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

The Tax Relief and  Health Care Act of 2006 contains provisions to improve health savings accounts (HSAs):

1.         HSA Funding Contributions: The Act allows rollover contributions from flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) into HSAs as long as the contributions are no more than the balance of those accounts as of September 21, 2006 and are made on or before January 1, 2012. 

2.         Increase in Deductible Limits of HSA Contributions: The contribution limitation which previously limited contributions to the lesser of the deductible of the high deductible health plan or the statutory limitations i.e. $2,250 for individuals and $4,500 for families (as adjusted for cost of living), have been revised to delete the plan deductible as a limitation.

3.         IRA Rollovers: The revision allows one time rollovers from IRAs into HSAs. This revision is a one time opportunity and the rollover, which is effected by excluding the transfer from gross income, is limited to the annual limitation for contributions to NSA less any prior HSA funding distribution from a FSA or HRA. 

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Assuming siganture by the President of the "Medicare Improvments and Extension Act of  2006"  , the following will be the major Medicare changes for the coming year. The complete text of the changes and Committee reports are avaialble on the link in the article posted here yesterday.

1.        2007 PHYSICIAN FEE SCHEDULE: The conversion factor for the Medicare Physician Fee was revised for 2007 only to eliminate the 5% reduction which would have been mandatory under Medicare’s sustainable growth rate formula.

2.         QUALITY REPORTING INCENTIVES OF 1.5% FOR 2007: The Act establishes a mechanism for enhancing the quality of reporting system first established by the Medicare Improvement Act of 2003 by adopting the quality measure specified in the physician voluntary reporting program, previously established by the Centers for Medicare and Medicaid Services, and establishing deadlines for adoption new quality measures. The Act provides transitional bonus incentive payments for quality reporting in 2007 equal to 1.5% of the Secretary’s estimate of allowed charges under the federal supplementary medical insurance trust fund for the covered professional services furnished during the reporting period, and provides future funding to promote physician payment stability and quality initiatives of $60 million to be transferred from the fund in 2007, 2008 and 2009.

3.         MEDICARE GEOGRAPHIC ADJUSTMENT: Extends floor established in Section 1848 (e) (1) (E) of the Social Security Act by MMA 2003 is extended through 2007 to protect physician work component payments in rural areas.

4.         2007 END STAGE RENAL DIALYSIS (ESRD) UPDATE: The composite rate component of the basic case -mix prospective payment is increased by 1.6% for 2007.

5.         RURAL CLINICAL DIAGNOSTIC LABORATORY TESTS: Reasonable cost payments for certain clinical diagnostic laboratory tests furnished to hospital patients in rural areas is extended until 2008.

6.         COMPETITIVE ACQUISITION PROGRAM (CAP): An audit process is established for reviewing drug and biological payments in the CAP program.

7.         QUALITY REPORTING PENALTIES: The Act extends the 2% penalty for the failure to observe the quality reporting programs for hospitals and applies it to ambulatory surgery centers.

8.         MEDICARE THERAPY EXCEPTION PROCESS: The exception process for appealing additional physical therapy payments is extended through 2007.

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Pennsylvania allows health care facilities or health care providers to charge fees for the reproduction of medical records. Below is the exact text of the announcement in the

December 2, 2006 Pennsylvania Bulletin (Vol. 36, No. 48, pages 7345 and 7346) announcing the approved fees for 2007:

Under 42 Pa. C.S. § § 6152 and 6155 (relating to subpoena of records; and rights of patients), the Secretary of Health (Secretary) is directed to adjust annually the amounts which may be charged by a health care facility or health care provider upon receipt of a request or subpoena for production of medical charts or records. These charges apply to any request for a copy of a medical chart or record except as follows:

(1) Flat fees (as listed in this notice) apply to amounts that may be charged by a health care facility or health care provider when copying medical charges or records either: a) for the purpose of supporting any claim or appeal under the Social Security Act or any Federal or State financial needs based program; or b) for a district attorney.

(2) An insurer shall not be required to pay for copies of medical records required to validate medical services for which reimbursement is sought under an insurance contract, except as provided in: (a) the Worker’s Compensation Act (77 P.S. § 1 et seq.) and the regulations promulgated thereunder; (b) 75 Pa. C.S. Chapter 17 (relating to financial responsibility) and the regulations promulgated thereunder; or (c) a contract between an insurer and any other party.

The charges listed in this notice do not apply to an x-ray film or any other portion of a medical record which is not susceptible to photostatic reproduction.

Under 42 Pa. C.S. § 6152.1 (relating to limit on charges), the Secretary is directed to make a similar adjustment to the flat fee which may be charged by a health care facility or health care provider for the expense of reproducing medical charts or records where the request is: (1) for the purpose of supporting a claim or appeal under the Social Security Act or any Federal or State financial needs based benefit program; or (2) made by a district attorney.

The Secretary is directed to base these adjustments on the most recent changes in the consumer price index reported annually by the Bureau of Labor Statistics of the United States Department of Labor. For the annual period of October 31, 2005, through October 31, 2006, the consumer price index was 1.3%.

Accordingly, the Secretary provides notice that, effective January 1, 2007, the following fees may be charged by a health care facility or health care provider for production of records in response to subpoena or request:

                                                                                                                        Not to Exceed

Amount charged per page for pages 1 - 20                                                      $  1.25

Amount charged per page for pages 21 - 60                                                    $    .93

Amount charged per page for pages 61 - END                                                $    .31

Amount charged per page for microfilm copies                                      $ 1.83

Flat fee for production of records to support any

   claim under Social Security                                                                            $23.49

Flat fee for supply records requested by a district attorney                                 $18.54

*Search and retrieval of records

*NOTE: Federal regulations enacted under the Health Insurance Portability and Accountability Act (HIPAA) at 45 CFR Parts 160-164 state that covered entities may charge a reasonable cost based fee that includes only the cost of copying, postage and summarizing the information (if the individual has agreed to receive a summary) when providing individuals access to their medical records. The Department of Health and Human Services has stated that the fees may not include costs associated with searching for and retrieving the requested information. For further clarification on this issue, inquiries should be directed to the Office of Civil Rights, United States Department of Health and Human Services, 200 Independence Avenue, S.W., Room 509F, HHH Building, Washington, DC 20201, (866) 627-7748, www.hhs.gov/ocr/hipaa.

In addition to the amounts listed previously, charges may also be assessed for the actual cost of postage, shipping and delivery of the requested charges.

The Department of Health is not authorized to enforce these charges.

Questions or inquiries concerning this notice should be sent to James T. Steele, Jr., Deputy Chief Counsel, Room 825 Health and Welfare Building, Harrisburg, PA 17120 or for speech and or hearing impaired persons, the Pennsylvania AT&T Relay Services at (800) 654-5984 (TT) or V/TT (717) 783-6514.

                                                            CALVIN B. JOHNSON, M.D., M.P.H.

                                                                                                            Secretary  

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The Pennsylvania Commission on the Medical Care Availability and Reduction of Error Fund (MCARE Fund) was created in December of 2005 for the purpose of investigating methods to reduce the unfunded liability of the MCARE Fund and the phasing out of the MCARE Program. The MCARE Program was created by Act 13 of 2002 to replace the Pennsylvania Catastrophic Loss Fund, to stabilize the professional liability insurance market in Pennsylvania and to assure continued access to quality health care.

MCARE operated basically by providing additional professional liability insurance to health care providers in Pennsylvania at subsidized premium rates, which were dependent upon actuarial funding programs, that basically paid expenses as incurred without funding for future liabilities, and providing for the abatement of the professional liability insurance premiums for physicians and other providers in Pennsylvania. Certain medical specialties qualify for 100% abatement while other specialties and providers qualify for 50% abatement. Although the MCARE operating expenses have decreased annually since inception, PricewaterhouseCoopers, the actuarial consultants for the state program, have reported that the unfunded liability has reached $2.33 billion.

The Insurance Department issued a report on November 30, 2006 listing the highlights of the Commission’s recommendations, which are as follows:

§      To continue the state’s MCARE abatement program which subsidizes health care providers’ catastrophic malpractice claims payments until MCARE coverage has been phased out. The MCARE abatement program was initially proposed by Governor Edward G. Rendell in 2003 to encourage health care providers to continue practicing in the Commonwealth and has defrayed nearly $1 billion of malpractice expenses for Pennsylvania health care providers;

§      To privatize MCARE malpractice coverage as directed under the Act 13 of 2002 as soon as is feasible, ideally in the period between 2008 and 2011. Currently, most health care providers are required to buy $1 million in malpractice coverage - the first $500,000 from the private market and the remaining $500,000 from the government-run MCARE Fund;

§      To eliminate the MCARE assessments paid by health care providers to support the MCARE Fund once private insurers begin covering the entire amount of required malpractice insurance, thereby reducing health care providers’ medical malpractice costs;

§      To use the public funds currently committed to the MCARE abatement program to retire the unfunded liabilities of the MCARE Fund, once the MCARE program ends;

§      To use any remaining currently committed public funds to mitigate increases in health care provider malpractice insurance costs, with a target of limiting the maximum increase in aggregate medical malpractice liability insurance costs in Pennsylvania to 10 percent annually; and

§      To aggressively promote health care quality initiatives, which will, among other things, reduce future malpractice expenses and maximize public funds that can be dedicated to health care services.

The complete text of the Insurance Department announcement and the “Final Report and Recommendations of the Pennsylvania Commission on the Medical Care Availability and Reduction of Error Fund” are available on the MCARE Program website, which is available as one of the links provided by the MedLaw Blog.

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