Baker Tilly healthcare update May 30, 2014

On the Hill

On May 14, Sylvia Burwell, President Obama’s nominee for Secretary of the Department of Health and Human Services (HHS), appeared before the Senate Finance Committee for a confirmation hearing. Much like the Senate Health, Education, Labor, and Pensions Committee hearing on Burwell’s nomination, there was widespread support expressed for the nominee. On May 21, the Senate Finance Committee voted 21-3 to move her nomination out of committee and onto the Senate floor. The full Senate is expected to vote on her nomination during the first week of June.

The House Oversight and Government Reform Subcommittee on Energy Policy, Health Care, and Entitlements and the House Ways and Means Subcommittee on Health each held hearings on May 19 regarding Medicare payment oversight. The hearings focused on Recovery Audit Contractors (RAC) and the apparent flaws in the Medicare claim auditing process. There was bipartisan consensus in both committees that the Medicare audit system is overwhelmed and inefficient. Citing a backlog of over 1 million audit appeals and the large number of overturned audit decisions by administrative law judges, there was a strong push from many congressional members to reform the system. Lawmakers representing small provider groups and rural hospitals in both committees expressed particular concern that the Medicare audit process is cumbersome and undermines the financial stability of these types of healthcare providers.

On May 21, the House Energy and Commerce Committee held a hearing titled “Keeping the Promise: Site of Service Medicare Payment Reforms.” The hearing focused on post-acute care Medicare payment systems, and congressional members highlighted current or proposed legislation that would help to “streamline” these payment models. Among the legislation discussed, a bill that would bundle Medicare payments for post-acute care services received the most attention and bipartisan support.

At the agencies

On May 19, the Centers for Medicaid and Medicare Services (CMS) released a final rule on Policy and Technical Changes to the Medicare Advantage (MA) and the Medicare Prescription Drug Benefit Programs (Part D). The rule revises the MA program regulations in accordance with the Affordable Care Act. In particular, the rule modifies agent/broker compensation, implements overpayment provisions of the Social Security Act, and prohibits the submission of diagnoses for additional payment after the final risk adjustment data submission deadline. In terms of Part D, the rule requires physicians who participate in Part D to enroll or officially opt-out of Medicare, increases transparency by releasing data on physician rates and billing practices, and allows CMS to rescind Medicare enrollment for providers with a proven history of over-prescribing or writing fraudulent prescriptions. The rule also includes the controversial “maximum allowable cost” standards which would set reimbursement rates to pharmacies according to a list of maximum costs dictated by pharmacy benefit managers and other Part D sponsors.

On May 20, CMS unveiled a proposed rule regarding the electronic health record (EHR) incentive program. The proposed rule, if enacted, would ease restrictions on providers and hospitals on the certification year for using EHRs under the program. Many provider groups have informed CMS that the current EHR incentive program requirements are technically burdensome and discourage providers from participating. Under the proposal, CMS would allow providers and hospitals to use EHRs certified in 2011 as opposed to requiring them to use EHRs certified in 2014, a requirement that was supposed to begin this year. CMS would also delay Stage 3 of the EHR incentive program until 2017.

CMS is also testing a new hospice payment program to evaluate whether Medicare beneficiaries who receive early hospice care have better quality of life and lower Medicare expenditures. The program, called the Medicare Care Choices Model, will be available for Medicare beneficiaries with a limited set of conditions, including advanced cancer, congestive heart failure, and HIV/AIDS. Hospices must apply by mid-June to participate in the three-year program, and CMS will select at least 30 hospices to participate. The selected hospices will receive $400 per month per beneficiary.

In third parties

James Madera, CEO of the American Medical Association (AMA), sent a letter to CMS Administrator Marilyn Tavenner lamenting the agency’s recent release of physician payment data. The letter, dated May 15, 2014, claims that the payment data only served to create “a series of sensationalist news stories, the majority of which inaccurately reported the data.” The letter is requesting that CMS allow physicians to “correct and explain their data.”

The AMA also sent a letter to CMS that provides its insight on ways to improve the agency’s Electronic Health Records Meaningful Use Program (MU). The MU Program is intended to encourage and assist physicians with implementing the use of electronic health records in their practices. The letter, dated May 8, claims that the financial penalties and extensive requirements of the MU Program discourage physicians from participating in the program.

A study published on May 12 in the Journal of the American Medical Association Internal Medicine found that every year up to 42 percent of Medicare beneficiaries receive at least one unneeded medical procedure, costing taxpayers up to $8.5 billion.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.