Cecil Essential Of Medicine

Doctors face risk of harsh penalties from new Medicare enrollment rules

April 24, 2009 on 1:01 am | In Uncategorized | Comments Off Washington -- Physician practices are anticipating major difficulties with Medicare enrollment rules that went into effect amid protests from doctors and practice managers. A wrong step by a practice could mean that it loses Medicare revenue or even gets kicked out of the program altogether.

Starting April 1, the time frame under which physicians can bill retroactively for services after successful enrollment or re-enrollment in Medicare has been shortened from 27 months to only 30 days. In addition, doctors must alert contractors of a change in practice location within 30 days, or risk expulsion from Medicare for up to two years.

The policy changes appeared in the final 2009 Medicare physician fee schedule rule and were slated to go into effect Jan. 1. But the American Medical Association and the Medical Group Management Assn. convinced Centers for Medicare & Medicaid Services officials to hold off implementation while they discussed the organizations' concerns.

"Many of the changes to Medicare's enrollment process are cause for concern, and the AMA is working to improve the process so physicians can participate without disruption to their practice," said Board of Trustees Chair Joseph M. Heyman, MD.

Derise Woods, operations project manager for TeamHealth, an emergency department staffing services company based in Knoxville, Tenn., is particularly worried about the shortened retroactive billing period. Far from the flexibility of the old 27-month window, the new 30-day window is counted back from the filing date of an enrollment application that is subsequently approved.

"From a billing standpoint, this will have a great impact on our revenue," Woods said. Time is a precious commodity when it comes to providing medical services, particularly in an emergency department, she added. "You may have situations where providers will go to work before the paperwork can be provided to Medicare."

Fear of punishment

The AMA is still working with CMS to ensure that contractors are clear about the details of the new retroactive billing rule. Some potentially vague language in rule guidance has physicians concerned that not all practices will be allowed even a 30-day retroactive billing period.

Physicians who can't comply with the new retroactive billing timeline are at risk of losing payment for any services they billed before the 30-day limit. But doctors who fail to update their addresses within 30 days of moving face the potentially more costly penalty of being unable to bill the program at all for up to two years.

Leslie Witkin is president of Physicians First Inc., a consulting company based in Orlando, Fla., that provides operational assessments, auditing and other consulting services to doctors. She has heard about Medicare participants who have been afraid to update their billing information with CMS for fear that billing privileges will be revoked.

"Providers out there are trying to keep pace with a lot, and there hasn't been intent or malice on their part, and now you're cutting people off at the knees by taking their revenue," Witkin said.

The AMA is pushing for physicians once again to have up to 90 days to report a change in practice location or ownership.

The harsh penalty of revocation is familiar to Erastus Smith, MD, an internist in Sanford, N.C. He said he was burned by the Medicare program in 2008 when his billing privileges were revoked for 5½ months after it was discovered he mistakenly had been assigned two National Provider Identifiers by CMS.

The development was a huge setback for the solo physician, who estimates that 40% to 60% of his business is based on Medicare pay. As a result of losing his billing privileges, Dr. Smith said his life insurance policy was canceled when he no longer could make payments and his credit rating went down. He also had to give up his receptionist of 26 years because he no longer could afford to pay her.

Dr. Smith is once again billing Medicare, but the experience has made him exceedingly wary. He is renovating a new office space across town that he hopes to move into soon, but he's fearful that any filing error connected to the move could have results similar to last year's disaster.

The new policies "set the stage for some severe problems for physicians," Dr. Smith said. "The vast majority of physicians are bringing a certain comfort to the people we see. These plan changes make it harder for us to do our jobs and get paid."

Looking for good faith

CMS is trying to reassure physicians that it is not trying to punish practices that are acting in good faith.

"Medicare does not intend to revoke those billing privileges," said Jim Bossenmeyer, director for provider and supplier enrollment at the CMS Program Integrity Group. "However, if we were conducting on-site inspections and we determined the supplier was no longer in that practice location, then Medicare may revoke privileges."

Bossenmeyer also said physician offices shouldn't be concerned about the new retroactive billing limit, as long as they update their Medicare enrollment prospectively.

In addition, rather than rejecting incomplete enrollment applications outright, contractors should simply deny the enrollment, he added. Then the physician can send a letter to the contractor within 30 days requesting a corrective action plan, thereby ensuring that the initial filing date -- and the original retroactive billing window -- is preserved.

Nevertheless, the AMA and others are worried that physicians will be punished for delays and glitches that are not their fault. The new provisions come amid reports of continuing serious enrollment problems stemming from last year's transition from older ID numbers to NPIs.

Even before the economic recession, physicians reported that many Medicare contractors already were strained beyond capacity and incapable of handling large enrollment workloads. The ongoing Medicare Administrative Contractor transition also has exacerbated enrollment delays, physicians said.

The print version of this content appeared in the April 27, 2009 issue of American Medical News.

New York budget increases Medicaid fees for physicians

April 24, 2009 on 1:01 am | In Uncategorized | Comments Off Physicians who treat Medicaid patients in New York state are getting a second significant increase in Medicaid fees later this year thanks to a state budget that invests tens of millions of dollars toward primary and preventive care.

Physician fee-for-service Medicaid pay will reach about 70% of Medicare rates effective Dec. 1. Rates were about 40% of Medicare before the Legislature appropriated $188 million over the last two years to boost physician and nurse practitioner pay, said Liz Dears, senior vice president of governmental affairs at the Medical Society of the State of New York. That first pay raise took effect Jan. 1. Physicians seeing Medicaid patients in federally designated health professional areas also became eligible for an additional 10% fee increase.

The changes are designed to emphasize primary and preventive care over inpatient care and are part of a $132 billion fiscal 2010 budget adopted April 3. The budget, which covers spending beginning April 1, authorizes Medicaid fee-for-service incentives and managed care payments for physicians, hospitals and community clinics that meet medical home standards to be defined this year. It also offers Medicaid care coordination fees to doctors who manage patient care in parts of the state without Medicaid managed care programs.

"These initiatives are critical to ensure that every New Yorker has access to a primary care physician and a patient-centered medical home ... particularly in low-income, underserved and rural areas of the state," said Vito Grasso, executive vice president of the New York State Academy of Family Physicians.

Other health care entities didn't fare as well in the 2010 budget. It includes $2.3 billion in health care-related cuts and new revenues, including tax increases on health plans, reduced Medicaid fees for nursing homes and reduced inpatient fees for hospitals, among other actions.

"Health care providers supported the investments in primary care ... and we understood the economic situation would require some cuts," said Daniel Sisto, president of the Healthcare Assn. of New York State. "However, this budget goes far beyond what was necessary or appropriate, threatening the safety and well-being of millions of New Yorkers who rely on the health care delivery system."

Hospitals will see their inpatient Medicaid fees cut by $225 million, according to the New York State Dept. of Health. Most of this money will be reallocated to hospital clinics, community clinics and doctors. But the budget also provides nearly $270 million for teaching hospitals to care for uninsured patients.

Health plans fared even worse in the budget. It increased taxes on health insurers by $738 million to help fund graduate medical education and other programs, Dears said.

Neither health plans nor their customers can afford these taxes, said Deborah Fasser, spokeswoman for the New York State Conference of Blue Cross and Blue Shield Plans. "Businesses will have to choose between raising an employee's contributions to the company's health plan or eliminating health insurance as a benefit. ... The result will be fewer New Yorkers with health insurance."

Many in managed care

Although the Medicaid fee increases are unprecedented, they won't directly impact many physicians around the state because many Medicaid enrollees are in managed care plans.

Medicaid and Family Health Plus -- a state program that offers health coverage to lower-income families not eligible for Medicaid -- have a combined 4.1 million enrollees. Of those, 2.7 million are in managed care, said New York State Dept. of Health spokeswoman Diane Mathis.

The vast majority of Medicaid patients in New York City are likely enrolled in managed care plans, said Mark Krotowski, MD, president-elect of the New York State Academy of Family Physicians. About 20% of the patients at his solo practice in Brooklyn are in Medicaid managed care.

Drew Merritt, MD, a family physician in semi-rural Marcellus, N.Y., said the first Medicaid fee increase for office visits effective Jan. 1 -- up about $6 to $36 -- isn't really going to impact his practice. He would continue seeing the 5% of his patients who are on Medicaid even if the pay stayed the same.

Despite the mitigating factors, the fee increases are significant because they're the largest in decades, Dears said. "It's not 100% of Medicare, but we're headed in the right direction."

The print version of this content appeared in the April 27, 2009 issue of American Medical News.

Details now emerging about cuts to Medicare private plans

April 24, 2009 on 1:01 am | In Uncategorized | Comments Off Washington -- Medicare private plans that for years have received annual pay increases are set to sustain sizeable reductions in 2010 under cost estimates recently released by the Obama administration.

In an April 6 directive to Medicare Advantage plans, the Centers for Medicare & Medicaid Services updated plan payment information that it first released in February. The National Per Capita Medicare Advantage Growth Percentage -- an estimation of how much more the program will need to spend on all beneficiaries -- will be 0.81% for 2010.

While this is an increase over the agency's initial projection of 0.5%, it still amounts to an expected reduction in payment over 2009 levels to private insurers that administer Medicare plans. For the first time, CMS will make a "coding pattern differences" adjustment to Medicare Advantage risk scores to account for differences in disease coding patterns between Medicare Advantage and traditional fee-for-service, producing more expected rate reductions.

Industry analysts project that, taken together, these administrative factors will produce cuts of between 4% and 5% next year for Medicare Advantage, said Robert Zirkelbach, America's Health Insurance Plans spokesman. CMS released the pay data so organizations offering Medicare Advantage and prescription drug plans could structure their benefits and beneficiary cost-sharing as they prepare their bids for 2010. Medicare Advantage plans have until June 1 to submit their bids to CMS.

Some experts think the latest CMS actions mean the Obama administration wants to limit Medicare Advantage plans even before cuts approved by Congress last July take effect in 2011. President Obama also has proposed saving another $180 billion over 10 years by requiring private Medicare plans to bid competitively for contracts, with the federal government paying the average of all bids.

Nearly 11 million beneficiaries are enrolled in Medicare Advantage plans.

A major part of the reason CMS is projecting such a low growth percentage for Medicare Advantage is that it is assuming Medicare physician pay will go down by an estimated 21% next year under current law. AHIP is dismayed that CMS has not taken into account the fact that Congress has stepped in every year since 2002 to head off a projected cut to Medicare payments for physicians and that it is likely to do so again this year, Zirkelbach said.

The potential effect of a Medicare Advantage cut next year on beneficiaries is raising concerns from some lawmakers in both parties. Sens. Max Baucus (D, Mont.) and Charles Grassley (R, Iowa) sent an April 3 letter to CMS saying projected payment rates could lead to premium hikes and benefit reductions.

The letter, addressed to CMS Acting Administrator Charlene Frizzera, said that by the time Congress acts later this year to adjust the physician payment formula, it would be too late for Medicare Advantage plans to resubmit their bids for the 2010 plan year under the updated projections.

"Even though Congress fully intends to avert the sizable physician pay reduction and is actively developing changes to the physician fee formula, CMS assumes current law in its update for Medicare Advantage plans," stated the letter from Baucus and Grassley, leaders of the Senate Finance Committee.

The projected payment cuts also are opposed by the California Assn. of Physician Groups, which is concerned about possible higher premiums and benefits reductions for the 1.5 million Medicare private plan enrollees in that state. "A reduction in Medicare Advantage funding would drastically limit the ability of physicians to provide important health care services to seniors and disabled Americans, many on limited incomes, who count on Medicare Advantage," said Donald Crane, president and CEO of CAPG, which represents groups that employ or contract with nearly 60,000 California physicians.

Nearly 11 million beneficiaries are in Medicare Advantage plans.

27% of Medicare Advantage plans have fewer than 10 enrollees.

CMS also is taking a closer look at how Medicare Advantage plans operate and wants to ensure that beneficiaries are protected from high out-of-pocket costs and given transparent choices of Medicare Advantage plans. The agency announced some of these policy changes in its annual "call letter" March 30 to plans that intend to offer Medicare Advantage and prescription drug plans in 2010.

CMS also is looking to pare the Medicare Advantage arena by asking insurers to eliminate low-volume plans that confuse beneficiaries. The agency said 27% of Medicare Advantage plans have fewer than 10 enrollees but that only a small number of beneficiaries -- less than 1% of all enrollees -- would be affected if these plans were dropped.

The American Medical Association is one of several physician organizations that supports equalizing private Medicare plan pay with traditional fee-for-service pay and using the money saved to boost doctor payments. The AMA also supports the new policies in the CMS call letter.

"The AMA believes that CMS' new oversight action will help strengthen these programs for patients," said AMA Board of Trustees Chair Joseph M. Heyman, MD. "We are pleased that the Obama administration listened to the concerns of physicians and implemented many of the AMA's suggestions into its latest guidance."

The print version of this content appeared in the April 27, 2009 issue of American Medical News.

Forums open up debate about health system reform

April 24, 2009 on 1:01 am | In Uncategorized | Comments Off Washington -- President Obama's effort to engage Americans in discussions about national health system reform reached a new phase with the conclusion of five regional health forums and another smaller gathering near the White House.

The invitation-only, two-hour forums were attended by a few hundred people each, including lawmakers, physicians, executives and others from a variety of backgrounds. White House staff moderated the forums, which were held between March 12 and April 6 in Dearborn, Mich.; Burlington, Vt.; Des Moines, Iowa; Greensboro, N.C.; and Los Angeles.

State medical society representatives and others who attended the events said they were a useful way to let people speak their minds about problems with the U.S. health system and the potential for positive changes. They said the regional events began with a video statement from Obama followed by statements from the host governors and moderators, then time for audience members to speak and ask questions.

"It was valuable in the sense that this is clearly a more transparent process than we had in the early 1990s," said Paul Harrington, executive vice president of the Vermont Medical Society, who attended the forum in Burlington on March 17. That event drew people from Massachusetts and New York as well and touched on universal coverage, preventive care and health care quality, he said.

The Los Angeles forum, held on April 8, was mostly scripted, with the moderator calling on specific people to get their views and just one spontaneous question from the audience, said Jeffrey Luther, MD, president of the California Academy of Family Physicians. Still, he said it was a good chance to network with others involved with health care.

"It was invigorating for those who were there," Dr. Luther said.

The comments at the regional forum in Dearborn were "all over the place," reported Michigan State Medical Society President Michael Sandler, MD. "There were some patients who wanted single payer. There were some legislative and hospital types who wanted more efficiencies in the system."

Many of the key local health care players attended the event and were allowed to share their expertise, he said. "The value was that people were allowed to give their input."

Nancy-Ann DeParle -- director of the White House Office of Health Reform -- hosted a smaller forum with about 30 health care representatives on April 8 at the Eisenhower Executive Office Building, adjacent to the White House. The same day, Obama issued an executive order formally creating the office headed by DeParle. It will be in charge of implementing the executive branch's health reform policies across federal departments and agencies.

DeParle led the April 8 discussion and asked attendees for opinions. "It didn't really take much to get the conversation started," said Ken Thorpe, PhD, professor of health policy at Emory University and executive director of the Partnership to Fight Chronic Disease. DeParle also moderated three of the regional forums.

Participants in the Washington, D.C., gathering -- including representatives from pharmaceutical companies and health plans -- appeared to agree on the need for universal coverage, better preventive care and payment reform, Thorpe said. But they differed on the methods needed to get there.

The executive branch outreach is probably not over, Thorpe said. He anticipated that the White House would hold more small health reform meetings in Washington, D.C. In addition, several members of Congress, at the request of the White House, hosted discussions in their districts and states during their two-week holiday recess. On April 1, DeParle also met with American Medical Association President Nancy H. Nielsen, MD, PhD, and Rebecca J. Patchin, MD, chair-elect of the AMA Board of Trustees, to discuss health system reform.

Obama's push for public participation began before he took the oath of office. The president's transition team asked Americans to hold community discussions on health system reform, then report the results of those discussions. About 3,200 groups did. Summaries of the comments submitted as well as videos of four of the regional forums are on the Dept. of Health and Human Services reform Web site (www.healthreform.gov).

Robert Blendon, ScD, a professor of health policy and political analysis at the Harvard School of Public Health, said Obama is trying to keep health system reform near the front of peoples' minds at a time when the economy is dominating the news. But these events weren't designed to get into the thorny details of negotiating legislation or answering tough questions, he said.

The print version of this content appeared in the April 27, 2009 issue of American Medical News.

Practices paperless before 2012 could maximize Medicare bonuses

March 18, 2009 on 1:00 am | In Uncategorized | Comments Off Washington -- The recent economic stimulus package provides a significant investment in health information technology that could benefit many physicians. But the government is expecting doctors to do their part to implement health IT and is prepared to penalize those who don't.

Over the next decade, the federal government is projected to spend more than $35 billion on Medicare and Medicaid bonuses to physicians, hospitals and others that adopt certified electronic health records. Because of the Medicare penalties that eventually will apply to nonadopters, however, the net spending level will be only about $20 billion over 10 years.

Physicians with approved EHRs in place before 2011 or 2012 will be eligible for the maximum Medicare incentive payments allowed by the stimulus. They will receive bonuses equal to 75% of their allowed Medicare Part B charges -- up to a sliding cap -- in each of the five years after adoption. The maximum of $18,000 in the first year phases down to $2,000 in the fifth year for a total five-year bonus of up to $44,000 for early adopters.

Doctors who wait until 2013 or 2014 to have EHRs in place will be eligible for smaller bonuses. The 2013 adopters can capture a maximum of $39,000 over four years, while the 2014 adopters can claim up to $24,000 over three years. Medicaid will have its own five-year bonus schedule that will offer as much as $64,000 to eligible physicians who don't claim Medicare bonus money.

Once the chance for bonuses ends, Medicare starts penalizing physicians who have not responded to the incentives. Doctors who have not adopted an EHR before 2015 and who fail to obtain a hardship exemption will see a 1% cut to their Medicare pay, a reduction that phases up to 3% for 2017 and remains each year after that.

Simply setting up any paperless system is not enough to earn bonuses and avoid penalties. The stimulus package stipulates that physicians must adopt a qualifying EHR and use it in a "meaningful way." Meaningful users are defined as physicians who demonstrate to the Health and Human Services Dept. that they are using electronic prescribing; that their technology is connected in a manner that provides for electronic exchange of health data to improve quality of care; and that they submit information to HHS on clinical quality measures.

No longer a question of "if"

Some physicians already have begun to move away from paper, and they would rather act sooner than later to avoid penalties down the road. "The question now isn't if, but how and when, because physicians are feeling a sense of inevitability," said Todd Rowland, MD, executive director of HealthLINC.org in Bloomington, Ind., a regional health information exchange that covers a multicounty area. "We need to figure out how to implement it in an economical, management-oriented approach that requires as few work-flow sacrifices as possible."

Dr. Rowland added that he doesn't expect physicians to like the implementation process -- or the possibility of penalties if they don't do it right -- but that it makes sense for physicians younger than 55 in particular to get on board. He estimates that more than 50% of physicians in Bloomington's metro area and more than 75% in the rural area have adopted EHR systems.

Early EHR adopters can get up to $44,000 in a Medicare bonus or $64,000 in a Medicaid bonus.

While the stimulus also provides Medicaid incentives, physicians can't have it both ways -- they must choose either Medicare or Medicaid bonuses, said Heidi Echols, a partner at the law firm McDermott, Will & Emery in Chicago.

In an effort to prevent additional "double-dipping," physicians who report using an EHR system that is also capable of e-prescribing no longer will be eligible for the e-prescribing bonuses that went into effect this year under the Medicare Improvements for Patients and Providers Act. On the other hand, Medicare penalties for those not e-prescribing by 2012 will sunset after 2014, so that no physician will be subject to double penalties for failing to e-prescribe and failing to use an EHR.

Now that Congress has set up the incentive structure for adoption, President Obama and his administration also must promote interoperability of EHR data so the records don't become information "islands," said David J. Brailer, MD, in an article published online as part of a series on health IT in Health Affairs' March/April issue.

Dr. Brailer was the first National Coordinator for Health Information Technology at HHS from 2004 to 2007 and is now chair of Health Evolution Partners, a health care investment firm based in San Francisco. He said physicians particularly need to be wary of vendors from which they purchase IT services, as systems that become obsolete could set back progress.

"What it boils down to is, are you buying EHRs that you can use and keep for a long time, or is it a system that in two or three years goes kaput?" he asked. "We're trying to avoid doctors having to start over again with electronic records during their career."

The next steps

The stimulus act requires HHS by Dec. 31 to develop an initial set of standards, implementation specifications and certification criteria for EHR system adoption. It also authorizes the department to provide competitive grants to states for implementation loans to health care entities.

The national health IT coordinator also will be authorized to make available a qualifying EHR system to physicians and others for a nominal fee. Doctors who do not purchase the government's system can purchase a qualifying system from a vendor of their choice as long as it meets certain standards, including interoperability requirements.

The American Medical Association will seek clarification from HHS on the cost of the government system and when it will be available. The department must determine more details on how it will spend the stimulus dollars and how doctors can access them.

Once those details are available, physicians must examine the cost-benefit breakdown. According to a May 2008 report from the Congressional Budget Office, estimated total costs for implementing a typical office-based EHR are about $25,000 to $45,000 per physician. Each physician would then need to spend about $3,000 to $9,000 per year to maintain the system.

This content was published online only.