The New Jersey Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act (the “Law”), New Jersey’s “surprise” medical billing law, went into effect on August 30, 2018.  Among other things, it requires licensed health care professionals in New Jersey (including, but not limited to, physicians, physician assistants and nurse practitioners) that bill health benefits plans issued or delivered in New Jersey (“NJ Health Plans”) to make certain patient disclosures regarding participation in such plans.  Additional patient disclosures are required for health care professionals who are out-of-network with a patient’s NJ Health Plan.

The Law also sets forth a “baseball-style” arbitration procedure to resolve disputes between health care professionals and NJ Health Plans over claims for reimbursement for (1) out-of-network emergency or urgent care services, and (2) “inadvertent” out-of-network services (such as on-call, radiology and anesthesiology services).

Please see our recently issued Health Law Alert on this matter for details on compliance with the Law, including the patient disclosure requirements and the arbitration process.

On October 24, 2018, Congress enacted a new anti-kickback law that applies to many commercial health insurance plans, as well as Medicare and Medicaid.  The law, known as the “Eliminating Kickbacks in Recovery Act of 2018” (the “Law”), was passed as part of the SUPPORT for Patients and Communities Act, which generally targets the national opioid crisis.

PillsMoneyThe Law makes it a criminal offense to do any of the following:

  1. Solicit or receive any remuneration (including any kickback, bribe or rebate), directly or indirectly, in return for referring a patient or patronage to a recovery home, clinical treatment facility or clinical laboratory; or
  2. Offer or pay a kickback to “induce” a referral of an individual to a recovery home, clinical treatment facility or clinical laboratory, or in exchange for an individual using the services of a recovery home, clinical treatment facility or clinical laboratory.

A “Clinical treatment facility” is broadly defined under the Law as essentially any non-hospital licensed facility that provides treatment for substance use.  Penalties for each violation can include a fine of up to $200,000 and imprisonment of up to 10 years.

The Law has seven “safe harbors”, some of which are similar to the safe harbors under the federal Anti-Kickback Statute that is generally applicable to Medicare and Medicaid services.  However, in contrast to the Anti-Kickback Statute, the safe harbor for employees and independent contractors under the Law expressly excludes from safe harbor protection any payment made to an employee or independent contractor that is determined or varies by:  (1) the number of individuals referred to one of the above facilities; (2) the number of tests or procedures performed; or (3) the amount billed to or received from the individual’s health insurance plan.

Although the Anti-Kickback Statute prohibits conduct similar to that prohibited by the Law in the context of Medicare and Medicaid, the Law casts a wider net in the context of referrals to recovery homes, clinical treatment facilities and clinical laboratories, as it applies to many commercial insurance plans.

It remains to be seen whether and how this Law may be narrowed down in application.  The U.S. Attorney General has the authority to issue additional safe harbor regulations under the Law, which could be used to clarify existing safe harbors.  The Law may also be amended by Congress in the future.

In addition to having a significant impact on the clinical laboratory industry, the Law could affect physicians employed or engaged by recovery homes or clinical treatment facilities, or participating in an arrangement directly or indirectly involving referrals to such homes or facilities.

The full text of the Law may be accessed at this link:  Eliminating Kickbacks in Recovery Act of 2018.

If you have any questions about how the Law may apply to your practice, please consult with experienced legal counsel.

Close up of health insurance formThe New Jersey Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act takes effect today, August 30, 2018, and requires all licensed health care professionals in New Jersey (including physicians, nurse practitioners and physician assistants, among others) who bill health benefits plans issued or delivered in New Jersey to provide certain disclosures to patients enrolled in such Plans.

The Act also contains additional obligations for physicians, including with respect to billing certain out-of-network services.  For more information regarding the Act’s impact on health care professionals and their employers, please see our Fox Rothschild Health Law Alert.

CMS recently issued its proposed changes to the 2019 Medicare Physician Fee Schedule, which include a controversial change to the reimbursement rates for Level 2-5 evaluation and management (E/M) services and some notable changes to the Quality Payment Program.  This post highlights some key aspects of the Proposed Rule that will affect medical practices.

Red stethoscope with a pile of hundred dollar bills.CMS views the Rule as one of “several proposed rules that reflect a broader Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment and innovation.”  Once finalized after public comment, the changes will be effective for calendar year 2019.

Notable Changes to the Medicare Physician Fee Schedule

Consolidation of Level 2-5 E/M Visits.  Probably the most significant change proposed to the Physician Fee Schedule in 2019, and the most controversial, is the consolidation of the reimbursement rates for Level 2 through 5 E/M visits into one flat base rate for new patients and one flat base rate for established patients.  The consolidated reimbursement rate for Level 4 and 5 visits would be approximately $50-75 less for new patients; and approximately $16-32 less for established patients.  For Level 2 and 3 visits, the consolidated rate would be substantially more.  CMS has also provided for a number of potential modifiers to account for additional time spent, and visits related to certain specialties, such as oncology.

However, the proposed change has drawn significant criticism because a visit for a minor health issue (such as an earache) would be reimbursed at the same base rate as a visit for stage IV cancer.  Further, the American College of Physicians has recently stated that the proposed rate model would result in lesser reimbursement for Level 4 and 5 visits overall, even considering the new modifiers.

Revised Documentation Requirements. In connection with the newly consolidated rates, CMS has proposed to streamline the documentation that physicians must provide for reimbursement for E/M visits.  The purpose of these proposals, and others which CMS says it plans to make in future years, is to allow physicians more flexibility to exercise clinical judgment in documentation.  The documentation changes:

  • Would allow physicians to document E/M visits based on medical decision-making and/or time, regardless of whether counseling or care coordination dominates the visit.
  • Would not require physicians to re-document information from prior visits, only what has changed for the patient (or what pertinent items have not changed) since the last visit.
  • Would be able to review and verify certain basic information entered into the medical record by physician extenders and other ancillary staff, instead of having to re-enter the information every time.

These revised documentation requirements are intended to lead to a lesser administrative burden on physicians, which could lead to fewer audit issues and overpayments.  In that regard, the proposal is seen by some as a trade, by which CMS relieved physicians and their practices of cumbersome documentation requirements in exchange for reduced reimbursement for level 4 and 5 E/M codes.  We expect that CMS will receive substantial commentary on these documentation and rate changes in advance of the Final Rule.

Additional Changes.  Other notable changes are as follows:

  • Medicare would pay for a virtual check-in service for which the physician would check-in with a patient by phone or other device to decide whether an office visit or other service is needed.  CMS believes that this will increase efficiency for practitioners and convenience for beneficiaries.
  • Medicare would pay for a Remote Evaluation service based on recorded video or images, so that a physician could be separately paid for reviewing a patient-transmitted photo or video to assess whether a visit is needed.
  • CMS will implement updated medical supply and equipment prices for purposes of determining the practice expense portion of its reimbursement rates.  The rates for supplies and equipment used in their payment formula had not been updated since 2005.  Based on a study conducted by a contractor, CMS will implement the new rates over a 4-year period beginning in 2019.
  • CMS plans to increase the overall reimbursement rate per RVU by $0.06.

Changes to the Quality Payment Program

Beginning with the 2019 calendar year, physicians and practices will be paid under Medicare Part B based on the standard rate for reimbursement for the service, plus or minus a bonus or penalty calculated on their performance under the Quality Payment Program during the 2017 calendar year.  For more information on the Quality Payment Program, please see our prior blog post here: https://physicianlaw.foxrothschild.com/2016/12/articles/medicare/are-you-ready-for-the-new-medicare-quality-payment-program-part-2-basics-of-the-mips-and-how-to-qualify-in-2017/.

In the face of doubts regarding the future of the Quality Payment Program and the Merit-based Incentive Payment System (MIPS), CMS is making substantial efforts to encourage participation of physicians.   A number of changes are focused specifically on making participation easier for small practices, including applying the existing small practice bonus to the Quality category (instead of overall score) and providing for an additional small practice bonus for meeting certain quality measures.  CMS has also proposed that small practices meeting certain requirements have the ability to opt-in to the MIPS, as opposed to being required to participate.  In addition, CMS continues to remind all practices that it offers free consulting services from its technical assistance network for any physician seeking to meet the MIPS requirements.

Practices should also note that CMS has proposed to require physical therapists, occupational therapists, social workers and clinical psychologists enrolled in Medicare to participate in the MIPS beginning in 2019.

With respect to scoring under the MIPS, CMS proposed to remove certain quality measures which physicians have complained are of low priority in their practice.  CMS also proposed a new scoring system for the EHR Incentive Program category, and proposed to change the title of the category from “Advancing Care Information” to “Promoting Interoperability.”  The change in name reflects CMS’s emphasis on increasing accessibility of health information to patients and their providers.  The new scoring system also matches up with the newly proposed Promoting Interoperability EHR incentive program for hospitals.

Finally, CMS proposed modifying the overall scoring weights for the MIPS during 2019 as follows:

  • Quality (45%)
  • Promoting Interoperability (25%)
  • Improvement Activities (15%)
  • Cost (15%)

…and increasing the bonuses and penalties from +5%/-5% to +7%/-7%.

 

Critics of the MIPS say that efforts to minimize penalties in the hopes of encouraging participation put the entire program at risk, as the MIPS is required by law to be budget-neutral.  When the penalties are reduced, so are the bonuses.  This is probably the biggest threat to the viability of the MIPS long-term.  However, the proposed changes show that CMS is committed to making the MIPS easier to comply with, even though it is still a complicated program.  Stay tuned to Fox Rothschild’s Physician Law Blog for an update on the Final Rule, once issued this Fall.

This is the second installment in a new series on the Physician Law Blog entitled “Small Doses” designed to provide you with quick updates on meaningful issues.  We will continue to provide you with detailed updates on significant topics which we think are worth your time to read.  The purpose of “Small Doses” is to give you just enough information regarding a topic to have a general understanding of its import in a quick, easy read.  

Soldier in uniform and doctor shaking hands with U.S. flag on background In response to the publicity surrounding long wait times and poor quality of healthcare for veterans, Congress passed a law in 2014 to improve access to healthcare for veterans. The law established the Veterans Choice Program, which requires the VA to cover a veteran’s healthcare from a private community-based physician, if the veteran lives more than 40 miles away from a VA facility or would have to wait at least 30 days for an appointment at a VA facility.  However, to qualify for coverage, the veteran is also required to obtain certification from the VA that the veteran actually lives more than 40 miles from a VA facility or would actually have to wait at least 30 days for an appointment at a VA facility.  This certification process can take anywhere from 2-10 business days or more.  Throughout this process, the veteran must wait to receive an appointment with a physician, not to mention the treatment that he or she needs.

Last month, President Trump signed the VA MISSION Act into law.  Among other things, the Act consolidates the existing VA community care programs into one program (called the “Veterans Community Care Program”) that seeks to facilitate access to healthcare outside the VA by loosening the qualification requirements for covered medical services from non-VA physicians.  Although the Act fails to remove the certification requirement, it provides additional ways for a veteran to qualify for services from a community-based physician, most notably:

  • If the VA is not able to furnish care within designated access standards established by the VA; or
  • If the veteran’s VA physician believes that receiving services from a private physician is in the veteran’s best interest, considering certain criteria, such as the timeliness of available appointments and the distance between the veteran and the nearest VA facility.  [An easy-to-read summary of the entire Act is available here:  VA MISSION Act Summary].

The designated access standards have not yet been established by the VA; however, the VA has begun the process of defining those standards by requesting comments and guidance from the public and commercial health insurance plans.  [See the VA’s Request for Information, for which comments are still pending through July 30, 2018].

The Act also provides for the expansion of an approved network of VA community-based providers under contract with the VA.  Payment rates under the Act will generally be tied to Medicare rates, although the VA will be permitted to incorporate value-based reimbursement models to promote high-quality care.  The Act also seeks to improve the sharing of medical records between community-based physicians and the VA.

The biggest question right now is whether the Act will be funded.  Currently, funding for the Act is caught up in the politics of the federal government’s next appropriations bill, which must be signed by September 30, 2018 to keep the government operational.

If funded, the new Veterans Community Care Program will likely increase the number of veterans who are able to seek treatment with community-based physicians. In the interim, the Act provided for sufficient funding to extend the Veterans Choice Program for another year, so physicians should expect a continuation of the status quo while the Act is implemented.

Stay tuned to Fox Rothschild’s Physician Law Blog for further developments on the Act and how it may impact physicians.

This is the first installment in a new series on the Physician Law Blog entitled “Small Doses” designed to provide you with quick updates on meaningful issues.  We will continue to provide you with detailed updates on significant topics which we think are worth your time to read.  The purpose of “Small Doses” is to give you just enough information regarding a topic to have a general understanding of its import in a quick, easy read.  

MedicareCMS recently updated its list of reportable final adverse actions with respect to Medicare enrollment matters.  The change became effective as of April 30, 2018.  Going forward, suppliers (such as physicians, physician assistants and nurse practitioners) are no longer required to report prior revocations of their Medicare enrollment to CMS, and their medical practices are no longer required to report such revocations, including with respect to owners or managing employees of the practice.

Also, Medicare payment suspensions are no longer considered to be reportable final adverse actions on Medicare enrollment forms or the PECOS system.

CMS released a short, easy-to-read Medicare Learning Network article summarizing what final adverse actions must be reported on all Medicare enrollment forms and the PECOS system.  The article is accessible at this link:  MLN Article – Reporting Adverse Actions

Of note, CMS reminds all suppliers (such as physicians and their medical practices) that all final adverse actions (including those of owners and managing employees) must be reported to CMS through the applicable Medicare enrollment form or the PECOS system, regardless of whether the action (e.g., a felony or license suspension) has been expunged from a criminal record or is pending appeal in front of a court or agency.

In April, the FDA released its “Medical Device Safety Action Plan,” a short to mid-term vision for increasing the safety of medical devices.  In it, the FDA acknowledges that enhancements and changes in its approach to device safety are necessary to ensure that it is “vigilant” in keeping up with the developments in the complexity and number of medical devices.

Key to the FDA’s new approach is focusing on the “Total Product Life Cycle (TPLC)” of each type of medical device, so that safety issues are not left unaddressed following a device’s approval by the FDA.  In this effort, the FDA will emphasize timely communication and resolution of new safety issues and help to advance innovations in technology that result in safer and more effective devices.

How will this impact physicians?

Medical devicesThe Plan sets forth certain action items that the FDA will be addressing over the next few years.  Each of these items could impact physicians who use medical devices in treating patients.  Some of these matters (such as additional training for physicians) will likely require new regulations.  Others may require only funds from Congress.  Highlights include:

  1. The FDA is considering a new regulatory approach to issuing additional safety requirements for devices with newly-discovered or increased safety risks. Instead of working on a one-off basis with individual manufacturers to address safety concerns, the FDA would like to issue regulations to address new safety matters.  These regulations (called “special controls”) could require manufacturers to conduct additional training for physicians who implant the devices.

 

  1. The FDA would like to facilitate the approval of devices that appear safer than devices that are currently on the market, so that government is less of a barrier to the entry of safer devices into the market.

 

  1. The FDA would like to focus on improving the safety of medical devices implanted in women, generally, as there have been many issues with these types of devices over the years.

 

  1. The FDA would like to expand its support for a public-private system called NEST (National Evaluation System for Health Technology), which is designed to monitor insurance claims, electronic health records and other data for early signs of device problems. The project will cost $250 million over 5 years, and device manufacturers are slated to contribute $30 million to the effort.

 

  1. The FDA would like to require cybersecurity features for electronic devices, such as pacemakers and defibrillators. In response to the growing awareness of the security risks of medical devices that connect to the Internet (and, therefore, become part of the “Internet of Things”), the FDA recognized the need for a long-term focus on pre-market and post-market actions to continually address cybersecurity threats.  Expect a CyberMed Safety Analysis Board to be formed to not only evaluate cybersecurity risks of electronic devices, but serve as a “go-team” deployed into the “field” by the FDA to investigate suspected compromises to electronic device security.

More details on the Plan can be accessed on the FDA website.  Stay tuned to the Fox Rothschild Physician Law Blog for updates on how the FDA’s implementation of the Plan could impact physicians.

Last month, CMS Administrator Seema Verma announced several initiatives to innovate the delivery of patient care at the ground level.  In collaboration with the Trump Administration and other federal agencies, CMS is taking steps to implement a system in which patients have control of their electronic health information and can easily transfer it between health care providers.  This system, referred to as “MyHealthEData,” is also intended to allow both physician and patient to access the clinical and payment data required to make the best healthcare decisions at the point of care.

Doctor using tablet to view electronic medical recordAs announced, CMS’s short-term efforts in connection with the MyHealthEData initiative include:

  • Launching Medicare’s Blue Button 2.0, which will allow a patient to access and share his/her healthcare information and medical history with a new physician, leading to less duplication in testing and enabling continuity of care.
  • Requiring providers to update their systems to improve data sharing.
  • Requiring hospitals to share specific types of data with a patient’s receiving facility or post-acute care provider following discharge.
  • Streamlining documentation and billing requirements for E&M codes to allow doctors to spend more time with their patients.
  • Reducing the incidence of unnecessary and duplicative testing that occurs as a result of providers not sharing data.

CMS is also taking steps to overhaul the EHR incentive programs (including the Advancing Care Information category of the Merit-based Incentive Payment System (MIPS) and the EHR Incentive Programs for Hospitals) to prioritize interoperability of EHR systems, reduce the time and costs required to comply, and prevent providers from withholding healthcare data from patients.

For more information on the MIPS and the Quality Payment Program, please see our prior post here and CMS’s interactive website on the Quality Payment Program here.

For more information on the MyHealthEData Initiative, please see CMS’s published Fact Sheet.  Stay tuned to Fox Rothschild’s Physician Law Blog for updates.

Earlier this month, Attorney General Jeff Sessions issued a Memorandum rescinding the Obama Administration’s “hands off” policy with respect to the prosecution of licensed cannabis distribution in states where medical or recreational marijuana are legalized.  Our sister blog, “In the Weeds” has covered the issuance of this new Memorandum extensively, including how it may affect state medical marijuana programs around the country.

Medical marijuana in jar lying on prescription form
Copyright: megaflopp / 123RF Stock Photo

So far, U.S. Attorneys in many of the states that have legalized medical marijuana (including Pennsylvania) have made public statements to the effect that they are not interested in prosecuting violations of federal law with respect to cannabis, especially if the activity involved is in compliance with state law.

  • For more information on the Sessions Memorandum, please see this post.
  • For more information on the responses to the Memorandum from U.S. Attorneys (including the U.S. Attorney for Pennsylvania’s Middle District), please see this post.
  • For Pennsylvania physicians, it appears that the medical marijuana program continues to be on track for implementation on April 1, 2018.  Pennsylvania Gov. Wolf issued a statement in response to the Sessions Memorandum confirming that he would seek legal action against the federal government to the extent that the federal government interferes with Pennsylvania’s medical marijuana program.  [See Governor Wolf’s statement].

Stay tuned to Fox Rothschild’s Physician Law Blog for updates on how the Sessions Memorandum will affect state medical marijuana programs.

Fox Rothschild’s HIPAA & Heath Information Technology Blog recently published two posts directly relevant to physicians and medical practices.  The first post, 5 Common HIPAA Mistakes to Avoid in 2018, addresses some typical misconceptions regarding disclosure of protected health information (PHI) and offers some ideas regarding how to avoid them.

The second post, New HIPAA Guidance on Disclosure of PHI related to Opioid Abuse and Mental Health, touches on the most recent HIPAA guidance released by the U.S. Department of Health and Human Services, Office of Civil Rights (OCR) regarding when and to whom PHI of patients suffering from addiction and mental illness may be shared.  Among other things, the guidance addresses disclosure of PHI to family members or friends of patients in situations where the patient is incapacitated or there is a serious or imminent threat to the patient’s health.  The guidance also addresses HIPAA’s rules on sharing PHI regarding a patient’s substance abuse or mental health with other treating physicians.

The OCR has published webpages on its website to make this guidance easily accessible and understandable to health care professionals and patients.

As always, if you have a specific question regarding your practice, please consult a knowledgeable attorney.