CMS and ONC Release Stage 2 Meaningful Use and Standards Final Rules – On August 23, 2012, CMS released a display copy of the final Stage 2 Meaningful Use criteria that eligible professionals (EPs), eligible hospitals and critical access hospitals (CAHs) must meet in order to qualify for incentive payments under the Medicare and Medicaid EHR Incentive Programs, as established by the HITECH Act (the Final Rule). The Office of the National Coordinator for Health IT also released a final rule establishing the certification standards EHRs must meet to enable providers to achieve meaningful use during Stage 2.
Stage 2 criteria will take effect beginning in 2014 for providers that successfully attested to meeting the Stage 1 criteria during the 2011 reporting year. CMS finalized its earlier proposal to extend the deadline by which successful Stage 1 meaningful users must satisfy the Stage 2 criteria from 2013 to 2014.
Meaningful Use Functionality Measures
CMS finalized its proposal to require eligible hospitals and CAHs to meet the criteria or an exclusion for 16 core functionality measures, and to meet the criteria for three of six menu options. EPs must meet the criteria or an exclusion for 17 core measures, and meet the criteria for three of six menu options. The Final Rule largely adopts the Stage 2 functionality measures set forth in the proposed rule. Of note, CMS will require that more than 50 percent of an eligible provider's unique patients be provided with online access to their health information. EPs must make this information available within four business days of the information becoming available to the EP, and eligible hospitals and CAHs must do so within 36 hours after an inpatient or emergency department discharge. Moreover, more than five percent of a provider's unique patients (down from the initial proposal of ten percent) must actually view online, download or transmit such health information.
CMS slightly revised its new requirements for computerized provider order entry (CPOE). More than 60 percent of an eligible provider's medication orders must be generated using CPOE, while more than 30 percent of laboratory and radiology orders must be generated using CPOE. CMS will now permit orders entered by any "credentialed medical assistant" to count toward the measure. Previously, only orders entered by EPs or licensed healthcare professionals otherwise permitted to enter orders under state, local and professional guidelines counted toward the measure. Providers have the option to exclude from the CPOE calculation all standing orders entered into the certified EHR.
The Final Rule adds several new measures to the set of core and menu options. CMS added a new EP core measure, requiring successful transmission of a secure electronic message to an EP by more than five percent of the EP's unique patients. The Final Rule also adds a new core measure for eligible hospitals: the ability to track the status of more than ten percent of medication orders, from order to administration. Eligible hospitals and CAHs may choose a new option from the menu set, an "outpatient lab reporting" measure requiring eligible hospitals and CAHs to transmit electronically more than 20 percent of their electronic lab results to the ordering provider.
CMS adopted its earlier proposal to permit EPs to submit functionality data as a group using a single batch file. For measures that require EPs to send an electronic "test" transmission, a group practice may submit one test for all practice locations if all EPs in the group have access to the same certified EHR at all locations using a shared network.
Clinical Quality Measures
The Final Rule adopts the same clinical quality measures (CQMs) set forth in the proposed rule. Eligible hospitals and CAHs must report on 16 of 29 CQMs, while EPs must report on nine out of 64 CQMs. CMS makes clear that providers will not be evaluated on performance of individual measures, but only on the actual reporting of the data. Beginning in 2014, eligible providers that are beyond their first year of demonstrating meaningful use must submit CQM data electronically. EPs may submit data as individuals through either a CMS portal or through the Physician Quality Reporting System (PQRS). EPs also may submit data as part of a group, either as members of an accountable care organization participating in the Medicare Shared Savings Program, or as members of a PQRS group practice. Eligible hospitals and CAHs must access a CMS portal to submit CQM data.
CMS revised the timeframe during which providers must collect and submit CQM data. CMS initially proposed a CQM reporting period of the entire 2014 calendar year for EPs and the entire 2014 federal fiscal year (October 1, 2013 through September 30, 2014) for eligible hospitals and CAHs. Recognizing the need among vendors and eligible providers for more time to develop and implement EHR technology that satisfies ONC's Stage 2 certification standards, eligible providers may now report CQM data only for one three-month quarter during the 2014 calendar year (for EPs) or the 2014 federal fiscal year (for eligible hospitals and CAHs).
Hospital-Based Eligible Professionals
CMS will permit EPs who previously would not have been eligible for incentives as hospital-based eligible professionals to request a waiver from that determination if the EP can demonstrate that he/she helped fund (without reimbursement from the hospital) the acquisition, implementation or maintenance of a stand-alone ambulatory certified EHR that the EP uses in the inpatient or emergency department of a hospital.
Definition of a Medicaid Patient Encounter
For purposes of satisfying the Medicaid patient volume thresholds to qualify for Medicaid EHR incentives, EPs may count all encounters with Medicaid-enrolled patients during which the EP furnishes any service to the patient regardless of whether the State Medicaid agency makes payment for the service. Previously, CMS only permitted EPs to count those encounters in which a Medicaid covered service was furnished. This change is not retroactive to encounters from 2011 or 2012. States are required to adopt this change in their State Medicaid HIT Plans within six months after the Final Rule is published.
Standards and Certification Final Rule
ONC also released its final rule of the new certification standards that EHRs must meet in order to enable providers to satisfy the Stage 2 meaningful use criteria. The standards rule permits a provider to possess only the certified EHR technology necessary for the provider to meet the meaningful use criteria to which it is attesting. Thus, providers attesting to the Stage 1 criteria need not posses technology enabled to satisfy the Stage 2 criteria. ONC has also added new privacy and security standards to the new certification criteria.
The display copy of the Stage 2 Meaningful Use Final Rule is available here. The ONC final rule is available here. Both final rules are scheduled to appear in the Federal Register on September 4, 2012.
Reporters, Christopher Kenny, Washington, D.C., + 1 202 626 9253, ckenny@kslaw.com and Joe Lynch, Washington D.C., + 1 202 626 8998, jlynch@kslaw.com.
CBO Issues Update to the Budget and Economic Outlook for Fiscal Years 2012 to 2022 Reflecting Changes in Medicare and Medicaid Spending Forecasts – On August 22, 2012, the Congressional Budget Office (CBO) issued an Update to the Budget and Economic Outlook for fiscal years 2012 to 2022 (Budget Update). CBO states in the Budget Update that “[s]harp reductions in Medicare’s payment rates for physicians’ services are scheduled to take effect[]” in fiscal year 2013. Following its normal procedures, CBO prepared baseline projections for, among other things, Medicare expenditures that assume that current laws remain in effect. For example, the baseline projections assume that Medicare physician payments will be reduced by 27 percent in fiscal year 2013 and by additional amounts in later years as a result of the sustainable growth rate (SGR). CBO acknowledged, however, that Congress has passed legislation every year since 2003 to prevent the scheduled reduction from occurring. Accordingly, CBO also developed alternate projections that assume that Congress passes legislation to block the SGR reduction from taking effect in fiscal year 2013, as Congress has done every year since 2003. “If payment rates through 2022 stay as they are now, outlays for Medicare (net of premiums) would be $10 billion higher in 2013 and about $245 billion (or about 3 percent) higher between 2013 and 2022 than they are in the current-law baseline,” CBO states.
A number of updates to its economic forecast caused CBO to reduce its estimate of mandatory outlays in fiscal year 2012 by $7 billion and to increase its projection of those outlays by $212 billion for fiscal years 2013 through 2022. With respect to fiscal year 2012, spending for Medicare is anticipated to be approximately $9 billion less than it was in 2011. “However, most of that reduction is the result of $15 billion in payments being made in fiscal year 2011 rather than in 2012 because the first day of fiscal year 2012 (October 1, 2011) fell on a weekend.” Without this change in the timing of payments, Medicare outlays would be up by nearly 4 percent this year. For fiscal years 2013 through 2022, CBO changed its projections for Medicare spending because its current projection of economy-wide productivity are lower than they were in its prior forecast and its projected prices for goods and services (e.g., labor and non-labor outputs) are higher. Accordingly, CBO now anticipates higher payment rates for Medicare than its March forecast—which results in an increase in Medicare outlays by $136 billion from 2013 through 2022. With respect to Medicaid, higher projected prices for medical services and the cost of labor are expected to increase spending by $27 billion from 2013 through 2022.
CBO projects that outlays for Social Security, Medicare, and Medicaid will grow from 10.5 percent of gross domestic product (GDP) in 2013 to 12.2 percent of GDP in 2022, and will account for approximately 55 percent of all federal spending by 2022. As a result of enrollment increases, Medicare outlays (excluding receipts from premiums and other sources) are predicted to total 3.7 percent of GDP in 2013 and 4.3 percent of GDP in 2022. As a result of the Medicaid expansion under the Patient Protection and Affordable Care Act (ACA), Medicaid outlays are anticipated to increase from an estimated 1.7 percent of GDP in 2013 to a projected 2.4 percent of GDP in 2022. CBO also stated that another factor leading to anticipated growth in mandatory spending is the provision of subsidies for the purchase of health insurance, which will become available in 2014 under ACA. “In total, outlays for those subsidies will reach $123 billion (or 0.5 percent of GDP) in 2022,” CBO states.
CBO’s Budget Update is available here.
Reporter, Adam Robison, Houston, +1 713 276 7306, arobison@kslaw.com.
HHS Publishes Final Rule on Administrative Simplification, Pushes Back ICD-10 Compliance Date – On August 24, 2012, HHS published a final rule standardizing a number processes relating to health care administrative transactions. The rule adopts the national unique health plan identifier (HPID) standard and establishes requirements for HPID implementation; adopts a data element that will serve as an “other entity” identifier (OEID), which applies to entities that are not health plans, providers or individuals; specifies circumstances under which covered health care providers must require certain noncovered prescribing health care providers to obtain and disclose a National Provider Identifier; and moves the date for covered entities to comply with ICD-10 diagnosis coding from October 1, 2013 to October 1, 2014.
The implementation of HPID is required under the administrative simplification provisions of the Affordable Care Act. Health plans and other entities performing health plan functions are identified in standard transactions under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) using a number of identifiers that sometimes vary in format. According to the summary of the rule, the move toward standardization—via the adoption of HPID and OEID—will increase efficiency and reduce errors within HIPAA standard transactions. For the entire health care industry, the projected savings of implementing HPID over 10 years ranges from $1.3 billion to $6 billion.
With respect to the transition from the ICD-9 to ICD-10 code set, the summary of the rule states that since 2009, when HHS published a final rule adopting ICD-10, provider groups have voiced concerns about their ability to transition to the new system of medical data code sets. The compliance date set by the 2009 final rule was October 1, 2013. The one-year delay (to October 1, 2014) will give covered entities more time to move to the new code sets and ensure a “smooth transition” across all industry segments, the rule states.
The final rule will be published in the Federal Register on September 5, 2012, and the regulations will go into effect 60 days later, on November 5, 2012.
Click here to view the final rule.
Reporter, Greg Sicilian, Atlanta, +1 404 572 2810, gsicilian@kslaw.com.
CMS Selects 500 Primary Care Practices to Participate in Comprehensive Primary Care Initiative – CMS announced in an August 22, 2012 press release that it had selected 500 primary care practices to participate in the Comprehensive Primary Care Initiative (the “Initiative”), a four-year initiative administered by the Center for Medicare and Medicaid Innovation aimed at fostering a partnership among CMS, state Medicaid agencies, commercial health plans, self-insured businesses and primary care providers to strengthen primary care. Under the Initiative, CMS will pay primary care practices a care management fee to support enhanced care coordination, and participating commercial, state and other federal insurance plans would offer enhanced payment to primary care practices to support the practices in providing high quality care. CMS estimates that over 300,000 Medicare beneficiaries will be served by over 2,000 providers through the Initiative.
The Initiative began in September 2011 when CMS issued a request for participation. Public and private health plans in seven regions signed letters of intent to participate, and markets were selected in April 2012 based on the percentage of the total population covered by payers who expressed interest in participating in the Initiative. According to CMS, eligible primary care practices in each market were invited to apply, and practices were chosen based on their use of health information technology, ability to demonstrate recognition of advanced primary care delivery by leading clinical societies, service to patients covered by participating payers, participation in practice transformation and improvement activities, and diversity of geography, practice size and ownership structure.
For a copy of the CMS press release, please click here. For more information on the Initiative, please click here.
Reporter, Kerrie S. Howze, Atlanta, +1 404 572 3594, khowze@kslaw.com.
States Reported $32 Billion in Medicaid Supplemental Payments for FY 2010 – The Government Accountability Office (GAO) recently released a report on state Medicaid supplemental payments during fiscal year (FY) 2010. According to the report, states reported $32 billion in Medicaid supplemental payments for FY 2010. GAO notes in the report, however, that as a result of incomplete state reporting on Medicaid supplemental payments, it was unable to determine the exact amount of such payments. GAO further notes that in FY 2010, federal and state Medicaid costs totaled approximately $383 billion and that, as Medicaid continues to expand, “better information” is needed in order to manage the program.
In addition to standard Medicaid payments, states make supplemental payments to Medicaid providers, which include a significant federal component. GAO classifies Medicaid supplemental payments into the following two general categories:
(1) Disproportionate Share Hospital (DSH) Payments: Payments made to hospitals that serve a disproportionate share of low-income and Medicaid beneficiaries; and
(2) Non-DSH Supplemental Payments: Other supplemental payments that states make under Medicaid Upper Payment Limit (UPL) regulations.
According to GAO’s report, of the reported $32 billion in Medicaid supplemental payments in FY 2010, $17.6 billion was for DSH payments and $14.4 billion was for non-DSH supplemental payments. GAO further states that non-DSH supplemental payments were more than $8 billion higher during FY 2010 than FY 2006 (in 2008, GAO issued a report on Medicaid supplemental payments during FY 2006). GAO concludes in the report that “transparency and accountability” of Medicaid supplemental payments is lacking and that enhanced reporting of Medicaid supplemental payments is needed.
To view GAO’s report click here.
Reporter, Stephanie F. Johnson, Atlanta, +1 404 572 4629, sfjohnson@kslaw.com.
Healthcare Roundtable on Healthcare Executive Liability – On Friday, September 28, 2012, at 1:00 - 2:30 P.M. Eastern Time, King & Spalding will host an Atlanta-based Roundtable focused on recent developments in healthcare executive liability. Participants will be able to attend in person or via Webinar.
The Roundtable will include the following topics:
- Government resources allocated to healthcare fraud investigation and prosecution after Health Reform;
- OIG's increasing use of exclusion authority to target healthcare executives;
- Discussion of factors reviewed by OIG in exclusion decisions and proactive steps to consider;
- Criminal liability for executives under the responsible corporate officer doctrine;
- Director and officer liability insurance policies, undertakings, "Upjohn warnings," and defense issues for consideration by individuals; and
- Lessons learned from recent high-profile prosecutions and exclusion proceedings against healthcare executives
More information about this Roundtable, including registration details, will be available in next week's Health Headlines.
This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.
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