Understanding Health Reform Series
This year marks the beginning of the second full year of federal health system reform and the implementation of two specific provisions of the Affordable Care Act
(ACA) of which you should be aware: the oft-cited rollout of ACOs, and increased fraud and abuse prevention efforts for the Medicare, Medicaid and CHIP programs. The year 2012 is also the time to start planning for the implementation of provisions of the ACA that are just around the corner in 2013, most importantly mandatory reporting under the Physician Quality Reporting System (formerly the PQRI). This article is by no means a comprehensive overview of health reform in 2012 but is meant to provide you with an introduction to the most pressing issues facing you and your practice in the coming year.
Final ACO Rules
By now you have almost certainly heard that the final ACO rule released in October 2011 was a significant improvement over the proposed ACO rules issued earlier that year. While the initial proposed rules made participation in – much less creation or leadership of – an ACO untenable at best for most physicians, the final rule provides greater opportunity to join in this care coordination model with less risk and easier avenues to physician participation.
To begin, under the proposed rule ACOs could choose between two tracks: track one, allowing for shared savings for two years before a third year requiring shared losses; and track two, allowing a higher rate of shared savings if an ACO agreed to share losses from the first year. The TMA expressed serious concern over the barriers that mandatory shared losses would present to most physicians attempting to start an ACO and the final rule addresses this concern, amending track one to allow three years of initial shared savings without shared losses. The government has also amended track one to provide shared savings from the first dollar saved whereas in the proposed rule, track one only provided shared savings after an initial two-percent savings was achieved.
Beyond reducing the risk of participating, the final rule also lessens some uncertainty that would have been created by the proposed rules. Beneficiaries will now preliminarily be prospectively assigned via a quarterly list of “probable beneficiaries,” rather than retrospectively assigned based on utilization of care. This change recognizes the obvious need for practices to know their patients in order to manage care. The assignment of beneficiaries has also been enhanced, with primary care services rendered by an ACO provider who is not a primary care provider counting toward inclusion in that provider’s ACO when the beneficiary does not receive primary care services from a primary care provider.
The final ACO rule also does away with a number of administrative burdens that were of concern. Of note, the quality measures have been reduced from 65 measures in five domains to 33 measures in four domains, with longer phase-in measures, including pay for reporting for each of the three initial years of the ACO’s operation. Further, although electronic health record (EHR) adoption is of great importance, it is no longer a specific requirement for participation in an ACO – however, it should be noted that EHR meaningful use is still a highly-weighted quality measure. Finally, the requirement that all ACO marketing materials be approved by CMS before use has been replaced with a “file and use” policy, which allows ACOs to begin using marketing materials five days after filing the materials and certifying compliance with CMS guidelines.
The first round of ACO applications is due in early 2012, with agreements beginning on April 1 and July 1 of this year. Although an ACO still might not be the right choice for your practice, the changes provided by the final rule could lead some physicians to take another look at the Shared Savings program.
Increased Fraud & Abuse Oversight
The other large effect the ACA could have on physicians in 2012 is a significant ramp-up in CMS efforts to combat fraud and abuse. Specifically, the health reform law requires: (1) procedures whereby screening of Medicare, Medicaid and CHIP providers will be conducted both before a provider is able to participate and once he or she is in any of the three programs; (2) an application fee imposed on some providers (not including physicians); (3) the ability of CMS to impose a temporary moratoria on new program applications if it is believed that doing so will stem fraud and abuse; (4) a requirement that state Medicaid agencies automatically terminate any provider who is terminated by Medicare or another state plan; and (5) required suspension of reimbursement payments in the case of credible allegations of fraud in both Medicare and Medicaid programs. This year also brings the rollout of Medicaid RACs – which are very similar but not completely identical to Medicare RACs.
CMS has announced there will be three levels of screening (“limited,” “moderate,” and “high”), depending on the level of risk a specific provider type poses in terms of fraud, waste and abuse. It is important to note that physicians, medical groups and clinics fall under the “limited” risk level. This means that while these physicians will be subject to (1) verification of compliance with any provider-specific requirements established by Medicare or Medicaid/CHIP, (2) licensure verifications, and (3) various database checks (including verification of SSN, NPI, OIG exclusion, tax delinquency, etc.), physicians will not be subject to the more invasive screening measures imposed on “moderate” and/or “high” level-rated providers – which include criminal background checks and unannounced site visits.
While physicians and their practices are exempted from paying the ACA-mandated application fee, TMA members have already begun to feel the impact of at least one element of the new program integrity requirements: TennCare providers must now perform monthly checks of the OIG List of Excluded Individuals and Entities (LEIE) to ensure that no employees or contractors have been placed on the excluded list – a direct result of the federal requirement that state Medicaid agencies terminate any provider who is found to have been excluded by the OIG. The online searchable LEIE can be found here.
All of this to say the federal government seems serious about stepping up program integrity enforcement, and physicians need to be ready. The housing of Medicare and Medicaid Program Integrity Groups together under the new Center for Program Integrity demonstrates the federal government’s increased focus on developing Medicare and Medicaid fraud and abuse policies together. Further, the U.S. Attorney’s Office for the Middle District of Tennessee has made clear it will be making investigation of healthcare fraud and abuse claims a high priority—and has doubled the size of its Affirmative Civil Enforcement (ACE) unit to handle these claims. Of course, the overwhelming majority of practices are not guilty of fraud or abuse but the stepped-up enforcement means a greater likelihood that an investigation could take place, making it even more important that practices can easily demonstrate compliance.
Finally, while ACOs and increased fraud and abuse oversight are in effect now, there is another change around the bend in 2013 that physicians would be wise to prepare for now. What was formerly known as the Physician Quality Reporting Initiative (PQRI) has now been renamed the Physician Quality Reporting System (PQRS) – a move denoting this reporting program is no longer an “initiative” but a permanent part of healthcare reform. For 2012, participation in the PQRS remains voluntary, with eligible professionals or group practices receiving a half-percent bonus incentive payment (or a one-percent bonus incentive if the provider also participates in the Maintenance of Certification (MoC) program).
In 2013, however, things become more complicated, as CMS has officially designated that as the “performance year” for the 2015 penalty. This means that while providers will receive a half-percent or one-percent incentive payment for 2013, depending on MoC program status, as well as a half-percent incentive payment for the year 2014, there is indeed a penalty for not participating in PQRS reporting beginning in 2013. If a practice fails to report under PQRS for calendar year 2013, it will receive an automatic penalty in the form of a 1.5-percent reduction in the fee schedule for the year 2015, and a two-percent reduction if the practice fails to report for the year 2014.
Thus, 2012 is the last year physicians should consider PQRS reporting “optional.” Reporting under the PQRS is not difficult – individual providers do not need to sign up to participate and must only submit quality data codes for the PQRS quality measures through claims, a qualified registry or their EHR to participate. Group practices (those with 25 or more providers) not wanting to report individually must, however, submit a self-nomination letter to participate as a group. For more information on the Physician Quality Reporting System, please visit the TMA’s Health Reform website.
Ms.Shields is assistant general counsel for the TMA. If you have questions or comments – or would like to suggest a future topic for this column – please contact her at firstname.lastname@example.org or visit the TMA Health Reform website.