MAPAM Fall Conference October 21, 2013 The ACA and Beyond – Continued Challenges, New Risks Brett D. Witham, Esq. Verrill Dana, LLP One Portland Square Portland, ME 04112-0586 207-774-4000 [email protected] Gary A. Rosenberg, Esq. Verrill Dana, LLP One Boston Place Boston, MA 02108-4407 617-309-2600 [email protected] Topics to be Covered • • • • • • • • Repayments Transparency of Cost Financial Assistance Policies (“FAPs”) / Billing and Collection Activities Incident to Billing ACA Performance Based Programs ACO Update Inpatient Admissions OPPS Proposal Repayments are Larger and More Unique • DoJ recouped nearly $3 billion last year • Three different, recent examples -(1) Shands Healthcare • 6 nonprofit hospital system in FL - $26m repayment • Billed short-stays as inpatients ’03-’08 • Whistleblower was an independent contractor/consultant hired to audit billing practices • Victim of ambiguous standards Another Example (2) Mass. hospital agreed to $66,000 settlement • Patients without health insurance and with unknown address or from other state or country • Hospital somehow sent bills for emergency care to homeless shelter • Established paper trail so state HSN could be billed • Whistleblower was former collections analyst at hospital • Breakdown of system Third Example (3) Florida doctors, hospital, clinics pay $3.5m for improper radiation oncology billing • Services not supervised by physician • Services performed when doctors on vacation or at another clinic • No evidence in medical records of service • Billed twice for service • Upcoded • Knowing improprieties? Transparency of Patient Cost • M.G.L. c. 111, Sec. 228 – Prior to service, on request, disclose allowed amount or charge, including facility fees, within 2 working days – Allowed amount = amount paid by insurer – Upon request, give patient info to use toll-free number and website of health plan to disclose patient’s out-of-pocket costs – Effective 1/1/2014 Incident-to Billing • Services that are furnished incident to physician professional services in the physician’s office (non-institutional setting) • Review when and how to bill – Integral part of normal course of treatment – Physician performs initial service – Physician remains actively involved – Direct Supervision Incident-to Billing • Service of a type commonly furnished in a physician’s office or clinic • Included in physician’s bill and expense to practice • If met, allows NPPs to provide services and obtain 100% of fee schedule amount • Some practices all or nothing • On 2013 OIG work-plan Incident-to Billing • Takeaways – The patient must be established – No new conditions – Must have physician in office suite and available – Physician involvement in record • Compliance Pitfalls – Billing configuration – Small practices where PA/NP may be working alone Incident-to Billing • Experience with Overpayment Process – May be able to net underpayments against overpayments – May use payment amount differential as basis for error rate – If rate is less than 5%, then may be able to take position that no extrapolation (just return overpayment related to probe sample) – Cost of compliance may exceed overpayment… IRS 501(r) Financial Assistance Policies (“FAPs) • ACA created new requirements for non-profit hospitals • Establish a FAP – Establish criteria for free or discounted care – Basis for calculating amounts charged to pts – Method for applying for financial assistance – Measures to widely publicize the FAP in community • Statute in Effect FAPs • Limitation on Charges – Limits amounts charged for emergency or medically necessary care to FAP eligible pt – Not more than amounts generally billed to pts with insurance (“AGB”) – Prohibits the use of gross charges • Billing and Collections – Reasonable efforts to determine if pt is FAPeligible before extraordinary collection actions Proposed FAP Regulations • IRS proposed regulations on 6/26/2012 – Two methods to determine AGB as charge limit – Look-back method: • Actual claims paid, either Medicare FFS or with all private insurers • At least annually • One average AGB for all emergency and medically necessary care, or multiple for separate items or services Proposed Limit on Charges – Prospective method: • Determine AGB using same billing and coding process as for a Medicare patient • Then set the AGB at the total amount that Medicare + beneficiary would pay – Once selected, method cannot be changed – Safe harbor – hospital does not violate law if it charges more than AGB if pt fails to submit a complete FAP application and hospital continues to make reasonable efforts to determine eligibility for financial assistance Widely Publicize FAP • Make paper copies of FAP, application and plain language summary of FAP available w/o charge in public locations of hospital • Inform visitors to hospital about FAP • Inform community • Make FAP, application, and plain language summary available online Billing and Collection Activities • Statute requires reasonable efforts to determine patient’s eligibility for assistance before taking extraordinary collection actions • “extraordinary” = – Reporting to credit agency – Selling debt to a 3rd party – Legal or judicial action • Placing lien or foreclosing on property • Attaching bank account • Filing civil action Before Engaging in Extraordinary Collection Actions • Notify patient of FAP during the “notification period” – begins on date care is provided and ends on 120th day after hospital provides first billing statement • If by end of notification period no determination of eligibility, hospital must accept FAP application during additional 120 day period Before Engaging in Extraordinary Collection Actions • “Application period” – begins on date of service, ends on 240th day after pt provided with first billing statement • Upon receipt of complete application, must suspend any ECA in process ACA Performance Based Programs • Medicare Reimbursement – Quality Counts – HACs – Readmissions – Value Based Purchasing • By 2017 it is estimated that these three programs will put up to 6% of a hospital’s Medicare reimbursement at risk • Final Rule issued August 2, 2013 ACA Performance Based Programs • HAC Program – Condition developed during stay not POA – Beginning in 2015 hospitals in the top quartile of HACs will receive 99% of their DRG payment – Will use measures from IQR – Payment reduction is across the board to all payments, including IME, DSH, etc – HAC reductions applied after adjustments for VBP – Worse performance means more points ACA Performance Based Programs • HAC Program Takeaways – CMS estimates teaching hospitals disproportionately affected – More quality based revenue is at risk – Accurate and complete POA data is paramount – Comprehensive physical exam – Quality checks and training – Full transition from DRA no additional payment to penalty ACA Performance Based Programs • Readmission Reduction Program – Reduction in payments to hospitals with excessive readmissions relative to other hospitals – If readmission occurs within 30 days of discharge and is related to prior admission – Maximum reduction increased from 1% to 2% for FY 2014 and up to 3% for FY 2015 – Current measures acute myocardial infarction, heart failure and pneumonia ACA Performance Based Programs • Readmission Reduction Program – New measures COPD and elective hip/knee arthroplasty – 2,225 hospitals impacted beginning October 1 (18 losing full 2%) – Hospitals treating larger number of low income patients more likely to be penalized – Good news: expanded the types of planned readmissions not counted against the readmission rate ACA Performance Based Programs • Readmission Reduction Program Takeaways – Many of the prominent academic medical centers hit in the first round have improved in the second – A lot of discussion and disagreement regarding disparate impact – Hospitals cannot afford to think they are not responsible for patients once they leave – Some now send nurses to check patients at home and give free meds to low income patients ACA Performance Based Programs • Value Based Purchasing Program – CMS compares performance during performance period to performance during a baseline period • Clinical Process of Care • Patient Experience of Care • FY 2014 includes Outcome Domain – VBP payments funded by reduction in DRG Payments ACA Performance Based Programs • Value Based Purchasing Program – Increases from 1% to 1.25% in IPPS Final Rule – Proposed Additional Measures for FY 2016 – New waiver program for natural disasters ACA Performance Based Programs • Value Based Purchasing Program Takeaways – $1.1 Billion now at risk – Transition to pay for reporting to pay for performance and quality complete – Groundwork for bundled payments – Accurate data paramount – Patient experience important ACO Update • Brief Overview – Must be willing to become accountable for the quality, cost and overall care of the Medicare fee-for-service beneficiaries assigned to it – Must enter into an agreement with CMs for a minimum of 3 years – Must have a formal legal structure to receive and distribute payments for shared savings – Must include PCP and have a minimum of 5,000 Medicare beneficiaries ACO Update • Brief Overview – Fee-for-service payment not going away, but also eligible for shared savings payment if: • Meet quality performance standards • Reduce Medicare expenditures as compared to a benchmark ACO Update • 3 Types of ACOs (1) Shared Savings ACO • One-sided, no risk = 50% sharing in savings created – Physicians paid FFS as usual – If savings and performance measures achieved, 50/50 split – If no savings, no downside • Two-sided, limited risk = 60% sharing in savings created – Physicians paid FFS as usual – If savings and performance measures achieved, 60/40 split – If no savings, fee adjustment occurs (capped) ACO Update (2) Advance Payment ACO • Created for MD owned and/or rural providers • Limited to two organizations: – ACOs with no inpatient and annual revenue of less than $50 MM – ACOs with inpatient through CAHs/Rural hospitals and revenue of less than $80 MM ACO Update (3) Pioneer ACO • Minimum of 15,000 aligned beneficiaries • Created for Advanced Health Care Organizations • Intent is to allow advanced systems to move quickly to population-based payment model ACO Update • ACO Adoption – Growth continues unabated – As of July 2013, more than double a year ago – Medicare ACOs comprises more than half of the 488 ACOs nationwide (253) – No single model has emerged as the most successful—much variety in organization and execution – Adjusting for population, Southern Maine has the largest number of ACOs per capita – Boston also has high concentration ACO Update • Initial Data - 32 Pioneer ACOs – 18 of 32 delivered savings, with 13 eligible for shared savings – At least 1 of the 14 that did not deliver savings must return dollars to CMS – At least 8 of the 14 that did not deliver savings are transitioning out of the Pioneer program, with 6 transitioning to another type of ACO (MSSP) ACO Update • EHR Systems in use – Among ACOs with savings no predominant system being used – 31% Epic – 19% NextGen – Allscripts, athenahealth, GE Centricity and Cerner ACO Update • Organizational Models – Among 18 ACOs with savings • 10 are Integrated Delivery Networks • 3 are Hospital System/Physician Group partnerships • 5 are Physician Groups – Among 14 without savings • 3 are Integrated Delivery Networks • 4 are Hospital System/Physician Group partnerships • 7 are Physician Groups Inpatient Admissions • 2014 IPPS update rule defined an inpatient: – Stays for which the physician admits patient based on expectation for stay of two or more midnights presumed to qualify as inpatient stays – Stays not spanning two midnights considered as outpatient Inpatient Documentation • Physician order must specify intent to admit, “to inpatient”, “as an inpatient”, “for inpatient services” or the like • Physician certification – Must certify inpatient services were ordered in accordance with federal regulations, such as inpatient services are reasonable and necessary – Must state reasons for hospitalization – Must be signed and documented in the medical record prior to the hospital discharge – Certification begins with order for admission OPPS Proposal • For years CMS has let hospitals charge 5 varying E&M levels/rates for ED and clinic services “facility fee”) – Codes were designed by AMA for physician, not hospital, billing • For 2014 CMS proposes to replace 5 codes with 1 flat rate for ED visits and 1 for clinic visits OPPS Proposal • Won’t distinguish new vs. established patients • Intent is to simplify billing • Is real intent to stop upcoding? Questionable data • Patients upset by provider-based clinic facility charge Facility Fees • 2013 ED facility fees range: $51.82 - $344.71 • 2014 ED proposal: flat rate of $212.90, regardless of intensity of treatment • 2013 clinic rates range : $56.77 - $128.48 • 2014 clinic proposal: flat rate of $88.31 Facility Fee Proposal • Physician fees and procedures not impacted • There will be winners and losers – – Minor ailments overpaid – Trauma centers underpaid • Eliminates compliance risks • Final rule to be released soon