Coordination of Benefits

Agreement (COBA) Crossover Process N/A

R1497OTN

Health Insurance Portability and Accountability Act

(HIPAA) EDI Front End Updates for October 2015 2015-10-01

R1500OTN

IDR Shared Systems Daily Claims Feeds Expansion to

Accommodate Medical Review Data Elements 2015-10-01

R3254CP

Quarterly Healthcare Common Procedure Coding System

(HCPCS) Drug/Biological Code Changes - July 2015

Update

2015-07-06

R3255CP

Correction to the Multi-Carrier System (MCS) Editing on

the Service Location National Provider Identifier (NPI)

Reported for Anti-Markup and Reference Laboratory Claims

2015-10-05

R469PR1

Provider Reimbursement Manual Part 1, Chapter 14,

Reasonable Cost of Therapy and Other Services Furnished

by Outside Suppliers

NA

R209BP

Updates on Hospice Election Form, Revocation, and

Attending Physician 2015-05-04

R3256CP

Quarterly Update for the Durable Medical Equipment,

Prosthetics, Orthotics and Supplies (DMEPOS) Competitive

Bidding Program (CBP) - July 2015

2015-07-06

R44QR1

Payments to Inpatient Rehabilitation Facilities That Do Not

Submit Required Quality Data 2015-08-11

R591PI Revisions to Surety Bond Collection Policies 2015-06-08

Transmittal

Number Subject

Effective

Date

R1492OTN

Health Insurance Portability and Accountability Act

(HIPAA) EDI Front End Updates for July 2015 2015-07-06

R468PR1

Provider Reimbursement Manual Part 1, Chapter 9,

Compensation of Owners N/A

R117DEMO

Affordable Care Act Bundled Payments for Care

Improvement Initiative - Recurring File Updates Models 2

and 4 July 2015 Updates

2015-07-06

R19QIO

QIO Manual Chapter 1 – “Background, Eligibility and

Responsibilities” 2015-05-01

R42QRI

Payments to Long Term Care Hospitals that Do Not Submit

Required Quality Data 2015-09-02

R1489OTN Analysis and Design for Part B Detail Line Expansion 2015-10-05

R1490OTN

Identification of Obsolete Shared System Maintainer (SSM)

Reports - FISS and VMS 2015-10-05

R1491OTN

Identification of Obsolete Shared System Maintainer (SSM)

On-Request Jobs - FISS and VMS 2016-01-04

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