Oklahoma County Medical Society

UPDATE - 2012 MEDICARE PHYSICIAN PAYMENT RATES

The payroll tax extension legislation that was passed by Congress and signed by the President on Dec. 23, 2011 (Public Law 112-078) delayed the 27.4% Medicare pay cut due to the SGR formula for two months. It also extended the floor on the work geographic practice cost index (GPCI) and certain other policies. The Centers for Medicare & Medicaid Services (CMS) has confirmed to the AMA, however, that all of the other changes that were included in the Medicare physician payment final rule for 2012 will still take effect. Physicians should not expect that payment rates will remain unchanged. As detailed in a memo sent to the Federation (http://www.ama-assn.org/resources/doc/washington/2012-medicare-physician-payment-schedule-analysis.pdf ) on Nov. 4, 2011 following release of the final rule, numerous changes are being made in the relative value units, GPCIs, electronic prescribing and quality reporting programs, and multiple procedure payment rules for 2012. All of these changes will take effect as scheduled for dates of service beginning Jan. 1, 2012.

In addition, although P.L. 112-078 provided for a zero percent update to the Medicare conversion factor, the final rule indicated that there would be a 0.18% increase in the conversion factor for budget neutrality and this change will also be effective Jan. 1, 2012. The budget neutrality increase is due to CMS adoption of the RVS Update Committee recommendations for misvalued codes. The 2011 conversion factor was $33.9764. The 2012 conversion factor will be $34.0376.

CMS also has indicated that because Congress acted so late in 2011 to prevent the SGR cut, claims must still be held for a period of time to allow CMS time to develop the new payment rate files and the Medicare claims administration contractors time to install and test the files. CMS expects that most if not all contractors will be ready to process claims under the revised rates on or before Jan. 18, 2012, which is the end of the 10-business-day claims hold period previously announced, but contractors’ time frames may differ. Contractors are expected to have the new rates posted to their web sites by Jan. 11th.

Finally, CMS published in the Jan. 4, 2012, Federal Register a correction notice (http://edocket.access.gpo.gov/2012/pdf/2011-33757.pdf ) to the 2012 final rule that modifies the relative values for a number of services. The agency also posted to its web site a revised relative value file (http://www.cms.gov/PhysicianFeeSched/PFSRVF/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=descending&itemID=CMS1255291&intNumPerPage=10 ) reflecting both the corrections and the legislation that stopped the 27.4% cut.

ACO Final Rule

The CMS has released its final rule on the Medicare Shared Savings/ACO program. Also released was a new Advanced Payment initiative specifically for physician organizations, a final FTC-DOJ Policy Statement on Antitrust Enforcement for Medicare ACOs, and an Interim Final Rule on fraud waivers for Medicare ACOs. Links to all documents are at the end of this message.

Based on AMA staff’s preliminary review, there are significant changes to the Final Rules and significant advocacy wins for the AMA and physicians. While AMA staff is now reviewing in detail, the following changes have been made to the rule that are very positive and reflect AMA comments on the proposed rules:

ACO Payment and Structure

•         The standard financial model for ACOs will still be shared savings, i.e., there will be no change in the underlying payment system, and the program will function essentially as a pay-for-performance program based on total cost. However, they are creating a complementary program through the Innovation Center to provide “Advance Payments” specifically to physician organizations and rural providers that do not have the capital reserves available to finance needed changes in care processes or to cover short-term losses while waiting for shared savings payments to be made.
•         There will still be two different tracks for ACOs, but one will be “upside only” during the three-year contract period, i.e., the ACO will not be liable to pay CMS if costs actually increase. The second will be both upside and downside, as in the proposed rule. (The proposed rule made ACOs even in the first track liable to pay CMS back for cost increases in the third year.)
•         There will no longer be requirements to withhold shared savings payments to cover potential future cost increases.
•         ACOs will be allowed to share in savings beginning with the first dollar of savings earned. The proposed rule gave ACOs a share of savings above a minimum threshold. ACOs must still meet a minimum threshold of savings but they can earn back more of the savings they generate.
•         There will be 33 quality measures instead of 65, and they have dropped the Hospital Acquired Conditions (HAC) measures, as we urged. Staff is reviewing now to determine exactly which measures are included. There will be no flexibility, though, for different quality measures in different regions.
•         They will have a more prospective method of assigning beneficiaries. ACOs will get a list of “probable beneficiaries” and the list will be updated quarterly. There will still not be mechanisms for beneficiaries to “sign up” voluntarily, though; the ACO will only get credit for them after the attribution methodology determines that they have had a majority of their primary care visits with the ACO. In addition, as the AMA recommended, CMS will include primary care services provided by specialist physicians in assigning patients to ACOs, and not limit the attribution method exclusively to primary care physicians.
•         They eliminated the requirement that at least 50 percent of an ACO’s primary care physicians must be “meaningful users” of EHRs by year 2 of the program. Instead they will double weight the quality measure "Percent of PCPs who successfully qualify for an EHR Incentive Program Payment." ACOs only have to report a percentage and not meet a specified percentage when reporting this quality measure and the term "qualify" covers PCPs who participate in either the Medicare or Medicaid EHR Incentive program.
•         There will be a rolling application process, so prospective ACOs will have time to prepare without having to meet arbitrary deadlines that are too short.

Antitrust

FTC-DOJ has adopted two important changes that the AMA requested:

•         They have eliminated the need for mandatory review of ACOs above the 50 percent threshold of the primary service area (PSA) calculation. While the Agencies will still rely on the PSA calculation, eliminating mandatory review will result in significant removal of burden and cost on potential ACOs.
•         The statement applies to ALL collaborations among otherwise independent providers. The draft statement applied only to new entities formed after
•         March 23, 2010. This would have placed all collaborations that existed prior to March 23, 2010 under a separate antitrust review system.

Fraud Waivers

• CMS and the Office of Inspector General adopted our recommendations to expand the waivers of certain Medicare laws for ACOs. The agencies adopted the AMA recommendations that the waivers begin sooner so that they will apply during the process of planning a Medicare ACO, and that ACOs will be able to offer certain additional medical benefits to patients, such as care management, without having them viewed as inappropriate inducements. In addition, the agencies issued the new waivers regulation as an interim final rule instead of a final rule, as the AMA had recommended.

Here are links to all key documents:

ACO final
http://www.ofr.gov/OFRUpload/OFRData/2011-27461_PI.pdf

Advanced Payment
http://www.ofr.gov/OFRUpload/OFRData/2011-27458_PI.pdf

OIG waivers
http://www.ofr.gov/OFRUpload/OFRData/2011-27460_PI.pdf

FTC / DOJ statement
http://www.ftc.gov/opa/2011/10/aco.shtm

CMS Finalizes Changes to 2012 Medicare ePrescribing Penalty Program

Physicians have until Nov. 1 to apply for an exemption and avoid financial penalties for failing to comply with Medicare's ePrescribing requirements. The AMA urges all physicians who have doubts about whether they met the program's requirements in the first six months of 2011 to review the allowed exemptions carefully and submit an online application for each of the exemption categories for which they qualify as soon as possible.

Under the Centers for Medicare & Medicaid Services (CMS) ePrescribing rule, physicians are required to have issued and reported at least 10 electronic scripts (e-scripts) by June 30 to avoid being penalized. The penalty reduces all their Medicare Part B claims paid under the 2012 fee schedule by 1 percent.

In November 2010 CMS made a sudden decision to require physicians to meet this criteria by June 30 in order to avoid 2012 penalties, and the AMA continually stressed that this last-minute requirement was unreasonable.

On Aug. 31, CMS released a final rule that allows qualifying physicians to avoid the 1 percent penalty by applying for one or more of six new ePrescribing penalty exemptions through a Web-based tool: https://www.qualitynet.org/portal/server.pt/community/communications_support_system/234 (Note: If you have difficulty accessing the online application, email QualityNet at qnetsupport@sdps.org which runs the portal for CMS.)

Although the final rule does not include an additional reporting period in 2012, it does reflect several other significant improvements the AMA requested. For example, the regulation provides more flexibility under the exemption categories so that more physicians can qualify to avoid the 2012 ePrescribing penalty.

In addition, CMS extended the application deadline for one month to Nov. 1. However, physicians are encouraged to apply for an exemption as soon as possible to avoid claims reprocessing. Physicians who found it difficult to meet the 10 e-script requirement during the first six months of this year can apply for one of the following exemption categories by Nov. 1:

• Your practice is located in a rural area without high-speed Internet access.
• Your practice is located in an area without sufficient available pharmacies for ePrescribing.
• You are registered to participate in the Medicare or Medicaid electronic health record (EHR) incentive program and you adopted certified EHR technology by Oct. 1, prior to requesting an exemption.
• You are unable to ePrescribe because of local, state or federal laws or regulations. (CMS confirmed that physicians who mainly prescribe narcotics but cannot submit these prescriptions electronically because of certain limitations can apply for this exemption category.)
• You do not prescribe on a regular basis.
• There were too few opportunities for you to report the ePrescribing measure because of limitations of the measure's denominator. For example, you do prescribe electronically but your e-scripts are not related to qualifying visits or services.
Learn more about the steps physicians should take now to avoid the Medicare ePrescribing penalty. http://www.ama-assn.org/ama/pub/physician-resources/health-information-technology/incentive-programs/cms-eprescribing-incentive-program.page

Medicaid Recovery Audit Contractor (RAC) Final Rule

CMS released the Medicaid Recovery Audit Contractor (RAC) final rule on September 14, 2011. In January, the AMA and 80 state and specialty societies submitted comments to CMS on the Medicaid RAC proposed rule. The AMA is currently reviewing the final rule, but our initial read is that the rule adopts many of our specific recommendations, including: 1) a 3-year maximum claims look back period; 2) RACs are required to employ a full-time physician Medical Director; 3) States must set limits on the number and frequency of medical record requests; 4) RACs must hire certified coders; 5) RACs must provide outreach and notify providers of audit policies and protocols; 6) RACs must accept submission of electronic medical records by fax or CD/DVD; 7) RACs cannot audit claims that have already been audited or are currently being audited by another entity; 8) RACs must return the contingency fee if an overpayment determination is reversed at any level of appeal; 9) States must adequately incentivize the identification of underpayments; and, 10) States must coordinate the efforts of the RACs with other auditing entities. The final rule sets an implementation deadline of January 1, 2012.

The final rule is available at http://www.ofr.gov/OFRUpload/OFRData/2011-23695_PI.pdf

The comment letter submitted by the AMA and 80 state and specialty societies is available at http://www.ama-assn.org/ama1/pub/upload/mm/399/rac-letter-10jan2011.pdf

Tell Congress to repeal Medicare's flawed SGR formula

Events in Washington, D.C., pose enormous threats to the future of medicine and patient care. The AMA is urging every physician in this country to engage their U.S. representatives and U.S. senators on looming decisions that will determine the future of health care.
A new congressional Joint Select Committee on Deficit Reduction has been granted broad power to develop a legislative package by Nov. 23 to reduce spending by $1.2 trillion. If Congress fails to enact spending reductions by Dec. 23, across-the-board cuts will be imposed to achieve the target amount.

Medicare provider payments are on the chopping block again at a time when physician payments are already slated to be cut 30 percent on Jan. 1 under current law.

A Medicare advisory committee created by Congress is contemplating recommendations for an18 percent cut in payments to non-primary care physicians over the next three years followed by a freeze for seven years. Medicare payments to primary care physicians would be frozen for 10 years under the misguided scheme concocted by this congressional advisory group.

Over the next few years, physicians who fail to comply with electronic prescribing, electronic health records and quality reporting requirements face additional payment reductions under current law.

Some physicians have said they are tired of going hat in hand every year asking members of Congress not to cut their Medicare payments; that they don’t believe they can make a difference. This defeatism will produce a self-fulfilling prophesy. Fatigue and failure to engage in the legislative process will be fatal to your medical practice. Every physician is at risk—solo or small private practice as well as those employed by physician-directed groups, hospitals or health plans.

The AMA is working with state and national medical specialty societies in a united campaign to convince Congress to shift the focus from destructive payment cuts to reforms that will stabilize the Medicare program.

Procedural protections granted to the Joint Select Committee on Deficit Reduction also offer a unique opportunity to advance medical liability reforms that have been blocked in the U.S. Senate. As we all know, fixing a broken medical liability system will lower federal spending and benefit patients. The AMA convened a medical liability task force composed of state and national specialty society leaders to coordinate advocacy efforts on this issue, as well.

Deadlines for congressional action are just weeks away. The stakes for medicine are enormous. Your ability to deliver high-quality care and preserve patients’ access to care hangs in the balance.

Together, the AMA, state medical societies, national medical specialty societies and individual physicians across the country can secure a better outcome than what looms ahead. Join us in the campaign for a better future for physicians and patients by sending an urgent message on this critical issue NOW— click here: http://ama.capwiz.com/ama/issues/alert/?alertid=53132696

Peter W. Carmel, MD, AMA President

Robert M. Wah, MD, AMA Chair, Board of Trustees

James L. Madara, MD, AMA Executive Vice President, CEO

AMA Joins Efforts to Ease Restrictions on FSA and HSA Funds

Since the Affordable Care Act (ACA) was enacted early last year, the AMA has been working to further incorporate important AMA policies into the law. These include dealing with the Independent Payment Advisory Board, safeguards on physician data release and the successful effort to repeal burdensome IRS Form 1099 reporting requirements.

One issue that has not received as much attention are new restrictions on the use of flexible spending accounts (FSAs), health savings accounts (HSAs) and other tax-preferred arrangements for the purchase of over-the-counter (OTC) medications like aspirin, acid reflux medications, allergy medications and eyedrops.

In 2003, as several popular drugs moved to OTC status, the IRS loosened restrictions on the use of these accounts for the purchase of nonprescription medications and other health care products. As a way to offset costs associated with the ACA, Congress revisited these guidelines as the law was drafted.

As an alternative to returning to the earlier limits, the ACA allowed consumers to continue purchasing OTC medications with pre-tax dollars, but only with a prescription. Though intended as a way discourage overconsumption of health care products, several unintended consequences emerged.

In response to federal rulemaking, the AMA wrote to IRS Commissioner Douglas Shulman in December 2010 to point out the many shortcomings of the new policy. Rather than saving money, the new policy may increase overall health care spending by forcing patients to schedule office visits with their physicians to obtain prescriptions for OTC medications, or they may seek more expensive prescription drugs that are covered by their health insurance plans.

Furthermore, since a prescription for an OTC product must be treated as any other prescription, record keeping requirements are increased for both physicians and pharmacies.

At the 2011 Annual Meeting of the House of Delegates, AMA policy on this issue was further strengthened by the adoption of Resolution 211, which calls on the AMA to support repeal of the federal restriction on the use of tax-exempt funds to buy medications without a prescription and to notify the appropriate federal legislative bodies and regulatory agencies of our support for repeal.

In response, the AMA has joined with the broad coalition of stakeholders, including retailers, consumer health product manufacturers and other physician groups to call for legislationrepealing these requirements.

After extensive conversations with this coalition of organizations, Rep. Lynn Jenkins, R-Kan., Rep. Shelley Berkley, D-Nev., Sen. Pat Roberts, R-Kan., and Sen. Ben Nelson, D-Neb., have introduced the Restoring Access to Medication Act (H.R. 2529 and S. 1368, respectively). This legislation repeals the new restrictions and would once again allow consumers to use these accounts to purchase OTC medications.

The AMA continues to work with other organizations to secure passage of these bills to remove these additional burdens from patients and physicians.

AMA CPT 2012 Changes and ICD-10-CM Workshops

The AMA is hosting CPT Changes Workshops in six convenient locations: Atlanta, Baltimore, Dallas, New Jersey, San Diego and Las Vegas this December, 2011. The Workshops will cover the 2012 CPT Changes and transition to ICD-10-CM.

For additional information, click on the links below:

CPT Changes 2012 Workshops:

http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/cpt/cpt-changes-workshops.page

ICD-10-CM Workshops:

http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/cpt/icd-10-cm-workshops.page

HHS Announces Federal Loan for CO-OP Formation

The Department of Health and Human Services (HHS) has released a Funding Opportunity Announcement (FOA) for federal loans for the creation of Consumer Operated and Oriented Plans (CO-OPs) at
http://www.grants.gov/search/search.do;jsessionid=5PyWTyzR5n1f9nZ9JQ4q2PH6xY7Shpsp7cQTjbFpyZQy2vV4q872!-370087949?oppId=109093&mode=VIEW.

The first round of applications are due October 17, 2011. Remaining funds will be available to additional applicants through December 31, 2012. Funding will be awarded on a competitive basis. Successful applicants in the first round will be awarded funds by January 12, 2012. HHS also announced that there will be a listening session for potential applicants on the FOA and the application process on August 10, time TBD. Details on this listening session will be posted on the CMS website in the coming days. The CO-OP program was created in the Affordable Care Act (ACA) to further insurance market competition. $3.8 billion in federal loans are available for the funding of start up and solvency requirements for these newly formed insurance entities. The AMA already has provided comments to HHS on the development of CO-OPs to ensure that they can be physician-led. Last week, CMS issued a proposed rule on CO-OP structure. See the Federal Register notice at http://www.ofr.gov/OFRUpload/OFRData/2011-18342_PI.pdf. Comments on the proposed rule are due September 16th and the AMA will be submitting comments. For more information on CO-OPs, including the AMA's previous comments submitted to HHS, go to www.ama-assn.org/go/aco. If your have further questions about the development of physician-led CO-OPs, contact either Wes Cleveland (wes.cleveland@ama-assn.org) or Henry Allen (henry.allen@ama-assn.org.), in the AMA's Division of Private Sector Advocacy.
The Department of Health and Human Services (HHS) has released a Funding Opportunity Announcement (FOA) for federal loans for the creation of Consumer Operated and Oriented Plans (CO-OPs) at
http://www.grants.gov/search/search.do;jsessionid=5PyWTyzR5n1f9nZ9JQ4q2PH6xY7Shpsp7cQTjbFpyZQy2vV4q872!-370087949?oppId=109093&mode=VIEW.

The first round of applications are due October 17, 2011. Remaining funds will be available to additional applicants through December 31, 2012. Funding will be awarded on a competitive basis. Successful applicants in the first round will be awarded funds by January 12, 2012. HHS also announced that there will be a listening session for potential applicants on the FOA and the application process on August 10, time TBD. Details on this listening session will be posted on the CMS website in the coming days. The CO-OP program was created in the Affordable Care Act (ACA) to further insurance market competition. $3.8 billion in federal loans are available for the funding of start up and solvency requirements for these newly formed insurance entities. The AMA already has provided comments to HHS on the development of CO-OPs to ensure that they can be physician-led. Last week, CMS issued a proposed rule on CO-OP structure. See the Federal Register notice at http://www.ofr.gov/OFRUpload/OFRData/2011-18342_PI.pdf. Comments on the proposed rule are due September 16th and the AMA will be submitting comments. For more information on CO-OPs, including the AMA's previous comments submitted to HHS, go to www.ama-assn.org/go/aco. If your have further questions about the development of physician-led CO-OPs, contact either Wes Cleveland (wes.cleveland@ama-assn.org) or Henry Allen (henry.allen@ama-assn.org.), in the AMA's Division of Private Sector Advocacy.

CMS to Modify Medicare ePrescribing Penalty Program

Under the Centers for Medicare & Medicaid Services (CMS) ePrescribing rule, physicians must issue at least 10 electronic scripts (e-scripts) by June 30, 2011, to avoid an ePrescribing penalty that amounts to a 1 percent reduction from their total Medicare Part B allowable charges in 2012.

The AMA continually stressed to CMS that the agency's sudden decision in November 2010 to require physicians to meet these criteria by June 30 of this year in order to avoid 2012 penalties was unreasonable. The AMA pressured CMS to make changes to the program, including the creation of additional exemption opportunities so that physicians who would have difficulty complying with the ePrescribing requirements so quickly would not be penalized unfairly.

On May 26, CMS released a proposed rule that would allow physicians, if they qualify, to apply for one of several new ePrescribing penalty exemptions through a Web-based portal that is still under construction. Physicians would have to apply for an exemption by Oct. 1 to avoid the penalty.

Physicians still are required to ePrescribe using a qualifying system and report the G8553 code on at least 10 Medicare Part B claims from Jan. 1–June 30, 2011, to avoid the 2012 penalty. However, physicians who find it difficult to meet the 10 e-script requirement can apply for one of the following exemption categories by Oct. 1 of this year:

• Their practice is located in a rural area without high-speed internet access.

• Their practice is located in an area without sufficient available pharmacies for ePrescribing.

• They are registered to participate in the Medicare or Medicaid Electronic Health Record (EHR) Incentive Program and have adopted certified EHR technology.

• They are unable to electronically prescribe due to local, state or federal law or regulation (such as prescribing controlled substances).

• They prescribe infrequently (for example, they prescribed fewer than 10 prescriptions between Jan. 1 and June 30).

• There are insufficient opportunities to report the ePrescribing measure due to program limitations (for example, a surgeon ePrescribes but not on the date of the patient encounter in accordance with the program requirements).

CMS will finalize its changes to the ePrescribing penalty program sometime this summer.

Read an AMA Wire story about CMS's proposed rule. And learn more about the steps physicians should take now to avoid the Medicare ePrescribing penalty.

AMA Model Physician-Hospital Employment Agreement

The American Medical Association (AMA) recognizes that many physicians are becoming employees of hospitals, medical groups or affiliate organizations.

The new annotated model physician-hospital employment agreement is a valuable resource that addresses the specific needs of physicians and their advisers who are preparing to negotiate an employment contract with a hospital or related entity.

AMA members and Federation staff may view the interactive Physician-Hospital Agreement online for free using their AMA password. Coming soon, non-AMA member/non-Federation staff, will be able to purchase access to the current edition through the AMA Bookstore. Questions may be directed to Barney Cohen, Office of General Counsel, American Medical Association at barney.cohen@ama-assn.org or (312) 464-4342.