Archive | February 2012

President Signs Medicare Fee Law as Part of Payroll Tax Extension

Last week, we reported that Congress failed to repeal Medicare’s sustainable growth rate (SGR) formula, but voted to avert the scheduled 27% fee cut in 2012 that is the consequence of the flawed Medicare payment formula. In doing so, Congress missed an historic opportunity to offset the growing cost of funding the SGR shortfall by offsetting the costs with excess spending projected for the conflicts in Afghanistan and Iraq. Instead, Congress adopted the proposal of the congressional conference committee.

Failure to address the SGR in the way proposed by AMA, MSNJ, and virtually all of organized medicine will:

  • cost $20 billion to stave off the cuts for ten months;
  • add another $25 billion to the cost of eliminating the SGR; and
  • result in an estimated payment cut of 32% in 2013.

The House voted 293-132 in favor of the conference committee’s proposal. The Senate voted 60-36 in favor of the proposal. President Obama signed the law on February 22. We are disappointed that resolution of the Medicare physician payment issue has been postponed until after the election.

MSNJ appreciates the support that we received from our representatives, among them: Congressmen Leonard Lance (R-7), Frank Pallone (D-6) and Scott Garrett (R-5) and Representative Rush Holt (D-12). A March meeting with Representative Jon Runyan (R-3) is anticipated. We will continue our efforts to repeal the SGR.

Proposed Rulemaking—PIP and Managed Care Contracts

This week, the New Jersey Department of Banking & Insurance (DOBI) proposed two significant regulations that are of interest to our membership.

MSNJ and many other physicians, practices, and specialty organizations filed comments on DOBI’s proposed comprehensive personal injury protection (PIP) regulations. DOBI has re-proposed certain key provisions in an effort to respond to the meritorious comments. In particular, MSNJ asked that the fees for spinal surgeons and neurosurgeons be re-examined in light of the shortage of these specialists and the amount of the fees. DOBI has responded by removing from the fee schedule 117 of the CPT codes of concern, permitting these codes to be paid at usual customary and reasonable (UCR) rates until further study can be concluded. MSNJ also asked that the proposed workers compensation managed care organization (WCMCO) network entity be removed from the proposed new regulatory framework. DOBI has responding by removing WCMCOs as network providers.

MSNJ has advocated for rulemaking on managed care contracts for over five years. Our effort has been focused on leveling the playing field and creating a “fair contract” environment between healthcare insurers and physicians. DOBI worked diligently with all affected stake-holders and publication of proposed fair contract regulations was imminent when Governor Christie signed Resolution One, the red-tape reduction initiative, which had the impact of holding regulations. With the cooperation of Governor Christie’s administration and DOBI, those proposed rules on managed care contracts were released this week. The proposed regulations appear to incorporate many of our desired provisions and we will work to ensure that the adopted “fair contract” regulations benefit our members.

Comments on the proposed PIP and managed care contract rules are due on April 21, 2012.

Mental Health, Addiction Services Prominent in FY13 Budget Address

The closure of Hagedorn Psychiatric Hospital and Administration’s plans to reform how New Jersey penalizes non-violent drug offenders were featured prominently in Governor Christie’s fiscal year 2013 budget address to the legislature in February.

On the matter of Hagedorn, the Governor announced plans to redirect at least some of the anticipated $42 million in savings to so-called bridge funding for community infrastructure.  Remarking that the hospital’s closure “marks a new day…that focuses on providing community-based care and housing” the Governor pledged $5.6 million additional dollars to the Division of Mental Health and Addiction Services (DMAS), and $10 million in new funding to the Department of Human Services.  The details of that funding are critical, of course, as the majority of those who have been released from Hagedorn have been sent back home to their families, who have been clamoring for better DHS family supports.

Persons institutionalized with developmental disabilities can also expect better access to community placement through the proposed $27 million in increased funding for DDD community placements.

Finally, the Governor also renewed his call for addiction services reform in our correctional system, noting to the delight of addiction medicine that it was time for New Jersey to start “treating drug addiction for what it really is – a disease that can be conquered, but only with effective treatment.”  To accomplish this the Governor proposed $2.5 million in spending to create drug courts in all 21 counties, which will work with the DMAS to place non-violent offenders in mandatory treatment as opposed to mandatory prison.

MSNJ has endorsed this approach in the past, and will work with our mental health and addiction services members to promote the best possible outcomes for their patients in the FY13 budget.

Health Insurance Exchange Dominates Early Healthcare Politics

The 215th legislature barely came to order last month before the Assembly Health and Senior Services Committee had scheduled Health Insurance Exchange legislation for a vote.  The bill, A-2171 (Conaway, D – Burlington), would create a Health Insurance Exchange (HIX) in, but not of, the Department of Banking and Insurance, meaning its Board of Directors would be free to act independently of the DOBI Commissioner.  Committee amendments would create a separate advisory panel consisting of provider and payer representatives to assist the board in its operations.  Once established, the exchange will provide a one-stop marketplace for purchasers of small employer and individual health benefits and it could help better spread risk.

The most contentious issue in the HBE debate thus far is over the matter of “active purchasing” versus “passive purchasing.”  Both A-2171 and its Senate counterpart S-1319 (Gill, D – Essex), provide for active purchasing, meaning the Board can decline applicant insurers the ability to sell products through the Exchange.  Proponents of passive purchasing argue that meeting state and federal requirements should be sufficient to qualify for access to the exchange.  MSNJ is currently supporting active purchasing, provided that proper measures are adopted to prevent larger insurers from exploiting the exchange to further consolidate market power.

According to the Affordable Care Act, states must have certified HIX operational by 2014, or delegate that authority to the federal exchange.

Medical Audits: What Physicians Need to Know

Government and private payers have increasing pressure to lower healthcare costs. This inevitably drives them to audit practices for alleged overpayments and to attempt to recoup. It is imperative that physicians understand the risk of these audits, how to prepare and how to respond. Physicians need to prepare for and manage external payer audits just as they manage any other part of the business side of their practices to minimize the risk of being audited and to ensure that any audit findings are fair and accurate.  Read a comprehensive white paper prepared by the Physicians Advocacy Institute (PAI) and share it with your staff.

PAI is a non-profit advocacy organization established in 2006 with funds from the class action settlement agreements against major national for-profit health insurers. MSNJ was a signatory on each of the national class-action lawsuits and actively engaged in enforcing compliance. Larry Downs, MSNJ’s CEO and General Counsel, is a member of PAI’s compliance committee.

PAI’s mission is twofold: to guarantee compliance with the national class-action settlement agreements and to work with the settling health insurers to encourage voluntary compliance with the settlements after their expiration; and, to develop projects and tools that guarantee the viability of physicians’ medical practices and the ability of physicians to deliver quality patient care.

PAI’s new audit tool will:

  • assist practices in determining their risk of being audited
  • describe the various type of audits
  • discuss the audit process
  • discuss how to respond to an audit
  • provide tips to analyze audit findings; and
  • provide guidance on how to appeal any adverse audit determinations.

Significantly, the tool provides information on extrapolation and the manner in which to test the validity of an extrapolation methodology. Frank Cohen, MPA, MBB, of The Frank Cohen Group, LLC, is an author of the white paper. Frank Cohen previously made a presentation to MSNJ on audits in a webinar format. Review the slides from his presentation.

Conferees reach agreement on short-term SGR patch; AMA & MSNJ express deep disappointment

A message from the AMA:

While some details are still being finalized, it is being reported from Capitol Hill that conferees have reached agreement on extending the payroll tax holiday, unemployment insurance benefits, and current Medicare physician payment rates for the next 10 months, through the end of 2012.

In lieu of the 27.4 percent physician payment cut scheduled to take effect on March 1, a payment freeze will be effective through the end of the year.  The cost of this short-term patch was reportedly offset through reductions in a number of health care programs, including Medicaid disproportionate share payments to hospitals, Medicare bad debt payments to hospitals, federal Medicaid payments to Louisiana, and the prevention fund created by the Affordable Care Act.  Other expiring Medicare policies were also extended through the end of the year, including the “floor” on geographic adjustments to the physician work component of the Medicare fee schedule, the therapy cap exemption process, and ambulance add-on payments.  Two policies—Section 508 hospital and special pathology payments—will be phased out, and mental health add-on payments and pay increases for bone density scans have been eliminated.

Assuming this agreement secures sufficient support, it could be voted on by both the House and Senate by the end of the week.

The AMA issued the following statement as details of this agreement began to emerge, attributable to AMA President Peter W. Carmel, MD:

“The House and Senate conference committee agreement averts a 27 percent cut on March 1, but it represents a serious missed opportunity to permanently replace the flawed Medicare physician payment formula and protect access to care for military families and seniors. People outside of Washington question the logic of spending nearly $20 billion to postpone one cut for a higher cut next year, while increasing the cost of a permanent solution by about another $25 billion.

 “Congress had an opportunity to permanently end this problem, which is the sound, fiscally prudent policy choice. We appreciate efforts by members of Congress on both sides of the aisle who publicly supported a framework for a permanent end to this perennial problem. We are deeply disappointed that Congress chose to just do another patch – kicking the can, growing the problem and missing a clear opportunity to protect access to care for patients. Shortly after the coming elections, access to care for seniors and military will again be threatened by an even larger cut, and members of Congress will need to take swift action to end the broken formula.”

Hospitals Immune from Civil Liability under Professional Reporting Act

A New Jersey appellate division court has found a hospital immune from civil liability under the New Jersey Healthcare Professional Responsibility & Reporting Enhancement Act, N.J.S.A. 26:2H-12.2a, et seq. in Senisch v. Carlino. The “Cullen Act” was passed in response to the murder of terminally ill patients by Charles Cullen, a registered nurse, in healthcare facilities in Pennsylvania and New Jersey.

The act requires healthcare facilities to truthfully provide information about a former employee’s job performance as it relates to patient care and the reason for separation. At issue was whether the hospital had provided negative information about a former employee’s job performance as it related to patient care in good faith, without malice, to another inquiring healthcare facility in order to be entitled to immunity under the act. The case involved a formerly employed physician assistant.

The Professional Responsibility & Reporting Enhancement Act applies to physicians. Physicians should be aware of and address any negative information that may be contained in the files of healthcare facilities in which they work.