CMS Reverses Position On New IDTF Standards

The Centers for Medicare and Medicaid Services (CMS) has quietly reversed itself on the new standards for Independent Diagnostic Testing Facilities (IDTFs). Transmittal 187, which established new standards for IDTFs and was scheduled to be effective as of February 26, 2007,  was rescinded without explanation. Therefore, some of the more significant changes, such as:

§      Limiting the number of sites a physician can supervise to three and expanding the supervising physician’s responsibilities to include overall operation and administration;

§      Prohibiting the sharing of facilities without a Medicare supplier; and

§      Establishing 14 specific operating standards;

will now not go into effect. Given the intent of CMS with respect to these issues, it would be careless to enter a new arrangement without considering the impact of these issues.

CMS Establishes Website for Physician Quality Reporting Initiative (PQRI) Mandated by Tax Relief and Health Care Act of 2006

The Centers for Medicare & Medicaid Services (CMS) is pleased to announce that the 2007 Physician Quality Reporting Initiative (PQRI) webpage is now available.

On December 20, 2006 the President signed the Tax Relief and Health Care Act of 2006 (TRHCA). Section 101 under Title I authorizes the establishment of a physician quality reporting system by CMS. CMS has titled the statutory program the 2007 Physician Quality Reporting Initiative.

PQRI establishes a financial incentive for eligible professionals to participate in a voluntary quality reporting program. Eligible professionals who successfully report a designated set of quality measures on claims for dates of service from July 1 to December 31, 2007, may earn a bonus payment, subject to a cap, of 1.5% of total allowed charges for covered Medicare physician fee schedule services.

This newly established webpage will be updated regularly, so check it often for timely and reliable information from CMS.

For more information on 2007 PQRI, visit http://www.cms.hhs.gov/PQRI/01_Overview.asp#TopOfPage on the CMS website.

IRS Issues Guidance in Notice 2007-22 Facilitating FSA and HRA Rollovers to Health Savings Accounts

The Internal Revenue Service has issued guidance regarding rollovers from Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (RHAs) to Health Savings Accounts (HSAs). The guidance is necessary because Health Savings Accounts are typically not available to individuals who are covered by standard FSAs and HRAs. The Tax Relief and Health Care Act of 2006 allowed rollovers from FSAs and HRAs into Health Savings Accounts. The purpose of the guidance is to allow the establishment of an HSA and the rollover of the qualified distributions for 2007 when the employee could potentially be covered by both types of plans.

The new rules provide for certain amounts in the FSA or the HRA to be rolled into the HSA. Generally, under the new rules, all of the following conditions must be satisfied in order to achieve the favorable tax treatment of the rollover:

A.        By plan year-end, the plan must have been amended, though the employee must have elected the rollover, and the year-end balance must have been frozen.

B.         The funds must have been transferred by the employer within 2-1/2 months after the end of the plan year resulting in a “zero” balance in the FSA or the HRA.

Under the special transition relief provided in Notice 2007 - 22, available at  (  www.irs.gov/pub/irs-drop/n-07-22.pdf ),  the amounts remaining at the end of the year for 2006 can be rolled over without the freezing of the year-end balance in either the FSA or the HRA and the amendment, election and transfer may be completed on or before March 15, 2007.

CMS Issues New Independent Diagnostic Testing Facility (IDTF) Standards Effective 2/26/07

The Centers for Medicare and Medicaid Services (CMS) announced significant changes to the regulatory requirements for operating independent diagnostic testing facilities (IDTFs) on January 26, 2007, which new rules will become affective February 26, 2007. These new requirements affect the:

§      Performance standards for operation.

§      The requirements for both interpreting and supervising physicians.

§      Licensing requirements for technicians.

Rather than try to summarize all of the changes for you, I am including links to both explanatory and direct source materials:

A.        Summary of Independent Diagnostic Testing Facility Performance Standards from the CMS Website. www.cms.hhs.gov/MedicareProviderSupEnroll/downloads/Independentdiagnostictestingfacility.pdf

B.         CMS Manual System Pub 100-08 regarding the implementation of new compliance standards for Independent Diagnostic Testing Facilities,  found courtesy of “Health Blawg”,  which is David Harlow’s Healthcare Law Blog. healthblawg.typepad.com/healthblawg/2007/02/idtf_requiremen.html

C.        Section 42 CFR § 410.33, which are the formal federal regulations defining the requirements for Independent Diagnostic Testing Facilities.  ecfr.gpoaccess.gov/cgi/t/text/text-idx 

D.        Highmark Medicare Services Independent Diagnostic Testing Facility Billing Guide. www.highmarkmedicareservices.com/partb/bguides/idtf.html

I hope the information is helpful.

Managed Care Satire

For an amusing satire about managed care, check out www.calhealthplan.org, which was created by California consumer activists ( who else?) to highlight perceived managed care abuses. The Nurse Avenger video game is mildly amusing, but the theme song & video,  the "Pirates of the Health Care-ibbean" is biting and hysterical, unless you're a managed care company.

California Court Ruling Waiving Administrative Exhaustion of Remedies Doctrine Somewhat Misleading

A California court recently concluded that exhaustion of administrative remedies was not required as a condition precedent to reinstatement of a physician. The summary description of this holding is somewhat misleading, because it is commonly accepted that physicians must exhaust their administrative remedies, i.e., the medical staff peer review hearing process, before pursuing either civil or equitable remedies. The California holding would apparently contradict that.

However, the California case involves peculiar circumstances. The physician was both a member of medical staff of the hospital and an employee of the hospital. The hospital summarily suspended the physician’s clinical privileges and terminated the physician’s employment. During an extended period of legal posturing, the parties were unable to agree upon a medical staff peer review process, due to technicalities in the due process procedures which gave both sides an arguable position about the appointment of a hearing officer.

During that period, the physician petitioned for an injunction reinstating her employment. The court cited an earlier California case holding that there must be a “pre-termination” hearing with respect to the employment if continued employment presented no immediate danger to patients. The court reasoned that since the physician’s clinical privileges were already summarily suspended and the physician could, therefore, not pose any risk to patients, the physician was, therefore, entitled to a pre-termination hearing with respect to the termination of her employment. Since the pre-termination hearing had not been held, the court ordered reinstatement of the petitioner’s employment and the hospital placed the physician on paid administrative leave.