American Osteopathic Association Webinar The Affordable Care Act, Nuts and Bolts for Healthcare Providers Tuesday, June 17, 2014

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American Osteopathic Association Webinar

“The Affordable Care Act

,

Nuts and Bolts for Healthcare Providers 2014”

Tuesday, June 17, 2014

Christopher M. Huryn, Esq., Partner, Health Care Group

J. Ryan Williams, Esq., Partner, Health Care Group

(2)

TABLE OF CONTENT

Page(s)

I. Introduction . . . 3

II. Physician Perspective on the Affordable Care Act (ACA), Douglas Harley, D.O. . . 4

III. Mandatory Compliance Programs for All Providers . . . 5-6 IV. Medicare – Fraud and Abuse: Incentive Reward Program, Proposed New Rules . . . 7

V. Medicare – Fraud and Abuse: Provider Enrollment . . . 8-9 VI. Medicare Compliance, 60-Day Rule and Self-Disclosure Protocol . . . 10

VII. Physician Payments Sunshine Act . . . 11-12 VIII. Physician shortage . . . 13-17 1. The Perfect Storm . . . 13

2. Consequences and Trends for Providers . . . 14

3. The ACA Fix: Medicare/Medicaid Parity . . . . . . . . . 15-16 4. “PCP Services” . . . 17

5. Examples . . . 18

IX. ACA Impact on Medicare Payments to Physicians and Hospitals . . . 19

X. Electronic Payments . . . 20

XI. Accountable Care Organizations (ACOs) . . . 21

XII. Patient-Centered Medical Homes (PCMHs) . . . . . . 22-23 XIII. Medicare Advantage (MA) Plans Makeover . . . 24-25 XIV. OIG’s Authority Expanded under the ACA . . . 26

XV. 2014 OIG Work-plan . . . 27

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I. INTRODUCTION

AFFORDABLE CARE ACT (ACA)

Affordable Care Act (ACA),

aka

Patient Protection and Affordable Care Act

(PPACA) or ObamaCare

Enacted on March 23, 2010

Despite numerous legal challenges, PPACA remains the law of the land

PPACA places emphasis on:

1. “New” payment models: Bundling, provider incentives, provider

payments tied to quality measures, capitation, etc.

2. Enforcement to (1) recoup funds and (2) prevent fraud and abuse

3. New care delivery models (accountable care organizations, medical

homes, etc.)

Major investment in health information infrastructure as a foundation and

strategic tool

EHRs, telemedicine, electronic payments

(4)

II. PHYSICIAN PERSPECTIVE ON THE ACA

Physician surveys:

Impact on patient care – Patient/Physician relationship

Healthcare costs

Independent Payment Advisory Board (IPAB)

Practice changers:

Insurance status

Sunshine Act

Newly-insured patients:

Higher complexity

Quality measures

Physician extenders

(5)

III. MANDATORY COMPLIANCE PROGRAMS

ACA Requires All Providers to have Compliance and Ethics Programs, including physician practices

ACA defines the “core elements” of a Compliance and Ethics Program

1. Design & scope

2. Governance & Leadership

3. Feedback, Data Systems, and Monitoring

4. Performance Improvement Projects (PIPs)

5. Systematic Analysis and Systemic Action

APPLICATION TO NURSING FACILITIES (NFs and SNFs) AND MEDICAL DIRECTORSHIP ACTIVITIES

1. Facility-wide ethics and compliance program; and

2. Comprehensive quality assurance and performance improvement program (QAPI)

TIMELINE:

• Deadline for NFs and SNFs to comply has passed (03/23/2012) but no regulations yet • No timeline for other providers or suppliers yet.

• Group practices should start to build into policies and procedures. Guidance available on OIG website:

https://oig.hhs.gov/compliance/compliance-guidance/index.asp

• Entities will need to review/ revise existing compliance plans and procedures when CMS issues regulations.

TIPS FOR SUCCESS: CONTINUOUS EFFORTS REQUIRED

• Start from the top and create a “culture” of compliance

• Document your compliance efforts and all compliance communications • Periodically discuss compliance with your employees, training

• Conduct compliance surveys

• Conduct and document exit interviews

OTHER ACA PROVISIONS IMPACTING SNFs and NFs:

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III. MANDATORY COMPLIANCE PROGRAMS (CONT’D)

CMS REQUEST FOR COMMENTS IN SPECIFIC AREAS, I.E. PITFALLS

The use of the 5 elements of an effective compliance and ethics program as

described in the U.S. Federal Sentencing Guidelines Manual as the basis for the

“core elements”

How the 5 elements have already been incorporated into compliance programs

Other suggestions for program elements

Whether external/internal quality monitoring should be required for hospitals

and LTC facilities

Costs and benefits of program elements

Types and costs of effective tracking systems, data capturing systems and

electronic claims submission systems

Interplay with state or other compliance requirements

Application to different types of providers and suppliers

Application to individuals vs. corporation

Current experiences and sophistication

Effectiveness and how effectiveness is measured

Use of third party resources

Identification of responsible staff

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IV. MEDICARE – FRAUD AND ABUSE:

INCENTIVE REWARD PROGRAM, PROPOSED NEW RULES

2013 ENFORCEMENT NUMBERS

Expected recoveries: $5.8 billion in total investigative ($5 billion) and audit

receivables ($850 millions)

Program exclusions: 3,214 individuals and organizations were excluded from

participation in Federal health care programs

Return on investment (ROI): For every $1 spent on health care-related fraud

investigations in the last three years, the government recovered $8.10

EXISTING INCENTIVE REWARD PROGRAM

Qui tam actions (whistleblowers): Incentive for relators to report information on

individuals and entities that have or are engaged in sanctionable conduct

HIPAA Section 203(b)(2): Reward is 10% of the first $10,000 of overpayments

recovered or $1,000 whichever is less

ADDITIONAL NEW RULES PROPOSED

Bring in line with IRS incentives

15% of final amount collected applied to the first $66,000,000 for the sanctionable

conduct

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V. MEDICARE – FRAUD AND ABUSE:

PROVIDER ENROLLMENT, EXISTING REQUIREMENTS

ACA SECTION 6402, “

Provider screening and other enrollment requirements under

Medicare, Medicaid, and CHIP”

PROVIDER ENROLLMENT REQUIREMENTS: 42 CFR PART 424, SUBPART P

A

CA already defines procedures, application fees, screening requirements, potential

temporary moratoria if necessary to combat fraud and abuse in both Medicare and

Medicaid, suspension of payments pending credible allegations of fraud

New Medicare providers: Enhanced screening and enrollment requirements up front

All providers were required to be screened by March 23, 2013

• Automated provider screening (APS)

• Revalidation project: 2 phases

Revalidation cycle:

• DMEPOS: 3 years

• Providers: 5 years

• Any-time-revalidation if CMS requires , including site visits [42 CFR § 424.515(e)(2)]

Implementation of Fingerprint-based background checks (SE1417)

Enhanced compliance enforcement down the line

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V. MEDICARE – FRAUD AND ABUSE:

PROVIDER ENROLLMENT (CONT’D), PROPOSED NEW RULES

ADDITIONAL NEW RULES PROPOSED: “Requirements for the Medicare Incentive Reward Program (IRP) and Provider Enrollment”

• Published April 29, 2013; comments until June 28, 2013 (CMS-6045-P); Final rule target date 04/29/2016

• Legal Authority: HIPAA; PL 111-148 sec 6402(j) and 6503 of the ACA

• Goal: Ensure that fraudulent entities and individuals do not enroll in or maintain enrollment in Medicare

PROVIDER ENROLLMENT PROPOSED RULES (proposed revisions to 42 CFR PART 424, SUBPART P)

• Debts to Medicare: Deny enrollment if the provider/supplier/owner was the owner of another provider/supplier that had Medicare debt

• Felony Convictions: Deny enrollment or revoke billing privileges if provider/supplier/owner/managing employee was convicted of felony within past 10 years

• Abuse of billing privileges: Revoke billing privileges if provider/supplier has pattern or practice of billing for services

• Post-revocation submission of claims: Revoked providers must submit all claims within 60 days of revocation (exceptions)

• Effective date of billing privileges: Limit ability of ambulance services to “back bill” for services furnished prior to enrollment $327.4 million per year estimated savings

• Effective date of re-enrollment bar: Re-enrollment bar to become effective 30 days after CMS mails notice of revocation

• Corrective action plans (CAPs): Eliminate CAPs for revoked providers and suppliers unless revocation is based on failure to comply with enrollment requirements (§ 424.535(a)(1))

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VI. MEDICARE COMPLIANCE,

60-DAY RULE & SELF-DISCLOSURE PROTOCOL

BILLING, 60-DAY RULE (CMS-6037-P)

• Proposed rule published 02/16/2012; comment period ended 04/16/2012 - No final rule yet.

• Requires the reporting and returning of overpayments by the later of 60 days from the identificationof the overpayment or the date of the corresponding cost report

• Proposes changes to the reopening regulations • Look-back period: 10 years

UPDATED SELF-DISCLOSURE PROTOCOL (SDP)

• OIG and HHS published the Provider Self-Disclosure Protocol at 63 FR 58,399 on October 30, 1998 • OIG updated the SDP April 17, 2013 pursuant to ACA Section 6409(a):

• Information on how the SDP has worked to date

• Procedural guidance

• Clarification regarding penalties

• Still no word on how DOJ would view the self-disclosure (DOJ not bound by SDP)

• Results:

• Over 250 healthcare companies have self-reported

• 29 hospitals have settled cases for a total of $3.3 million

• Look-back period: “The time during which the disclosing party may not have been in compliance”

• Indefinite! Must disclose all non-compliant periods

• Specifically not the time frame established for reopening determinations under 42 C.F.R. § 405.980(b)

INTERPLAY BETWEEN 60-DAY RULE AND SDP

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VII. PHYSICIAN PAYMENTS SUNSHINE ACT

GOAL:

Public transparency into industry-physician financial relationships

SUNSHINE ACT requires public disclosures of

:

(1) Financial transfers:

Applicable manufacturers of drugs, medical devices, and

biologicals must report annually information regarding “payments and other transfers of

value” provided to “covered recipients;” and

Direct payments

to physicians and/or teaching hospitals of $10 per transaction or

$100 annually

12 exceptions

Third party payments

Indirect financial transfers

(2) Ownership:

Applicable manufacturers and group purchasing organizations must

report annually information regarding “ownership and investment interests” held by

physicians and their immediate family members

PREPARING FOR THE SUNSHINE ACT:

Check information for accuracy; Annual 45 day review

period to correct inaccuracies

TECHNOLOGY

: CMS issued two “Apps” for data tracking assistance

Open Payments Mobile for Physicians

Open Payments Mobile for Industry

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VII. PHYSICIAN PAYMENTS SUNSHINE ACT, CONT’D

CMS PORTAL: CMS will aggregate data from manufacturers and Group Purchasing Organizations (GPOs) and create individualized physician reports that will become public.

CONTENT OF REPORT: Business address; NPI; State license number; Amount of payment or other transfer of value; Identity of associated drug, device, biological or medical supply; Eligibility for delayed publication; Payments to third parties on behalf of physician; Assumptions made by manufacturer/GPO

PENALTIES for manufacturers and GPOs’ failure to report and knowing failures to report: Maximum combined annual total $1,150,000

KEY DATES FOLLOWING INCEPTION: Final regulations published February 2013

• August 1, 2013: Applicable manufacturers and GPOs must begin data collection

• Industry (manufacturers and GPOs):

• Phase 1 User Registration - March 31, 2014: First report was due to CMS (2013 data) but the database has yet to be completed; due 90thday of each year thereafter

• Phase 2 – June 1 through 30, 2014: Industry to register with Open Payments System, file testing, final data submission

• Physicians:

• Phase 1 User Registration – starts June 1, 2014 (CMS Enterprise Portal); voluntary but physicians must be registered to be able to correct data submitted by Industry

• Phase 2 - July 2014: Physicians will be able to register for the Open Payments Systems to have access to their individualized consolidated reports for prior calendar year, check and dispute data

• September 30, 2014: CMS will release reports to public

PREPARING FOR THE SUNSHINE ACT:

NPI: Update information and check for accuracy. Manufacturers will use NPI information as one identifier in reporting data

Request ongoing notice: Ask manufacturers and GPOs to provide notice and opportunity to review and correct information they plan on disclosing to CMS

Update disclosures periodically: Ensure that financial and conflict of interest disclosures required by employers, advisory bodies and research funding entities are current

• Set-up internal procedures to check system periodically

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VIII. PHYSICIAN SHORTAGE, THE PERFECT STORM

ACA is biggest expansion of health coverage in 50 years: +13 million people enrolled (private

insurance and Medicaid)

Medicaid: 4.8 million people added since October 2013 (1 in 5 residents covered in Ohio)

MEDICAID REIMBURSEMENT HAS BEEN AT A VERY LOW RATE

: Averaged 66% of Medicare fees in 2012 (59% for primary care services).

PHYSICIAN SHORTAGE NATIONWIDE:

91,500 by 2020; 130,600 by 2025

• Shortage without the ACA would be 64,100

• In spite of shortage, muted early demand for PCP services – overall (exceptions include Colorado, Kentucky, and Washington state which had biggest gains in coverage): few reports of patients facing major delays

• Key factors:

• Exchanges’ technical difficulties slowed the signing-up process

• 5 million people projected to gain coverage remain uninsured because only half the states expanded Medicaid

• But the surge is coming!

NEED TO ENCOURAGE GREATER MEDICAID PARTICIPATION AMONG PHYSICIANS AS THE

PROGRAM EXPANDS IN 2014 AND THE DEMAND FOR CARE INCREASES.

CONSEQUENCES & CONSIDERATIONS FOR HEALTH CARE PROVIDERS

:

Policy makers will likely continue to leverage clinical reimbursements to (1) attract more

students into primary care field; and (2) incentivize providers to accept more Medicaid patients

Expect more federal dollars towards streamlining the healthcare delivery system and

evidence-based innovations

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VIII. PHYSICIAN SHORTAGE (CONT’D),

CONSEQUENCES & TRENDS FOR PROVIDERS

RECRUITING

• Emphasis on preventative services: Focus NOW on recruiting primary care physicians, residents, physician extenders

• Design attractive compensation packages within the legal framework • Focus on retention

RETAIL HEALTH CLINICS

(examples: CVS Caremark Corp., Walgreens, Target, WalMart)

• Study predicts that number of retail health clinics will more than double by 2015 (1,450 clinics - 2013) • New competition and complement for health care providers

• Retail clinics target physician extenders

• Provider employment contracts: non-compete clause; “moonlighters”

TELEMEDICINE

: Increased use of telemedicine for all compatible specialties with physician

shortage

• New studies show promising cost reductions

MENTAL HEALTH CARE

: Additional 2.3 million individuals will gain mental health coverage, a

specialty traditionally lagging in insurance coverage

• Medicaid rates today fairly attractive relative to primary care or other specialties • ACA mandates coverage of depression screening

• Incidence on employers’ bottom line: some pros and cons

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VIII. PHYSICIAN SHORTAGE (CONT’D),

THE ACA FIX: MEDICARE/MEDICAID PARITY

PARITY:

Medicaid reimbursements (fee-for-service and managed care) must rise to the

level of Medicare payments for “PCP services.”

“PCP services” include some specialist services (see eligible sub-specialties’ slide)

Increases do not apply to Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs) Alaska not participating; North Dakota will experience nominal increase

FUNDING:

Federal dollars for 2 years ($11.8 billion extra funding)

RESULT:

Average Medicaid reimbursement increase of 64% nationally (76% in Ohio)

WHEN:

Effective for dates of service on or after 01/01/2013 through 12/31/2014

DELAYS

in increasing the rates and paying physicians retroactively

37 states and D.C. have started

Some states have not started at all: California, Texas, Nebraska, Wisconsin, Georgia, Kentucky, New-Jersey. Some states have started the process for Medicaid fee-for-service plans only: Washington, Michigan, New Mexico, Florida, Montana, New-York, Louisiana.

RISK:

Overpayments. Two potential sources of overpayments:

Billing processes, especially if provider is assigning his/her billing rights to third-party, e.g. physicians providing emergency services to a hospital though a lease arrangement

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VIII. PHYSICIAN SHORTAGE, THE ACA FIX:

MEDICARE/MEDICAID PARITY (CONT’D)

ELIGIBILITY

– Two options to qualify:

Board certification and/or 60% of “PCP services”

1.

Provider is Board certified is an eligible specialty or subspecialty; and/or

2.

60% of the provider’s Medicaid claims for the prior year were for the E&M codes

specified in the regulation.

E&M codes 99201 through 99499 and vaccine administration codes 90460, 90461, 90471-90473 (or successor codes, where applicable) are eligible for higher payments.

1.

SPECIALTIES AND SUB-SPECIALTIES ELIGIBLE, as defined by:

American Board of Medical Specialties (ABMS)

American Board of Osteopathic Association (AOA)

American Board of Physician Specialties (ABPS)

see next slide for all eligible specialties – lots of (pleasant) surprises!

2.

PCP SERVICES:

Applies to primary care services delivered by a physician with a specialty designation of

family medicine, general internal medicine, or pediatric medicine

“General internal medicine” encompasses internal medicine and all subspecialties

recognized by the ABMS, AOA, and ABPS

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VIII. THE ACA FIX, MEDICARE/MEDICAID PARITY (CONT’D):

WHAT ARE “PCP SERVICES?”

ACA specifies increased payments for 3 primary care medical specialties: Family Medicine, General Internal Medicine and Pediatrics The Final Rule interprets this language to include some subspecialties with a relation to the original three

QUALIFYING SUBSPECIALTIES UNDER THE ABMS

Family Medicine – Adolescent Medicine; Geriatric Medicine; Hospice and Palliative Medicine; Sleep Medicine; Sports Medicine

Internal Medicine – Adolescent Medicine; Advanced Heart Failure and Transplant Cardiology; Cardiovascular Disease; Clinical Cardiac Electrophysiology; Critical Care Medicine; Endocrinology, Diabetes and Metabolism; Gastroenterology; Geriatric Medicine; Hematology; Hospice and Palliative Medicine; Infectious Disease; Interventional Cardiology; Medical Oncology; Nephrology; Pulmonary Disease; Rheumatology; Sleep Medicine; Sports Medicine; Transplant Hepatology

Pediatrics– Adolescent Medicine; Child Abuse Pediatrics; Developmental-Behavioral Pediatrics; Hospice and Palliative Medicine; Medical Toxicology; Neonatal-Perinatal Medicine; Neurodevelopmental Disabilities, Pediatric Cardiology; Pediatric Critical Care Medicine; Pediatric Emergency Medicine; Pediatric Endocrinology; Pediatric Gastroenterology; Pediatric Hematology-Oncology; Pediatric Infectious Diseases; Pediatric Nephrology; Pediatric Pulmonology; Pediatric Rheumatology; Pediatric Transplant Hepatology; Sleep Medicine; Sports Medicine

QUALIFYING SUBSPECIALTIES UNDER THE AOA

Family Physicians – No subspecialties

Internal Medicine – Allergy/Immunology; Cardiology; Endocrinology; Gastroenterology; Hematology; Hematology/Oncology; Infectious Disease; Pulmonary Diseases; Nephrology; Oncology; Rheumatology

Pediatrics– Adolescent and Young Adult Medicine; Neonatology; Pediatric Allergy/Immunology; Pediatric Endocrinology; Pediatric Pulmonology

QUALIFYING UNDER THE ABPS

• ABPS does not certify subspecialists

Eligible certifications: American Board of Family Medicine Obstetrics; Board of Certification in Family Practice; and Board of Certification in Internal Medicine

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Board-certified “general surgeon” practicing as a general family practitioner

Does the physician qualify under either prong of the 2-part test?

• Board certification: No

• Neither the ABMS, ABPS, nor the AOA recognize “general surgeon” as a sub-specialty of family medicine, internal medicine, or pediatrics.

• PCP services: Perhaps

• Yes, if 60% of Medicaid claims for prior year were for E&M codes specified in the regulations • Physician must self-attest to that effect

• No, if less than 60% of Medicaid claims for prior year were not PCP services in accordance with the regulations

• Physician cannot self-attest

Physician with a certification in Family Medicine Obstetrics under the ABPS

Does the physician qualify under either prong of the 2-part test?

• Board certification: Yes

• The physician is first certified in family medicine with additional certification in obstetrics and practices as a family practitioner.

• Physician can self-attest to a qualified specialty

Physician with a certification in Obstetrics under the ABMS or AOA

Does the physician qualify under either prong of the 2-part test?

• Board certification: No

• PCP services: Perhaps (60% PCP services rule)

VIII. THE ACA FIX, MEDICARE/MEDICAID PARITY (CONT’D):

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IX. ACA IMPACT ON MEDICARE PAYMENTS

TO PHYSICIANS AND HOSPITALS

Independent Payment Advisory Board (IPAB)

Primary care physicians incentives

10% bonus 2011 through 2016

Medicare payment sustainable growth rate (SGR):

Implementation

delays continue

Quality/Cost payment

Payment modifier applicable in 2015

Physician quality reporting system (PQRS)

Imaging reimbursement cuts

Reduction for inpatient hospital prospective payment system

Clinical measures, efficiencies, patient outcomes may increase or decrease

a hospital’s reimbursement

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X. ELECTRONIC PAYMENTS

ACA adopted new operating rules for how electronic transactions are conducted

• Goal: To create consistency, enhance reliability, increase efficiency, lower administrative/operating costs, and strengthen security

• Potential savings:

• $11 billion annually if 100% healthcare payments using Electronic Fund Transactions (EFTs)

• Billing and insurance-related costs represent approx. 12% of a provider’s revenue annually

Phase 1 - January, 2014: Compliance with electronic payment rules

• Medicare must make 100% of claims payments electronically as of 01/01/2014

• All payors must be able to pay electronically if the provider requests it

• 2012, only 33% of healthcare claim payments were made electronically Phase 2 - January, 2016: Compliance with rules for:

• Health care claims or equivalent encounter information

• Coordination of benefits

• Health plan enrollment/disenrollment

• Health plan premium payment

• Referral certification and authorization transactions

Obstacles to overcome before going electronic:

• Lack of provider awareness

• Expense

• Enrollment volume

• Security - Concern about giving out banking information

• Not understanding the benefits

• Need for training

Preparing for the new operating rules:

• Educate yourself

• Work with your bank

• Contact health plans

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XI. ACCOUNTABLE CARE ORGANIZATIONS (ACOS)

ACO, Definition of the “classic” model:

• Medicare ACO or Medicare Shared Savings Program (MSSP)

• 123 Medicare ACOs nationwide

• Non-profit organizations can participate

GOAL: Reduce Medicare costs through better coordination and delivery of high quality care CMS EXPERIMENTS WITH NEW ACO MODELS BEYOND TRADITIONAL MSSP

Advance Payment Model: Participants receive upfront and monthly payments to make investments in care coordination infrastructure.

• 35 nationwide; 1 in Ohio

Pioneer ACO Model: Designed for health care providers already experienced in coordinating care for patients across care settings.

• 32 nationwide; none in Ohio

YEAR-ONE RESULTS (2012-2013):

$380 million savings from Medicare ACOs and Pioneer ACOs

Medicare ACOs: 114 total, 54 showed lower spending growth

Pioneer ACOs: 23 total, 9 showed lower spending growth

SPECIALTY OR DISEASE-SPECIFIC ACOs:

Slight shift from primary care ACOs to specific chronic

diseases ACOs, such as cancer, chronic kidney disease, and end stage renal disease

CMS released revised application for the Comprehensive ESRD Care Model (04/15/2014)

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XII. PATIENT-CENTERED MEDICAL HOMES (PCMH)

AKA “PRIMARY CARE MEDICAL HOMES”

PCMH

is an enhanced primary care delivery model that strives to achieve

better access, coordination of care, prevention, quality, and safety, and to

create a strong partnership between the patient and primary care physician.

PCMH CORE FUNCTIONS and GOALS:

Patient-centered orientation

Proactive, comprehensive, team-based care

Care coordinated across health care system

Superb access by patient to care

Commitment to quality and safety

PCMH acts as the medical home; ACO serves as the medical neighborhood

Providers receive incentive payments for improving primary care services for

each patient in the home

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XII. PATIENT-CENTERED MEDICAL HOMES (PCMHS), CONT’D

PAYMENT METHODOLOGY: Payers reward providers with a per member per month “bonus” for improving primary care services for each patient in the medical home

10% INCENTIVE PAYMENTS FOR PRIMARY CARE SERVICES (ACA SECTION 5501)

• ACA establishes an additional payment for services provided by a “primary care practitioner” between January 1, 2011 and January 1, 2016 equal to 10% of the amount otherwise paid under Medicare

• “Primary care practitioner” includes any physician whose primary specialty designation is family, internal, geriatric or pediatric medicine, and any nurse practitioner, clinical nurse specialist, or physician assistant, for whom “primary care services” accounted for at least 60% of the allowed charges in such prior period as determined by the Secretary

• “Primary care services” include services identified by CPT codes 99201 through 99215, 99304 through 99340, and 99341 through 99350, or as may be subsequently modified by the Secretary

AGENCIES INVOLVED:

• Agency for Healthcare Research and Quality (DHHS)

• CMS has implemented the Medicare Multi-Payer Advanced Primary Care Practice Demonstration (MAPCP) and Federally Qualified Health Center Advanced Primary Care Demonstration (FQHC APCP) and other initiatives

• DOD (TriCare) sees PCMH as the most promising model to deliver care

• Health Resources and Services Administration (DHHS) has been funding projects on the medical home concept since the 1980s; ongoing initiatives; toolkits and resources available to public

• Substance Abuse and Mental Health Association (SAMHSA) funds a variety of behavioral health-specific programs and promotes their use in primary care and PCMH settings

PCMHs ARE NOT ACOs

• PCMHs and ACOs both focus on improving health outcomes through care coordination and primary care

• ACOs are comprised of many “medical homes”

• ACOs are accountable for the cost and quality of care both within and outside of the primary care relationship. Although not a legal requirement, ACOs usually include specialists or hospitals in order to be able to control costs and improve health outcomes across the entire care continuum

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XIII. MEDICARE ADVANTAGE PLANS MAKEOVER

MEDICARE ADVANTAGE PLAN, AKA “PART C” OR “MA PLAN”

• Plan offered by a private company that contracts with Medicare to provide Part A (hospital) and Part B (medical) benefits. Most also offer Part D (drugs)

• Types: Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans

Traditional fee-for-service Medicare: 80% cost covered; enrollees can go to any Medicare provider

Medicare Advantage:usually covers a higher percentage of cost after enrollee has paid out-of-pocket limit; enrollees can only go to providers in their network

ACA PROVISIONS TARGET “WASTEFUL” MEDICARE SPENDING

• In 2009, MA plans received on average 13% more per enrollee than the cost of comparable care under traditional Medicare

• ACA aims at bringing in line MA payments with traditional Medicare payments cut in reimbursements

• ACA does not eliminate MA plans or reduce the extra benefits seniors receive under MA plans

• Majority of new regulations were published on April 12, 2012 (77 FR 22072) and a correction was published June 1, 2012 (77 FR 32407)

New medical loss ratio (MLR) requirements recently finalized: Final rule (CMS-4173-F) published May 23, 2013 (78 FR 31283), effective July 22, 2013

• Under the “80/20 rule,” MA plans are required to spend at least 80-85% of their revenue on medical care rather than for administrative expenses or profits

• Pressure may be passed on to providers

• Several levels of sanctions for failure to meet the 80-85% MLR requirement for 3 or 5 consecutive years (rebates to enrollees, remittance of funds, prohibition on enrolling new members, and contract termination)

MA PLANS CONTINUE TO GROW – DESPITE ACA/ANALYSTS’ PREDICTIONS

• Analysts had predicted a reduction in Medicare Advantage enrollment under the ACA

• Enrollment in MA has grown by 41% since the enactment of the ACA (4.6 million increase)

• Virtually all states affected

• 30% seniors are enrolled in MA nationwide (March 2014)

• 1.3 million more beneficiaries enrolled in the program between 2013 and 2014 (nearly 10% year-over-year increase)

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XIII. MEDICARE ADVANTAGE PLANS MAKEOVER (CONT’D)

REGIONAL DISPARITIES

• Rise in premiums not applicable in all states: South Florida and New York, seniors can still choose health plans with no monthly premiums.

• HMOs versus PPOs

• Some markets have “super concentration” at the top

• Less competition for beneficiaries and more pressure on providers • e.g. States where top 3 plans represent over 90% of enrollees

• Alaska, Connecticut, Delaware, District of Columbia, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, North Carolina, Rhode Island, South Dakota, Vermont, West Virginia, Wyoming

• Contrast with Ohio: Top 3 plans represent 67% total MA enrollees: Humana, Inc. (26%); BCBS Wellpoint (24%); Aetna (16%)

IMPLICATIONS FOR PROVIDERS

:

• MA plans will pass along cuts to providers and consumers

• The Obama administration proposes cuts but backs down due to heavy lobbying

• 1.9% proposed cuts for 2015 turned into 0.4% increase

• 2.2% proposed cuts for 2014 turned into 3.3% increase.

• Although average monthly premiums have remained stable since 2012 ($35 per month in 2014), the average out-of-pocket costs have risen significantly.

• Between 2013 and 2014, the share of plans with limits above $5,000 has doubled • Seniors have higher cost up front but they have better coverage

• Concentration at the top: Risk/vulnerability (electronic payment glitch); pressure to reduce costs; impact on payment to providers; imbalance of power in contract negotiations

• Providers must enroll and manage contracts with many plans

ANALYZE YOUR MEDICARE DATA

• Where are your $$ coming from?

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XIV. OIG’S AUTHORITY EXPANDED UNDER THE ACA

Proposed Rule [79 FR 27080 (May 12, 2014)]: Expands the OIG’s Civil Monetary Penalties (CMP) authority in accordance with the ACA.

Authority: Sections 6402(d)(2)(A)(iii) and 6408(a) of the ACA

Goal: To further protect the federal health care programs

Delegation: Express delegation of authority from the HHS Secretary to the OIG

5 new violations will expand the OIG’s penalties and exclusionary authority: • Failure to grant OIG timely access to records

• Ordering or prescribing items or services that the person knows or should know may be paid for by a federal health care program while excluded

• Making false statements, omissions, or misrepresentations in an enrollment application to participate in a federal health care program

• Failure to report and return a known overpayment

• Making or using a false record or statement that is material to a false or fraudulent claim

Medicare Advantage plans: Responsible for misconduct by contracted providers

Factors evaluated for assessing penalty and/or period of exclusion:

• Increase in threshold of claims-mitigating factors ($5,000) and claims-aggravating factors ($15,000) • “Degree of culpability” factor: Now references the person’s level of intent

New mitigating factor: Appropriate and timely corrective action

Single aggravating circumstance: Should result in maximum penalty allowed

Notable additions to the general definitions of the CMP authority:

• Separately billable item of services & non-separately billable item or services

• New “per-day penalty” methodology for non-separately billable items provided by an excluded person Emergency Medical Treatment And Labor Act (EMTALA):Would revise the definition of “responsible physician” to clarify the circumstances when an “on-call” physician has EMTALA responsibility

(27)

XV.

OIG WORKPLAN 2014

Full report (101 pages) available at: http://oig.hhs.gov/reports-and-publications/archives/workplan/2014/Work-Plan-2014.pdf

AREAS OF FOCUS:

• Ensure the accuracy of health care-related expenditures and costs while recovering lost funds due to fraud, abuse and waste

• Increase the security of electronically-monitored patient information

• Enforce agency policies and regulations

• Mandate compliance among providers

• Oversee the full implementation of the ACA and resolve issues with select ACA provisions

KEY AREAS FOR PROVIDERS TO EVALUATE AND REVISE, AS APPLICABLE:

New inpatient admission criteria

Medicare costs associated with defective medical devices Impact of provider-based status on Medicare billing Comparison of provider-based and free-standing clinics

Outpatient evaluation and management (E&M) services billed at “new patient” rates Participation in projects with quality improvement organizations

Oversight of hospital privileging

Power mobility devices: add-on payment for face-to-face examination Medical necessity of high cost diagnostic radiology tests

Electro-diagnostic testing – questionable billing Physicians’ place-of-service coding errors

Controls over networked medical devices at hospitals

Security of personal devices containing personal health information (PHI)

Improper Medicare payments for beneficiaries with other health care coverage (Medicare Secondary Payer, MSP) Kwashiorkor diagnostic (malnutrition) and treatment

(28)

XVI. QUESTIONS & ANSWERS

Douglas W. Harley, DO, FACOFP, FAAFP

• Doug.Harley@AkronGeneral.org- (330) 344-4000 Daniel K. Glessner, Esq., Chair, Health Care Group • Dglessner@brouse.com- (330) 434-7240

Christopher M. Huryn, Esq., Partner, Health Care Group • Churyn@brouse.com- (330) 434-4610

J. Ryan Williams, Esq., Partner, Health Care Group • Rwilliams@brouse.com- (216) 830-6830

David Schweighoefer, Esq., Partner, Health Care Group • DES@brouse.com– (330) 434-5207

Joy D. Kosiewicz, Esq., Partner, Health Care Group • Jkosiewicz@brouse.com- (330) 434-7156

Michael G. VanBuren, Esq., Associate, Health Care Group • Mvanburen@brouse.com- (330) 434-7116

Isabelle Bibet-Kalinyak, Esq., Associate, Health Care Group • IBK@brouse.com- (330) 434-7543

Figure

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