A Legal Look at The Healthcare Landscape in 2016

By: Jeff Cohen

MACRA 

The Medicare Access and CHIP Reauthorization Act was enacted to replace the flawed sustainable growth rate (SGR).  MACRA contains performance measures for new payment models that will go in place in 2017.  MACRA also established the Merit-Based Incentive Payment System (MIPS).

Physicians have to begin to learn about MACRA to improve performance and to avoid payment penalties.

We also have the Physician Quality Reporting System (PQRS), which penalizes providers for failing to report quality measures data on Part B services.  To avoid a 2018 PQRS payment adjustment, for instance, providers have to report for a 12 month period.

There is also the Value Based Payment Modifier (VM) program that rewards groups for providing high quality, low cost care.  It’s interesting to note that CMS proposes to publically report those providers who receive an upward adjustment.  It’s being waived for Pioneer ACOs.  It’s interesting to note that the measures used for the VM program are different than those used for ACOs; and this is causing a lot of confusion.

Bottom line:  an increased use of benchmark establishment for quality and cost and financial incentive programs to achieve or surpass those benchmarks.

STARK LAW CHANGES

A new compensation arrangement exception is established for timeshare arrangements for the use of office space, equipment, personnel, items, supplies and other services.  This sort of “overhead sharing” arrangement is done, but there hasn’t been a specific Stark provision for it till this year.  It’s expected to be particularly useful in physician/hospital arrangements.

This exception amplifies the existing requirements that such arrangements must (1) be located where the physician or practice sees its patients, and (2) be used for designated health services that are incidental to what the doctor does, meaning E&M services and DHS that are provided at the time of such E&M services.Continue reading

CMS Sanctions Cigna over Substantial Failures in Medicare Plans

CMS log blueBy: Karina Gonzalez 

Centers for Medicare and Medical Services (CMS) has  banned Cigna from enrolling and selling new Medicare products because of issues with Part C (Medicare Advantage Plans) and Part D (Prescription Drug Program )that increased enrollees out-of-pocket expenses which led to delays or denials  in receiving medical services and prescription drugs.  These sanctions were imposed effective 1/21/2016 because CMS  determined that “Cigna’s conduct posed a serious threat to the health and safety of Medicare beneficiaries.” Continue reading

Managed Care Contracts: Watch Out for Definitions Section Pitfalls

Contract CWBy: Karina Gonzalez

One of the most commonly overlooked components of a managed care contract is the definitions section despite the fact that what is contained here will affect the contracted provider on a daily basis.  Contract terms that are too generic so that they are not clearly defined and understood as they relate to a particular area of practice can have a direct influence on clinical decision making.  A patient may need a higher level of care but be approved for a lower level only.  The provider knows that a patient may suffer if the level approved will not treat the illness or that the patient’s condition could deteriorate without a higher level of care.

Let’s take, for example, the definition of medical necessity in a contract. Who decides medical necessity?  Is it the provider or is it the managed care organization (MCO)?  Many contracts state that the term “medical necessity” relates only to the issue of reimbursement.  Further, that the approval or denial of a claim is “for reimbursement purposes only” and should not affect the provider’s judgment on whether treatment is appropriate to treat the illness, symptoms or complaints of the patient.  Continue reading

Audit Decisions Leading to Absurd Outcomes

healthcare businessBy: Karina Gonzalez

Commercial plans continue their audit activity in 2016 demanding many changes and adjustments yet giving little in return. The 2015 audits have not been completed for the majority of substance abuse providers in South Florida, yet the commercial plans have arbitrarily stopped paying new claims even though it takes them at least 6 months to complete a post payment audit.  If and when a provider finally gets an audit result, payors are imposing requirements that just are impossible to meet.

Payors do not appear to be paying attention to the public health crisis of substance abuse addiction and the ever growing need for treatment.   The assumption is being made by the payors that all providers in this space are over utilizing services and engaged in fraudulent practices, despite the reality that  many providers are doing just the contrary.   Continue reading

Physicians: Start Preparing for 2016 Changes in Healthcare

By: Jeff Cohen

Stepping into 2016, physicians and medical practices must continue to be vigilant about the changing landscape in healthcare.  Those who adapt quickly and smartly will thrive, while those who don’t will lose.  What can they do?

Stabilize

Stability for medical practices requires two things:  clear analytics and fixes.  Smart medical practices will examine threats outside the practice and within it.  As far as external threats go, the key area to focus on is competition.  Do you know what competitors are doing and how they’re different than you?

Internal threats are general revealed in the form of (a) employees that need better training and communication, (b) employees that just need to go, and (c) creating a succession plan for the practice.  If the practice is top heavy with older physicians, what plan is in place to ensure that “new blood” is brought in?  What recruitment strategies are in place?  Can the practice go it alone or does it need a recruitment arrangement with a hospital that can demonstrate a community need?  How will the older physicians phase out?  Is there a plan in the corporate documents to make sure phase out is slow and planned?  What do departing physicians get?  What about billing and collection?  When was the last time that was analyzed?  And finally, coding analysis.  Is money being left on the table?  Far too many practices actually undercode visits and services out of fear of payer audit.  Apart from constituting a False Claims Act violation (though regulators are not fast to indict providers who are underpaid), the differential can mean the difference between a good year and a bad one.

Finally, in light of the fact that regulatory and recoupment activity has never been higher, practices would do well to ensure compliance via a self-audit and compliance plan.  This is a different animal than a coding audit.  This one looks at all contractual relationships to ensure compliance and augments coding compliance.  Continue reading

Cigna Points to Tox Costs and Fraud in Quitting Florida Obamacare

gavelBy: Jeff Cohen 

Cigna just announced it is withdrawing from Florida’s Health Insurance Marketplace.  As reported by Carol Gentry in Health News Florida, Cigna blamed its decision to withdraw on fraud and abuse and on “out of network substance abuse clinics and labs.”  Interestingly, Cigna spokesman, Joseph Mondy, pointed to a recent article in the Palm Beach Post (“Addiction Treatment Bonanza:  How urine tests rake in millions”) in support of Cigna’s announcement.

Media reports regarding the treatment industry and Cigna’s announcement go unquestioned by reporters.  For instance, the Palm Beach Post article claims “the sky-high charges have exploited addicts and alcoholics seeking help, gouged insurers and spurred law enforcement interest….”  It pictures a young, tattooed man as a recovery business owner, but does not mention any wrongdoing or charges against him.  It restates claims in a lawsuit against a toxicology lab without any counterbalancing input from the lab that is the subject of the lawsuit.  It expresses certainty that insurers are being gouged, but does not mention that the rates actually paid by insurers for out of network services are determined entirely by the insurers, not the treatment providers.  It’s an article full of allegations and innuendos, but no meaningful coverage of any of the issues.     Continue reading

Managing Managed Care

managed care moneyBy: Valerie Shahriari

While your healthcare business may be compliant with billing regulations and coding, this does not mean that your payer is compliant and has paid you correctly per your contract.  Providers know that Fraud and Abuse has been one of the largest areas of focus for payers and the government over the past 20 years.  Due to this attention, many healthcare businesses engage auditors to audit their compliance of claims quarterly or annually.  However, in addition to compliance audits, a provider should be auditing their payer interaction to create a dynamic blueprint of denial management and payment recovery.   The AMA states that a 5% denial rate for an average family practice equates to about $30,000 walking of the door.  A good benchmark for payer compliance would be a denial rate of 5-10%.  Often times, practices and healthcare businesses operate with a much higher rate, and even in the 20-30% range without even knowing it.

When auditing the payer interaction, several components should be included in the review including:

  • Denial rate percentage
  • Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period as an Aggregate
  • Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period by each Payer
  • Claims denied categorized by denial reason as an Aggregate for previous 12 months
  • Claims denied categorized by denial reason by each Payer for previous 12 months
  • Claims that have been appealed, the date submitted, the date of the outcome, the outcome by each Payer
  • Claims not paid according to fee schedule as an Aggregate for previous 12 months
  • Claims not paid according to fee schedule by each Payer for previous 12 months

Continue reading

Medical Necessity and Payment: Who Decides?

medical necessity kpgBy: Karina Gonzalez

There is nothing readily understood about the term medical necessity.  In healthcare it is the “overarching criterion for payment”.  There is no payment for services or supplies if there is no medical necessity to support it.   Today, every provider at some time is faced with a denial because of lack of medical necessity.  Physician providers will usually hear that payors do not get in the way of the physician-patient relationship.  Payors typically state that they never tell a physician how to practice medicine and a denial based on lack of medical necessity is for purposes of payment only.  However, what provider, on a routine basis, will continue to order care and services which medically unacceptable and not supported for payment purposes?

The definition of medical necessity varies from one commercial plan to another. Federal law such as Medicare has its definition and so does state law under programs such as Medicaid.  Various medical associations such as the AMA also define medical necessity.

Generally, medical necessity refers to services or supplies which are required for the treatment of an illness, injury, diseased condition or impairment and which is consistent with a patient’s diagnosis or symptoms and are in accordance with generally accepted standards of medical practice.  Services or supplies must not be ordered only as a convenience to the patient or provider. Of course care and services which are investigational or unproven are not considered medically necessary.Continue reading

How to Get Managed Care Companies to Pay For Your Practice's Improvements

managed care moneyBy: Valerie Shahriari

Florida’s providers are buzzing with questions about value based care, asking why now? Is it a fad? Will it really ever be a widespread form of payment? Why does Florida seem farther behind the value based curve than other markets?

While there are more aggressive markets in other parts of the country, the bottom line is this: CMS changes are coming and they will not be stopped.  The government has invested too much money to turn around at this point.  Here are just a few examples of why:

  • The CMS Value Based Program with hospitals is already implemented;
  • Center for Medicare and Medicaid Innovation is piloting NUMEROUS programs covering many physician specialties
  • CMS expanded the Medicare Shared Savings Program to 3 tracks.
  • A new Merit-Based Incentive Payment for Physicians, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists will be apply to payments for services furnished in 2019.

The train has left the station. Providers will now shift from fee for service to value based payments with CMS.  To be successful and still have a profitable business, clinical integration and quality improvements will need to be implemented to improve your practice whether you are hospital based or office based AND whether you are employed by a hospital or in private practice. These changes will be implemented for all of your patients as you will not distinguish in your level of service between patients with managed care as the payor rather than CMS.  This essentially means that managed care payors will reap the benefits of these improvements in your practice.  If you do not have a value based contract in place with the managed care payors they will not be sharing one dime with you.  They will reap the benefits of your improvements AND keep the money!  And by the time you get around to a managed care contract that is value based, the shared savings opportunities will be less than if you began those discussions now. Continue reading

How to Get Managed Care Companies to Pay for Your Practice’s Improvements

managed care moneyBy: Valerie Shahriari, via Healthcare Reimbursement Blog

Florida’s providers are buzzing with questions about value based care, asking why now? Is it a fad? Will it really ever be a widespread form of payment? Why does Florida seem farther behind the value based curve than other markets?

While there are more aggressive markets in other parts of the country, the bottom line is this: CMS changes are coming and they will not be stopped.  The government has invested too much money to turn around at this point.  Here are just a few examples of why:

  • The CMS Value Based Program with hospitals is already implemented;
  • Center for Medicare and Medicaid Innovation is piloting NUMEROUS programs covering many physician specialties
  • CMS expanded the Medicare Shared Savings Program to 3 tracks.
  • A new Merit-Based Incentive Payment for Physicians, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists will be apply to payments for services furnished in 2019.

The train has left the station. Providers will now shift from fee for service to value based payments with CMS.  To be successful and still have a profitable business, clinical integration and quality improvements will need to be implemented to improve your practice whether you are hospital based or office based AND whether you are employed by a hospital or in private practice. These changes will be implemented for all of your patients as you will not distinguish in your level of service between patients with managed care as the payor rather than CMS.  This essentially means that managed care payors will reap the benefits of these improvements in your practice.  If you do not have a value based contract in place with the managed care payors they will not be sharing one dime with you.  They will reap the benefits of your improvements AND keep the money!  And by the time you get around to a managed care contract that is value based, the shared savings opportunities will be less than if you began those discussions now. Continue reading