Med Law Blog : Pennsylvania Health Care Lawyers & Attorneys : Tucker Arensberg Law Firm : Employee Benefits, HIPAA & HIT in Pittsburgh, PA

All health care providers covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) must begin using the standard unique identifiers for healthcare providers and health plans mandated by HIPAA no later than May 23, 2007. According to the Centers for Medicare and Medicaid Services release on November 17, 2006, “every covered health care provide must obtain a new NPI … even providers that do not conduct electronic transactions and are not covered by HIPAA may be required by health plans or employers to obtain one.” CMS states that health care providers can apply for NPIs in one of three ways:

§      For the most efficient application processing in the fastest receipt of NPIs, use the web-based application process. Simply log onto the National Plan and Provider Enumeration System (NPPES) and apply on line.

§      Health care providers can agree to have an Electronic File Interchange (EFI) organization (EFIO) submit application data on their behalf if an EFIO requests their permission to do so.

§      Health care providers may wish to obtain a copy of the paper NPI Application/Update Form (CMS-10114) and mail the completed, signed application to the NPI Enumerator located in Fargo, North Dakota.

NPI information can be obtained at the CMS website at:

http://www.cms.hhs.gov/NationalProvIdentStand/03_apply.asp.

Information can be obtained from the NPI Enumerator at Phone: 1-800-465-3203 or Email:

customerservice@npienumerator.com.

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The Office of Inspector General (OIG) issued Advisory Opinion 06-22, which is another in a series of similar approving gainsharing arrangements, i.e., 01-01 and 05-01 through 05-06. Under the current proposed arrangement, a hospital would pay a cardiac surgery group 50 percent of the hospital’s first year cost savings directly attributable to specific changes in the surgical group’s operating room practices, which changes would involve (1) limiting the use of certain surgical supplies, (2) substituting less costly items for items currently being used by the surgeons, and (3) product standardization of certain cardiac devices. As with its earlier gainsharing opinions, the OIG concluded that the proposed arrangement would implicate the civil monetary penalty (CMP) provisions, and would potentially implicate the anti-kickback law, but that the OIG would not impose sanctions under these authorities against the requestors, given the following safeguards:

Civil Money Penalties

(1) The practices and savings would be “clearly and separately identified” allowing “for public scrutiny and individual physician accountability for any adverse effects.”

(2) There was “credible medical support” for that position that the arrangement would “not adversely affect patient care.”

(3) The payments would be based on all surgeries regardless of payor.

(4) The arrangement would protect against “inappropriate reductions in services” by utilizing “objective historical and clinical measures.”

(5) The physicians would nevertheless have the same selection of surgical devices available, regardless of standardization.

(6) Full disclosure of the program would be provided to patients.

(7) The financial incentives under the proposed arrangement would be “reasonably limited in duration and amount.

(8) The surgical group’s profits would be distributed on a per capita basis and, as such, “any incentive for an individual surgeon to generate disproportionate cost savings” would be “mitigated.

Anti-Kickback Law. 

(1) The arrangement would have a one-year term, participation would be limited to surgeons already on the Hospital’s medical staff, and the potential savings derived from procedures for Federal healthcare program beneficiaries would be capped (based on the prior year’s admissions of such beneficiaries).

(2) Because the surgeon group would be composed only of cardiac surgeons, the proposed arrangement could not be used to reward cardiologists or other physicians in a position to make referrals to the surgical group.

(3) Because the cost saving recommendations carry “some increased liability risk for the physicians,” it is “not unreasonable for the surgeon to receive compensation,” particularly where it would be limited in amount, duration, and scope.

Stark Law. 

Finally, as in its earlier gainsharing opinions, the OIG declined to provide any guidance regarding the Stark Law because it is outside the scope of the advisory opinion process.  

The full opinion is available on the OIG website at http://oig.hhs.gov/.

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In accordance with § 626 of the Medicare Modernization Act of 2003, which commissioned a study by the GAO to evaluate a payment system using groups of covered services under the outpatient prospective payment system, the Centers for Medicare and Medicaid Services (CMS) proposed a new reimbursement system for Ambulatory Surgery Centers (ASC) on August 23, 2006 in the Federal Register. The full text of the proposal is available at www.cms.hhs.gov/ASCPayment/06_CMS1506P.asp#TopOfPage. Key changes include:

1.         A new ASC Fee Schedule protocol which will link the ASC procedure payment rate to approximately 62% of the reimbursement rate for the procedures as done in hospital outpatient departments, which rates will be phased in beginning January 1, 2008 and will become fully operational as of January 1, 2009;

2.         The addition of 14 procedures to the lists in 2007;

3.         The addition of 750 new procedures to the lists for 2008, which procedures will primarily be office-based procedures but for which the reimbursement will be capped at the lower of the non-facility expense for that procedure as provided in the Medicare Physician Fee Schedule or the new ASC rates; and

4.         The bundling of most surgical implants into the new ASC rates.

The goal of the new ASC reimbursement protocol is to coordinate ASC payments with hospital outpatient department payments at a rate which is intended to maintain neutrality between site of service choices. The proposed uniform conversion rate is intended to implement such neutrality. However, given the significant relative discrepancies between certain groups of ASC reimbursement at current rates, with some categories increasing and some categories decreasing, the new payment rate may change the economics of current ASC structures. The proposals fail to maintain relative neutrality between site of service by failing to have uniform inflation adjustments or update factors and failing to provide the same set of professional services for ambulatory surgery centers.

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The Centers for Medicare and Medicaid Services (CMS) issued the final rule for the 2007 Physician Schedule on November 1, 2006, which will soon be published in the Federal Register.

§      The final rule provides a 5% reduction in the 2007 Fee Schedule, which is just a slight change from the proposed 5.1% reduction proposed in August of 2006. 

§      The work component RVU for the intermediate office visit E & M Code will increase by 37%.

§      There will be a 25% reduction in the technical component for multiple imaging services rather than the original proposed 50% reduction.

§      Nuclear imaging services will be included as a Stark designated health service.

A link to the Physician Fee Schedule will be published as soon as it is posted.

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