the impact of the healthcare reform act presented by: michele p. madison, esq
TRANSCRIPT
The Impact of the
Healthcare Reform Act
Presented by:
Michele P. Madison, Esq.
Overview
• Health Care Reform legislation enacted March 23, 2010; amended March 26, 2010
• Insurance Reform
• Impact on Patient Volumes and Coverage
• Impact from Medicare and Medicaid reimbursement methodologies
• Enhanced enforcement of fraud and abuse laws
• Strategic Ideas related to CMS Innovation Center
Insurance Reform
Employer Responsibilities
Applies to employers who employed an average of at least 50 FTEs on business days during the preceding calendar year (FTE = average of 30 hours per week).
Must pay a fee if coverage IS NOT offered to FTE AND any FTE receives premium assistance from federal government.
– $2,000 annual fee for each full-time employee employed (minus the first 30 employees)
Must pay a fee if coverage IS offered to full time employees BUT any FTE still receives premium assistance from federal government
– the lesser of $3,000 annual fee for each employee receiving premium assistance OR $2,000 annual fee per employee for each FTE
Small Employer
Provide small employers with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees with a tax credit.
Credits will Start 2010-2013 (35%)
Credits in 2014– (50%)
Insurance Market Reforms
Dependent Coverage until age 26
No Rescissions- not able to rescind a health care policy once an individual is covered, except for fraud or intentional misrepresentation of a material fact by an individual.
Restrictions on Annual & Lifetime Limits- not permitted to impose lifetime limits on the dollar value of essential benefits for a participant or a beneficiary
Establishes Early Retiree Reinsurance
No restrictions on pre-existing conditions- Effective for plan years beginning 6 months after enactment for children under 19;
State Health Exchanges
• By January 1, 2014, each state directed to establish an exchange established for the purposes of facilitating the purchase of Qualified Health Plans
• If a state does not implement an exchange, then DHHS will be required to implement an insurance exchange in that State or contract with a non-profit organization to do so
• Must have minimal basic coverage
• Allows for variation in ratings for plans offered based on age, family composition, premium rating area, and tobacco usage
Evaluation of Insurance Volume
Evaluate current uninsured volume
Evaluate Service Areas for potential “Small Employers” that are exempt from penalties
Evaluate Income Level of Patient Population in Service Area
--Some individuals will pay the Fee
--Some individuals will now qualify for Medicaid
--Some individuals will opt into State Exchanges
Requirements for 501(c)(3) Hospitals
• Community Health Needs Assessment
• Financial Assistance Policy Requirement
• Restrictions on Patient Charges
• Limitation on Collections Practices
Rural/CAH Impact
Improving Medicare for Patients and Providers
Extension of Demonstration Projects
Value Based Demonstration Project
Payment Changes
• Subsidy for Low Income Medicare Beneficiaries for Prescription benefits
• Closes Part D doughnut hole
Expands coverage for Preventative Services
– Colonoscopies
– Cancer screenings
Physicians
Changes to Physician Reimbursement: (2011 – 2015)
• 10% increase for primary care services
• 10% increase for General Surgeons in Health Professional Shortage Area (HPSA)
• Increase in Medicaid Rates for Primary Care Physicians
• Modifies imaging equipment utilization rate at 75% for imaging equipment costing more than $1 million beginning in 2011.
Hospitals
• Reduces Disproportionate Share Hospital (DSH) payments by 75% and subsequently increases such payments based on the percent of the uninsured population and the amount of uncompensated care provided by the hospital
• Reduces Medicare payments for preventable hospital readmissions
• Reduction in Growth Adjustment rates
• In 2015, reduces Medicare payments to certain hospitals for hospital-acquired conditions by 1%
Payment Model Reform
Shared Savings Program
Accountable Care Organizations
-New Legal Entity
-Minimum of 5000 lives
-Primary Care Involvement
Medical Home for the Patient
CMI
Creation of Centers for Medicare and Medicaid Innovation (CMI)
• The CMI will be the major focal point for the identification of problem areas in health care delivery and identification and testing of new models to improve program performance.
• To design, implement and evaluate Medicare and Medicaid demonstrations and pilot programs to test the feasibility, cost effectiveness and quality outcomes of new health care delivery models.
CMICont’d
• To promote research and demonstration transparency by disseminating findings to inform law makers and interested parties about health care delivery issues, new innovative concepts, and demonstrations and pilot programs
• Evaluative findings to develop new objectives for basic research and new research demonstrations
• Has the authority to extend and expand the operation of successful models
Requested Bids on May 14, 2010 for a Consultative Entity to assist
DemonstrationProjects
• Establishes a Medicare pilot program to develop and evaluate paying a bundled payment for acute, inpatient hospital services, physician services, outpatient hospital services, and post-acute care services for an episode of care that begins three days prior to a hospitalization and spans 30 days following discharge.
• Establishes a hospital value-based purchasing program in Medicare to pay hospitals based on performance on quality measures and extend the Medicare physician quality reporting initiative beyond 2010
OtherModels
Independence at home demonstration program.
Hospital readmissions reduction program.
Community-Based Care Transitions Program.
Extension of gainsharing demonstration.
Medicaid
Pediatric Accountable Care Organization Demonstration Project
Demonstration project to evaluate integrated care around a hospitalization
Global Payment System Demonstration Project
Medicaid emergency psychiatric demonstration project
PAYMENT MODELS
Linking Payment to Quality
Enhanced Quality Reporting for Physicians and Hospitals
Be ready for HIPAA 5010 and ICD-10
Enhanced Fraud and Abuse
New Tools to Fight Fraud and Abuse Efforts
Modifications to Fraud and Abuse Laws
Enhanced Sharing of Data
Increased Restrictions
Enhanced Penalties
Increased Funding of Enforcement
The Act increases by $250MM the funding for the Health Care Fraud and Abuse Control Fund over next ten years, to be adjusted by the CPI.
Expands potential avenues of receiving Claims
Whistleblowers
Self-Disclosure Protocol
Anti-Kickback
Amends the Anti-Kickback Statute’s (“AKS”) intent standard and rejects heightened intent standard of Ninth Circuit in Hanlester that had required the Government to prove that a defendant (1) knew that the AKS prohibited the conduct; and (2) nevertheless engaged in the conduct with specific intent to disobey the law.
The Amendment to the AKS does not eliminate the requirement, however, that the Government show that a defendant knew the conduct was unlawful.
False Claims Act
Amends the False Claims Act to provide that a violation of the AKS constitutes a fraudulent act under the False Claims Act.
All overpayments must be refunded within 60 days after “identification” of the overpayment. The Act then clarifies that such a retention of an overpayment and repaying same is an “obligation” under the False Claims Act.
Fraud and Abuse
The Act also lowers the intent requirement under the healthcare fraud criminal statute, 18 U.S.C. § 1347 – The Act eliminates the requirement that the Government show a specific intent to violate the statute.
The Act will encourage self-disclosure of Stark Law violations in that the Secretary of HHS must develop a Stark self-disclosure protocol within six months that would permit the compromise of claims and penalties.
RAC Expansion
Recovery Audit Contractors-
Role of RACs to be expanded to the Medicare Part D and Medicare Advantage programs.
Available for State Programs
Provider Screening
• Provider Screening- Requires the Secretary of HHS to establish procedures for screening providers based on the perceived risk of fraud, waste and abuse in each category of health care services.
– Site Visits
– Limitation of Initial Enrollment or Caps on Reimbursement
– Fingerprinting
– Criminal Background Checks
Physician-Owned Hospitals
• After December 31, 2010, Physicians will not be permitted to own or invest in hospitals that the physician refers patients unless the Hospital had physician ownership prior to that date and a Medicare Provider Agreement.
• Effective immediately, the only way for physician-owned hospitals to update or expand their facilities while preserving their Medicare participation would be to meet narrow criteria set out by the government
• Hospitals’ aggregate ownership by physicians can not increase after the date of enactment. Thus for future investment – physicians may purchase shares only from other selling physicians
Disclosure Requirements
• Applies to device, drug, medical supply, and biologic manufacturing companies
• Requires reporting information related to payments and other transfers of value to physicians and hospitals for values of $10 or more (or $100 aggregate in a calendar year) to the Secretary of HHS.
• Effective March 31, 2013
Compliance Program
Compliance Programs- Requires providers to establish compliance programs that contain core elements determined by the federal government.
US Sentencing Commission published on April 29, 2010 Additional Guidance about what is required in an Effective Compliance Program
New Requirements apply as of November 1, 2010
November 1, 2010 Guidance
1. Compliance Officer has Direct Access to Board
2. Compliance Program identifies the issue before reported by Outsider
3. Prompt reporting of offense to Government
4. Compliance Officer (and others) did not ignore or participate in offense
Compliance Program
Next Steps
Healthcare Reform Will Be Implemented Over the Next 5 -8 years
Immediate Impact from Enforcement Activities
Medicare/Medicaid Reimbursement will be modified immediately in some instances
Evaluate Demonstration Projects and Track CMI
Consider Strategic Options related to Alignment, Payment Models and Pilot Programs
Thank you
Healthcare Practice
Michele [email protected]
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