Nov. 20, 2014

National Update

10 Medicare payment policy revisions you need to know

Chances are you haven't been able to read through the nearly 1,200 pages that constitute the 2015 Medicare Physician Fee Schedule final rule released Oct. 31 and published last Thursday in the Federal Register. We've pulled out the 10 top payment policy changes discussed in this mammoth document that you need to know about.

Among the policy changes discussed in the top 10 list are:

Read the full list and get additional details about each policy change at AMA Wire®.

Nachimson Advisors respond to criticisms of ICD-10 study on physician costs

The American Health Information Management Association (AHIMA) Journal recently carried an article stating that costs for physicians to implement ICD-10 were much less than previously estimated. The AHIMA article asserts the costs are only $1,960–$5,900 and calls into question the estimates provided in the AMA-sponsored Nachimson Advisors report (log in) released last February, which estimated that costs would range from $22,560 to $105,506 for small practices. The AMA stands by the Nachimson Advisors study. Learn more by reading a response (log in) from Nachimson Advisors countering the AHIMA assumptions.

FDA should initiate rulemaking on lab-developed tests

The AMA recently sent the Food and Drug Administration (FDA) a letter asking that it withdraw draft guidance proposing to regulate laboratory-developed testing services and instead proceed through notice and comment rulemaking. The letter (log in)—signed by more than 50 organizations that include the American Hospital Association, the American Clinical Laboratory Association, and a cross-section of national medical specialty societies, industry, and leading clinical laboratory directors—noted that the proposed guidance would result in sweeping new regulations and requirements that could impede patient access and stifle innovation.

Notice and comment rulemaking will ensure that the FDA responds to stakeholder comments, compel the agency to undertake an economic impact analysis and bind the agency to the regulations. In addition to the sign-on letter, the AMA has provided preliminary feedback to the FDA on the proposed guidance, including concern with potential duplication of regulatory requirements that exist under the Clinical Laboratory Improvement Amendments, lack of specificity with regard to categorization of risk and the potential to regulate the practice of medicine (e.g., constraining the discretion of physicians to provide the most appropriate testing services).

Seeking Federation feedback for VA Secretary

Robert A. McDonald, secretary of U.S. Department of Veterans Affairs (VA), addressed the AMA's House of Delegates at its 2014 Interim Meeting. During the lengthy question and answer session following his speech, Secretary McDonald expressed interest in feedback from the Federation on a variety of topics, including the implementation of the Veterans Access, Choice and Accountability Act of 2014, the Nursing Handbook, and the future recruitment of physicians to the VA.

The secretary's staff asked the AMA to collect input from the Federation. Individual physicians as well as state and specialty medical associations can submit information to share with the secretary via an email to the AMA. Learn more about McDonald's address at AMA Wire

Health IT grant funds available

The Office of the National Coordinator for Health IT (ONC) has announced a Market R&D Pilot Challenge that provides $300,000 in grant funding to bridge technological gaps by bringing together health care organizations and innovative companies and facilitating match making.

Through this effort, the ONC will pair health innovators with host sites like hospitals, clinics, laboratories and pharmacies to develop a pilot proposal. The program will select up to six teams to implement the pilot, conduct a rigorous evaluation and disseminate its findings in collaboration with the ONC. The first half of the challenge will focus on team creation, selection and pilot preparation. Over the second six months, teams will run their pilot and produce an evaluation report for future learning. The ONC will award $25,000 when the teams are selected, and another $25,000 following completion of the pilot and evaluation. Teams will be selected by April 30.

Improve care with new clinical networks: Submit by Nov. 20

Physician practices that have an existing relationship with physician networks are eligible to participate in a new $840 million initiative to improve care via clinical networks. Optional letters of intent are due to the Centers for Medicare & Medicaid Services (CMS) by Nov. 20, and the application deadline is Jan. 6.

As a new model of the CMS Innovation Center, the Transforming Clinical Practice Initiative will award $840 million for the creation of evidence-based, peer-led collaboratives and practice transformation networks to support physicians in providing high-quality care. Large group practices, medical associations, quality improvement organizations, regional health collaborative and other organizations that have existing relationships with multiple clinician practices can apply. Read more at AMA Wire.

Congressional Budget Office revises score for SGR repeal

On Nov. 14, the Congressional Budget Office (CBO) released revised scoring for repealing the sustainable growth rate (SGR) formula. The CBO reduced the 10-year score for repealing the SGR and replacing it with a long-term payment freeze to $118.9 billion. In August, CBO had scored this policy at $131 billion.

The CBO also increased the score for the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015/S. 2000) from $138.4 billion to $144 billion, primarily a result of the "misvalued codes" provisions in the bill being enacted into law last March as a part of the 17th payment patch. While the cost of repealing the SGR remains near its historic low, the multiple revisions of the score this year demonstrate the volatility of the CBO's scoring methods and the risk that the estimated costs could rise again in the future.

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Issue Spotlight

Top 5 stories from AMA Interim Meeting

Another Interim Meeting of the AMA House of Delegates is in the books. Here are some advocacy highlights:

Turn to AMA Wire for complete coverage, including the rest of the top 10 stories.

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State Update

Physicians outline 6 key provisions for network adequacy

The AMA, the Children's Hospital Association and more than 100 other organizations urged the National Association of Insurance Commissioners (NAIC) in a letter (log in) sent Monday to adopt model legislation that would give patients access to the care and physicians they need.

The letter includes six key provisions that would serve as a template for many state policymakers considering revision of their network adequacy standards. It was sent to Kansas Insurance Commissioner Sandy Praeger and Wisconsin Commissioner Ted Nickel, who chair key committees at the NAIC.

"By adopting provisions consistent with the principles outlined in this letter, we believe lawmakers and regulators can adapt the model act to establish reasonable, meaningful standards, while still allowing for market flexibility and choice," the letter said.

The letter aligns with policy adopted at the 2014 AMA Interim Meeting, which calls for health insurers to make any changes to their provider networks before the open enrollment period gets underway each year. Implementing changes to provider networks at this time will help prevent patients from being stuck with plans that drop their physicians after they already have enrolled.

Model bills put patients' treatment first in nation's prescription drug abuse epidemic

As part of the AMA's emphasis on ensuring treatment and prevention of addiction, overdose and death, the AMA Board of Trustees recently approved three new model bills that will put patients' treatment first in the nation's prescription drug abuse epidemic.

While recent state legislative sessions have seen a heavy emphasis on law enforcement and punitive approaches to prescribing medication for patients with pain, this model legislation takes a public health approach and seeks to enhance treatment and preserve access to care.

Contact Daniel Blaney-Koen of the AMA for information about the model legislation. 

Series of new AMA model bills lays foundation for telemedicine 

The AMA believes that the appropriate use of telemedicine to deliver care to patients could greatly improve access and quality of care, while maintaining patient safety. With a growing number of services provided through telemedicine technologies, a set of safeguards and standards are needed to support the appropriate coverage of and payment for telemedicine. A new series of AMA model bills aim to do just that.

These model bills follow new AMA telemedicine principles (log in) adopted in June 2014, which establish a foundation for physicians to utilize telemedicine to help maintain an ongoing relationship with their patients, and as a means to enhance follow-up care, better coordinate care and manage chronic conditions. 

Contact Kristin Schleiter of the AMA for information about the model legislation. 

Model bill helps protect physicians who use electronic funds transfers

Electronic funds transfers (EFT) can save physicians significant time and money. However, physicians are being subjected to fees associated with electronic payment that essentially reduce their contracted fee amounts.

A new AMA model bill, the Transparency in Health Insurer Payment Transactions Act, aims to increase transparency for physicians with EFT payments. The model bill would prevent contracts from restricting methods of payment from the health insurer to the physician when the only acceptable payment method is a credit card payment. It also would require a health insurer to notify the provider of all fees associated with a particular payment method, offer clear instructions on how to opt out of the payment method and prevent insurers from imposing inappropriate fees on physicians for specific EFT payments.

This model bill complements a campaign from the AMA's Administrative Simplification Initiative that offers important EFT resources for physicians and advocates, including a new on-demand continuing medical education webinar designed to help physicians effectively implement electronic payments into their practice.

Contact Emily Carroll of the AMA for more information about the model legislation and Heather McComas of the AMA for EFT resources for physicians. 

AMA backs interstate compact to streamline medical licensure

special compact designed to facilitate a speedier medical licensure process with fewer administrative burdens for physicians seeking licensure in multiple states received the support of the nation's physicians with a new policy adopted at the 2014 AMA Interim Meeting.

The model legislation was developed by the Federation of State Medical Boards (FSMB) to make it easier for physicians to obtain licenses in multiple states while providing access to safe, quality care.

Under the new policy, the AMA will work with interested medical associations, the FSMB and other stakeholders to ensure expeditious adoption of the compact and the creation of an Interstate Medical Licensure Commission.

The compact, which was released in July, is based on several key principles.

The AMA Advocacy Resource Center stands ready to work with medical associations interested in pursuing the compact. Contact Kristin Schleiter of the AMA to learn more.

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Judicial Update

Physician medical liability funds protected from state raids

Five years after the state government took $100 million from a special medical liability fund in Pennsylvania, a settlement has been reached that provides key protections against future diversion and returns $200 million in overpayments to physicians and other health care providers.

The origins of the settlement go back to 2009 when the Pennsylvania government took $100 million from the Mcare Fund, a state-run medical liability fund that helps cover liability pay-outs. The funds come from annual assessments physicians and other health care providers pay.

Rather than using year-end balances to reduce the next year's assessment, the state let money in the fund accrue for several years. Then, contrary to state law that established Mcare as a means of keeping medical liability costs in check, the government took $100 million from that special fund to use for general state purposes.

The Pennsylvania Medical Society, with assistance from the Litigation Center of the AMA and State Medical Societies, took the state to court for this unlawful action.

The case was settled a few weeks ago with both retrospective and prospective relief for physicians, totaling $200 million.

Read more at AMA Wire.

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Other News

New analysis of the slowdown in health spending

A new AMA Policy Research Perspective (PRP) describes the recent slowdown in health spending growth (log in) and addresses the reasons thought to explain it. Based on a review of the literature, between 37 percent and 77 percent of the slowdown is due to the recent recession. Because the slowdown started five years prior to the recession, it is clear that there were other contributing factors. Unfortunately, there is not wide consensus on what the most important factors were or—importantly—on how much of the slowdown they each explain. The PRP concludes that while average annual growth over the next 10 years is likely to be higher than for recent periods, it will be lower than the 7.2 percent average rate for the 1990 to 2008 period.

Updated AMA resource helps practices manage overpayment recovery process

Attempting to determine the validity of alleged overpayment recovery requests from health plans can divert significant time from direct patient care, which results in lost practice revenue. Overpayment recovery requests often are made in very general terms and can be intimidating to practices.

The AMA has updated its overpayment recovery toolkit to help practices recognize and interpret overpayment recovery requests, address and resolve these requests, automate the process, and know their overpayment recovery rights. The toolkit also includes a new webinar that provides an introduction to this challenging topic.

Visit the overpayment Web page to access this newly updated resource and learn more about automating and improving the overpayment recovery process.

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Upcoming Events

Nov. 30:
CMS has reopened the submission period for hardship exception applications in the electronic health record meaningful use program, allowing more physicians to avoid next year's payment penalty for not demonstrating meaningful use. The new deadline is Nov. 30. Read more at AMA Wire.

Feb. 23-25:
The AMA's National Advocacy Conference will take place in Washington, D.C. Visit the conference Web page to view highlights from the 2014 event, including a brief video.

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