As many people are discussing methods to improve healthcare, the Centers for Medicare & Medicaid Services (CMS) is giving stakeholders an opportunity to send in their thoughts on this topic.  In CMS’s April 14, 2017 proposed rule, CMS issued a “Request for Information” (“RFI”), where they described their desire to have a “national conversation” about improving the health care delivery system.

CMS would like to know, amongst other ideas: (1) How CMS can help make its healthcare delivery system (Medicare) less bureaucratic and complex; and (2) How CMS can reduce the burden on clinicians, providers and patients in a manner that increases quality of care and decreases costs.  “CMS is soliciting ideas for regulatory, sub-regulatory, policy, practice and procedural changes to better accomplish these goals.”

Per CMS, some ideas could include recommendations regarding payment system re-designs; elimination or streamlining of reporting; monitoring and documentation requirements; and operational flexibility; amongst others.  CMS is also looking for ideas on how CMS issues regulations and policies, and how these could be simplified.

In a separate RFI in the same proposed rule, CMS also seeks information on how the scope and restrictions imposed on “Physician-Owned Hospitals” affect the delivery system, particularly with regards to Medicare beneficiaries.

To the extent respondents have data and specific examples, CMS requests such information be included in the submission.  If a proposal involves novel legal questions, CMS is also welcoming analysis regarding CMS’ authority.

If you wish to submit your comments to CMS, you have until June 13, 2017 to do so.

For more information please see the CMS Fact Sheet for Fiscal Year (FY) 2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule, and Request for Information CMS-1677-P.

The Centers for Medicare & Medicaid Services (“CMS”) recently introduced a new education initiative for Chronic Care Management (“CCM”) patients and providers. The initiative, called Connected Care, is intended to raise awareness of the benefits of providing CCM services to Medicare beneficiaries with multiple chronic conditions and to help ensure that health care providers are receiving optimal reimbursement for providing such services.

CMS has stated that two-thirds of Medicare beneficiaries have two or more chronic conditions, and one-third have four or more chronic conditions. CMS recognizes CCM as a critical component to primary care that contributes to better quality health care at reduced cost. However, many CCM providers are not aware that the Medicare Physician Fee Schedule allows separate payments for CCM services such as telephone communication, review of medical records and test results, and coordination and exchange of health information with other providers. CCM also includes activities such as patient education or motivational counseling, which are provided either in person or by telephone. Physicians, certified nurse midwives, clinical nurse specialists, nurse practitioners and physician assistants may bill for CCM services.

Specifically, CPT Code 99490 has been available since 2015 for eligible providers to bill for at least 20 minutes of clinical staff time directed by a physician each month to coordinate care for beneficiaries who have two or more serious chronic conditions expected to last at least 12 months. Effective January 1, 2017, CMS expanded the CCM billing codes to account for more complex and time-consuming care coordination:

  • HCPCS Code G0506 is an add-on code to the CCM initiating visit for providing a comprehensive assessment and care planning to patients;
  • CPT Code 99487 is for complex CCM that requires substantial revision of a care plan, moderate or high complexity medical decision making, and 60 minutes of clinical staff time;
  • CPT Code 99489 is a complex CCM add-on code for each additional 30 minutes of clinical staff time.

CMS’ Connected Care program provides the following educational materials for CCM services:

If you have questions regarding billing for CCM services, please contact a knowledgeable and experienced healthcare attorney.

We recently issued a Health Law Alert on the Medicare Quality Payment Program, focusing specifically on what physicians and their medical practices need to know to be in compliance with the Program in 2017.  The Alert may be accessed at this link: Fox Rothschild Health Law Alert – Medicare Quality Payment Program

You may also view some of our recent posts on the Physician Law Blog for more information on the Medicare Quality Payment Program.  In short, compliance with the Program in 2017 can earn you and your practice anywhere from a 0%-4% increase in your reimbursements under the Medicare Physician Fee Schedule in 2019.  However, failure to meet at least the minimum level of compliance this year will result in a negative adjustment of 4% to your Medicare reimbursements in 2019.

Stay tuned to Fox Rothschild’s Physician Law Blog for updates on the Medicare Quality Payment Program in 2017 and beyond.

The Medicare incentive programs with which you and your medical practice are familiar will soon be no more.  As of January 1, 2017, these programs (including the Electronic Health Records (EHR) Meaningful Use Incentive Program, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Modifier Program) will morph into the new Medicare Quality Payment Program (QPP).   The QPP will also include a fourth category of incentives entitled “Clinical Practice Improvement Activities”, which we discuss in more detail below.

The purpose of the QPP is to create one central program that will govern Medicare Part B payments to physicians, while incentivizing physicians to increase quality of care and decrease inefficiencies in the cost of care for Medicare patients.  Participation in the QPP will be mandatory beginning January 1, 2017.  The QPP will either reward or penalize physicians and their practices by adjusting their reimbursement rates under the Medicare Physician Fee Schedule two (2) years after the reporting year.  Therefore, physicians/practices will have their reimbursement rates adjusted in 2019 based on their reporting data for the year 2017.

As we noted in our first blog post in the Series, accessible here, physicians will have the option to choose between two payment tracks under the QPP:  (1) the Merit-Based Incentive Payment System (MIPS); and (2) an Advanced Alternative Payment Model (Advanced APM).  This blog post will discuss the basics of the MIPS and how to qualify for the MIPS in 2017, while our next post will touch on the basics of participation in Advanced APMs.

Basics of the MIPS

Each physician or group practice (you may report individually or as a group) participating in the MIPS in 2017 will earn a “composite performance score” based on the physician/group’s scores within the following four (4) categories:

  1. Quality of Care – 60%
    • Explanation: Scored based on the reporting of “quality measures”, which will be published annually by CMS.  Physicians will be able to choose which quality measures they will report each year.
    • Replaces: PQRS and quality component of the Value-Based Modifier.
  2. Advancing Care Information – 25%
    • Explanation: Scored based on the reporting of EHR use-related measures with which you are familiar from the current EHR Meaningful Use Incentive Program.  However, unlike the existing program, the QPP measures will not have “all-or-nothing” targets.
    • Replaces: EHR Meaningful Use Program.
  3. Clinical Practice Improvement Activities – 15%
    • Explanation: Scored based on attestation by the physician/group that the physician/group has performed certain care coordination, beneficiary engagement, population management and patient safety activities.
    • Replaces:   New Program.
  4. Resource Use – 0%
    • Explanation: Scored based on per capita patient costs and episode-based measures.  CMS collects and analyzes the data from your claims submissions.  No additional reporting will be required.
    • Replaces: Cost component of the Value-Based Modifier.

How to Qualify for 2017

CMS has eased the reporting requirements for the first year of the QPP.  No physician/group will be required to begin collecting data in accordance with the QPP’s requirements on January 1, 2017 (but may elect to do so).  To receive a neutral or positive payment adjustment, physicians/groups will need to report data for only a 90-day performance period during the year.  There are also minimum threshold reporting requirements to avoid a negative payment adjustment and full participation requirements which are more likely to result in a guaranteed positive adjustment.  The table below organizes the requirements in an easy-to-read format:

MIPS Measures Chart

Final Thoughts on Qualifying for the MIPS in 2017

  • Get involved sooner rather than later. CMS has kept reporting requirements minimal in 2017 in order to encourage clinicians to participate in the QPP.  Take advantage of that opportunity to ensure your practice has the right software to report the quality and EHR use-related measures.  Since adjustments will be made based on threshold scores, it may be easier in 2017 to earn a positive adjustment, and even an exceptional bonus, than in later years.
  • Ensure that your current EHR technology meets the requirements for the QPP in 2017, including reporting capabilities for quality measures and EHR use-related measures. The easiest way to do this is to contact your EHR vendor.
  • CMS has given providers plenty of time to report 2017 data. The deadline for reporting 2017 data is March 31, 2018.

As always, if you have questions specific to your practice, please contact a knowledgeable and experienced attorney.

You may have heard that a transformation of Medicare’s physician payment program is in the works.  However, you may not know that the structure of the new program, called the “Quality Payment Program”, has been finalized and will begin its first reporting year on January 1, 2017.  Now is the time for you and your practice to get up to speed on the new Quality Payment Program.  This post is the first in a new Blog Series that we will be publishing on Fox Rothschild’s Physician Law Blog to help you and your practice prepare for Medicare’s Quality Payment Program.

In October, the Centers for Medicare and Medicaid Services (CMS) issued a Final Rule setting forth the structure of the Quality Payment Program and the parameters for its first year of operation.  The purpose of the Quality Payment Program is to create one central program that will govern Medicare Part B payments to physicians, while incentivizing physicians to increase quality of care and decrease inefficiencies in the cost of care for Medicare patients.  The Quality Payment Program will consolidate the existing Medicare incentive programs (which include the Electronic Health Records (EHR) Meaningful Use Incentive Program, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Modifier Program), along with a new program incentivizing clinical improvement activities, into a single payment program that will either reward or penalize physicians by adjusting their reimbursement rates under the Medicare Physician Fee Schedule.

In each reporting year under the Program, physicians will be required to qualify for one of two (2) payment tracks:  (1) the Merit-Based Incentive Payment System (MIPS); or (2) the Advanced Alternate Payment Model (Advanced APM) model.  The MIPS is the default payment track, and will be the track used by most physicians over the next five years.  Qualification for the Advanced APM model requires participation in a CMS-approved Advanced APM.  The long-term goal of CMS is for most physicians and practices to participate in Advanced APMs.

While calendar year 2017 will be the first reporting year under the Quality Payment Program, payment adjustments for physician performance in 2017 will not be made until the 2019 calendar year.  This two-year gap between reporting and payment adjustment has been carried over from the existing incentive programs and may eventually be shortened.  However, for now, the gap will allow a smoother transition from Medicare existing incentive programs, which have collected data over the last two years for incentive payments in 2017 and 2018, respectively.  To be clear, incentive payments based on data reported under existing incentive programs in 2015 and 2016 will still be made.

The good news is that CMS has eased the reporting requirements for the first year of the Program.  For example, no physician will be required to begin collecting data in accordance with the Program’s requirements on January 1, 2017.  To receive a neutral or positive adjustment to reimbursements in 2019, physicians will need to report data and perform certain practice activities for a 90-day performance period during the year.

Stay tuned to the Physician Law Blog for upcoming posts on what you and your practice need to know about the Quality Payment Program (QPP).  The next posts in the QPP Blog Series will be:

  1. Basics of the MIPS and How to Qualify in 2017
  2. Basics of Advanced APMs and How to Qualify in 2017
  3. Details of the MIPS Scoring System

In the interim, if you would like to learn more about the QPP, we encourage you to check out the excellent website CMS has developed on the QPP, which can be found at this link:  https://qpp.cms.gov

As always, if you have questions regarding the applicability of the QPP to you and your practice, we advise you to consult with a knowledgeable attorney.

The Office of Inspector General (“OIG”) of the Department of Health and Human Services, generally, would have concerns about a potential or existing referral source receiving free goods or services, since these free goods and services could be used to provide unlawful payments for the referral of Federal health care program business.  However, under Advisory Opinion 16-09, the OIG decided not to pursue sanctions against a company that provides computerized point-of-care storage and dispensing systems for vaccines (the “Dispensing System”) to physicians free of charge due to the specific circumstances in this arrangement.

The Arrangement:  A manufacturer of a refrigerated vaccine storage and dispensing system (the “Dispensing System”) would retain title to their Dispensing System and the internal data, but would provide the system free of charge to certain physicians.  The manufacturer would enter into two types of agreements:

1)  Sole-Source Vaccine Agreement – The Dispensing System manufacturer would enter into an agreement with manufacturers who are the sole suppliers of a vaccine (“Sole-Source Vaccine”).  The Sole-Source Vaccine manufacturer would pay the Dispensing System manufacturer a fee for each unit of vaccine that a participating physician dispenses out of the Dispensing System (the “Dispense Fee”).

2) Physician Agreement – Dispensing System manufacturer would enter into agreements with only those Physicians who had not previously stocked adult vaccines previously, or only stocked vaccines sporadically or in low volumes.  The Dispensing System would be free of charge to physicians, provided the physician agrees to stock at least one Sole-Source Vaccine that has an Agreement with the Sole-Source Vaccine manufacturer.  The physician would be responsible for the internet connectivity and utilities for the system.  The physician could use the Dispensing System to store other vaccines.  However, the physician may only store Sole-Source Vaccines if the vaccine manufacturer has an agreement with the Dispensing System manufacturer.

OIG’s Analysis: Due to the following “unique factors” the OIG concluded that the following arrangement would be permissible.

  • No Dispense Fee is shared with the physicians.
  • The Dispense Fee is paid directly to the Dispensing System manufacturer, who does not generate Federal healthcare program business.
  • The risk of unfair competition is reduced because (1) only Sole-Source Vaccine manufacturers can enter into an agreement with the Dispensing System manufacturer; (2) More than one Sole-Source Vaccine manufacturer can have their vaccines in any machine and each would be paying the Dispense Fee; and (4) Since a physician needs the Sole-Source Vaccine for patient, the physician has inherently chosen the manufacturer, since they cannot get the vaccine from anywhere else.
  • Physicians may store any non-sole-source vaccines in the Dispensing System that they wish.
  • The manufacturer will not advertise, market or promote any specific vaccine.
  • Adult vaccines are administered in limited manner and serve to prevent diseases, which if not prevented could lead to costlier services to federal payors.
  • The Arrangement helps achieve the CDC’s goal to improve adult vaccination rates which is a benefit from a public policy perspective.
  • The Dispensing System helps mitigate one of the key challenges – proper vaccine storage and management

While it appears the opinion is likely limited to the discrete issue of vaccine storage, it does demonstate that the OIG may be willing to entertain proposals that align with public health concerns or other government agency goals, even in situations where there could be a risk of fraud or abuse to federal payor programs.

If your practice is interested in guidance regarding free vaccine dispensing systems or similar arrangements, be sure to consult experienced counsel.

In March 2016, we covered the conviction of Dr. Venkateswara Kuchipudi for violating the federal anti-kickback statute by referring nursing home patients to Sacred Heart Hospital (in Chicago) in exchange for kickbacks. For a summary of the case, please see our post here: Nursing Home Fraud Scam Results in Conviction for King of Nursing Homes

Dr. Kuchipudi was convicted of one count of conspiracy to defraud the United States and nine counts of illegally soliciting or receiving benefits in return for referrals of patients covered under a federal health care program. On August 12, 2016, the U.S. District Court for the Northern District of Illinois sentenced Kuchipudi to two (2) years in prison and the return of over $786,000, consisting of overpayments and fines.

According to the Court, Kuchipudi had become more focused on making money than on the best interests of his patients, and knew that his scheme to refer nursing home patients for kickbacks was “morally wrong”.

The Hospital made the following kickbacks to Kuchipudi:  (1) it covered the costs of the physician assistants (PAs) and nurse practitioners (NPs) who exclusively treated Kuchipudi’s patients, while allowing Kuchipudi to bill Medicare and Medicaid for the services of the PAs and NPs treating his patients; (2) it inappropriately paid him rent payments; and (3) it paid him bogus teaching fees.

The prosecutors sought 6 to 8 years in prison for Kuchipudi, and stressed Kuchipudi’s greed in engaging in the scheme.  In his defense, Kuchipudi offered support letters from many of his patients, testifying to his selfless nature and years of patient-centered care. However, some of the most telling evidence of Kuchipudi’s intentions was that he frequently did not know why his patients were admitted to the Hospital or even who they were.  In addition, in the sentencing memorandum, prosecutors noted that Kuchipudi pressured the Hospital to pay for his meals at an expensive steakhouse in Chicago, which a Hospital executive agreed to do expressly in exchange for Kuchipudi’s admissions.

As we noted before, this case is an example of how violations of the federal anti-kickback statute can involve kickbacks in forms other than direct payment for referrals. It also serves as a reminder to physicians to carefully review their hospital relationships and arrangements with other providers to avoid running afoul of federal and state fraud and abuse laws. We encourage you to seek legal counsel with experience in the nuances of these laws and regulations if you have any questions regarding your arrangements with providers.

There are big changes coming to the Medicare incentive programs as we know them.  Beginning on January 1, 2017, the new Quality Payment Program (the “Program”) will replace all existing Medicare incentive programs with a comprehensive incentive model.  The Program will involve a modified set of EHR Meaningful Use requirements, new quality of care metrics, new cost efficiency goals and “clinical practice improvement activities” (for which physicians will be rewarded for care coordination, beneficiary engagement and patient safety).  The Program will also have a separate track for incentive payments associated with participation in Advanced Alternative Payment Models (such as Accountable Care Organizations) (“APMs“).

Congress provided for the development of the Program in the 2015 Medicare Access and CHIP Reauthorization Act (the “MACRA”).  Under the MACRA, the Program must be “budget-neutral” each year.  In other words, the rewards paid by Medicare to well-performing physicians and practices must be equally offset by the penalties levied against poor-performing providers.  The rewards will continue to take the form of payment adjustments to the Medicare Physician Fee Schedule.  The first year of payment adjustments will be 2019, based on data from the 2017 reporting year.  For 2019, the reward paid to (or penalty levied against) any provider may not exceed a 4% adjustment to the Medicare Physician Fee Schedule.  However, in subsequent years, the limits are set to increase, reaching a maximum of 9% in 2022.

The potential for substantial penalties under the Program has led to concerns that the Program will make it difficult for smaller practices with higher numbers of Medicare patients to be financially viable.  Foreseeing these economic issues, Congress earmarked $100 million over five years to help small practices successfully participate in the Program.

In June, the U.S. Department of Health and Human Services (“HHS”) announced that the first $20 million of these earmarked funds will be awarded by the end of 2016.  The recipients of the funding will be organizations that provide education, training and consultation on the Program to small practices.  In particular, these organizations will assist small practices in understanding what quality measures, EHR options and clinical practice improvement activities are most appropriate for their practices.  The organizations will also help small practices evaluate their options for joining an APM.  HHS has not announced when the organizations will begin training and educating small practices.

While the intention behind such training and education is laudable, it does not lay to rest the concern that small practices serving substantial Medicare populations will be under greater pressure and financial strain to continue to operate independently.  After all, the Program itself must remain budget-neutral.  If practices improve their compliance and quality of care metrics, payment adjustments will have to be reduced or compliance standards raised.  In the long-term, this may lead to small practices being forced to join an APM in order to continue to serve Medicare patients.

Stay tuned for updates on the Program from CMS, including details on the final regulations for the Program.  If you have specific questions about how the Program may affect your practice, be sure to contact a knowledgeable healthcare attorney.

The deadline for providers to file a hardship exception application to the electronic health record (EHR) meaningful use requirements for the 2015 reporting period is July 1, 2016.

If you have any concern that your practice or certain eligible professionals in your practice may have been unable to meet the meaningful use requirements for the 2015 reporting period, it may be appropriate for the applicable provider to file a hardship exception application with CMS to avoid future payment adjustments.  Note also that certain provider types may automatically qualify for a hardship exception for the 2015 reporting period without the need to file an application.

For more information, please see the Health Law Practice Alert recently published by Fox Rothschild LLP on this topic, accessible at this link:  Fox Rothschild LLP Health Law Practice Alert – Hardship Exception (June 17, 2016).

In a recent Advisory Opinion (No. 16-02), the OIG concluded that it would not seek sanctions against a state-run hospital (the “Hospital”) under the federal anti-kickback statute or the civil monetary penalty law for two arrangements under which the Hospital provides transportation aid and short-term lodging to pregnant women covered by federal health care programs.  Although the OIG stressed that the unique factors of the arrangements led to its decision, the OIG’s analysis offers some insight into its concerns regarding the provision of transportation and other aid to patients by a provider.

The Hospital is a state academic medical center that operates 11 Hospital-based clinics providing prenatal care (the “Clinics”).  The patients are primarily low-income women, and each is presented with the Hospital as a potential location for the delivery of her child.  In 2014, 97% of the Clinics’ patients who delivered at the Hospital had high-risk pregnancies.

Under the first arrangement, Hospital employees offer transportation aid to any Clinic patient with a high-risk pregnancy who expresses concern about the cost and distance of traveling to the Hospital for delivery.  The aid is offered in the form of mileage reimbursement or fare reimbursement (for public transportation).

Under the second arrangement, the Hospital offers a Clinic patient and her companions free lodging at an apartment building near the Hospital under certain circumstances.  The apartments have simple living accommodations and are staffed by an on-call nurse.  To be offered lodging, the patient must have a physician’s order justifying the stay.  As a result, the majority of the patients who receive free lodging under this arrangement have high-risk pregnancies requiring frequent monitoring.  Patients without high-risk pregnancies may be offered lodging only if they are experiencing contractions or are scheduled for induction of labor or delivery the following day.  All patients receiving free lodging also receive free transportation to the Hospital for delivery.

The Hospital stated that the purpose of the above-described arrangements is to allow Clinic patients to benefit from specialty and continuing care at the Hospital when close to the end of their pregnancies.  In its Advisory Opinion, the OIG acknowledged the Hospital’s legitimate purpose and concluded that it would not pursue sanctions against the Hospital under the federal anti-kickback statute or civil monetary penalties law, even though, in the OIG’s opinion, these arrangements implicated both laws.  The OIG emphasized that its decision was influenced by the unique circumstances of the arrangements, and that no individual factor (or any combination of factors other than all of them) would necessarily result in the same decision.  Nonetheless, the OIG’s concerns provide some insight into how the OIG would view similar arrangements in the future.

The OIG’s analysis rested on the following key factors of the arrangements:

  • The arrangements were beneficial to the patients because they provided continuity of care, access to specialty care, and focused on patients who lack sufficient financial means of delivering at the Hospital.
  • The aid given to the patients would be “modest” in nature and available only in limited circumstances.  Specifically, (i) the transportation aid would be available only if a patient expressed concern about her ability to afford the cost of traveling to the Hospital for delivery, and (ii) the lodging aid would be available only if the patient has a high-risk pregnancy or is scheduled for delivery the following day, and the patient receives a physician’s order justifying the stay.
  • The aid would not be advertised by the Hospital or the Clinics, and would be offered only to existing patients.  As a result, the OIG did not view this arrangement as being designed to serve as an inducement for patients to seek care at a Clinic or the Hospital over other providers.
  • Eligibility for the aid would not be limited to patients on the basis of their health insurance coverage.
  • The cost of the aid would not be claimed as bad debt or otherwise shifted to Medicare, Medicaid or another federal health care program.
  • The aid would be part of a program of care operated by a state-run academic medical center for the benefit of a large number of Medicaid and CHIP beneficiaries.  As a result, the OIG stated that it would expect the State to promote the integrity of the arrangements.

If you or your practice is interested in guidance on providing aid or other benefits to patients, be sure to consult experienced legal counsel.

The full text of the Advisory Opinion is available here:  http://oig.hhs.gov/fraud/docs/advisoryopinions/2016/AdvOpn16-02.pdf