Drummond Group, Inc. a New Certifying Body?

The Drummond Group, Inc. has plans to submit a plan to become a certifying body when the Office of the National Coordinator for Health Information Technology (ONC) releases its requirements for certifying bodies for EHRs. Right now, there is only one certifying body.

More to the story: http://www.healthcareitnews.com/news/drummond-group-may-provide-competition-cchit

Medicare Advantage Analysis by Kaiser

The Kaiser Family Foundation produced an interesting analysis of what the Medicare Advantage (Part C) plans will look like in 2010: http://www.kff.org/medicare/8007.cfm

Dialysis Facilities' Dosage Protocals for Administering Erythropoiesis-Stimulating Agents - OIG Decision

The Office of Inspector General (OIG) issued a statement regarding dialysis facilities and their protocols in place for administering ESA. It found that only 56 percent of the facilities' protocols state a target hemoglobin range. Of those protocols that state a target hemoglobin range, 94 percent are consistent with the boxed warning on FDA-approved labeling.

New Physician Fee Schedule Just Days Away

CMS is expected to release its final rule on the 2010 Medicare Physician Fee Schedule by November 1, 2009. Cardiologists are still facing some of the biggest cuts.

Here's how one cardiologist in Arkansas describes his efforts to travel to rural areas to treat patients and how the cuts could hurt those efforts: http://www.youtube.com/guardinghearts#p/a/u/0/szk0wj0S-gY

Are There Really 46 Million Uninsured Americans?

It seems like the number of uninsured Americans always stays around 46 million. It doesn't go up by a huge percentage each year. And it seems like people always like to attack Texas and its "high uninsured population." But you rarely see a breakdown of what the uninsured population really looks like.

National Review Online did an interesting job of breaking down the 46 million uninsured Americans:

“The American health-care debate is a blizzard of numbers, but few get tossed around as frequently as “46 million.” According to the Census Bureau’s Current Population Survey (CPS), that’s roughly how many people (the more precise figure was 45.7 million) lacked health insurance at a given moment in 2007 — nearly one-sixth of the entire U.S. population. ... Economist Keith Hennessey, director of the National Economic Council under Pres. George W. Bush, has examined the 2007 data and sliced the 45.7 million uninsured into several distinct clusters, basing his estimates on an earlier government analysis, conducted in 2005. Hennessey reckons that

· “6.4 million were enrolled in Medicaid or the State Children’s Health Insurance Program — now known just as the Children’s Health Insurance Program (CHIP) — but misreported their status (a phenomenon known as the “Medicaid undercount”);

· “4.3 million were eligible for Medicaid or CHIP but not enrolled;

· “9.3 million were noncitizens;

· “10.1 million belonged to families earning more than 300 percent of the federal poverty level (FPL); and

· “5 million were childless adults aged 18 to 34.

“If we eliminate those individuals from the original 45.7 million, we are left with about 10.6 million.”

Cleveland Clinic's Top 10 Medical Innovations for 2010

The Cleveland Clinic's 2009 Medical Innovation Summit just wrapped up. They released their "Top 10 Medical Innovations for 2010" list. They include:

10. Whole-Slide Imaging for Management of Digital Data In Pathology: A technology for creating digital pathology slides with excellent image quality that can be viewed, stored, streamed over the Internet, and analyzed on a computer.

9. Devices for Occluding Left Atrial Appendage to Reduce Stroke Risk: Device alternatives to long-term warfarin use that can prevent clots from developing in patients with atrial fibrillation.

8. Oral Thrombopoeitin (TPO) Receptor Agonist That Stimulates Platelet Production: A recently approved drug that stimulates production of cells in bone marrow that form platelet cells in the blood.

7. Outpatient Diagnosis of Sleep-Related Breathing Disorders: Self-contained, reliable, at-home sleep-monitoring devices for screening, diagnosing, and treatment assessment of sleep-related breathing disorders.

6. Forced Exercise To Improve Motor Function in Patients With Parkinson's: Pedaling at 90 RPMs on a tandem bike to dramatically improve motor functioning of patients with Parkinson's disease.

5. Fertility Preservation Through Oocyte Cryopreservation: A rapidly-improving technology that allows eggs of a healthy woman to be safely frozen and stored, ready to be thawed and fertilized at a later date.

4. Non-Vitamin K Antagonist Oral Anticoagulants: Predictable and well-tolerated alternatives to the oral anticoagulant warfarin that provide a more convenient -- and safe -- way for patients to dose themselves and prevent blood-clot formation.

3. Continuous-Flow Ventricular Assist Devices: Tiny 3-ounce devices surgically attached alongside the heart that quietly and effectively take over the pumping ability of the heart.

2. Low-Volume, Low-Pressure Tracheal Tube Cuff To Reduce Ventilator-Associated Pneumonia: A device that dramatically reduces the risk of ventilator-associated pneumonia and death in the hospital ICU by providing continuous effective airway seals.

1. Bone Conduction of Sound For Single-Sided Deafness: A new non-surgical, removable hearing and communication device designed to imperceptibly transmit sound via the teeth to help people with single-sided deafness.

Cancer Prevention and Research Institute of Texas Grants Available

The state's new cancer organization announced new grants available to organizations for cancer outreach programs. The deadline to submit the grants is November 13, 2009.

Two Requests for Applications (RFAs) for cancer prevention grants are available on the CPRIT website (www.cprit.state.tx.us).

Evidence-Based Prevention Programs and Services
This RFA seeks grant applications from qualified organizations located in the State of Texas that would provide services aimed toward prevention and reduction of the risk of cancer, early detection, and improving the lives of those living with the disease. These projects would provide services that are based on scientific evidence of their effectiveness in prevention of cancer or improvement in quality of life. CPRIT expects measurable outcomes of supported activities that demonstrate impact on incidence, mortality, or morbidity or interim measures related to the outcomes. Successful applicants are eligible for a grant award of up to $1 million for up to 24 months.

Health Promotion, Public Education, and Outreach Programs
This RFA seeks grant applications from qualified organizations located in the State of Texas that propose education and outreach efforts that have the potential to demonstrate change in the behaviors that can prevent or reduce the risk of cancer. CPRIT seeks projects and partnerships that will apply evidence based strategies in novel ways, leverage resources and can demonstrate measureable outcomes in personal behaviors leading to prevention, risk reduction, early detection of cancer and improve the quality of life for survivors. Successful applicants are eligible for a grant award of up to $300,000 for up to 24 months.

The online application system for prevention grant submission will be available October 15, 2009 at 7:00a.m. CST. The deadline for grant submissions is November 13, 2009 at 3:00 p.m. CST. CPRIT expects to award the first round of prevention grants in March or April of 2010.

CPRIT has created two new list serves to provide up-to-date information by email to anyone interested in agency news and grant information. To sign up for the list serves, please visit the CPRIT website (http://www.cprit.state.tx.us) and click the “Listserve” button on the top information bar.

Health Care Overhaul Package Before Thanksgiving?

There is talk that the Congress could attach a health care overhaul package to one of the tax bills before Thanksgiving. Of course, nobody knows if that would include a public health insurance option or not.

In addition, eight moderate Democrat senators sent a letter to congressional leadership asking them to present the health care bill at least 72 hours before a vote. They include: Bayh, Lincoln, Pryor, McCaskill, Landrieu, Ben Nelson, Lieberman and Webb.

Powerchair Registration Forms in a Dallas Hospital Waiting Room

I am sitting in a Dallas hospital and there is a box where you can place registrations for a powerchair from Nationalwide Medical Equipment, Inc. "Register for a free evaluation." I wonder if the hospital realizes that this registration box is here.

WSJ Article Examines Pennsylvania Health Care Outcomes System

Today's Wall Street Journal examined Pennsylvania's extensive health care outcomes reporting system for Pennsylvania health care facilities. "Hospitals Find Way to Make Care Cheaper - Make It Better" looked at the death and complications rates that are reported to the state.

Texas will soon enforce its own health-care associated infections (HAI) in health care facilities. Regulators will hold a meeting in Austin later this month to examine reporting requirements.

The article can be viewed by clicking here: http://online.wsj.com/article/SB125478721514066137.html

Corrections to Senate Finance Committee CBO Score

The Senate Finance Committee made a few corrections to the Chairman's Mark. The Congressional Budget Office (CBO) requested this so that they could score the bill. They are mostly technical in nature.

 CORRECTIONS
Page 56, Children’s Health Insurance Program
The maintenance of effort requirement for children in Medicaid and for CHIP expires on September 30, 2019, not on December 31, 2019 as the document indicates.
Page 116, CMS Innovation Center
Strike the sentence beginning with “To be approved for expansion” and ending with “individualized care plans.
Page 126, Redistribution of Unused Graduate Medical Education Slots
The GME redistribution pool was reduced to 65% in the Modification to the Mark.
The implementation date for the redistribution of residency slots should be July 1, 2011 rather than July 1, 2010.
Page 252, Review and Report by the U.S. Department of Veterans Affairs
The review and report by the Secretary of the U.S. Department of Veterans Affairs shall review and report to Congress on the effect of the fees outlined in Title VI of the Chairman’s Mark not just the fees on branded drugs and medical devices.
CLARIFICATIONS
Page 12, Grandfathered Plans
Any individual or group with existing coverage would be able to keep this plan through the grandfather policy – not just those with a policy equal in value or greater than the “young invincible” plan.
Page 23, Deductible for Small Employer Plans
The deductible amounts for small employer plans ($2,000/$4,000) are indexed to premium growth.
Page 35, Penalty Amount in 2017 and Beyond
The penalty amount of $750 is indexed to CPI-U after 2017.
Page 35, Threshold for Affordability Exemption
The 8% threshold for the affordability exemption is indexed in the same manner as the income caps in the exchanges.
Page 38, Cap on Employer Penalty
The $400 cap on the employer penalty is indexed to premium growth. Page 2
Page 116, CMS Innovation Center
The list of potential opportunities for improving quality and reducing costs are intended to be illustrative not binding; the Secretary would have authority to focus on identifying, designing, testing, and evaluating models that would be expected to reduce program costs while preserving or enhancing the quality of care received by individuals receiving benefits.
Page 128, Promoting Greater Flexibility for Residency Training Programs
Hospitals and eligible training sites participating in a jointly operated residency training program will receive GME payments proportional to the resident costs incurred at each facility.
Page 164, MA Coding Intensity
The policy to transition current MA benchmarks to competitively bid benchmarks from 2011 through 2013 also includes the current law coding intensity adjustment over that time frame.
Page 168, Grandfather Policy for MA Plans
The grandfather policy applies only to beneficiaries enrolled in MA on the date of enactment and excludes rebate payments or performance bonus payments under competitive bidding.
The Secretary shall review the utilization factor for grandfathered plans and only allow factors that reasonably capture added use of care from the extra benefits allowed by the grandfather provision based on historical bids.
Page 174, MA Private Fee-for-Service Plans
The waiver for employer-based PFFS plans only applies to employer-sponsored plans (as defined in 1857(i)(2)) that have enrollment as of the date of enactment.
Page 176, Provider-Specific Cap on Home Health Outlier Payments
The Secretary would continue to withhold 5% from episode payments for the outlier pool, with payouts capped at 2.5%.
Page 183, Extension of Section 508 Reclassifications
In implementing this provision, the Secretary shall use the hospital wage index promulgated in the Federal Register on August 27, 2009 (74 Fed. Reg. 43754) and any subsequent corrections.
Page 187, Medicare Market Basket Cuts
The first paragraph should read: “For hospitals, the provision would require a market basket minus 0.25% reduction in 2010 (effective January 1, 2010) and 2011 for inpatient and outpatient hospitals, inpatient psychiatric facilities, inpatient rehabilitation and long term care hospitals.”
Page 187, Productivity
The first sentence should read: “The provision would provide for updates based on the MB or CPI minus full productivity for all Parts A and B providers, except for Graduate Medical Education, who are subject to a MB or CPI update.”
Page 188, Clinical Labs
Add to the fifth year of the 1.75% reduction x percentage point additional reduction to equal $100 million in additional savings.

Kidney Dialysis Payment Changes

Several weeks ago, CMS proposed a new payment system for renal dialysis facilities - bundled payments. It is expected to hurt some drug makers. However, the verdict is out as to how it could impact facilities.

Meanwhile, the Office of Inspector General, in its FY 2010 Work Plan, included a few renal issues in its items to be analyzed. Among them:

Medicare Payments for End-Stage Renal Disease Drugs
We will review dialysis facilities’ fourth-quarter 2008 average acquisition costs for selected ESRD drugs and compare these to fourth-quarter 2008 Medicare payment amounts. Medicare bases payment on 106 percent of the drugs’ ASPs. However, effective January 1, 2011, MIPPA will change payments for ESRD items and services by bundling ESRD drugs, which are currently billed separately, with all of the other costs of ESRD care. Previous OIG reviews have found that Medicare payments for the majority of separately billable ESRD drugs are consistently higher than average acquisition costs reported by dialysis facilities and prices paid by the Department of Veterans Affairs (VA). We will also compare facilities’ 2008 fourth-quarter average acquisition costs to the costs that facilities reported for these drugs in previous quarters.
(OEI; 03-09-00280; expected issue date: FY 2010; work in progress)


Renal Dialysis Facilities’ Dosing Guidelines for Erythropoiesis-Stimulating
Agents
We will review whether protocols used by renal dialysis facilities for erythropoiesis-stimulating agents (ESA) adhere to FDA labeling recommendations. In response to research published in 2007, FDA approved revised labeling for ESAs, including a “black box” warning recommending that ESAs be dosed to maintain a hemoglobin value of less than 12 g/dL. According to the revised labeling for ESAs, maintaining hemoglobin levels above 12 g/dL can adversely affect a patient’s health, possibly resulting in death. There are concerns that dialysis facilities may be using dosing guidelines, standards, and protocols that are not consistent with the revised labeling
recommendations. We will determine the extent to which renal dialysis facilities’ protocols for administering ESAs are consistent with CMS’s monitoring policy for ESA claims.
(OEI; 03-09-00010; expected issue date: FY 2010; work in progress)

Ambulance Services Used To Transport End-Stage Renal Disease Beneficiaries
We will review the extent to which ambulance services are used to transport ESRD beneficiaries to and from dialysis facilities. CMS’s “Medicare Benefit Policy Manual,” Pub. No. 100-02, ch. 10, § 10.3, describes coverage of ambulance services to and from renal dialysis facilities for ESRD patients who require dialysis. Furthermore, section 623(f) of the MMA requires the Secretary to develop a report on a bundled PPS for ESRD services. The bundled PPS for ESRD services generally does not provide for ambulance services. In CY 2005, payments for ambulance services between beneficiaries’ residences and hospital-based or freestanding ESRD facilities were approximately $262 million. We will examine factors such as the percentage of
the population using ambulance services, the feasibility of contracting by freestanding facilities with ambulance suppliers, and the coverage policies of other health insurance programs.
(OAS; W-00-10-35417; various reviews; expected issue date: FY 2010; new start)

Comparative Effectiveness Amendment Failed

Another amendment that would prevent the federal government from using certain data for comparative effectiveness data research.

The amendment and vote:


KYL-ROBERTS-CRAPO-CORNYN AMENDMENT #D8 America’s Healthy Future Act of 2009


Short Title: The PATIENTS Act Description: The amendment would add
the “Preserving Access to Targeted, Individualized, and Effective New
Treatments and Services (PATIENTS) Act of 2009” (S.1259).

SECTION 1. SHORT TITLE.

This Act may be cited as the `Preserving Access to Targeted,
Individualized, and Effective New Treatments and Services (PATIENTS)
Act of 2009' or the `PATIENTS Act of 2009'.

SEC. 2. PROHIBITION ON CERTAIN USES OF DATA OBTAINED FROM COMPARATIVE
EFFECTIVENESS RESEARCH; ACCOUNTING FOR PERSONALIZED MEDICINE AND
DIFFERENCES IN PATIENT TREATMENT RESPONSE.

(a) In General- Notwithstanding any other provision of law, the
Secretary of Health and Human Services--

(1) shall not use data obtained from the conduct of comparative
effectiveness research, including such research that is conducted or
supported using funds appropriated under the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5), to deny coverage of an
item or service under a Federal health care program (as defined in
section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f)));
and

(2) shall ensure that comparative effectiveness research conducted or
supported by the Federal Government accounts for factors contributing
to differences in the treatment response and treatment preferences of
patients, including patient-reported outcomes, genomics and
personalized medicine, the unique needs of health disparity
populations, and indirect patient benefits.

(b) Rule of Construction- Nothing in this section shall be construed
as affecting the authority of the Commissioner of Food and Drugs under
the Federal Food, Drug, and Cosmetic Act or the Public Health Service
Act.


Offset: None

Republicans
CHUCK GRASSLEY -yes
ORRIN G. HATCH -yes
OLYMPIA J. SNOWE- yes
JON KYL -yes
JIM BUNNING -yes
MIKE CRAPO -yes
PAT ROBERTS -yes
JOHN ENSIGN -yes
MIKE ENZI -yes
JOHN CORNYN -yes

Democrats
MAX BAUCUS -no
JOHN D. ROCKEFELLER -no
KENT CONRAD -no
JEFF BINGAMAN -no
JOHN F. KERRY -no
BLANCHE L. LINCOLN -no
RON WYDEN -no
CHARLES E. SCHUMER -no
DEBBIE STABENOW -no
MARIA CANTWELL -no
BILL NELSON -no
ROBERT MENENDEZ -no
THOMAS CARPER -no

Not Agreed to (10-13)

2nd Public Option Senate Finance Amendment Dead

The second shot at a public health insurance option died in the Senate Finance Committee. It was offered by Senate Chuck Schumer (D-NY):

Schumer Amendment #C1 to Title I, Subtitle E-

Short Title: Level Playing Field Public Option

Description of Amendment:

Strike Title I, Subtitle E, Health Care Cooperatives and replace with a national ―level playing field‖ public health insurance option with negotiated reimbursement rates to enhance competition for consumers within the Exchange.

The new national level playing field public option must adhere to the same rules (actuarial reporting, community rating and guaranteed issue) as all other plans in the Exchange and must be self-sustaining with premiums and copayments covering claims. Like private plans, the ―level playing field‖ public option would also be required to establish a reserve fund. Aside from covering some initial start-up costs, general revenues or annual appropriations may not support the ongoing operation of the plan.

The government must not use existing programs like Medicare as a stick to compel providers to participate in the public option. Instead, doctors and hospitals should be able to voluntarily opt-in to participate in the public option.

Offset:

Increase annual fee on for-profit health insurance providers by amount necessary to offset the increase in spending.

Republicans
CHUCK GRASSLEY -no
ORRIN G. HATCH -no
OLYMPIA J. SNOWE -no
JON KYL -no
JIM BUNNING -no
MIKE CRAPO -no
PAT ROBERTS -no
JOHN ENSIGN -no
MIKE ENZI -no
JOHN CORNYN -no

Democrats
MAX BAUCUS -no
JOHN D. ROCKEFELLER -yes
KENT CONRAD -no
JEFF BINGAMAN -yes
JOHN F. KERRY -yes
BLANCHE L. LINCOLN -no
RON WYDEN -yes
CHARLES E. SCHUMER -yes
DEBBIE STABENOW -yes
MARIA CANTWELL -yes
BILL NELSON -yes
ROBERT MENENDEZ -yes
THOMAS CARPER -yes


Not Agreed to (13-10)

1st Public Option Amendment in Senate Finance Committee Dead

The first public health insurance option offered in the Senate Finance Committee died. This was offered by Senate Jay Rockefeller (D-WV).

The details:

Rockefeller Amendment #C6 to Title I, Subtitle C (Making Coverage Affordable)

Short Title: Consumers Health Care Act (S. 1278), as modified

Description of Amendment:

This amendment would add a strong public health insurance option, the Consumer Choice Health Plan (CCHP), to the exchange to compete directly with private plans. Like private health plans, CCHP would be offered to all individuals and businesses purchasing health insurance through the national health insurance exchange. To guarantee plan availability nationwide, public program provider networks will be used.

The Consumer Choice Health Plan will be financially self-sustaining (subject to an annual third party audit). The plan administrator will establish and fund a contingency reserve for CCHP in a manner similar to that of the contingency reserve established by OPM for the Federal Employees Health Benefits Plan. Funds to operate the plan shall be derived from premiums for individuals enrolled under the plan.

To help enrollees afford the cost of coverage, the same premium subsidies would be provided to enrollees in CCHP as those offered to consumers enrolled in private health plans. Any additional revenue gained under this public plan option would be reinvested in CCHP in the form of reduced premiums and cost-sharing or increased benefits.

At a minimum, the Consumer Choice Health Plan would be required to follow the same insurance regulations as private plans operating in the exchange. CCHP would also be required to offer the same type of plans as private plans participating in the exchange. Minimum benefit requirements for children would be based on the pediatric care guidelines provided by Bright Futures, which offers evidenced-based direction on the provision of well-child and other primary health care services. The provider payment rates for the first two years of CCHP would be based on Medicare provider payment rates, including new delivery models enacted as part of health reform. For subsequent plan years beyond the first two years, CCHP would be required to determine competitive provider payment rates based on public and private best practices, integrated models of care delivery (such as medical home and chronic care coordination), evidence-based practices, quality improvement, and the use of health information technology.

This amendment would also establish America‘s Health Insurance Trust to give consumers a voice in health insurance oversight. This nonprofit, consumer-driven organization will evaluate and give ratings to all health insurance products offered through the national health insurance exchange based on factors such as affordability, adequacy, transparency, consumer satisfaction, provider satisfaction, and quality.

The CCHP shall not include abortion, except in cases of rape, incest, or the life of the mother. It also prohibits the expenditure of Federal funding for abortion and it requires the segregation of funds to ensure that no Federal dollars pay for abortions.

Republicans
CHUCK GRASSLEY -no
ORRIN G. HATCH -no
OLYMPIA J. SNOWE -no
JON KYL -no
JIM BUNNING -no
MIKE CRAPO -no
PAT ROBERTS -no
JOHN ENSIGN -no
MIKE ENZI -no
JOHN CORNYN -no

Democrats
MAX BAUCUS -no
JOHN D. ROCKEFELLER -yes
KENT CONRAD -no
JEFF BINGAMAN -yes
JOHN F. KERRY -yes
BLANCHE L. LINCOLN -no
RON WYDEN -yes
CHARLES E. SCHUMER -yes
DEBBIE STABENOW -yes
MARIA CANTWELL -yes
BILL NELSON -no
ROBERT MENENDEZ -yes
THOMAS CARPER -no

Not Agreed to (15-8)

Patient-Centered Outcomes Amendment Fails in Senate Finance Committee

Senator Pat Roberts (R-Kansas) offered an amendment to strike the patient-centered outcomes program in the Senate Finance health care overhaul bill. It failed on a mostly party-line vote (Olympia Snowe defected).

Roberts Amendment # D4 to Title III, Subtitle F, Patient-Centered Outcomes Research Act of 2009



Short Title: To protect patients and doctors



Description of Amendment: Strike Title III, Subtitle F, Patient-Centered Outcomes Research Act of 2009



COST: $0


OFFSET: n/a

Republicans
CHUCK GRASSLEY -yes
ORRIN G. HATCH -yes
OLYMPIA J. SNOWE -no
JON KYL -yes
JIM BUNNING -yes
MIKE CRAPO -yes
PAT ROBERTS -yes
JOHN ENSIGN -yes
MIKE ENZI -yes
JOHN CORNYN -yes

Democrats
MAX BAUCUS -no
JOHN D. ROCKEFELLER -no
KENT CONRAD -no
JEFF BINGAMAN -no
JOHN F. KERRY -no
BLANCHE L. LINCOLN -no
RON WYDEN -no
CHARLES E. SCHUMER -no
DEBBIE STABENOW -no
MARIA CANTWELL -no
BILL NELSON -no
ROBERT MENENDEZ -no
THOMAS CARPER -no

Not Agreed to (9-14)

Cardiologists' Overhead Going Up According to MedAxiom

A study by MedAxiom found that cardiologists' overhead came in at a new high of $710,000 in 2008. Office visits to cardiologists increased by 12 percent and return visits by patients increased 34 percent. Cardiologists tended to perform at least one echocardiography test per day in 2008. That's a 43 percent increase over the number of echocardiograms performed five years ago.

ER Waiting Times Now Online

In a response to consumer demand, several hospitals are now posting ER waiting times online. Part of this could be due to the new competition coming from free-standing ERs.

More from The Hartford Courant: http://tinyurl.com/qg2mhs

Upcoming MedPAC Meeting - Fast Medicare Growth

MedPAC will be meeting later this week in Washington. The two most interesting panels on Friday will be:

10:30 AM – 11:15 AM

Comparative effectiveness: physician perspectives and ongoing initiatives


11:15 AM – 12:15 PM

Episodes that account for the greatest share of Medicare spending and fastest growth

More to follow.

Free-Standing ERs Licensed in Texas Soon

The 2009 Texas Legislature passed a new law (HB 1357) that will regulate free-standing ERs in Texas. It's hard to tell how many there are, but it appears that there are about 40 free-standing ERs in Texas. Also, it's important to not confuse these with the walk-in retail clinics (CVS, etc.).

The licensing of free-standing ERs in Texas will begin in September 2010. The regulators are in the process of drafting regulatory measures.

Some of the key issues include:

* Whether or not you can have two different types of facilities licensed at the same address (you can't currently do that under Texas law). But there are probably a few health care facilities that would like to add a free-standing ER to their building.

* Another big question is what should the credentials of the physicians at the ERs be. Currently, a physician does not have to have special emergency medicine credentials to work in a free-standing ER (or even in a hospital ER).

* Pediatric credentials for an RN will be a big measure that needs to be addressed. (Should a nurse with pediatric emergency credentials be in the facility at all times?)

* Perhaps the most interesting issue that will have to be addressed involves that of laboratory services. The proposed rules suggest three types of labs: waiver, moderate, and high-end. The latter two require strong credentials for the lab director (MD or PHD and additional training). The question in this case ultimately becomes: What will lab services look like in a few years? Should the government prescribe a lot of standards now and then turn around and those standards will be out-of-date in a few years?

New Medicare Physician Fee Schedule & Cardiologists

CMS is expected to release its final rule for the 2010 physician fee schedule on November 1, 2009. They gave us a preview of what it could look like earlier this summer. The big story is that it could result in large cuts for specialties and increase payments to primary care physicians.

Those specialties that have a strong emphasis on imaging could see the biggest cuts. In particular, cardiologists could be hit hard.

Here's a look at what the proposed rule could mean for cardiologists:

Practice Expense (PE)
CMS has proposed incorporating the AMA's Physician Practice Information Survey (PPIS) to update the practice expense component of physician fees. This could result in a 10 percent decrease in PE RVU changes (leading to a grand total of a negative 11 percent combined impact on cardiology in the 2010 physician payment fee schedule). Other specialties fare better: anesthesia, family practice and ophthalmology would see increases.

Potential Cuts to Cardiology:

- 42 percent Transthoracic Echo Proposed Cuts
- 24 percent Left Heart Catheterization Proposed Cuts
- 21 percent ECG Payment Proposed Cuts
- 40 percent Technical Component of CT, MR and IMRT Proposed Cuts
- 11 percent Proposed Increase for Office Visits (Level 4 Established Patient Office Visit - 99214)

Consultation Codes
The proposal would stop payments for consultation codes and use existing E/M service codes. CMS claims that the "savings" would be re-distributed to E/M service codes.

Equipment Utilization: 50 percent to 90 percent
CMS proposes to adopt MedPAC's recommendation regarding medical equipment that costs more than $1 million. It would be assumed that the equipment is being used 90 percent of the time that the office is open (as opposed to the current 50 percent).

Other interesting aspects include the idea of separating administered drugs from the physician fee schedule. Physicians will also face a massive cut of over 20 percent if the SGR formula is not updated.

Red Flag Rules Enforcement Pushed Back Again

Red Flag Rules
By Brant Crouch and Jason Lavender

We've all heard a horror story about identity theft - or perhaps you have been a victim yourself. But did you know that you (individually) and your hospital could be found guilty of stealing someone else's identity without even knowing that you did it? You read correctly. Any institution or individual who HANDLES personal non-public information is at risk of breaking new Federal and State Identity Theft Legislation. Non-compliance carries strong consequences such as fines, criminal and civil litigation and up to 10 years in prison.

This article focuses on one particular area known as the Red Flag Regulations. Enforcement has been delayed until May 1, 2009. In late 2007, the Federal Trade Commission ("FTC") issued sweeping regulations aimed at deterring, detecting and preventing identity theft. Under these rules, known as the Red Flag Regulations, 16 C.F.R. § 681.1 et seq. and Final Rule ("Red Flag Regulations") financial institutions and creditors of covered accounts must establish a program to detect, prevent and mitigate identity theft. For more information go to http://www.ftc.gov/bcp/edu/pubs/articles/art11.shtm.

Most health care providers fall under the regulation due to its definition of Creditor. It applies to personal accounts that are paid after the service is rendered or if the service is intended to be paid in installments. Most health care accounts or charges are not paid in advance of service. However, even if a provider generally provides care on a pre-paid basis, accepting patient payments plus insurance payments amounts to a multiple payment account would make the provider subject to the Red Flag regulations. It's important to note that the American Medical Association (AMA) and several other healthcare associations are making efforts to get the FTC to remove health care providers from the definition of Creditor. However, it appears that the FTC will continue to broaden the scope of who will need to comply versus narrowing it. In a February 4, 2009 response to the AMA, the FTC specifically addressed this issue by reinforcing that providers will not be excluded and cites several reasons why. To obtain a copy of this letter or more information you may email the authors of this article.

So now what can health care providers do to get in compliance as quick as possible and most cost effectively? Much of what needs to be done to comply can be done internally using your own staff. Many compliance plan templates are available for free and some at a nominal cost. However, the multiple steps required to comply fully with the regulation involve employee training for ALL staff, third party vendor notification, and possibly more heavy lifting. One option is to utilize an outside resource to assist in providing the employee training. TPHAC has a resource available to all members that provides these services at no cost.

Many medical facilities around the country have taken pro-active measures to ensure that they protect and educate their own staff and the public they serve by enforcing a solid privacy policy as one way to minimize internal risks. One CEO said, "We take pride in the fact that we are taking the reasonable steps necessary to protect our staff, patients and private records. Our employees have found significant value in the Identity Theft awareness training and related employee benefits we now provide."

One of the leading publications for business legal issues, Business & Legal Reports, writes:

"One solution that provides an affirmative defense against potential fines, fees, and lawsuits is to offer some sort of identity theft protection as an employee benefit. An employer can choose whether or not to pay for this benefit. The key is to make the protection available, and have a mandatory employee meeting on identity theft and the protection you are making available, similar to what most employers do for health insurance."

John Gardner, a former member of the South Carolina House of representatives and 23-year veteran attorney explains that, "The government says that an institution must have four things: a written privacy policy, someone to oversee that policy, training for your employees on the true problem of identity theft, and a mitigation plan in place."

Many health care providers either don't know about these laws or falsely believe that they are exempt from them. Some state governments like Texas have taken the aggressive approach of sending investigators out to businesses to look for violations.

"Identity theft is one of the fastest growing crimes in the United States," Attorney General Greg Abbott said. "Texans expect their personal information to be protected. The Office of the Attorney General will take all necessary steps to ensure that consumers are protected from identity thieves." And they have; making examples of many companies from large ones like Radio Shack and EZ Corp, to smaller businesses like modeling agencies and beauty colleges.

While there's no doubt that health care providers simply do not need any more government compliance headaches, it's clear that when it comes to identity theft there will be no letting up. The AMA will continue to contest this issue with the FTC. In the meantime, it is important to take immediate steps regarding compliance and providing identity theft protection to your patients and employees might be the best way to address these challenges.

Brant Couch, CPA and Vice President with HealthSure, Inc. is located in Austin,Texas. He can be reached at 512-292-3315 or brantc@healthsure.com.

Jason Lavender, Managing Partner & Certified Identity Theft Risk Management Specialist with ID Theft Solutions of America, is located in Austin, Texas. He can be reached at 512-514-6598 or jlavender@idtsoa.com.

Hospital-Acquired Infection Policy Change Makes Little Impact on Medicare

CMS recently created a new policy in which it would penalize health care facilities for the extra costs of treating hospital-acquired infections. Today's Wall Street Journal (09/09/09) found that it might not make a difference:

"The government won't save much from Medicare's year-old policy of refusing to pay hospitals' extra costs to treat hospital-acquired infections and injuries such as bedsores, a new study concludes. Medicare adopted the policy last year with the goal of saving lives and cutting costs. Each year, about 1.7 million Americans acquire infections while in the hospital, and 99,000 of them die, according to the federal Centers for Disease Control and Prevention. Medicare . . . stopped paying the extra costs of treating 10 hospital injuries and infections beginning Oct. 1, 2008"

The state of Texas is following Medicare's lead and passed legislation in the 2009 Legislature that would require state-run programs (for example, Medicaid) to adopt a similar policy. However, it is not clear when this will go into effect considering the fact that money was not appropriated to enforce this policy.

House Bill 2256 - Facility-Based Physician Disclosure

House Bill 2256 is a new law that requires Texas health care facilities to disclose to their patients that facility-based physicians may be out-of-network. And it also sets up a mediation process as well.

The new law also places the burden on the facility-based physician as well. A facility-based physician who bills a patient covered by a PPO or HMO and does not have a contract with the patient's plan is required to send a notice to the patient regarding the mediation process that is available.

New OTC Recommendations Survey by Pharmacists

Pharmacy Times recently released an interesting new Web site that provides pharmacist recommendations regarding certain OTC products: http://otcguide.net/

New HIPAA Rules Coming Soon

In addition to moving HIPAA enforcement over to the Office of Civil Rights (OCR), HHS proposed new rules regarding HIPAA. The "breach notification" regulations, as part of the economic stimulus package, will require health providers, health plans and other entities covered by HIPAA to notify impacted individuals, HHS and the media of breaches impacting more than 500 individuals. Those entities that properly secure information through encryption or destruction will not be required to give notification.

These regulations will now cover business associates of covered entities. This is a big change to HIPAA.

New Texas Health Care/Hospital/Medical Practice Laws (Effective 09.01.09)

The following is an analysis of health care bills signed into law by Governor Rick Perry. Specifically, these bills are of interest to hospitals and medical practices. In addition, bills that failed to pass have been included as well. They will probably make an appearance in the 2011 Texas Legislature.

Insurance Issues -Signed Into Law:

HB 2256 (Hancock) - Relating to requirements between physicians, hospitals, and health benefit plans. The bill became the "negotiated" balance billing bill. A health plan enrollee may request mediation of a settlement of an out-of-network health benefit claim if the enrollee is responsible to the facility-based physician for more than $1,000 and if the health benefit claim is for a medical service or supply provided by a facility-based physician in a hospital that is a preferred provider or that has a contractor with the plan administrator.

Except in the case of an emergency, a facility-based physician shall, prior to a service, provide a complete disclosure that explains that the facility-based physician does not have a contract with the health plan, disclose projected amounts for which the enrollee might be responsible and discloses the circumstances under which the enrollee would be responsible. As a result of disclosing this, the facility-based physician will not be required to mediate a billed charge if the amount billed is less than or equal to the maximum amount projected in this disclosure.

"Facility-based physician" refers to a radiologist, an anesthesiologist, a pathologist, an emergency department physician or a neonatologist. Each facility must develop, implement and enforce written policies for the billing of facility health care services and supplies. The policy must address: any discounting of facility charges to an uninsured patient, any discounting of facility charges provided to a financial or medically indigent patient, the providing of an itemized statement (whether interest will be applied to any billed service not covered by a third-party payor), the procedure for handling complaints and the providing of a conspicuous written disclosure to a consumer at the time they are first admitted to a facility.

HB 1342 (Menendez) - It requires a health insurance company to have information concerning co-payment, deductibles and covered plans and services available in a real-time manner. In addition, a provider that receives an overpayment from an enrollee must refund it within 30 days of when that overpayment was officially identified.

HB 389 (John Zerwas) - Clarifies the definition of a "medical group."

HB 1888 (John Davis) - Relating to standards required for certain rankings of physicians by health benefit plans. The bill would prohibit health plans from ranking physicians unless the plan uses standards prescribed by the TDI Commissioner in conformance with nationally recognized standards.

Nursing Issues - Signed Into Law

SB 476 (Jane Nelson) - SB 476, which will prohibit mandatory overtime for hospital nurses, will go into law on September 1, 2009. This does not prevent nurses from working voluntary overtime. In addition, there are exceptions for emergencies. Texas will now join Pennsylvania in banning mandatory overtime.

As you may remember, this bill competed against a bill that was endorsed by a California nursing union. The union bill did not make it out of a committee hearing.

Scope of Practice/Facility Issues - Signed Into Law

HB 643 (John Zerwas) - Regarding surgical technologists. All surgical technologists hired after September 1, 2009 must complete an accredited educational program for surgical technologists and hold and maintain certification as a surgical technologist by: the National Board of Surgical Technology and Surgical Assisting, the National Center for Competency Testing or another surgical technologist certification program approved by the program. Or the person can complete an appropriate training program for surgical technology in the U.S. Military or U.S. Public Health Service. All of those who were employed prior to September 1, 2009 or are in the service of the federal government will be grandfathered.

SB 911 (Tommy Williams) - Relating to the certification and regulation of pain management clinics. Hospitals and clinics owned and operated by a physician who treats patients within the physician's area of specialty and who uses other forms of treatment, including surgery, with the issuance of a prescription for the majority of the patients are exempted. This act will require pain management clinics that don't meet the exemptions to obtain a certificate from the state. The owner/operator must be on-site at the clinic at least 33 percent of the clinic's total number of operating hours and review at least 33 percent of the total number of patient files of the clinic.

SB 532 (Dan Patrick) - Amends a physician's delegation of prescriptive authority to physician assistants or advanced practice nurses.

HB 1357 - (Carl Isett) - Regulation of freestanding emergency departments.

Health IT (Medicaid) - Signed Into Law

HB 1218 (Donna Howard) - Relating to programs to exchange certain health information between the Health and Human Services Commission and certain health care entities and facilities.

HB 1996 (John Davis) - Relating to an e-prescribing implementation plan under the Medicaid and child health plan programs.

Reporting Requirements/Data Collection - Signed Into Law

HB 1362 (Gutierrez) - Amends the 2007 MRSA registry pilot program that tracks MRSA infections in Bexar, Brazos, Potter, and Randall counties. The extension will allow the San Antonio Metropolitan Health District to continue tracking these infections.

SB 203 (Shapleigh) - Relating to the reporting of MRSA infection rates in general hospitals (pediatric hospitals have different requirements). Requires a general hospital to report to DSHS the incidence of surgical site infections, including the causative pathogen if the infection is laboratory-confirmed, occurring in certain procedures. It amends SB 288 (from the 2007 Legislature) that handled HAI. SB 203 will require hospitals to report each HAI adverse condition for which the Medicare program will not provide additional payment and also includes adverse events identified by the National Quality Forum. In addition, it changes the HAI advisory panel.

Other Hospital Issues - Signed Into Law

HB 2585 (Will Hartnett) - Updates the state's advance medical directives laws by stating that electronic and digital signatures are acceptable (this was not completely clear in the past).

SB 2577 (Mike Jackson) - Requires the board of trustees of the Employee Retirement System of Texas to develop a cost-neutral or cost-positive plan for providing bariatric surgery coverage to eligible employees. Stakeholders and the Employees Retirement System of Texas have been meeting about this issue for the past two years.

Insurance Issues - Did Not Pass:

HB 223 (Eiland)/SB 714 (Van de Putte) - Relating to regulation of the secondary market in certain physician and health care provider discounts.

HB 531 (Anchia) - Relating to medical loss ratios of certain health benefit plan issuers. The bill would require health plans to report their medical loss ratios and set minimums requiring rebates to the insureds.

SB 863 (Harris) - Relating to adoption of certain information technology. The bill would take a step toward real-time claims adjudication by the health plans.

HB 1369 (Rodriguez) - Relating to unfair claim settlement practices by an insurer that issues a preferred provider benefit plan. The bill would set the out-of-network provider's billed charges as the amount the PPO must use to computer out-of-network co-insurance.

HB 1370 (Rodriguez) - Relating to the use of certain insurance policy forms in connection with a PPO plan. The bill would create a DTPA cause of action against the health plan that does not use the out-of-network billed charge to calculate the co-insurance amounts.

HB 1442 (Hancock)/SB 586 (Carona) - Relating to the operation of certain managed care plans regarding out-of-network health care providers. The bill would prohibit health plans from removing or otherwise punishing in-network physicians for referring their patients to out-of-network providers.

HB 2431 (Todd Smith) - Relating to mediation of out-of-network health benefit claim disputes between enrollees and health benefit plan issuers. This is the "model bill" for dispute resolutions regarding balance billing.

SB 1007 (Hegar) - The Texas Department of Insurance (TDI) sunset bill failed to pass. Instead, a temporary extension was passed during a special session. The sunset bill will be taken up again in a few years.

HB 1929 (Jim Jackson) - Relating to payment of claims of certain out-of-network physicians and health care providers. The bill punishes the out-of-network provider by limiting their out-of-network payment to the health plan's in-network rates if the enrollee has made a "reasonable" effort to find an in-network provider.

HB 1930 (Jim Jackson) - Relating to health services provided to health benefit plan enrollees by certain out-of-network health care providers. The bill punishes the out-of-network by banning balance billing if the referring provider does not give the patient notice of the out-of-network provider's out-of-network status and have the patient sign a document in which the patient states that they know the out-of-network provider is out-of-network and agrees to pay the out-of-network provider the balance bill. This measure was opposed by most medical groups.

SB 351 (Shapleigh) - Relating to payment of certain emergency room physicians for services provided to enrollees of managed care health benefit plans. The bill would ban balance billing in ER situations. This measure was opposed by most medical groups.

Integrated Care Models/"Evidence-Based Medicine" - Did Not Pass:

SB 10 (Robert Duncan) - This bill would authorize the board of trustees of the Employees Retirement System of Texas to establish one or more pilot programs that would resemble a physician-hospital organization (PHO). The pilot program would be established in at least one region and reimburse the state health insurance plan with an alternative model that focuses on "quality-based" reimbursement. The pilot program would have been located in Lubbock.

SB 7 - Nelson - Senator Jane Nelson's bill includes 10 elements that she believes would improve Texas health care. Although the bill failed, several items, such as the HAI reporting, were amended to other bills that were signed into law. Among the sections that would be of interest to hospitals:

· Uncompensated hospital care data - Increased hospital and state reporting requirements regarding uncompensated care.
· A quality-based reimbursement program for Medicaid.
· "Preventable events" reporting - Additional measures would be added to the current Health-Care Associated Infection Reporting System (which should receive funding for enforcement this Legislature). "Never events" would not be reimbursed under the state's Medicaid program.

Uncompensated Care/Charity Care - Did Not Pass:

HB 3473 (Garnet Coleman) - Relating to charity care requirements by for-profit hospitals. The bill would require for-profit hospitals that receive tax abatements to provide charity care or government-sponsored indigent health care. A hospital that qualifies would be required to provide charity care in an amount equal to at least five percent of the hospital's gross patient revenue, and government-sponsored indigent health care in an amount equal to at least four percent of the hospital's gross patient revenue.

SB 2278 (Rodney Ellis) -Relating to charity care. The bill would require a hospital to report total gross revenue, including: Medicare gross revenue, Medicaid gross revenue, other revenue from state programs, revenue from local governments, local tax support, charitable contributions, other third party payments, gross inpatient revenue, and gross outpatient revenue. Hospitals would also have to report DSH payment revenue, UPL payment revenue, tobacco settlement proceeds, federal grant funding, charity care, bad debt expenses. In addition, they would have to report total admissions, including: Medicare admissions, Medicaid admissions, admissions under a local government program, charity care admissions, any other type of admission, total discharges, total patient days, average length of stay, total outpatient visits, total assets, total liabilities, estimates of unreimbursed costs of unreimbursed costs of services reported separately (emergency and trauma care, neonatal intensive care, free-standing community clinics, collaborative efforts with local government or private agencies in preventive medicine), donations, total costs of reimbursed and unreimbursed research, education of faculty, and community health education through informational programs and publications. Also, the hospital would have to submit its charge description master or charge master.

The bill would require hospitals electing to provide charity or government-sponsored indigent health care make sure that the charity care and community benefits are provided in a combined amount equal to or at least 10 percent of the hospital's or hospital system's net patient revenue, provided that charity care and government-sponsored indigent health care are provided in an amount equal to at least eight percent of net patient revenue.

Scope of Practice/Facility Issues - Did Not Pass:

HB 2028 (John Zerwas)/SB 2427 (Bob Deuell) - Regarding the delegation of cosmetic and certain dermatological treatments. Only a physician or a physician may delegate to a qualified physician assistant: the administration of botulinum toxin injections, administration of dermal fillers, cosmetic or aesthetic medical treatments or the use of a laser or intense pulsed light device that is a prescriptive device.

Facility Issues - Did Not Pass

HB 3749 (Coleman) - Relating to itemized statements provided by certain health care facilities. The bill would require facilities to itemize their billing statements with regards to medical devices and drugs.

Nursing Issues - Did Not Pass

HB 1489 (Senfronia Thompson) - Relating to the practice of nursing; providing civil penalties. This bill is supported by the National Nurses Organizing Committee and establishes a mandatory nurse to patient ratio. This is similar to the nursing laws in California.

Ownership/Imaging - Did Not Pass

HB 2279 (Thompson) - Relating to the provision of and billing for certain diagnostic imaging services. The bill would create new burdens on physician imagers and new billing requirements.

HB 2259 (Thompson)/SB 1461 (Duncan) - Relating to the registration of diagnostic imaging equipment, the accreditation of diagnostic imaging facilities, and the regulation of diagnostic imaging providers. The bill would require a burdensome and costly (a) registration of MRI, CT, and PET and (b) reporting of patient referrals and study.

Health IT (Medicaid) - Did Not Pass

SB 288 (Jane Nelson)-Relating to the review of a Medicaid recipient's electronic medication history by a Medicaid provider.

SB 289 (Jane Nelson) - Relating to ensuring that health information technology used in the medical assistance and child health plan programs conforms to certain standards.

SB 286 (Jane Nelson) - Also referred to as the "Medicaid Health Passport."

Latest health IT regulations from the federal government for practices and health care facilities

"As the web continues its torrid growth, we simply have too many web sites to sort through, too many places to buy products from, too many software providers to pick from." - Anonymous Blogger

Health Care Information Technology Update

The health care industry is not immune to the vast array of information technology (IT) choices to sort through in the "Web 2.0" era. The following is an attempt by CAB Strategies to sort through the latest health IT laws and regulations that will impact Texas medical practices and health facilities in the near future. Please note that the following is for information purposes only and does not serve as legal advice.

American Recovery and Reinvestment Act of 2009 (HR 1/P.L. 111-5)

Signed into law by the president in February 2009 (also known as the Stimulus Act), this law incorporated the Health Information Technology for Economic and Clinical Health (HITECH) Act.

What does HR 1 do?

Beginning in January 2011, HR 1 provides Medicare reimbursements incentives to physicians (eligible professionals) and hospitals who are "meaningful users" of electronic health records (EHRs). (More about meaningful users down below.) Beginning in 2015, payment penalties will begin for physicians and facilities who are not meaningful users of EHRs.

Medicare incentive payments for hospitals

Incentive payments for eligible hospitals that are meaningful EHR users will begin in October 2010. Reduced payments for hospital that fail to become meaningful EHR users will begin in FY 2015.

The incentive process for determining hospital incentive payments is a little complicated. According to CMS, the incentive payment for each eligible hospital would be based on the product of (1) an initial amount, (2) the Medicare share, and (3) a transition factor.

The initial amount

It is the sum of a $2 million base year amount plus a dollar amount based on the number of discharges for each eligible hospital.

The Medicare share

It is a fraction based on estimated Medicare fee-for-service and managed care inpatient bed-days and modified by charges for charity care.

The transition factor

It phases down the incentive payments over the four-year period. The factor equals 1 for the first year, ¾ for the second payment year, ½ for the third payment year, and ¼ for the fourth payment year. The transition factor is modified for hospitals that wait until 2014 to become a meaningful EHR user (their first year transition factor would be ¾ instead of 1).

What does this mean for ASCs?

The law does not provide incentives for ASCs to adopt EHRs. Only eligible professionals (physicians) and hospitals can take advantage of the incentives. However, many ASCs will want to adopt the EHRs in order to connect to the medical office.

Payments for eligible professionals

The incentives for eligible professionals, such as physicians, will begin in January 2011. Hospital-based physicians who furnish their services in a hospital setting will not be eligible. Eligible providers who furnish most of their services in a health professional shortage area would see their incentive payments increased by 10 percent.

The incentive payment formula is a little complicated. Key highlights of the payment formula:

· You must take advantage of the incentive payments during the time window of 2011 - 2016 (penalties set in after that).

· The payment is equal to 75 percent of Medicare allowable charges for the covered services (or maximum amounts on the sliding scale). We'll focus on the maximum amounts.

· Note that eligible professionals who utilize EHRs in 2011 or 2012 will have a maximum payment of $18,000 for the first year (instead of $15,000).

Incentive disbursements (top row is the year that the EHR is implemented):

	2011	2012	2013	2014	2015
2011	$18,000	$0	$0	$0	$0
2012	$12,000	$18,000	$0	$0	$0
2013	$8,000	$12,000	$15,000	$0	$0
2014	$4,000	$8,000	$12,000	$12,000	$0
2015	$2,000	$4,000	$8,000	$8,000	$0
2016	$0	$2,000	$4,000	$4,000	$0

Payment penalties for eligible professionals

A physician who does not utilize a meaningful EHR by 2015 would start seeing Medicare payment reductions in 2015. They include:

· 1 percent reduction in 2015

· 2 percent reduction in 2016

· 3 percent reduction in 2017

· 3 to 5 percent reduction in subsequent years.

The Secretary of Heath & Human Services would then re-visit the issue in 2018.

What must the EHR look like and what is a meaningful user?

Unfortunately, the federal government often waits until the last minute to release necessary regulations for implementing a law (it will be late 2009 when HHS releases the final EHR guidelines). However, there are three key factors to look for when determining if your system could qualify for the EHR incentives: meaningful user, qualifying EHR technology and certified EHR technology.

Meaningful user

The law sets out three basic standards for defining a meaningful user of EHR technology for purposes of meeting the incentive requirements:

· Certified or qualified EHR technology use.

· Electronic exchange of health information.

· Using the EHR to report clinical data and other quality measures.

HHS will release the final meaningful user guidelines in late 2009.

Qualifying EHR technology

You must have qualifying EHR technology in place in order to receive the incentive payments. In addition, qualifying technology is the first step to take in order to reach certification.

HR 1 provides an outline of what functionality will be required for qualifying EHR technology:

· Provide clinical decision support.

· Support provider order entry.

· Capture and query information relevant to health care quality.

· Exchange electronic health information with and integrate it with other sources.

All EHR systems must meet the qualifying standards.

Certified EHR technology

Certified EHR technology will be a qualified health record that is certified as meeting the standards adopted by the Office of the National Coordinator for Health Information Technology (ONCHIT). The Certification Commission for Health Information Technology (CCHIT) will certify products. There is a possibility that EHRs currently certified by CCHIT may not meet the new incentive standards. However, that remains to be seen and will be addressed in late 2009.

Currently, CCHIT does not certify products specific to ASCs. It is mostly focused on the physician practice environment.

Medicaid programs will determine their own requirements (closely following the Medicaid measures set out in HR 1).

What grants are available?

HR 1 authorizes $19 billion grants and incentives to help providers purchase health IT systems. Much of the money will likely flow to the state agencies and provide them with the ability to provide the grants. Of the $19 billion, $2 billion will be used to develop infrastructure to increase health IT adoption (ASCs will be eligible for these funds). The other $17 billion will be used for low-cost loans for the meaningful use of certified EHRs (ASCs will not eligible for this).

Keep in mind that it is very difficult to obtain a state or federal grant. It is a very long process in which you compete with a large number of sophisticated competitors for a relatively small pot of money. It is not like a congressional earmark in which a member of Congress directs the money to a certain entity.

Does it create health care "best practices" endorsed by the federal government?

HR 1 gives the Office of the National Coordinator for Health Information Technology (ONCHIT) within the U.S. Department of Health and Human Services more authority.

This new authority includes:

· Developing vocabulary, messaging and functional standards for interoperability.

· Criteria to make sure that the IT systems meet those needs.

· Privacy and safety criteria.

· "Helping facilitate the creation of prototype health information networks."

E-Prescribing (As Part of the Medicare Modernization Act of 2003)

The Medicare Modernization Act of 2003 required the Centers for Medicare and Medicaid Services (CMS) to develop a set of standards for electronic-prescribing (e-prescribing). The Medicare Improvement for Patients and Providers Act of 2008 took e-prescribing one step further by authorizing incentive bonus payments (and eventual penalties for failing to do so) under Medicare.

What are the bonuses and penalties?

Physicians who use e-prescribing will be provided Medicare bonuses between the years 2009 and 2013. Physicians who fail to do so (beginning in 2012) would witness reductions in the Medicare payments.

The e-prescribing incentives:

· 2 percent bonus in 2009 and 2010

· 1 percent bonus in 2011 and 2012

The e-prescribing penalties:

· 1 percent reduction in 2012

· 1.5 percent reduction in 2013

· 2 percent reduction in 2014

Physician Quality Reporting Initiative (PQRI)

A 2006 law established the first physician quality reporting system for CMS (including an incentive payment). A 2008 law made the PQRI permanent. However, Congress only authorized incentive payments through 2010. (Congress will likely add new incentive payments in the future.)

Eligible providers who meet the requirements and submit the necessary information will receive a 2.0 percent bonus from CMS for the reporting period of January 1, 2009 through December 31, 2009.