CMS Final Regulations for Accrediting Organizations0

The following e-Bulletin was published by the California State Bar, Business Law Section, on May 21, 2015.

CMS issued its proposed final regulations for accrediting organizations, revising the survey, certification and enforcement procedures relating to CMS oversight of entities such as the Joint Commission and the Healthcare Facilities Accreditation Program. These revisions implement provisions under the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), as well as clarify CMS’ oversight of these accrediting organizations.

In general, providers and suppliers of health care services must be substantially in compliance with certain statutory requirements before participating in the Medicare program. These obligations are known as “conditions of participation” (CoPs) for hospitals and most providers, “requirements” for skilled nursing facilities, and “conditions for coverage” (CfCs) for ambulatory surgical centers. Failure to meet the standards set forth by CMS may compromise a provider’s ability to participate in the Medicare Program.

Following the April 5, 2013 proposed regulations, the final regulations accomplish, in part, the following:

  1. Confirm CMS’ standards to the MIPPA revisions.
  2. Clarify and reorganize existing regulations, eliminate potentially confusing and unnecessary duplication.
  3. Strengthen CMS’s ability to oversee the 21 CMS-approved accrediting organizations.

The text of these final regulations can be found here.

 

HIPAA: Society’s Modern Day Prohibition0

This article, HIPAA: Society’s Modern Day Prohibition, was first published in California Healthcare News on May 4, 2015.

HIPAA: Society’s Modern Day Prohibition
HIPAA: Society’s Modern Day Prohibition

Secrets, silent, stony sit in the dark palaces of both our hearts: secrets weary of their tyranny: tyrants willing to be dethroned.” – James Joyce, Ulysses

Codified in American Law through Article Three of the United States Constitution and evolving through changing times by way of the Sixth and Fourteenth Amendments, the right to trial by jury remains a sacrosanct keystone of our nation’s legal system. Even so, there exists a degree of delicacy with which the judicial system evaluates the facts of any given case, and all involved must remain mindful that at times pertinent information may not be available for consideration. Significant violations of judicial filtering may result in the end of deliberations, known more abrasively as a “mistrial.”

The judicial system understands all too well that information cannot be honestly disregarded or ignored once heard, and does its best to account for the imperfections of the human mind. To enforce the Constitutional tenets of trust and truth upon which the faith of a jury must rest, today’s health care providers find themselves held to a unique standard of scrutiny when dealing with issues of privacy.Read more →

CMS Quality Measures0

iStock_000016711099Small-300x225This Health Law e-Bulletin, published on March 20, 2015, summarizes the 2015 National Impact Assessment of CMS Quality Measures Report (the “2015 Impact Report”) (as mandated by section 3014(b), as amended by section 10304, of the Affordable Care Act (the “ACA”)).

What if one day the Internal Revenue Service (“IRS”) changed the ways in which the Federal Government taxed individuals? For example, rather than assessing tax liability on the basis of income, what if the IRS assessed taxes on the basis of an individual’s contribution to society, or on his or her general demeanor or overall perception as “good” or “bad”? Under the ACA, Medicare has started to transform in such an historical manner, reimbursing hospitals now (and physicians soon) on the basis of performance, efficiency, and patient satisfaction, gradually replacing the previous system that structured reimbursement on the costs involved in the delivery of health care. The 2015 Impact Report represents the second assessment by CMS since the ACA became the law in 2010, this time focusing on 25 CMS reporting programs and nearly 700 quality measures (using data from 2006 to 2013).

The ACA mandated a push toward high-quality, evidence-based care for patients, with top priorities including (1) making care safer, (2) ensuring that each person and family are engaged, (3) promoting effective communication and coordination of care, (4) promoting the most effective prevention and treatment practices, (5) working with communities to promote wide use of best practices to enable healthy living and (6) making quality care affordable. The 2015 Impact Report provides a 262-page scorecard for those who may be interested in the ACA’s success during its first few years.

CMS is committed to quality measurement as it transforms the very nature of modern American health care. The 2015 Impact Report illustrates how providers, private payers, and communities can work together to achieve the greatest impact on quality. As stated in the 2015 Impact Report: “Everyone receiving healthcare in the nation is likely to benefit from CMS programs and initiatives, as healthcare professionals engage in delivery system reform to achieve better care for patients, better health for the U.S. population and lower costs through quality improvement.” The complete 2015 Impact Report can be found here.

Advancing Health Care The Old-Fashioned Way0

This article, Advancing Health Care the Old-Fashioned Way, was first published by Healthcare Innovation News on February 8, 2015.


Stethoscope and hourglass with book.“Nothing recedes like progress.”
— Edward Estlin (e.e.) Cummings

Though cutting-edge technology serves as the foundation for modern American healthcare, an accurate measure of progress must consider the occasional conflict between society and science. Even as yesterday’s medical miracles give way to what are now considered “state of the art” practices, it is the duty of health care providers to remain mindful of both sides of the equation, balancing the capabilities of today’s technologies with the needs of today’s patient. If society and science are not in sync, patient care will suffer, and sometimes we can only advance healthcare through old-fashioned methods. For example, radiology information systems (RIS) and picture archiving and communication systems (PACS) collaborate to deliver dynamic and brilliant medical images to any healthcare provider around the globe with access to a desktop computer or mobile device. And yet, if these technologically advanced tools of the trade fail to employ the appropriate methods of encryption as they transmit digital health information to a doctor’s iPad as he or she vacations on the island of Tristan da Cunha, or worse, send this sensitive information to the hard drive of any one of the island’s 297 permanent residents living in the recesses of the Atlantic Ocean, a data breach occurs. This is no small matter for the hospital of today, and could easily result in a series of fines that could force the shutting of its doors for a single infraction.

Read more →

A Brave New Medicare0

This article, A Brave New Medicare, was first published in California Healthcare News on February 4, 2015. 

Caduceus background“Consistency is contrary to nature, contrary to life. The only completely consistent people are dead.” —Aldous Huxley

Next month the Affordable Care Act turns five, and by all accounts the influence of this historic legislation will forever change the landscape of health care in the United States, regardless of its ultimate fate. As each passing year introduces thousands of new regulatory pages to an already expansive body of federal and state law, praise for what has come to be known as health care reform is only rivaled by the relentless partisan calls for its repeal.

Recognition of the Affordable Care Act’s more laudable accomplishments should not be overlooked, especially the elimination of preexisting conditions, an overall reduction in the number of uninsured, and, according to some experts, findings that point to an actual slowing in health care spending at a national level. On the other hand, we as a nation must also be mindful of any collateral damage caused by reform, especially when considering that the immediate statistical data used to document the success of reform tends to present itself easily, while the longer-term, potentially less favorable information upon which the Affordable Care Act can also be judged may take decades to unfold.Read more →

Updates for Individuals and Families from the IRS0

Updates for Individuals and Families from the Internal Revenue Service

This e-Bulletin from the Health Law Committee of the Business Law Section for the California State Bar regarding updates for individuals and families from the IRS was published on January 27, 2015.

Tax Form with StethoscopeThe Affordable Care Act’s impact on tax provisions in 2014 was significant, especially relating to individuals and families. IRS Publication 5187 provides an overview, explaining how taxpayers satisfy the individual shared responsibility provision by enrolling in minimum essential coverage, qualifying for an exemption, making a shared responsibility payment, and the new premium tax credit. The IRS also has a useful chart showing the ways in which health insurance qualifies as minimum essential coverage.

The IRS also published new forms for 2014, including Health Coverage Exemptions (Form 8965), Premium Tax Credit (Form 8962), and Health Insurance Marketplace Statement (Form 1095-A).

The IRS also issued Revenue Procedure 2015-15 which provides the 2015 monthly national average premium for qualified health plans that have a bronze level of coverage for taxpayers to use in determining their maximum individual shared responsibility payment under Section 5000A(c)(1)(B) of the Internal Revenue Code. Effective January 1, 2015, the maximum monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through the Health Insurance Exchanges is $1,035 for a shared responsibility family with five or more members.

Finally, true to the Affordable Care Act’s commitment to transparency as it relates to health insurance benefits and coverage, on December 30, 2014, the Departments of the Treasury, Labor and Health and Human Services released the Summary of Benefits and Coverage and Uniform Glossary (79 Federal Register 78578).

The Poor Get Poorer: the Fate of California’s Hospitals Under the Affordable Care Act0

iStock_000013550840SmallThis article appeared in California Health Law News, Volume XXXII, Issue 3, Fall 2014/Winter 2015

[1] By Samuel R. Maizel[2] and Craig B. Garner[3]

Introduction

Distressed hospitals in California operate on small or non-existent profit margins.[4] For many of these hospitals, Medicare and Medicaid (Medi-Cal in California) are the largest payors.[5] The Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”)[6] was designed in part to increase the number of insured nation-wide,[7] the result of which logically should have been positive for California hospitals. Any cause for celebration, however, must first prevail over the cost containment provisions firmly entrenched in the Affordable Care Act, as these regulations created new concerns for California’s financially distressed hospitals.[8] Included among the multitude of threatening provisions in the Affordable Care Act are:

  1. A complete recalibration of Medicare disproportionate share payments (“DSH”) to hospitals[9];
  2. A reduction in Medicare revenue up to 1.5% during Fiscal Year 2015 (and 2.0% by Fiscal Year 2017) for hospitals which perform poorly under the Hospital Value Based Purchasing (“VBP”) Program[10]; and
  3. A penalty of as much as 3.0% for the hospitals which fail to meet the standards set forth in the Hospital Readmission Reduction Program (“RRP”).[11]

In addition to a penalty up to 2% for lapses in inpatient quality reporting and similar penalty relating to outpatient quality reporting, [12] a 2% cut in Medicare due to sequestration[13] as well as a penalty for those hospitals which fail to attest for “Meaningful Use”,[14] collectively the potential for any hospital to lose more than 10% of its Medicare revenue creates daunting challenges, especially with those institutions in California already struggling financially not to mention lacking the resources to establish the necessary infrastructure to compete in this era of change.[15]Read more →

The Nexus Between Compliance and Reputation0

This article first appeared in Corporate Compliance Insights on December 11, 2014.

reputation conceptual meter“It is easier to cope with a bad conscience than with a bad reputation.” — Friedrich Nietzsche

The past few years have been fraught with litigation for the health care industry, with major companies feeling the sting of compliance in both their reputations and their pocketbooks. In early November, Stryker settled hip implant litigation for more than $1 billion. In 2012, GlaxoSmithKline paid $3 billion to settle claims of overcharging, kickbacks and other health care transgressions, while, Abbott Laboratories paid $1.5 billion and Johnson & Johnson $1.2 billion, both for alleged violations of law. Even so, during the first week of November 2014, Stryker traded at its 52-week high, as Abbott and Johnson & Johnson traded near their 52-week high, though GlaxoSmithKline dipped near its 52-week low. GlaxoSmithKline’s downward trend began before a court in Changsha, China fined the company $500 million after a bribery conviction, coupled with the company’s pending bribery charges in the United Arab Emirates, Syria, Jordan, Iraq and Poland. Sadly, bribery charges are not uncommon in today’s health care market, as can be seen by the events of 2013, when prosecutors in Poland investigated Stryker, and those in 2014, when Abbott settled claims in India. China also fined Johnson & Johnson in 2014 for bribery charges, with a penalty of just over $3 million.Read more →

The Problem With Value-Based Purchasing0

This article first appeared in AHLA Weekly on October 31, 2014.

1379617_thumbnailFrom its inception on October 1, 2012,[1] the Hospital Value-Based Purchasing (VBP) Program shifted Medicare’s paradigm to emphasize performance over costs in determining hospital reimbursement.[2] Reducing the overall Medicare reimbursement to hospitals by an estimated $1.4 billion for Fiscal Year (FY) 2015,[3] the VBP Program was quick to secure the attention of the nation’s health care providers. Technically “budget neutral,”[4] the VBP Program will return this same $1.4 billion to hospitals the following year in the form of performance incentives.[5] According to the federal government: The program’s “benefits will be seen in improved patient outcomes, safety, and in the patient’s experience of care. However, [the federal government] cannot estimate these benefits in actual dollar and patient terms.”[6]

As the federal government waits to assess the accuracy of its prediction, the FY 2015 reduction of 1.50% will finally level off at two percent (2%) in 2017.[7] An additional two years, however, are unnecessary to evaluate the VBP Program under fundamental accounting principles when using a general overview into the ways in which successful and profitable companies operate. Viewed from this perspective, the VBP Program is fundamentally flawed, and data from 2015, 2016, or 2017 will not present opportunities for correction. This article suggests that while smaller hospitals may bear the greatest collateral damage from the VBP Program, larger systems may suffer as well. The number of hospitals forced into financial distress or insolvency by the Hospital VBP Program remains to be seen, although consideration should be given to the number of hospitals lost to their communities it would take to undermine the projected benefits relating to outcomes, safety, and the overall patient experience. … Read more →

Medicare: The Gift That Keeps On Giving0

This article was first published at Corporate Compliance Insights on September 5, 2014.

iStock_000010996009Small“The darkest places in hell are reserved for those who maintain their neutrality in times of moral crisis.”  — Dante Alighieri

The end of summer brings with it change across the United States.  Children and many young adults prepare themselves for the new school year, professional baseball players set their sights on what has come to be known as the Fall Classic, and foliage undergoes the first stages of fall’s impending metamorphosis. For America’s health care professionals, August has also become synonymous with the release of the final rule from the Centers of Medicare & Medicaid Services (“CMS”), which covers the Medicare Program’s Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (“IPPS”), and sets the rules of the game for those in the field, at least for another year.

Including such updates to the hospital IPPS for operating and capital-related costs as CMS continues to implement the Affordable Care Act, changes relating to graduate medical education (“GME”) and indirect medical education (“IME”) payments, revisions to the Hospital Value-Based Purchasing (“VBP”) Program, the Hospital Readmissions Reduction Program (“HRRP”), and the Hospital-Acquired Condition (“HAC”) Reduction Program, technical corrections to the provider administrative appeals and judicial review process, expanded use of Medicare Advantage (“MA”) risk adjustment data, not to mention the alignment of reporting and submission timelines for quality measures within the Medicare E.H.R. Incentive Program and IQR Program, this is one millenary regulation not to be missed. For those who may shy away from such Federal Register epics, the following is a brief overview of two critical topics. … Read more →