CMS is closely watching the implementation of ICD-10. What is your reaction?

At the agencies

The Centers for Medicare and Medicaid Services (CMS) is closely watching the implementation of ICD-10. The use of ICD-10 in the place of ICD-9 took place on October 1. Through their ICD-10 Coordination Center, CMS is monitoring how providers are dealing with the change and will answer any concerns or questions they may have.

On September 24, CMS released answers to questions regarding electronic health record (EHR) meaningful use hardship exceptions. Under hardship exceptions, providers can apply for exemptions from the payment adjustments created under the EHR meaningful use programs if they can prove that adhering to the program would cause “considerable hardship.” These released answers confirmed that providers can claim a hardship exception if they switch EHR vendors during a program year and can also claim a hardship exception if their EHR product is decertified under certain timeframe circumstances.

On September 25, CMS announced that it awarded $110 million through the Partnership for Patients initiative, a program that is intended to reduce the rate of hospital-acquired conditions.  This is the second round of the program that was created by the Affordable Care Act and was first implemented in 2011. Seventeen hospital associations and health system organizations were awarded the funds. According to CMS, the rate of hospital-acquired conditions had declined 17 percent since the program was initiated. This decline represents 50,000 fewer deaths and $12 billion in healthcare cost savings over a three-year period.

On September 28, CMS announced that it is requesting information regarding implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Among other provisions, MACRA repealed the sustainable growth rate formula and created new merit-based incentive payments systems, higher rate updates for Alternative Payment Models, and added the Value-Based Payment Modifier. CMS is seeking input from any interested stakeholder on MACRA’s implementation and will accept that input until October 31, 2015.

The Centers for Medicare and Medicaid Service has announced a plan to address health disparities among Medicare patients. The Office of Minority Health within CMS revealed the plan at a recent conference and identified six priorities for achieving their health equity goals. These six priorities are: expanding the collection, reporting, and analysis of standardized data; evaluating the health impacts of disparities and integrating solutions across CMS programs; developing and disseminating promising approaches to reducing health disparities; increasing the accessibility of the healthcare workforce to serve the needs of vulnerable populations; improving language access for those with limited English proficiency, and increasing physical accessibility of healthcare facilities for vulnerable populations. CMS hopes to begin implementing aspects of the plan soon and will be working with industry stakeholders to develop plans of action.

Chairman Tom Price (R-GA) of the House Budget Committee has drafted a letter to CMS requesting that the agency delay implementation of the bundled payment program for hip and knee surgeries that is set to take place on January 1, 2016. In the letter, Chairman Price indicates that providers will need more time to implement the bundled payment program for these procedures given that CMS has yet to release the final rule governing the program. The letter also outlines the chairman’s questions regarding incentives for hospitals to consolidate with post-acute care providers, how CMS proposes to account for higher-cost surgeries, and the potential impact of the rule on rural hospitals.

Government building icon

On the Hill

On September 10, a subcommittee of the House Judiciary Committee held a hearing during which representatives from the American Medical Association (AMA), American Hospital Association (AHA), and America’s Health Insurance Plans (AHIP) discussed healthcare industry consolidations and their impact on healthcare costs. The AMA requested additional flexibility for providers as they determine new payment models to use in the wake of all of this consolidation, asking for antitrust scrutiny of providers to be temporarily lessened. The AHA representative’s testimony argued that recent hospital mergers are being driven by the increased regulation of the industry. This hearing is the first of several to come as members of Congress are anxious to determine whether consolidation in this space needs to be limited.

In recent weeks, numerous congressional members have expressed their desire for a delay of the EHR Stage 3 meaningful use final rule. On September 25, Chairman of the Senate Finance Committee, Orrin Hatch (R-UT), arranged for several concerned stakeholders to meet with the Office of Management and Budget (OMB) to discuss delaying the rule’s implementation, and separately, 116 members of the House signed a bipartisan letter written to the OMB asking them to pause consideration of the final rule. Also, on September 30, Chairman of the Senate Commerce, Science and Transportation Committee, Senator John Thune (R-SD), called for a delay of Stage 3 of the meaningful use program. 

On October 1, in a hearing held by the Senate Committee on Health, Education, Labor, and Pensions (Senate HELP), Chairman Lamar Alexander (R-TN), continued to ask CMS to delay the final rule on Stage 3 of meaningful use. Other members of Senate HELP echoed the chairman’s concerns, citing several reasons that the delay on the final rule is necessary including: providers expressing that they are unprepared to meet the requirements outlined in the rule; statistics showing that the vast majority of providers are still working on meeting the Stage 2 requirements; and concerns that providers will be negatively impacted financially. Lawmakers cited that 25 percent of providers’ scores, according to the Merit-Based Incentive Payment System, will be based upon their implementation of meaningful use and this could significantly impact bonuses and penalties. 

Legislative building icon

In the courts

On September 22, a federal district court judge issued a ruling regarding the ongoing two-midnights rule battle between HHS and the American Hospital Association (AHA). Previously, Judge Moss decided that HHS failed to provide the assumptions it used in its creation of the two-midnights rule, and by doing so, failed to give stakeholders appropriate time to comment on the rule. The September 22 ruling gave the parties until October 1 to set out a timetable for an additional comment period. The controversial rule could be modified due to additional commentary from stakeholders, or, if the agency fails to abide by the timetable, could be set aside entirely. Because of this, the AHA said this decision represents “a significant victory for hospitals.” 

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

Next up

The new normal is here … are you ready to embrace risk contracting?