Poliner Opinion: Full Text
Click on the link to read the Poliner Opinion, as referenced in the previous blog post:
Fifth Circuit Reverses Poliner
The Fifth Circuit reversed the dictrict court holding in the Poliner case, and concluding that the hospital had conducted an appropriate investigation and was therefore entltled to HCQIA immunity.
As with most of these cases, the law is fairly clear and the facts are the issue. In Poliner, the physician was asked or coerced into accepting an "abeyance". The court see this as an issue - it saw the action as an adverse peer review action regardless. The issue thebn was whether the hospital had conducted enough of an investigation as of that point to take the action it took. The court concluded that it had.
I'll post the entire case in the "links" section of the Medlaw Blog on Monday morning, when there is somebody here that knows how to do that.
A critical lesson from this case, and one thart is a common thread in most peer review cases, is that proctection is not provided by the ability to sue afterwards. Protection is provided by insuring a fair peer review process. IMHO, one way to assure fairness is to allow the investigated physician to appoint a member of the investigating committee and a member of the hearing panel, if necessary. this certainly would not change tjhe balance of power in the process, but it would go a long way to assuring fairness and transparency in the process. It would seem difficult for a reasonable hospital administration to refuse to include this in the bylaws. I suggest medical staffs use the bylaw review process sure to follow the Joint Commission developments on MS.1.20 as a means to develop discussion on this issue.
Medicare Audit Program Identifies Significant Over-Payments
In follow up to a previous posting, the Wall Street Journal recently reported that the Medicare Recovery Audit Contractor Program has identified 1.03 billion dollars of improper payments over the past three years, about 992.7 million dollars of which were over-payments by Medicare. While the Recovery Audit Contractor Program is currently underway in six states, Medicare is in the process of expanding the program's scope nationally. With this increasing scope, the risk of being audited is also likely to increase.
In the event a provider is subject to a Medicare or other third party payor audit, it is important to review the documentation provided by the auditor and take the steps necessary to prepare an appropriate and timely response. If the steps required to respond to an audit are not properly followed, there is a risk that the provider may forfeit certain rights. If a provider is subject to an audit, the services of an attorney or other professional familiar with the audit process can be of significant benefit.
Paul Welk
412-594-5536
pwelk@tuckerlaw.com
Proposed Stark Exceptions For Incentive Payments And Shared Savings Program
CMS is acknowledging the continued interest in Pay for Performance ("P4P") and gainsharing ideas, and is issuing a specific self-referral exception in
The links below contain both the actual regulatory proposals and the CMS discussion of the proposals, which comprises pages 261-316 of the
CMS indicates that its concerns for both programs are the withholding of quality care ("stinting"), the selection of only healthier patients for programs ("cherry picking"), the redirection of sicker patients to other providers ("steering") and premature discharge to reduce length of stay ("quicker-sicker"),
CMS is proposing one set of standards, i.e. new 42 CFR § 411.357(x), to apply to both shared savings and incentive programs and has outlined a philosophy requiring three elements, i.e. transparency, quality controls and safeguards against payments for referrals.
Quality.
The program must include patient care quality or cost saving measures (or both) supported by objective, independent medical evidence indicating that the measures would not adversely affect patient care. Specifically, all performance measures must use an objective methodology, be verifiable, be supported by credible medical evidence, and be individually tracked. The measures must reasonably relate to the hospital's practices and patient population in the interest of creating clear, bright line rules, we are proposing specifically that patient care quality measures be listed in CMS's Specifications Manuel for National Hospital Quality Measures.
CMS is proposing that the programs must review prior to the implementation and at least annually thereafter to ascertain the program's impact on the quality of patient care services provided by the hospital. The reviews must be conducted by an independent person or organization with relevant, clinical experience.
Self-Referral Payments.
The proposals apply only to payments by hospitals to physicians or physician organizations. The proposals note that the programs involving non-physician practitioners ("NPP") might be possible, but also are not governed by the physicians self-referral statute. Physician organizations, such as an existing private practice, could include physicians who are non-participating in the program. All payments must be made to pools of five or more physicians who are members of the medical staff at the commencement of the program. The pre-existing membership requirement is imposed out of the concern that these programs will be used to recruit physicians from competing hospitals. CMS will consider comments on how to establish an appropriate process for the addition of physicians who join the medical staff in the normal course of business.
The hospital may not determine eligibility for physician participation in a program based on the volume or value of referrals or other business generated between the parties.
To qualify for protection under the proposed exception, an incentive payment or shared savings program may not limit the discretion of physicians to make medically appropriate decisions for their patients, including, but not limited to, decisions about tests, treatments, procedures, services, supplies or discharge.
Payments made to physicians participating in either the incentive payment or shared savings program must be distributed on a per capita basis, although CMS will consider alternative proposals.
Medical Devices.
CMS is proposing that a physician (or qualified physician organization) could not receive a payment under an incentive payment or shared savings program for the use of an item, supply or device if the physician or physician organization has an ownership or investment interest, or a compensation arrangement with, a manufacturer or distributor of the item, supply or service, or GPO that arranges for the purchase of the item, supply or devise.
Transparency.
To implement transparency and foster accountability, CMS has proposed that the arrangement require written disclosure to patients affected by the program regarding the nature of the program and the physician or qualified physician organization participation in the program prior to admission to the hospital, or, if preadmission disclosure is not feasible, prior to the procedure or other treatment to which the program is applicable. CMS is also inviting comments on whether patients should have the opportunity to op-out of the program. However, it would seem that patients always have the opportunity to opt-out of any treatment program, and the issue should be whether the opt-out opportunity is specifically disclosed in the program disclosure.
CMS Medicare Physician Fee Scedule Notice: .5 % Increase
New 2008 Medicare Physician Fee Schedule Payment Rates Effective for Dates of Service July 1, 2008 through December 30, 2008
The Medicare Improvements for Patients and Providers Act of 2008 was enacted on
July 15, 2008. As a result, the mid-year 2008 Medicare Physician Fee Schedule (MPFS) rate of -10.6 percent has been replaced with a 0.5 percent update, retroactive to July 1, 2008.
Physicians, non-physician practitioners and other providers of services paid under the MPFS should begin to receive payment at the 0.5 % update rates in approximately 10 business days, or less. Medicare contractors are currently working to update their payment system with the new rates.
In the meantime, to avoid a disruption to the payment of claims for physicians, non-physician practitioners and other providers of services paid under the MPFS, Medicare contractors will continue to process the claims that have been on hold on a rolling basis (first in/first out) for payment at the -10.6% update level. After your local contractor begins to pay claims at the new 0.5% rate, to the extent possible, the contractor will begin to automatically reprocess any claims paid at the lower rates.
Under the Medicare statute, Medicare pays the lower of submitted charges or the Medicare fee schedule amount. Claims with dates of service July 1 and later billed with a submitted charge at least at the level of the January 1 – June 30, 2008, fee schedule amount will be automatically reprocessed. Any lesser amount will require providers to contact their local contractor for direction on obtaining adjustments. Non-participating physicians who submitted unassigned claims at the reduced nonparticipation amount also will need to request an adjustment.
Contractor websites are being updated with the new rates and these should be available shortly.
Be aware that any published MLN Matters articles affected by the new law will be revised or recinded as appropriate.
Finally, be on the alert for more information about other legislative provisions which may affect you.
Further instructions regarding other provisions of MIPPA will be forthcoming.
Congress Overrides Medicare Veto
Congress Overrides Medicare Veto
The House voted 383 to 41 to override the veto, while the Senate voted 70 to 26, in both cases far more than the two-thirds necessary to block the president's action.
With organized medicine and other lobbies promoting the popular measure in an election year, Republicans broke heavily from the White House. A total of 153 House Republicans voted to defy the White House, 24 more than in a June 24 vote that started the momentum toward passage of the Medicare doctors' bill yesterday. Twenty-one Senate Republicans voted for the bill this time, including four senators who had voted "nay" in the two previous Medicare votes.
The Medicare bill is the third, along with the recent farm bill and a water resources bill, to become law despite Bush's veto. Overall, Bush has vetoed 12 pieces of legislation during his presidency, including a "pocket veto" of last year's defense authorization bill.
This action applies only to the remainder of 2008. The sustainable growth rate (SGR) formula wil present this issue agin for 2009 anf yeras after unless revised by Congress.
Congress Overrides Medicare Veto
The House voted 383 to 41 to override the veto, while the Senate voted 70 to 26, in both cases far more than the two-thirds necessary to block the president's action.
With organized medicine and other lobbies promoting the popular measure in an election year, Republicans broke heavily from the White House. A total of 153 House Republicans voted to defy the White House, 24 more than in a June 24 vote that started the momentum toward passage of the Medicare doctors' bill yesterday. Twenty-one Senate Republicans voted for the bill this time, including four senators who had voted "nay" in the two previous Medicare votes.
The Medicare bill is the third, along with the recent farm bill and a water resources bill, to become law despite Bush's veto. Overall, Bush has vetoed 12 pieces of legislation during his presidency, including a "pocket veto" of last year's defense authorization bill.
This action applies only to the remainder of 2008. The sustainable growth rate (SGR) formula wil present this issue agin for 2009 anf yeras after unless revised by Congress.
MGMA Reports That President Vetos Medicare Bill to Prevent Physician Fee Cut
medicare payment UPDATE
Today the president vetoed the Medicare Improvement Act for Patients and Providers (H.R. 6331). The House of Representatives must now schedule a new vote to override the veto, followed by a similar vote in the Senate. A two-thirds majority in each chamber must support a veto override for it to succeed.
Please use the grassroots hotline at 800.833.6354 to call Congress and urge lawmakers to immediately override the veto of H.R. 6331 to provide 18 months of positive Medicare payments to physicians and ensure that Medicare beneficiaries have access to quality care.
Please click the links below to see how your senators and representatives previously voted on this bill. If they voted “yea”, thank them for their support of this important legislation and urge them to vote to override the presidential veto. If they voted “nay”, urge them to reconsider their position and vote to override the veto.
This bill reverses the 10.6 percent cut to Medicare reimbursement that took effect July 1 and the projected 5.4 percent cut scheduled for 2009. It continues the 0.5 percent payment increase for 2008 and provides an additional 1.1 percent increase in 2009.
See how your representatives previously voted. http://clerk.house.gov/evs/2008/roll443.xml
See how your senators previously voted. http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=2&vote=00169
Click here to determine who your senators are. www.senate.gov/general/contact_information/senators_cfm.cfm
Click here to determine who your representative is.
Notice 2008-59 - Health Savings Accounts (HSA)
In Notice 2008-59, the Treasury and IRS have recently provided guidance related to Health Savings Accounts (HSAs) in the form of 42 frequently asked questions and corresponding answers related to HSAs. HSAs are medical savings accounts which are available to US taxpayers who are enrolled in a High Deductible Health Plan. The funds from HSAs, contributed by the owner of such account, can be used to pay qualified medical expenses in a tax-advantaged manner. Notice 2008-59 can be found at the following link:
http://www.treas.gov/press/releases/reports/notice200859.pdfJamie D. Aul
412-594-3923
jaul@tuckerlaw.com
Physician Self-Referral and Anti-Markup Issues
The proposed 2009 Medicare Physician Fee Schedule also deals with proposed changes to the reassignment rules related to diagnostic tests, sometimes referred to as the Anti-Markup Provisions. The discussion of the proposed rules, which occupies pages 237 through 260 of the Federal Register publication, which pages are attached at the link below, discusses the history of the Anti-Markup Rules, the proposed changes from 2008, the delay in implementation and the reasons therefore, and the litigation history of Atlantic Urological Associates v. Leavitt.
The 2009 Fee Schedule Proposals contain two alternatives.
First, the new proposal is a far simpler proposal in which the Anti-markup Provisions would apply in all cases where the TC of the diagnostic tests is either (i) purchased from an outside supplier or (2) performed or supervised by a physician who does not share a practice with a billing physician or physician organization. The most significant change is that the rules that specify that a physician who is employed by a contract with a single physician or physician organization shares a practice with that physician or physician organization. CMS believes that when a physician provides his or her efforts for a single physician organization (regardless of whether those efforts are fulltime or part time), he or she has a sufficient nexus with that practice to justify not applying the Anti-markup Provisions.
Second, the alternative proposal is basically a re-proposal of the presently proposed rules with amendments to do the following:
1. Clarify that the office of the billing physician or other supplier includes space in which the diagnostic testing is performed that is located in the same building in which the billing physician or other supplier regularly furnishes patient care;
2. Clarify that, with respect to TCs the Anti-Markup Provision applies if the TC is either conducted or supervised outside of the office of the billing physician or other supplier;
3. Clarify that a TC of the diagnostic test is not purchased from an outside supplier if the TC is supervised by a physician located in the office of the billing physician or another supplier;
4. Clarify that, for the purposes of applying the payment limitation, the performing supplier with respect to the TC is the physician who supervised the TC and, with respect to the PC, the performing supplier is the physician who performed the PC;
5. Propose an exception for diagnostic tests ordered by a physician in a physician organization; and
6. Solicit comments on how to define net charge.
Medicare 2009 IDTF Proposals
Medicare is proposing that all physician practices providing diagnostic testing must enroll as independent diagnostic testing facilities effective as of
This proposal would make physician practices subject to the performance standards for independent diagnostic testing facilities. This will prohibit, or at least discourage, hotel and motel sites, which are described as inappropriate in IDTF standards.
It would require non-physician personnel performing testing to have licensure or certification. There are a number of IDTF standards which would not apply to physician practices; one of those is the prohibition against sharing a practice location with another Medicare enrolled organization, which presumably means the physician practice. However, it still would prohibit leasing or subleasing the operations or the practice location, or sharing diagnostic testing equipment.
I have attached a copy of the comments from the 2009 Medicare Physician Fee Schedule Proposal. This is only a proposal, but the potential impact is obvious.
The proposals will also require enrollment of entities furnishing mobile services.
Medicare Payment Update
White House continues to threaten veto of Medicare payments bill.
The AP (7/11) reports, "President Bush intends to block a bill protecting doctors from a cut in their Medicare pay, even though Congress has enough votes to override his veto, a White House spokesman indicated on Thursday." The President opposes "reduce[d] spending on private health insurers serving about nine million elderly and disabled patients through Medicare Advantage," which the bill calls for in order to "pay for rescinding [a] 10.6 rate cut" in Medicare payments to doctors. According to White House spokesman Tony Fratto, "Taking choices away from seniors in order to pay for the reimbursements for physicians is the wrong way to pass this bill and to extend the reimbursements that we want to see physicians get." The White House predicts that reduced Medicare Advantage spending -- about $13.5 billion over five years -- would slow enrollment growth," estimating "that about two million fewer people would take part in the program."
But, "Senate Democrats say they have enough support to override [the] potential presidential veto," according to the Boston Globe (7/10, Milligan). Minutes before the vote, Sen. Edward Kennedy (D-Mass.), "under treatment for brain cancer, made a brief, triumphant return to the Senate" to vote on the measure, giving "Democrats the vote they needed to stop a Republican filibuster and pass the bill."
In addition to concern over the pending veto, Jacob Goldstein added in the Wall Street Journal's (7/10) Health Blog that, even if the measure is instated, "the issue will return next year, just as it returned last year and the year before that." He explained that Congress passed a budget bill in 1997 "called the sustainable growth rate (SGR) for Medicare. The SGR says essentially that the amount Medicare pays doctors for an average Medicare patient can't grow faster than the economy as a whole." Meaning that "if growth in payments per beneficiary grows more than the economy as a whole, the SGR says you have to lower payments to doctors across the board to keep costs under control." Which is "fine," he stated, until "the economy slowed and healthcare spending skyrocketed early in this decade." Now, "we're stuck with continued short-term interventions until, some day, Congress come[s] up with a whole new system to start the clock running again." Modern Healthcare (7/10, Lubell) also covered the Senate's passage of the bill.
Senate Passes Medicare Physician Fee Savings Bill
The LA Times has reported that the senate passeds a medicare savings bill, but the President has threated a veto.
WASHINGTON -- In a floor session electrified by the appearance of Sen. Edward M. Kennedy, the critically ill Massachusetts Democrat, the Senate voted Wednesday to stave off a cut in Medicare fees to doctors who treat seniors, military personnel and their families and others.
Kennedy, a longtime champion of the federal Medicare program who underwent surgery for brain cancer last month, appeared halfway through the vote, to tears and thunderous applause from fellow senators and spectators.
Moving carefully but steadily, his broad face slightly puffy, Kennedy held up both thumbs, flashed a smile and roared his vote: "Aye."
Democrats credited Kennedy's appearance with their 69-30 victory in what had been a closely contested and bitterly partisan dispute. A Senate vote on an identical measure failed by one vote in June.
"We got this victory because of Ted," said Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee. "He made this happen."
The vote, coming on what Democrats had cast as a key election year test, sets the stage for a showdown with President Bush, who has promised to veto the bill. But Senate leaders, buoyed by their victory, sounded confident. The bill has already passed the House by a veto-proof 355-59 vote.
"Let the president veto it," said Senate Majority Leader Harry Reid (D-Nev.). "We got overwhelming support in the House and more than enough votes to override a veto today."
In an added element of drama, the only senator to miss the vote was Sen. John McCain (R-Ariz.), his party's presumed presidential nominee, who was campaigning in Ohio. McCain would have faced the choice of voting against the interests of seniors and active and retired military personnel, whose healthcare system is linked to Medicare, or voting against party elders at a time when he needs their support.
McCain also was absent for the June vote, in which the measure ultimately failed 58 to 40. Between the votes, nine Republicans switched sides, with 18 Republicans voting in favor overall. McCain said in a statement later Wednesday that he would have opposed the measure. Sen. Barack Obama, the Illinois Democrat and presidential candidate who accompanied Kennedy onto the Senate floor, supported the bill.
The Medicare Improvements for Patients and Providers Act of 2008 would halt a 10.6% cut in payments to physicians, scheduled to take effect July 15, and instead institute a 1.1% payment increase in 2009. The bill would also boost preventive and mental health benefits.
Bush and many Republicans opposed the bill because the funds to prevent Medicare reimbursement cuts would come from more than $12 billion set aside to pay private insurance companies that offer Medicare Advantage, including Blue Cross, Blue Shield and Humana.
The American Medical Assn. estimates that without the legislation, 60% of U.S. doctors will be forced to limit the number of new Medicare patients they treat.
Groups representing military personnel say the cut would particularly hurt the 9.2 million active and retired personnel and their family members in the military's Tricare system, which uses payment rates set by Medicare.
The annual cuts in Medicare reimbursement rates for doctors stem from 1990s legislation intended to lower the federal deficit. The Medicare reductions were supposed to occur in small increments every year, but Congress has generally canceled them. The result is that the small cuts have become cumulative -- now totaling over 10% -- but Congress has not rewritten or repealed the requirement for the cuts.
Though both sides agree that the cuts in Medicare reimbursements should be prevented, they do not agree on how.
Insurance firms and Republicans say the cuts in Wednesday's bill would lead to benefit reductions for seniors who rely on the private Medicare Advantage program -- about 20% of the nation's 44 million Medicare beneficiaries.
Medical groups countered that the cuts to private companies would largely eliminate waste because private insurers charge the government, on average, 12% to 17% more than the Medicare program charges.
"If they cut services to seniors, it's because they choose to, rather than cut advertising or profits," said Maria Freese of the National Committee to Preserve Social Security and Medicare.
Medical groups, which had lobbied hard for the bill, celebrated its passage.
Doctors welcomed Wednesday's vote as a small reprieve from financial pressures that were leading many of them to limit or even stop seeing Medicare patients. They warned, however, that the bill was a short-term fix.
"It doesn't solve the longer-term problem," said Dr. Howard R. Krauss, president of the Los Angeles County Medical Assn., who said that financial pressures were already pushing some Los Angeles doctors to limit the number of Medicare patients they treat, or to end their Medicare practice altogether. "There needs to be an overhaul of our health system nationally so that there's adequate healthcare for everyone."
Kennedy, 76, flew directly to Washington after his daily cancer treatment and returned to Massachusetts immediately after the vote. His wife, Victoria Reggie Kennedy, wiped away tears as she watched from the Senate press gallery, where she sat with her niece Caroline Kennedy.
"I return to the Senate today to keep a promise to our senior citizens -- and that's to protect Medicare," Kennedy said later in a statement. "Win, lose or draw, I wanted to be here. I wasn't going to take the chance that my vote could make the difference."
nicole.gaouette@latimes.com
Kennedy, a longtime champion of the federal Medicare program who underwent surgery for brain cancer last month, appeared halfway through the vote, to tears and thunderous applause from fellow senators and spectators.
Moving carefully but steadily, his broad face slightly puffy, Kennedy held up both thumbs, flashed a smile and roared his vote: "Aye."
Democrats credited Kennedy's appearance with their 69-30 victory in what had been a closely contested and bitterly partisan dispute. A Senate vote on an identical measure failed by one vote in June.
"We got this victory because of Ted," said Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee. "He made this happen."
The vote, coming on what Democrats had cast as a key election year test, sets the stage for a showdown with President Bush, who has promised to veto the bill. But Senate leaders, buoyed by their victory, sounded confident. The bill has already passed the House by a veto-proof 355-59 vote.
"Let the president veto it," said Senate Majority Leader Harry Reid (D-Nev.). "We got overwhelming support in the House and more than enough votes to override a veto today."
In an added element of drama, the only senator to miss the vote was Sen. John McCain (R-Ariz.), his party's presumed presidential nominee, who was campaigning in Ohio. McCain would have faced the choice of voting against the interests of seniors and active and retired military personnel, whose healthcare system is linked to Medicare, or voting against party elders at a time when he needs their support.
McCain also was absent for the June vote, in which the measure ultimately failed 58 to 40. Between the votes, nine Republicans switched sides, with 18 Republicans voting in favor overall. McCain said in a statement later Wednesday that he would have opposed the measure. Sen. Barack Obama, the Illinois Democrat and presidential candidate who accompanied Kennedy onto the Senate floor, supported the bill.
The Medicare Improvements for Patients and Providers Act of 2008 would halt a 10.6% cut in payments to physicians, scheduled to take effect July 15, and instead institute a 1.1% payment increase in 2009. The bill would also boost preventive and mental health benefits.
Bush and many Republicans opposed the bill because the funds to prevent Medicare reimbursement cuts would come from more than $12 billion set aside to pay private insurance companies that offer Medicare Advantage, including Blue Cross, Blue Shield and Humana.
The American Medical Assn. estimates that without the legislation, 60% of U.S. doctors will be forced to limit the number of new Medicare patients they treat.
Groups representing military personnel say the cut would particularly hurt the 9.2 million active and retired personnel and their family members in the military's Tricare system, which uses payment rates set by Medicare.
The annual cuts in Medicare reimbursement rates for doctors stem from 1990s legislation intended to lower the federal deficit. The Medicare reductions were supposed to occur in small increments every year, but Congress has generally canceled them. The result is that the small cuts have become cumulative -- now totaling over 10% -- but Congress has not rewritten or repealed the requirement for the cuts.
Though both sides agree that the cuts in Medicare reimbursements should be prevented, they do not agree on how.
Insurance firms and Republicans say the cuts in Wednesday's bill would lead to benefit reductions for seniors who rely on the private Medicare Advantage program -- about 20% of the nation's 44 million Medicare beneficiaries.
Medical groups countered that the cuts to private companies would largely eliminate waste because private insurers charge the government, on average, 12% to 17% more than the Medicare program charges.
"If they cut services to seniors, it's because they choose to, rather than cut advertising or profits," said Maria Freese of the National Committee to Preserve Social Security and Medicare.
Medical groups, which had lobbied hard for the bill, celebrated its passage.
Doctors welcomed Wednesday's vote as a small reprieve from financial pressures that were leading many of them to limit or even stop seeing Medicare patients. They warned, however, that the bill was a short-term fix.
"It doesn't solve the longer-term problem," said Dr. Howard R. Krauss, president of the Los Angeles County Medical Assn., who said that financial pressures were already pushing some Los Angeles doctors to limit the number of Medicare patients they treat, or to end their Medicare practice altogether. "There needs to be an overhaul of our health system nationally so that there's adequate healthcare for everyone."
Kennedy, 76, flew directly to Washington after his daily cancer treatment and returned to Massachusetts immediately after the vote. His wife, Victoria Reggie Kennedy, wiped away tears as she watched from the Senate press gallery, where she sat with her niece Caroline Kennedy.
"I return to the Senate today to keep a promise to our senior citizens -- and that's to protect Medicare," Kennedy said later in a statement. "Win, lose or draw, I wanted to be here. I wasn't going to take the chance that my vote could make the difference."
nicole.gaouette@latimes.com
Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act)
EMPLOYEE BENEFITS LAW ALERT
June 25, 2008
EFFECTIVE IMMEDIATELY - NEW LAW PROVIDES NEW EMPLOYEE BENEFIT
PLAN RIGHTS TO MEMBERS OF THE MILITARY AND THEIR SURVIVORS
Effective immediately, a new federal law, called the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), requires action to be taken by sponsors of qualified retirement plans and permits action to be taken by sponsors of Cafeteria Plans (or Section 125 Plans) with a health flexible spending arrangement. Two of the changes made by the HEART Act are summarized below.
- Qualified Retirement Plans - The HEART Act requires sponsors to amend their qualified retirement plans to provide additional benefits to survivors of participants who die while performing qualified medical service. For example, if a retirement plan provides that a participant will become fully vested upon his or her death while actively employed by the sponsor, then the retirement plan must now provide that the participant's benefit will become fully vested if he or she dies while performing qualified military service. The effect is that the participant's survivors will receive a bigger benefit than they would have before the HEART Act was passed. How the change affects a retirement plan will differ for each retirement plan. Amendments to the formal retirement plan document and corresponding summary plan description will be required.
- Cafeteria Plans / Flexible Spending Arrangements - The HEART Act permits (but does not require) sponsors of Cafeteria Plans with a health flexible spending arrangement to allow participants who are called to active duty to take distributions of the unused balance in their health flexible spending arrangements. Ordinarily, the use-it or lose-it rule requires participants to forfeit the unused balances of their health flexible spending arrangements if they do not incur eligible medical expenses during the year. Now, participants called to active duty may take a distribution of their unused balance to avoid forever losing the contributions.
Since the HEART Act is effective immediately, it is important that you consult with the professional responsible for your qualified retirement plans and flexible spending arrangements. You also may contact us for more information on how the HEART Act impacts your employee benefit plans and for assistance in revising the qualified retirement plans and flexible spending arrangements sponsored by your company.
******
Employee Benefits Law Group: The Employee Benefits Law Group at Tucker Arensberg, P.C. has a diverse client base of private and public employers. We are dedicated to working with our clients to resolve complicated legal issues in a practical, common-sense and cost-efficient manner. In doing so, we routinely work with our clients to design, establish, implement, administer, and terminate many different types of employee benefit plans. Refer to http://www.tuckerlaw.com/practice/employee.html for more information on the Employee Benefits Law Group.
TAX ADVICE DISCLAIMER: Any federal tax advice contained in this communication (including attachments) was not intended or written to be used, and it cannot be used, by you for the purpose of (1) avoiding any penalty that may be imposed by the Internal Revenue Service or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein. If you would like such advice, please contact us.
2009 Medicare Physician Fee Schedule Issues
The Centers for Medicare/Medicaid Services posted the proposed 2009 Medicare Fee Schedule Rule on July 7, 2008. The link to those rules was provided in an earlier Medlaw Blog post.
The proposals include numerous items, but I would like to highlight the following:
1. Proposed changes to the Independent Diagnostic Testing Facility (IDTF
enrollment requirements;
2. Significant clarification and proposed changes to the Purchased Diagnostic Testing or Anti
markup Rules;
3. A new Stark exemption for incentive payment and shared saving programs (gainsharing); and
4. Proposed revisions to the Physician and Non-Physician Practitioner Enrollment Requirements.
Over the next several weeks, I will be posting articles on the Medlaw Blog regarding each of these.
Wall Street Journal Update on Medicare Physician Fee Schedule
Congress
Clash on Preventing Cut to Doctor Payments
Centers on How to Pay for Medicare Bill
By ANNA WILDE MATHEWS
July 7, 2008
Before Congress took the July 4th week off, a partisan standoff in the Senate blocked a bill that would prevent a cut in doctors' Medicare fees. When members return to Capitol Hill this week, the question for Democrats and Republicans will be: Who will blink to get it done?
Both parties want to avoid the 11% drop-off in physician payments. Already, lawmakers have missed the July 1 deadline for the automatic cut to go into effect, but the Bush administration said it won't process claims at the new, lower rate for the first 10 business days of July.
The clash -- and the holdup -- center mostly on how to pay for the bill. Its cost, about $20 billion over five years, reflects a package of other tweaks in addition to the doctors' money. To fund them, the bill relies largely on trimming outlays for the private insurers' version of Medicare, known as Medicare Advantage plans.
The White House has threatened to veto the bill, largely over new limits it would impose on one particular type of Medicare Advantage plan known as private fee-for-service. Such plans are offered by companies including Humana Inc., WellPoint Inc. and UnitedHealth Group Inc.
Despite the veto threat, the House passed the bill last month, 355-59. But in the week before Congress's holiday recess, it fell one vote short of the 60 needed to move forward in the Senate.
Senate Democrats have vowed to bring the bill up again this week. So the spotlight will be on a handful of Republican senators who could potentially switch votes. The American Medical Association, which backs the bill and says many of its members would be reluctant to see new Medicare patients if the cut remains in effect, ran ads last week targeting 10 Republican senators in their home states.
They include Pennsylvania Sen. Arlen Specter, New Hampshire Sen. John Sununu and Mississippi Sen. Roger Wicker. Texas Sen. John Cornyn, who, like Sens. Sununu and Wicker, is up for reelection this fall, saw the political arm of the Texas Medical Association withdraw its endorsement of him. "I think they don't understand the fury out there," said AMA President Nancy Nielsen. "It's galvanized doctors."
On the other side, America's Health Insurance Plans, the main lobbying group for the industry, ran its own ads, defending the Medicare Advantage plans. "What we'd like to see is the physician-fee issue addressed without the significant reliance all the bills propose placing on Medicare Advantage beneficiaries," said Karen Ignagni, chief executive of the group.
Even if the bill wins 60 votes in the Senate this week, it would not be enough to overcome a veto if the White House refuses to back down. That would throw the issue back to Congress with even less time left on the clock before the cuts take full effect. Democrats would then face more pressure to accept a compromise measure, likely more narrowly crafted, that does not go after the private fee-for-service plans.
Write to Anna Wilde Mathews at anna.mathews@wsj.com
Proposed 2009 Medicare Physician Fee Schedule
Proposed Physician Fee Schedule Rule Includes Stark,
Purchased Diagnostic Test and IDTF Changes and Clarifications
By Barry Alexander*
Purchased Diagnostic Test and IDTF Changes and Clarifications
By Barry Alexander*
On June 30, 2008, the Centers for Medicare and Medicaid Services (CMS) posted at the Office of Federal Register its Proposed 2009 Medicare Physician Fee Schedule rule. The rule is scheduled to be published in the July 7, 2008, edition of the Federal Register, but was placed on display at the Office of Federal Register.
As with any proposed physician fee schedule update, this proposed rule is full of interesting and significant changes to Medicare Part B payment policies, including pieces impacting the Stark Law and the purchased diagnostic test (PDT) rule. In particular, the proposed rule:
- Includes annual updates to relative value units (RVUs) used to calculate physician payment.
- Proposes to create a new series of HCPCS codes for follow-up inpatient telehealth consultations.
- Proposes changes to the methodology used to calculate the Average Sales Price (ASP) of certain covered Part B drugs effective April 1, 2008, and proposes changes to the Competitive Acquisition Program (CAP) for Part B drugs.
- Proposes changes to the IDTF enrollment requirements including: (1) proposed requirements that physician and nonphysician practitioner entities enroll and meet certain IDTF requirements; (2) proposed requirements that mobile entities furnishing diagnostic tests bill directly for the mobile diagnostic services that they furnish, regardless of where the services are performed; and (3) proposed limits regarding how long an IDTF can submit claims for services furnished prior to any effective date of IDTF revocation.
- Includes significant clarification and proposed changes to the PDT or anti-markup rule including: (1) changes that would conform aspects of this payment limitation rule to the federal physician self-referral or Stark law by modifying the current definition of "office of the billing physician" to include diagnostic services furnished in the same building (even if furnished on different floors of the building provided applicable supervision requirements can be met); (2) changes that would clarify that physician supervision—not the employment relationship of the technician—is the key factor for application of the payment rule provisions; (3) changes that would exempt diagnostic services furnished by certain multi-specialty practices in locations where only some of the ordering physicians of the physician organization work; and (4) a proposed exemption for certain non-compliant relationships where an ordering physician in a physician organization does not have any owners who have a right to receive profit distributions.
- CMS solicits numerous comments regarding these proposed changes including: (1) alternatives to the proposals it offers; (2) whether the term "net charge" should include any overhead or other costs of the billing physician when the PDT applies; and (3) whether the effective date of the PDT clarifications should be extended beyond January 1, 2009. CMS does not, however, back away from its view in the final 2008 Medicare Physician Fee Schedule that the PDT rule will apply in situations that could qualify under the "centralized building" component of the in-office ancillary services exception under the Stark law.
- Proposes a new and permanent Stark exemption for certain incentive payment and shared savings programs offered by hospitals.
- Proposes revisions to the physician and non-physician practitioner enrollment requirements.
- Proposes revisions to the appeals process rules where CMS or a contractor determines that a provider or supplier fails to meet the requirements for Medicare billing privileges.
- Proposes to change the DMEPOS supplier standards to prohibit payment to a supplier for furnishing a CPAP device to a beneficiary if the supplier also "directly or indirectly" provided the diagnostic sleep study or furnished the sleep test device used in the study.
- Proposes changes to the Physician Quality Reporting Initiative (PQRI) reporting requirements.
Comments on this proposed rule are due by August 29, 2008, with the final rule expected in November for implementation effective as of
January 1, 2009.
*We would like to thank Barry Alexander (Nelson, Mullins, Riley & Scarborough, LLP Raleigh, North Carolina) and Alex M. Hendler (Washington, DC) for providing this email alert.
Medicare Announces 10 Day Hold on Physician Medicare Payments
The Questions and Answers below apply to the recent decision by the Centers for Medicare & Medicare Services to hold for up to 10 business days claims paid under the Medicare physician fee schedule (MPFS) that contain July 2008 dates of service.
Q1. Will claims containing services paid under the MPFS be held that contain both June and July dates of service?
A1. Yes, your local contractor will hold the entire claim for 10 business days.
Q2. Will claims be held that contain both services paid under the MPFS and services paid under a separate fee schedule?
A2. Yes, claims that contain both services paid and not paid under the MPFS will be held. For example, a claim with a July date containing an Evaluation and Management code and a drug code would be held.
Q3. Does the holding of claims paid under the MPFS also include anesthesia and purchased diagnostic services?
A3. Yes, contractors will hold all claims with dates of service July 1, 2008, and after that contain services paid under the MPFS, including anesthesia and purchased diagnostic services.
