Administration Warns Hospitals on Gaming EHR System
On September 24, HHS Secretary Sebelius and Attorney General Holder sent a joint letter to the five major hospital trade associations warning against using electronic health records (“EHRs”) to artificially inflate Medicare and Medicaid payments.
The strongly worded letter noted there is “troubling indication that some providers are using [EHR] technology to game the system.” The letter noted hospitals using EHRs to facilitate “upcoding” of the intensity of a patient’s care or “cloning” of medical records to inflate reimbursement.
The five hospital associations receiving the letter were the American Hospital Association (“AHA”), the Federation of American Hospitals, the Association of Academic Health Centers, the Association of American Medical Colleges and the Association of Public Hospitals and Health Systems.
AHA responded to the Administration’s letter, calling for Medicare to develop clear guidelines for the billing of common hospital services. The AHA response also complained about Medicare Recovery Audit contractors who are paid a percentage of the improper payments they identify, regardless of whether those payments are overturned on appeal.
On the Hill, CMS and ONC officials briefed staffers on September 26 on EHR meaningful use requirements. According to staff attending the briefing, the upcoding issue was not addressed at length despite many staffers’ concerns over the issue.
While Congress is out until after the November elections, congressional action on the coding issue is expected following their return. Medicare fraud has been one of the few health-related areas of consensus among Republicans and Democrats. In May, a bipartisan group of Senators sent a letter to the health care community seeking new solutions for fighting fraud.
House Democrats Release Q&A Document on Sequester
The House Budget Committee Democrats provided an eight-page document to Congress answering several “frequently asked questions” about sequestration, which is scheduled to go into effect January 2, 2013. The document lists how and when the $1.2 trillion cuts would be implemented.
The report affirms that most Medicare programs are subject to sequestration but limited to 2%, which the Office of Management and Budget has estimated will result in $11 billion in non-discretionary cuts for fiscal year 2013. This includes about $5.6 billion from Part A, $4.9 billion from Part B and $559 billion from Part D. Many health reform programs are exempt from sequestration, along with Medicaid and other low-income programs that were excluded under the law.
CMS Launches Quality Initiative for Nursing Homes
On September 27, CMS announced seven cooperative agreement awards to organizations partnering with nursing facilities to implement an avoidable readmissions initiative. The seven organizations will partner with 145 nursing homes in seven states to test models for reducing avoidable hospitalizations among nursing home residents. One of the seven states will be Indiana, as Indiana University was selected for this initiative.
Participating organizations in the initiative will implement and operate their proposed intervention models over a four-year period. Each participant is required to partner with a minimum of 15 Medicare-Medicaid certified nursing facilities in the same state where the intervention will be implemented.
The initiative will be run collaboratively by the CMS Medicare-Medicaid Coordination Office and the CMS Innovation office. Both offices were created by the Affordable Care Act (“ACA”). The other organizations participating in the initiative are: Alabama Quality Assurance Foundation, Allegiant Health Nebraska, University of Missouri, New York Hospital Foundation, HealthInsight of Nevada and UPMC Community Provider Services.
House Committee Approves Legislation to Exclude Commissions from Loss Ratio
On September 20, the House Energy and Commerce Committee approved a bill that would help protect health insurance brokers from cuts in commissions resulting from the medical loss ratio (“MLR”) provision of the ACA.
The Access to Professional Health Insurance Advisors Act (H.R. 1206), introduced by Reps. Mike Rogers (R-MI) and Rep. John Barrow (D-GA) in 2011, would exclude brokers’ commissions from MLR calculations. Barrow was the only Democrat on the committee to vote for the bill, while all 25 committee Republicans voted to approve it. Under the ACA, large group health insurance plans must spend at least 85% of premiums on medical claims or quality improvements, and small group and individual plans must spend at least 80%.
Similar legislation has been introduced in the Senate (S. 2288) by Sen. Mary Landrieu (D-LA) and also has bipartisan support. No action has been scheduled for the Senate bill.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
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