Modern Healthcare has reported the following: "HHS Secretary Mike Leavitt named Leslie Norwalk as acting administrator for the CMS effective Oct. 15. Norwalk has served as deputy administrator for the agency that oversees $740 billion in federal spending on Medicare and Medicaid. She replaces Mark McClellan, who resigned from the CMS on Sept. 5."
Just a few days ago (and not long after the announcement of a possible 5.1% cut in Medicare payments to physicians was announced), the Institute of Medicine released a report calling for an across the board reduction in Medicare payments to providers and the creation of a fund that pays "bonuses" for strong performances. The committee chair and a professor of health care at the University of California, San Francisco, Steven A. Schroeder, offered his support of the proposal when he stated that "Medicare beneficiaries are not getting the highest possible quality of care because the program's payment system encourages volume rather than efficiency and quality." The comittee acknowledged, however, that there is little data available suggesting that pay-for-performance systems have a positive impact on patient care.
In and of itself, this proposal seems like a sound, logical solution to the so-called problem. The logic goes something like this: (1) The prospect of the receipt of a monetary benefit encourages all human beings to perform at their highest levels. (2) Providers are human beings. (3) Therefore, offering providers a monetary benefit will encourage them to perform at their highest levels.
This logic may not take into consideration the current climate, however. Given that providers are already under a substantial amount of pressure to avoid malpractice suits and already face another cut to their Medicare payments, such quality measures accompanied by an across the board cut may only serve to drive an even stronger wedge between those providers who care about patients and patients who deeply desire to have a good relationship with those responsible for providing their medical care.
When proceeding with reforms, care should be taken to ensure that the divide between physicians and patients is not strengthened and that changes made do not lead to increased resentment between the parties.
Modern Healthcare just announced the following: "Officials are expected to announce that Robert Kolodner, chief health informatics officer at the Veterans Health Administration, has been named HHS' acting national coordinator for health information technology, sources said. Kolodner would replace David Brailer, the first occupant of the post, who resigned in May."
Here's a look back at a few important headlines from last week:
An anonymous blogger alerted me to an interesting article published by Robert J. Samuelson in The Washington Post. In the article, Samuelson asserts that Medicare is the "monster in our future." He takes to task economists who believe that increased health care spending is worthwhile and nonthreatening. Essentially, Samuelson questions whether Americans really ought to prefer health care spending, which purportedly results in longer lifespans, to "a third car [or] yet another television." After citing a few of the benefits of health care spending, including advances in Alzheimer's disease, Parkinsons and cancer, Samuelson writes, "But the present explosion in health spending is increasingly wasteful and socially corrosive. It may ultimately lower economic growth--a side effect of the high taxes needed to pay for Medicare and Medicaid--and already depresses take-home pay, squeezes other public services and redistributes income from the young to the old."
Is Samuelson correct? Is Medicare really the "monster in our future?" By helping those who are elderly to live longer lives, are we depriving the young? Is such spending "wasteful" and "socially corrosive?" How do we overhaul the system, but still nevertheless ensure that those needing health care receive high quality care and that research and development continues on effectively so that we find more cures to debilitating and life threatening diseases?
Recently, the moratorium prohibiting Medicare payments for services rendered pursuant to a referral to specialty hospitals in which the referring physician has a financial interest expired. Responding to the lifting of the ban, the Department of Health and Human Services ("HHS") released a strategic and implenting plan that called for revisions to payment schedules and increased transparency to address concerns raised by critics that specialty hospitals focus more on the profitability of patients than on providing high quality care. Specialty hospitals provide care for patients with cardiac conditions, orthopedic conditions or patients in need of surgical procedures.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 created the moratorium. Though the moratorium was originally scheduled to last for eighteen months, upon expiration, CMS announced a new policy that prohibited regional offices and contractors from enrolling these hospitals in the Medicare program. Subsequently, the Deficit Reduction Act of 2005 extended the moratorium for an additional six months.
The lifting of the moratorium is not a complete victory for physicians. The plan released by HHS calls for improvements to the accuracy of the hospital payment system and increased transparency. Discussing the plan, Mark B. McClellan, quoted in a CMS press release, stated, "We are bringing transparency to physician investments in hospitals, to help ensure that investment and compensation are appropriate, and to make sure that any such financial arrangements are disclosed to patients." CMS believes that the implementation of major changes to the current hospital inpatient prospective system and the ambulatory surgical center payment systems will eliminate improper incentives. Additionally, the plan calls for increased disclosure of physician investments and compensation arrangements.
Before physicians enter into this type of an arrangement, they should contact an experienced health care attorney to ensure that the proposed arrangement does not violate any state or federal fraud and abuse laws.
On Tuesday, September 26, the Centers for Medicare and Medicaid Services ("CMS") will host a roundtable to discuss the transition to the National Provider Identifier system. To participate, call 1-877-203-0044 and enter pass code 4795739.
Here's a quick look back at a few noteworthy stories from last week:
The Centers for Medicare and Medicaid Services ("CMS") recently announced that "getting an NPI is free--not getting one can be costly."
The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") mandates the adoption of a standard unique identifier number system. In a January 2004 final rule, the Secretary of the Department of Health and Human Services announced that HIPAA covered providers must obtain a National Provider Identifier ("NPI") by May 23, 2007. As of August 23, 2006, providers only have nine months to obtain their NPIs. Medicare will delay or reject claims submitted without an NPI after this compliance deadline. Small health providers have an additional year--until May 23, 2008--to obtain their NPIs.
Medicare will begin accepting NPIs starting October 1, 2006. CMS highly recommends, however, that providers submit both their legacy identifiers and their NPI on claims.
To obtain an NPI, visit https://nppes.cms.hhs.gov. Alternatively, call to request a paper application at 1-800-465-3203. Do not wait until the last minute to submit your application, as application processing could take several weeks or even months.
The Food and Drug Administration ("FDA") recently announced that it entered into an agreement with the Massachusetts Institute of Technology to develop a new safety monitoring system designed to more quickly identify problems with drugs and medical devices. The Associated Press reports that this new system will "scour federal and private health care databases in real time for unusual and emerging patterns that could indicate potential safety concerns." In further attempt to improve patient safety, the FDA also intends to regularly issue reports to physicians that inform them of potential risks associated with drugs and devices.
Currently, the FDA manually assesses reports submitted voluntarily. The FDA has stated that this safety monitoring system leaves many known problems unreported.
Recently, the Centers for Medicare and Medicaid Services ("CMS") announced a 3.1% increase in the Medicare payment rates for skilled nursing facilities ("SNFs") and issued a proposal to increase the payment rate for home health agencies ("HHAs") by 3.1%. These payment increases will take effect starting January 1, 2007 and will result in approximately $560 million dollars in additional payments to SNFs and $460 million dollars in additional payments to HHAs.
Along with these payment increases, CMS announced the implementation of several initiatives designed to improve quality of care and eliminate unnecessary spending. With respect to nursing homes, CMS announced that it is in the process of developing a "Nursing Home Value Based Purchasing Demonstration." Under this program, nursing homes will have the opportunity to receive additional payments based upon their performance on quality measures. CMS also intends to initiate a "Nursing Home Quality Campaign" designed to positively impact the quality of life of SNF residents and increase the efficiency of the delivery of SNF services.
While CMS's announcement regarding the SNF increase simply mentioned the creation of quality initiatives, CMS's proposed rate increase for HHAs actually makes the increase contingent on the receipt of quality data. Currently, as mandated by the Omnibus Budget Reconciliation Act of 1987, HHAs collect and report Outcome and Assessment Information Set ("OASIS") data. Under the proposed rule, if an HHA does not submit the requisite OASIS data, CMS will reduce the amount of the HHA's increase by two percentage points.
This message is intended to serve as a reminder that, from September 22, 2006 though September 30, 2006, as mandated by Section 5203 of the Deficit Reduction Act of 2005, a hold will be placed on Medicare payments for all claims, including initial claims, adjustment claims and Medicare Secondary Payer claims. All health care providers billing Medicare potentially are subject to this hold. During these nine days, no payments will be made to providers, interest will not accrue or be paid and late penalties that generally apply are inapplicable. Claims held during this nine day period will be paid on October 2, 2006.
This policy does not apply to full denials and no-pay claims, periodic interim payments, home health requests for anticipated payments, cost reports settlements and other non-claim payments. This policy only applies to claims subject to payment.
On August 1, 2006, Michael Leavitt, Secretary of the Department of Health and Human Services, announced new exceptions to the Stark Law ("Stark") and new safe harbors to the Anti-Kickback Statute ("AKS") designed to encourage physicians to implement electronic prescribing and interoperable health records systems. Ordinarily, the provision of such technology may trigger Stark and AKS investigations, fines and potential criminal liability. Under the new e-prescribing technology rules, if applicable criteria are met, certain entities such as hospitals and group practices may donate items and services, including hardware, software internet connectivity training and support, to qualifying physicians. The new interoperable health record systems rules are similar to the e-prescribing rules, except that an entity may not donate hardware, and physicians must pay 15% of the donor's costs. The new HIT rules expire December 31, 2013.
Proponents have argued that these rules will contribute to the reduction in the total number of errors made and will improve efficiency and overall patient care. Critics have emphasized that e-prescribing and e-health records may jeopardize patient privacy.
Effective January 1, 2007, Health Care Providers Must Arm Employees with False Claims Act Education
On February 8, 2005, President Bush, strengthening his commitment to reducing the national debt, signed into law the Deficit Reduction Act (the "DRA"). In addition to cutbacks to other federally funded programs, the DRA aims to reduce Medicare and Medicaid expenditures and to recoup losses and overpayments made to health care providers. Among the most noteworthy provisions included in the DRA is a provision that requires employee education about the False Claims Act ("FCA") and applicable laws that protect, and even reward, employees who blow the whistle on their employers for violating these laws. The DRA specifically requires entities that receive or make annual payments of at least $5,000,000 pursuant to any state Medicaid program to establish written policies for employees that explain the provisions of the FCA, any state false claims laws and the applicable administrative remedies. The policies must also include a description of whistleblower protections and an explanation of internal policies that aim to prevent fraud and abuse. An employer must include a discussion of these matters in the employer's employee handbook. Entities that fail to comply by January 1, 2007 risk exclusion from the Medicaid program.
Essentially, these provisions constitute a recognition by the federal government that employees often play key roles in federal FCA investigations. These provisions increase the likelihood that employees lurking within, armed with full knowledge of their rights (and the millions of dollars they may recover if successful), will bring qui tam actions. Despite the fact that health care providers covered by these provisions may be hesitant to comply, they have no choice, as exclusion from the Medicaid program would be devastating.
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