Washington Report – June, 2012
Bill Finerfrock, Pam Jackson, Zhaneta Mansaku, Kelly Sullivan and Kristen Metzger
Supreme Court Decision on PPACA
CMS Wants to Improve Primary Care for Patients, Save Money for Medicare
Improvements to the Medicare Internet-based PECOS system
Healthcare Spending Will Continue to Rise
All Medicare Provider and Supplier Payments To Be Made By Electronic Funds Transfer
Medical claims error rate drops to 9.5%
CMS announces technical fix for certain 5010 crossover claims
I’ll See Your 10 and Raise you 11
Medicare Fee-For-Service to Reject Version 4010 Electronic Transactions July 1, 2012
CMS Transmittals
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Supreme Court Decision on PPACA
In one of the most anticipated Supreme Court decisions since Bush V. Gore in 2000, the Supreme Court handed down their decision on the Constitutionality of the individual mandate and the Medicaid expansion included in the Patient Protection and Affordable Care Act (PPACA).
On the individual mandate, the Court ruled that the mandate is permissible under the Constitution because the enforcement mechanism is a tax and Congress has unlimited authority to use the tax code to either incent or penalize individuals to engage in certain activities. The Court noted that the Congress has long used the tax code to encourage people to undertake various activities such as buying energy efficient products or discouraging certain actions, such as imposing high taxes on cigarettes to discourage smoking. Although a “negative” tax (i.e. penalizing people for not doing something) the Court reasoned that the “tax” for failing to obtain health insurance was no different than previous efforts by Congress to promote or discourage various types of activities.
With respect to the Medicaid expansion, a majority on the Court concluded that the federal government had crossed a line and rather than creating an incentive for the states to expand Medicaid eligibility, the Congress “enforcement” was coercive and excessive. Under the PPACA, the federal government would initially pick up 100% of the cost of the Medicaid expansion, however, this would eventually drop to 90% of the costs. More importantly, if a state failed to expand as outlined in the PPACA, then the federal government’s basic share of payment for Medicaid would be reduced. The Court held that this reduction in base Medicaid funding for failure to expand was “coercive”.
The case, National Federation of Independent Business Vs. Sebelius was decided by a 5-4 majority. Chief Justice Roberts was joined by Justices Ginsberg, Breyer, Kagan and Sotomayor. Dissenting in the opinion were Justices Kennedy, Scalia, Thomas and Alito.
Now that the Supreme Court has weighed in on the Constitutional issues, the future of the PPACA now rests in the hands of the Legislative and Executive Branches of government.
Between now and the November elections, there will be much posturing and gnashing of teeth. But readers should not expect to see any substantive changes made in the PPACA between now and when the new Congress and President are sworn into office in January, 2013. The American people have the opportunity in November to decide who controls the House of Representatives, who controls the United States Senate and who sits in the White House. Candidates will pontificate both for and against the PPACA but in the end, it will be up to the voters to decide the future of this legislation by the way they vote in November.
HBMA has scheduled an Audiocast for July 6th entitled, "Supreme Court Update: What did they say? What does it mean?" at which time the implications of the Supreme Court’s decision will be discussed.
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CMS Wants to Improve Primary Care for Patients, Save Money for Medicare
According to a CMS press release, nearly 4 dozen commercial, federal and State insurers in seven markets have “pledged to work with the Centers for Medicare & Medicaid Services (CMS) to give more Americans access to quality health care at lower cost.”
Under the newly minted Comprehensive Primary Care initiative, CMS will pay primary care practices a care management fee, initially set at an average of $20 per beneficiary per month, to support enhanced, coordinated services. At the same time, participating commercial, State, and other federal insurance plans are also offering an enhanced payment to primary care practices that provide high-quality primary care.
According to Acting CMS Administrator Marilyn Tavenner, "We know that when we support primary care, we get healthier patients and lower costs. This initiative shows that the public and private sectors can come together to meet the critical need for these services."
Insurers in the following states have agreed to participate in this initiative:
Arkansas
New Jersey
Colorado
Oregon
New York’s Albany/Hudson Valley Region
Ohio-Kentucky Cincinnati-Dayton Region
Oklahoma (Greater Tulsa)
In order to receive the new care management fee from CMS and insurers, primary care practices must agree to provide enhanced services for their patients, including offering longer and more flexible hours, using electronic health records; delivering preventive care; coordinating care with patients’ other health care providers; engaging patients and caregivers in managing their own care, and providing individualized, enhanced care for patients living with multiple chronic diseases and higher needs.
This program will only be available on a limited basis within the markets identified above. Approximately 75 primary care practices in each of the markets will be selected to participate.
The Comprehensive Primary Care initiative is a four-year initiative administered by the CMS Innovation Center. Applications will be accepted until July 20.
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Improvements to the Medicare Internet-based PECOS system
Over the last year, CMS has been working with HBMA and other representatives of providers and provider-related organizations and we are pleased to report that they are listening to our feedback on the Internet-based PECOS. Most importantly, they have made some significant improvements in the system and we are confident that more are on the way.
For more than a year, Sherri Dumford, CHBME, the HBMA Director of Operations has been part of what is called the “PECOS Power Users Group.” These are individuals representing various stakeholder groups who have intimate knowledge and work with provider enrollment. CMS solicits ideas from these individuals and then has them “field test” their solutions to the problems the group identifies.
As an example, during one of the Power User meetings, it was mentioned that the PECOS website was not particularly user friendly and it was sometimes difficult to find information on the website. Based upon this observation, CMS reviewed the site and came back to the group with possible changes.
Now, visitors to the site will see a redesigned layout of the Internet-based PECOS homepage and log in screen. The homepage is an easier way for users (providers, billing companies on behalf of providers etc.) to register for a PECOS account and update personal information. It also features additional helpful links to allow access to multiple tools and reference information. The helpful links include PECOS enrollment tutorials, the Ordering and Referring List, and the Revalidation Notice Sent List.
Some additional features that will be added to the page include:
§ Users will soon be able to see if their revalidation application has been received and processed by the Medicare Administrative Contractor (MAC). In addition to a “Revalidation Notice Sent” date, a “Revalidation Received” date and a “Revalidation Complete” date will be displayed on the My Enrollments page. The “Revalidation Notice Sent” date and the “Revalidation Received” date will display on the My Enrollment page for 120 days.The “Revalidation Complete” date will display on the My Enrollments page indefinitely. HBMA is aware of some problems with this system as it has been reported that some physicians are appearing on the page as having been sent a revalidation notice but there is no record of the notice being sent by the Contractor. HBMA has made CMS aware of this problem and they are investigating and will notify us when they have discovered the cause of the problem and possible solutions.
§ A reassignment report is now available for all organizations and individuals that are accepting reassignments.The option to view this report is only available if the enrollment has current reassignments.The reassignment report is accessible via the Application Questionnaire page and displays the following columns:
o Provider Name
o National Provider identifier (NPI)
o Current Enrollment Status
o Enrollment State
o Revalidation Notice Sent Date
o Revalidation Status
The report displays up to 50 records on the report screen. For reassignment reports containing more than 50 records, the authorized user will be prompted to download the report into an excel spreadsheet by clicking the Generate Report button at the bottom of the screen.
Finally, CMS announced that beginning this Fall, surrogates can enter and sign the enrollment form electronically for individuals enrolling in Medicare as part of a group. This change is directly related to the work of the Power Users Group. CMS has assured HBMA that they are working on establishing similar capability for individual provider enrollment but it will take some time to work out the technical issues surrounding that functionality.
HBMA appreciates the improvements CMS has made thus far and the Association looks forward to even more improvements in the not too distant future.
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Healthcare Spending Will Continue to Rise
According to projections included in a study entitled, National Health Expenditure Projections 2011-2021 done by the CMS National Health Expenditure Accounts Team, “between 2011 and 2021, national health spending is projected to grow at an average annual rate of 5.7 percent.”
In 2014, national health spending is projected to rise by 7.4 percent, or 2.1 percentage-points faster than in the absence of reform, as the major coverage expansions from the Affordable Care Act (ACA) are expected to result in 22 million fewer uninsured people (compared to estimates that exclude the law’s impacts). It should be noted that these projections were published BEFORE the Supreme Court ruling on the Medicaid expansion. It is not known what effect the Court’s decision will have on states opting out of the expansion but it is expected that at least some states will decline the additional money to expand Medicaid eligibility.
Increases in Medicaid and private health insurance spending will both contribute to the overall acceleration in national health spending in 2014. Conversely, out-of-pocket spending is projected to decline as previously uninsured individuals who paid out-of-pocket for health care will now be covered by insurance.
Because a significant percentage of the newly insured individuals will be relatively younger and healthy they are expected to devote a greater proportion of their spending to prescription drugs and physician & clinical services. Consequently, the analysis concludes, prescription drug spending growth is projected to reach 8.8 percent in 2014 (4.7 percentage-points higher than would have been expected in the absence of reform). Spending on physician services is also projected to grow faster than what would have been projected in the absence of reform (3.2 percent more).
The CMS study also projects that healthcare will continue to consume an ever higher percentage of our nation’s Gross Domestic Product over this 10-year time period.
The effect on future government spending will be dramatic. According to the researchers, “By 2021, federal, state and local government healthcare spending is projected to be nearly 50 percent of national health expenditures, with federal spending accounting for about two-thirds of the total government share.
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All Medicare Provider and Supplier Payments To Be Made By Electronic Funds Transfer
CMS has asked HBMA to remind its members that existing regulations require that at the time of enrollment, enrollment change request, or revalidation, providers and suppliers that expect to receive payment from Medicare for services provided must also agree to receive Medicare payments through electronic funds transfer (EFT).
As part of CMS’s revalidation efforts, “all suppliers and providers who are not currently receiving EFT payments are required to submit the CMS-588 EFT form with the Provider Enrollment Revalidation application, or at the time any change is being made to the provider enrollment record by the provider or supplier, or delegated official.”
Go to Further Details on the Revalidation of Provider Enrollment Information. for more information about provider enrollment revalidation.
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Medical claims error rate drops to 9.5%
According to a new report released by the American Medical Association, “…error rates for paid medical claims among seven major private health insurers dropped to 9.5% in 2012 from 19.3% in 2011. The AMA's findings were released in the association's annualNational Health Insurer Report Card (PDF)on health insurer claims performance.
HBMA through its Commercial Payer Relations Committee and the AMA have been working diligently over the past year to work collaboratively with the major health insurers to reduce the number of payment errors. The AMA estimates that the year-to-year improvement identified in the current survey has resulted in a “savings” of $8 billion achieved mainly by cutting administrative costs. If claims can be billed and paid correctly the first time, this can result in considerable savings to the practice and dramatically improved practice cash-flow.
The AMA survey also noted a significant increase in the number of patient encounters that required prior authorization which increases patient wait time and slows down practice productivity.
HBMA, the AMA and other healthcare organizations have been working with government and commercial third-party payers to reduce and/or eliminate unnecessary administrative burdens that slow provider receipt of payments.
Some of the payers participating in the analysis included:
Aetna
Anthem Blue Cross and Blue Shield
Cigna Corp.
Humana
Regence
United HealthCare
Medicare
In a related story, the Center for American Progress has released a new report entitled, “Paper Cuts, Reducing Health Care Administrative Costs”. According to the report, “Administrative costs in the U.S. health care system consume an estimated $361 billion annually—14 percent of all health care expenditures in our nation.”
The reports authors, Elizabeth Wikler, Peter Basch, and David Cutler conclude that “At least half of this spending is estimated to be wasteful. In an era of government budget deficits and rising health care costs, the case for reducing the administrative complexity of health care is compelling. Successful efforts can result in significant financial savings while simultaneously improving system performance indicators and the quality of patient care.”