Month: September, 2018

HHS Seeks Input From the Provider Community On Possible Changes to the Federal Anti-Kickback Statute and the Beneficiary Inducement Civil Monetary Penalty Law

On August 27, 2018, the Department of Health and Human Services (“HHS”), Office of Inspector General (“OIG”) published a request for information (“RFI”) seeking input from the public on how it might change the Federal Anti-Kickback Statute (“AKS”) and beneficiary inducement civil monetary penalty law (“CMP Law”) to eliminate barriers to coordinated care and value-based care. Any comments must be submitted by October 26, 2018 at 5:00 p.m.

The OIG’s request states that HHS is “working to transform the health care system into one that better pays for value.” Removing unnecessary government obstacles to care coordination has been identified by HHS as a key priority to accomplishing better care coordination. Accordingly, as part of its “Regulatory Sprint to Coordinated Care”, HHS is looking to identify regulatory provisions that act as barriers, assess whether they are unnecessary obstacles and either issuing guidance or revising regulations to remove the obstacles. The ultimate goal is “to encourage and incentivize coordinated care while protecting against harms caused by fraud and abuse.”

Part of this process is a review by the OIG to identify either new safe harbors that can be created under the AKS or new exceptions to the definition of “remuneration” under the CMP Law. The OIG has identified both of these laws as having a broad reach and a potential significant impediment to beneficial arrangements that would advance coordinated care. The AKS provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit or receive remuneration to induce or reward the referral of business that is reimbursable under Federal health care programs. (Section 1128B(b) of the Social Security Act). The CMP Law provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or State health care program beneficiary that the benefactor knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a State health care program. (Section 1128A(a)(5) of the Social Security Act).

In addition, the OIG is looking for input on “[t]he structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements designed to promote care coordination and value” and “terminology related to alternative payment models, value-based arrangements, and care coordination” to better assess where and how to make improvements. The goal is to identify and understand potential beneficial new ways of delivering health care so that appropriate safe guards can be put in place to avoid potential violations of the AKS and the CMP Law.

Another area of interest to the OIG is engagements with beneficiaries, whether through incentives or elimination of cost sharing obligations. The OIG has requested input on the types of incentives the industry would be interested in providing along with explanations of the type of incentive, how it is believed it would improve quality of care and what, if any, restrictions or guidance would be necessary. Similarly, the OIG seems willing to consider possible relief or elimination of beneficiary cost-sharing obligations and has requested input on how this might improve care and what the risks and safeguards should be if modifications were permitted.

Finally, the OIG has asked for input regarding (1) the current use of fraud and abuse waivers for testing delivery models, (2) possibly allowing donations or subsidies for cybersecurity related items or services, (3) accountable care organization beneficiary incentive programs and (4) options for further telehealth expansion.

It remains to be seen what, if any, changes will come about as a result of this RFI. However, it is a step in the right direction that the OIG is acknowledging the impediments of these laws and is beginning a dialogue on how to improve the system.

CMS Proposes Significant Changes to the Medicare ACO Program

Recently, the Centers for Medicare & Medicaid Services (“CMS”) issues a proposed role that would force Medicare accountable care organizations (“ACO”) to begin risk sharing at a faster pace. This is being referred to as the “Pathways to Success” program.

Currently, Medicare ACOs may participate for up to six years without taking on any risk.  These ACOs are eligible for shared savings, but do not bear any responsibility for increased costs.  The large majority of Medicare ACOs currently do not participate in risk sharing.  Further, based upon performance of Medicare ACOs thus far, Medicare spending has increased.  The “Pathways to Success” program aims to change this.

CMS has proposed to reduce the aforementioned six year non-risk track to two years and replacing all tracks with the Basic Track and the Enhanced Track.  Under the Basic Track, an ACO would participate for five years, except ACOs that start in the Basic Track on July 1, 2019 (more on this date below) would participate for five-and-a-half years.  All ACOs that elect the Basic Track would have no risk sharing for the first year (or the first year-and-a-half of ACOs that start in the Basic Track on July 1, 2019).  ACOs could continue with no risk sharing for the second year except that ACOs that have previously participated in the old Track 1 would have to move to risk sharing in the second year.  The amount of risk sharing would gradually increase each year to a maximum of fifty percent in the fifth year.

As for the Enhanced Track, it is essentially based on the existing Track 3.  All Basic ACOs would have to move to the Enhanced Track after five years (or five-and-a-half years for ACOs that start in the Basic Track on July 1, 2019) with the exception of certain low revenue ACOs, which might be permitted to renew a Basic Track agreement for another five years.

To give ACOs additional time to consider whether they want to continue participating in the Medicare ACO program, CMS has proposed that a six month extension for all ACOs whose agreements expire on December 31, 2018 and a special one-time July 1, 2019 start date (as opposed to January 1) with an application period during spring 2019.


CMS Proposes Simplifying E/M Documentation Requirements to Reduce Clinician Burden While Simultaneously Seeking to Cut E/M Reimbursement Rates

The Centers for Medicare and Medicaid Services (“CMS”) recently released its notice of proposed rulemaking titled “Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2019.” Buried therein were proposed changes to the way in which evaluation and management (“E/M”) visits are documented and paid. While CMS has touted its proposal as a “historic change[] that would increase the amount of time that doctors and other clinicians can spend with their patients by reducing the burden of paperwork,” it has also slipped in a cut in reimbursement for many E/M visits, especially those coded at Level 4 or Level 5. Consequently, many specialists who historically code at these higher level visits due to the complexity of the patients they typically treat may face significant reductions in revenue for the services they provide.

E/M services have historically been categorized in the outpatient setting as Level 1 to Level 5 with visits being distinguished based on the level of complexity, site of service and whether the patient is new or established. Moreover, the coding takes into account such key components as the history of present illness, the physical examination and the medical decision making of the clinician. In its most basic sense, the greater the time and complexity required, the higher the level of visit and the greater the payment rate.

CMS has proposed to simplify the documentation for these services by (1) eliminating the need to document medical necessity of a home visit made in lieu of an office or outpatient visit, (2) eliminating the prohibition of documenting multiple visits with the same practitioner, or by practitioners in the same or very similar specialties within a group practice, on the same day as another E/M service, and (3) allowing practitioners to choose, as an alternative to the current framework specified under 1995 or 1997 guidelines, either medical decision making or time (regardless of whether 50% is spent on counseling or care coordination) as a basis to determine the appropriate level of an E/M visit. CMS has stated in its press release, which was issued following the proposals, that it believes these changes will “fundamentally improve the nation’s healthcare system and help restore the doctor-patient relationship by empowering clinicians to use their electronic health records (EHRs) to document clinically meaningful information, instead of information that is only for billing purposes” and therefore “puts patients over paperwork.” As a result of this, CMS has suggested that clinicians will see a savings of thousands of hours and millions of dollars in reduced administrative costs in CY 2019.

Absent from the CMS press release is any real discussion of the corresponding cut in reimbursement that is also included in the proposal and which accompanies this reduction in necessary documentation. A review of the notice reveals CMS is attempting to sell its changes on reimbursement as a proposal to “simplify” the payments and “eliminate the increasingly outdated distinction between the kinds of visits” reflected in the current levels. In actuality, as the below chart demonstrates, specialists that are required to expend the greater amounts of time and address the cases with greater complexity (i.e. Level 4 and 5 visits) will be reimbursed significantly less per visit while those general practitioners and others that have historically treated less complex cases (i.e. Levels 2 and 3) will suddenly be compensated more than they have historically and exactly the same as the most complex Level 4 and Level 5 cases.

New Patient 2018 Rate, National Avg 2019 Rate, Proposed, National Avg
99201 $45 $44
99202 $76 $135
99203 $110 $135
99204 $167 $135
99205 $211 $135
Established Patient 2018 Rate, National Avg 2019 Rate, Proposed, National Avg
99211 $22 $24
99212 $45 $93
99213 $74 $93
99214 $109 $93
99215 $148 $93


CMS has attempted to rectify the inherent inequity in creating a uniform rate for Levels 2 through 5 by creating new Healthcare Common Procedure Coding System G-code add-ons for factors such as inherent visit complexity and additional prolonged face-to-face services. With these additional codes, additional work Relative Value Units can be added to a visit. Nevertheless, CMS acknowledges in its proposal that there will nevertheless be a number of specialties that see a decrease in overall reimbursement for providing the exact same services they are providing today. Included in that list are such specialties as dermatology, rheumatology, oncology, neurology and hematology, which are each estimated to see decreases in overall reimbursement.

CMS is currently seeking comments, which are due by September 10, 2018, regarding not only whether such implementations should be made, but also whether a delay in implementation, such as to January 1, 2020 rather than January 1, 2019, would be warranted given the breadth of changes being proposed.