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

The AMA issued the following news release regarding the Medicare Sustainable Growth Rate Medicare physician fee cuts scheduled to go into effect on JUne 1, 2010.

Congress failed to address this year’s Medicare physician payment cut before the June 1 deadline next week. Although the U.S. House of Representatives passed legislation at the last minute to suspend cuts for another 19 months, the U.S. Senate left for a week-long Memorial Day recess without taking action. When Congress returns from their vacation on June 7, the Senate is expected to take up the House-passed bill.

The Centers for Medicare & Medicaid Services already issued instructions to its contractors to postpone processing claims for Medicare physician services provided on or after June 1 for 10 days to provide time for Congress to complete its action and overturn the scheduled cut retroactive to June 1.

The new proposal being considered by Congress would provide payment updates of 2.2 percent for the remainder of 2010 and an additional 1 percent increase in 2011. However, in 2012 the SGR formula will once again go into effect and payments will be cut by an estimated 33 percent!

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At the request of several Members of Congress, the Federal Trade Commission is further delaying enforcement of the “Red Flags” Rule through December 31, 2010, while Congress considers legislation that would affect the scope of entities covered by the Rule. Click here to read the announcement.

By Paul Welk

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The U.S. House of Representatives is expected to consider legislation to block the pending 21.2 percent cut to physician Medicare payments soon. The cuts will take effect June 1 unless final legislation is signed into law before then. The proposed bill, H.R. 4213, “The American Jobs and Closing Tax Loopholes Act of 2010” also includes numerous other “tax extender” provisions, such as extended unemployment insurance and COBRA coverage through the end of 2010.

The current proposal would increase Medicare physician payment rates by 1.3 percent for the remainder of 2010, and by 1 percent in 2011. Rates would continue to increase for 2012 and 2013 if overall spending growth on physician’s services does not exceed a fixed target level with an extra allowance for primary and preventative care. Rates could not be reduced in 2012 or 2013. In 2014, the system would refer back to payment levels under current law, at which point providers would face an estimated 35 percent cut.

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Two recent decisions emphasize the ongoing battle for discovery of peer review information in negligence cases, and confirm that confidentiality is alive and well, but no longer automatic. 

In Shell v. Sudan, the United States District Court for the District of Nebraska ordered that deposition questions regarding a hospital risk analysis tool were not precluded by the state peer review privilege. The Court ruled that a process called Failure Modes and Effects Analysis (FMEA) was a prospective analysis tool and concluded that prospective analysis for avoiding future problems did not constitute retrospective analysis of actual peer review events, and was therefore not protected from discovery.

Conversely, the United States District Court for the Eastern District of Michigan ruled in William Beaumont Hospital v. Medtronic Inc. that Medtronic was not entitled to the incident reports, or variance reports, arising out of a patient adverse event. In this case, the hospital entered into a settlement with a patient who was overdosed using a medical device, and the hospital then sought contribution from Medtronic alleging Medtronic’s negligence in providing medical devices. The Court concluded, even though the hospital was seeking recovery from Medtronic, the hospital had not waived any privilege under state law and the specific documents sought by Medtronic were covered by the state peer review confidentiality privilege. The Court further concluded that Medtronic had alternative means of obtaining the information it desired in order to appropriately and reasonably defend its position.

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The U.S. Department of Health and Human Services ("HHS") has issued draft guidance on HIPAA Security Standards as it pertains to risk analysis.  The aim is to assist organizations in identifying and implementing the most effective and appropriate administrative, physical, and technical safeguards to security electronic protected health information (also known as "ePHI").

While the draft guidance is not intended to be a blueprint per se, but rather it clarifies expectations for organizations in meeting the HIPAA Security Rule requirement of risk analysis.

By way of background, the Security Rule requires entities to evaluate risks and vulnerabilities in their information system environments and to implement reasonable and appropriate security measures to protect against reasonably anticipated threats or hazards to the security or integrity of ePHI.  Risk analysis, which is required by the Security Rule, is a first step in the process.  Risk analysis is a necessary tool for reaching substantial compliance with standards and implementation specifications of the Security Rule. 

The Security Rule describes two sets of implementation specifications: required and addressable.  Addressable implementation specifications are not optional, but, rather if -- after conducting the risk analysis -- the organization determines that the implementation specification is not reasonable and appropriate, the organization must document why it is not reasonable and appropriate and adopt an equivalent measure if it is reasonable and appropriate to do so.

The draft guidance lays out the elements of the risk analysis and also defines certain terms not expressly defined in the Security Rule such as "vulnerability", "threat", and "risk."

The draft guidance also provides pointers to resources developed by several federal and non-federal organizations which may be helpful for organizations developing and implementing risk analysis and risk management strategies.

Finally, the draft guidance expressly provides that it is not to be interpreted inconsistently with the Security Rule, but rather merely provides clarification to those seeking to understand the risk analysis requirement.

URL for draft guidance on risk analysis: http://www.hhs.gov/ocr/privacy/hipaa/administrative/securityrule/radraftguidance.pdf.

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@medlawblog on Twitter, <http://www.twitter.com/medlawblog>, now has 302 followers and is listed on 17 lists.  We tweet and retweet about the latest in health care law and news.  Please check us out on Twitter.

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Contributed by Jon Grossman & Jo-Anne Mineweaser

jgrossman@tuckerlaw.com / jmineweaser@tuckerlaw.com

The Internal Revenue Service (IRS) announced the 2011 inflation adjusted amounts for health savings accounts (HSAs) in Revenue Procedure 2010-22.
 
Annual contribution limits for calendar year 2011 are unchanged from 2010 amounts:

• Deductions for an individual with self-only coverage under a high deductible health plan: $3,050
• Deductions for an individual with family coverage under a high deductible health plan: $6,150

High deductible health plans (for calendar year 2011):

A “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,200 for self-only coverage or $2,400 for family coverage, and the annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage.

Please contact Jon Grossman at 412.594.5574 or Jo-Anne Mineweaser at 412.594.3920 if you have any questions or for more information.

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www.medlawblog.com/uploads/file/PA Bulletin.pdf

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The Patient Protection and Affordable Care Act (PPACA) Section 6404 establishes a maximum period for submission of Medicare Claims of not more than 12 months. As a result of the PPACA, Medicare has announced that claims with dates of service on or after January 1, 2010, received later than 1 calendar year beyond the date of service will be denied by Medicare. Further details are provided in Medicare Learning Network (MLN).

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CMS announced that it is sharing more than $15 million in savings with 166 Home Health Agencies (HHAs) based on their performance during the first year of the 2-year Medicare Home Health Pay For Performance (HHP4P) demonstration. The demonstration project began in January, 2008 and ended December, 2009. The results for calendar year 2008 produced $15.4 million in savings to be shared with HHAs in seven states representing four census regions; the four regions were Northeast, South, West and Midwest, but the Midwest region did not achieve any savings. 

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