Bill Finerfrock and Paige Bagby

Washington Report –January, 2007

Capitol Associates

NPI, Where is the Industry

New Year, New Congress – Old Problems

What’s in a Name?

First 100 Hours

Raising Minimum Wage Linked to Small Business Tax Changes

Prescription Drug Price Negotiations

More Medicare Cuts on the Horizon?

What He Said, What He Meant

Medicare Listserve open to Billing Companies

CIGNA cited by OIG for Inappropriate Payments

CMS Issues HIPAA Security Guidance for Remote Use of and Access to Electronic Protected Health Information

Medicare Proposes Expanded Coverage Of Angioplasty Of The Carotid Artery Concurrent With Stenting

CMS Program Transmittals released in January

NPI, Where is the Industry

On January 24th, the National Committee on Vital and Health Statistics (NCVHS) Subcommittee on Standards And Security conducted a hearing to assess the readiness of various segments of the health care industry to comply with the May 23rd start date for use of the National Provider Identifier (NPI).

Witnesses representing providers, healthcare business partners and payers were all asked to present testimony on the respective state of readiness for their segment of the healthcare community to use the NPI. HBMA was asked to present testimony on the state of the billing industry to submit claims using the NPI and our assessment on the relative readiness of the provider community we deal with. We were also asked to identify any problems we see with the healthcare provider community complying with the May 23rd deadline.

The organizations invited to present testimony were:

Panel 1 – Providers
American Medical Association
Federation of American Hospitals
Medical Group Management Association
American Dental Association
National Minority Quality Forum / Panel 2 – Business Partners
Healthcare Data Exchange
EDIfecs
Healthcare Billing and Management
Association
Gateway EDI
Panel 3 – Payers
Americas Health Insurance Plans
Centers for Medicare and Medicaid Services
Blue Cross/Blue Shield Association / Panel 4 – Pharmacy
National Association of Chain Drug Stores
National Community Pharmacists Association
Panel 5 – Proposal Presentation
WEDI

HBMA’s testimony was presented by Bob Burleigh, Past-President of HBMA. Bob is also a member of HBMA’s Government Relations Committee.

HBMA expressed confidence that billing companies and the physicians and providers for whom they work are well on their way to being fully compliant with the NPI requirements. This confidence was based upon the results of a member survey HBMA conducted in late November 2006.

More than 130 member companies responded to the on-line survey. This represents slightly more than 20% of the HBMA membership. Respondents ranged from companies that bill for fewer than 10 physicians (11%) to companies that bill for more than 200 physicians (18%)

According to the survey, more than 75% of HBMA member companies have sought and received NPIs for all or nearly all of their physicians and providers. Only one HBMA member company reported that it had not yet obtained NPIs for any of their physicians. HBMA believes that the high level of NPI enrollment by HBMA physicians is a direct result of the Association’s various member education programs and reminders throughout the year.

But as optimistic as HBMA is about the ability of physicians and providers who use billing companies to be ready, concern was expressed that many physicians are still unaware of the importance of obtaining an NPI. Anecdotal information was presented from individual billing company reports of meetings they’ve attended at which physicians were either unaware of the need to obtain an NPI or mistakenly believed that they did not need an NPI.

HBMA also expressed its collective frustration over the fact that HHS has yet to issue the public dissemination notice that is necessary in order to make the NPI database publicly available. The notice, which was originally supposed to be issued in the Spring of 2006, has not been released by HHS and as a consequence, there is no public database providers, billing companies or other entities that need to have access to the database can go to and get NPIs. This is extremely significant for physicians who rely on referrals. Medicare policy requires that when a physician to whom a patient has been referred submits a claim for the services provided, the physician must not only put his/her personal NPI on the claim form, but also that of the physician from whom the referral came. Beginning May 23rd, if the claim does not have both NPIs, it will be rejected.

As a consequence of the failure of HHS to make the database available, and the impediments this has caused in making sure that all providers, payers and billing companies are ready to go on the 23rd of May, HBMA was joined by other witnesses in recommending that CMS adopt a contingency plan to allow claims to be submitted and processed after May 23rd using the provider’s legacy number. The duration of the delay in full implementation would be dependent upon HHS’ release of the dissemination notice. While witnesses offered different timelines for the contingency plan, virtually all were in agreement that a contingency plan was critical; otherwise the system could come to a crashing halt on May 23rd.

The lone dissenting voice for some type of delay or contingency plan was the witness representing the Workgroup on Electronic Data Interchange (WEDI). While WEDI acknowledged all of the problems identified by the other witnesses with meeting the May 23rd effective date, the organization took the position that all claims should still be required to include the provider’s NPI as a condition for payment. The reaction of the audience and several Commission members to the seeming disregard by WEDI for the problems this might cause was swift and very vocal. It appeared that WEDI’s principle argument for holding to the May 23rd date is the belief that changing the date will make it difficult to force compliance with the NPI requirements.

NCVHS is an Advisory Committee to the Secretary of Health and Human Services. It has representation from payers, providers, academicians, lawyers and members of the general public. According to the Committee’s Charter, “The National Committee on Vital and Health Statistics is the Department's statutory public advisory body on health data, statistics and national health information policy. This Committee shall serve as a national forum on health data and information systems. It is intended to serve as a forum for the collaboration of interested parties to accelerate the evolution of public and private health information systems toward more uniform, shared data standards, operating within a framework protecting privacy and security.”

Based upon the findings from the hearing, NCVHS will write a letter to the Secretary of HHS assessing where it believes the industry is in terms of NPI compliance and making any recommendations the Committee feels are necessary in order to ensure there are no disruptions in the marketplace.

In terms of process, the Standards and Security Subcommittee will prepare a draft letter that it will submit to the Full NCVHS for consideration. The Full Committee is scheduled to meet in mid-February and will consider the letter at that time. Presuming the letter is approved by the Full Committee, it would most likely be transmitted to the Secretary in late February.

It is not clear what actions the Committee will recommend to the Secretary; however, if the Committee recommendations reflect the views of a majority of the witnesses, then some delay in the effective date should be forthcoming. Even if the Committee recommends a delay, the Secretary is not obligated to follow the Committee’s recommendation.

New Year, New Congress – Old Problems

The elections this past November resulted in major changes in the political landscape in Washington, DC. The election of a Democrat controlled House ended 12 years of Republican control for that chamber and resulted in the election of the first woman as Speaker of the House.

New Chairmen/women have assumed control of all Congressional Committees and this will affect the type of legislation we will see passed by the House and Senate in 2007 and 2008. Whether the legislation adopted by a Democrat Congress will be signed by the President remains to be seen. President Bush has been reluctant to use his veto pen during the first six years of this administration, however, that was largely due to the fact that both houses of Congress were controlled by his party during most of that time. Now that Congress is controlled by Democrats, the likelihood that he will veto bills during the last two is quite high.

Here are the new Democrat Chairs of the key House and Senate Committees (and Subcommittees) that deal with Health policy matters.

Senate Finance - Chair, Senator Max Baucus (D-MT)

Senate Health, Education, - Chair, Senator Ted Kennedy (D-MA)

Labor & Pensions

House Energy & Commerce - Chair, Representative John Dingell (D-MI)

Health Subcommittee -Chair, Representative Frank Pallone (D-NY)

House Ways & Means -Chair, Representative Charlie Rangel (D-NY)

Health Subcommittee -Chair, Representative Pete Stark (D-CA)

Other than Representative Pallone, all of these Representatives and Senators are seasoned veterans on their respective Committees or Subcommittees. Baucus, Kennedy, Dingell and Stark previously served as Chairs of their respective Committees or Subcommittees during previous Congress in which the Democrats were in control. Representative Rangel had been the ranking Democrat on the Ways & Means Committee for several years.

Among the new Chairs, Representative Pallone is the least experienced Member. His elevation to the Chairmanship of the Energy & Commerce Health Subcommittee was made possible by the decision of former Representative Sherrod Brown (D-OH) to seek election to the U.S. Senate. Brown was successful in defeating GOP incumbent Mike DeWine (R-OH) in the November election and has moved offices to the Senate side of the Capitol. That departure created a vacancy at the top of the Health Subcommittee and Speaker Pelosi chose Pallone as the new Subcommittee chair.

One of the most familiar returning Chairs is Pete Stark. Representative Stark is familiar to all in the health world as he is the author of the “Stark Rules” governing various business relationships between and among healthcare providers. It is expected that the new Democrat majority will want to revisit and perhaps try to update the Stark rules to close what some view as “loopholes” in the current requirements. Representative Stark is also well-known in Washington for his sometimes terse relationship with organized medicine.

In addition to different types of legislation coming out of the Committees, we can also expect numerous “oversight” hearings. CMS officials will probably be spending so much time before the Committees explaining their actions, they will want to rent a long-term parking space near the Capitol. If nothing else, Committee hearings should be lively!

What’s in a Name?

One of the first actions the Democrat leadership took upon assuming the leadership of the House was to change the name of one of the Committees. For several decades when Democrats controlled the House, there was a Committee call the Education and Labor Committee. When Republicans assumed control of the House in 1993, the name of the Committee was changed to Education and Workforce. At the time, it was believed that this was a political shot across the bow of organized labor that their influence in the House was not as great as it once was.

In an example of “turn about is fair play” the new Democrat majority has switched the name of the Committee back to Education and Labor and signaled to the outside world that organized labor is once again, an influential voice in the United States House of Representatives.

No word on whether there will be changes in the rules governing the sandboxes at the Congressional child care center.

First 100 Hours

During the campaign, Democrat candidates asserted that if they were elected to the majority, they would move to pass a spate of legislation during the “first 100 hours” of the new Congress. The legislative packaged ranged from cutting interest rates on student loans, raising the minimum wage and authorizing CMS to negotiate with drug companies are part of the Medicare Part D prescription drug program.

Democrats were elected and House and Senate leaders have met their commitment to pass the promised legislation (H.R. 1 through H.R. 6 and S. 1 through S. 6). Although each house has passed the legislation necessary to fulfill the commitment, none of those bills have been reconciled (i.e. different versions passed by House and Senate) and it will likely be some time before a unified bill is ready for transmittal to the President.

Democrats should be congratulated for meeting their self-imposed deadlines for passing the bills.

Raising Minimum Wage Linked to Small Business Tax Changes

Raising the minimum wage received overwhelming support in both the House and Senate. The bill passed the House by a vote of 315 - 116 and the Senate, by a vote of 94 – 3. However, despite the broad bi-partisan support for raising the minimum wage, getting a bill to the President is not certain. The bill passed by the Senate was linked to certain tax breaks for small businesses and other tax and policy changes.

The bill, as passed by the House, was a short, rather simple bill that raised the minimum wage on the following schedule:$5.85 an hour, beginning on the 60th day after the date of enactment of the bill; $6.55 an hour, beginning 12 months after that 60th day; and, $7.25 an hour, beginning 24 months after that 60th day.

Although the bill was short and sweet when passed by the House, by the time the bill made it’s way to the Senate floor, it had grown dramatically in size and scope.

Examples of legislative changes included in the Senate version, not included in the House version are:

* Extension of Increased Expensing For Small Businesses

* Clarification of Cash Accounting Rules For Small Business

* Extension and Modification Of Combined Work Opportunity Tax Credit and Welfare-To-Work

Credit

* Treatment of Bank Director Shares

* Special Rule For Banks Required To Change From The Reserve Method Of Accounting On Becoming

S Corporation

* Treatment of the Sale Of Interest In A Qualified Subchapter S Subsidiary

* Elimination of All Earnings And Profits Attributable To Pre-1983 Years For Certain Corporations

* Expansion of Qualifying Beneficiaries of An Electing Small Business Trust

Due to the differences in the two versions of the bill, a House-Senate Conference Committee will be required to resolve the differences. Senior House Members have expressed some skepticism over several of the Senate passed tax provisions. It is not clear whether any of the Senate provisions are “deal breakers” for the House. According to news reports, the House Leadership has repeatedly said that want to pass a minimum wage bill without the tax provisions. Some House Leaders have even threatened to challenge the bill as passed by the Senate on Constitutional grounds arguing that the Constitution requires that all bills dealing with the raising or spending of money must “originate” in the House.

Prescription Drug Price Negotiations

Democrats have long believed that a major flaw in the Medicare Part D, prescription drug program has been the inability of the government to negotiate prices with the pharmaceutical industry. Proponents of negotiation argue that given the size of the Medicare program and the size of the drug benefit, the government should be able to use its market power to negotiate better drug prices for seniors then seniors will get under an open market system. The analogy is made to the VA which typically is able to get some of the best prices for prescription drugs due to the fact that it negotiates as a system

As part of their 100 Hour initiative, Democrat House and Senate candidates promised to pass legislation authorizing the federal government to negotiate drug prices as part of the Medicare Part D prescription drug program. That legislation, H.R. 4, was introduced and passed by the House by a vote of 255 – 170.

The bill would require the Secretary of HHS to “negotiate with pharmaceutical manufacturers the prices (including discounts, rebates, and other price concessions) that may be charged to PDP sponsors and MA organizations for covered Part D drugs for Part D eligible individuals who are enrolled under a prescription drug plan or under an MA-PD plan.”

The Bush Administration has indicated that even though Congress would authorize the Secretary to negotiate with Drug Companies, there’s no requirement that would force the Secretary to engage in those negotiations.

More Medicare Cuts on the Horizon?