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Health Policy Perspectives - Health policy and your practice

January 28th, 2011

Having just witnessed the completion of one of the busiest legislative years in recent health policy history, it seemed a good time to reintroduce the "Health Policy Perspectives" column to the AAOMS Today. Our goals are not only to keep AAOMS members abreast of changes and how and when they can help the specialty make an impact, but also to provide resources to assist in the process.

While numerous provisions of the health reform law have already been implemented, others are still in the regulatory phase at the agency level. Many of these provisions relate to Medicare and reimbursement. The AAOMS Compliance Timeline available on the Practice Management pages of aaoms.org provides a quick overview of many regulations and a projected timeline for implementation and compliance. It also includes links to additional information on each of the regulations, as well as to AAOMS resources and governmental agencies.

Following is a summary of coding and reimbursement activities that AAOMS staff is monitoring:

HIPAA 5010/ICD-10-CM

On January 1, 2012, standards for electronic healthcare transactions change from Version 4010/4010A1 to Version 5010. These electronic healthcare transactions include such functions as claims, eligibility inquiries, and remittance advices. Version 5010 will accommodate the ICD-10 codes, and must be in place before the changeover to ICD-10 on October 1, 2013 to allow adequate time for testing and implementation. AAOMS members are encouraged to work with their vendors to begin testing early to assure a smooth transition. For more information, visit the Practice Management pages of the AAOMS Web site, specifically the ICD-10-CM News page.

ICD-10 codes must be used on all HIPAA transactions, including outpatient claims with dates of service, and inpatient claims with dates of discharge on and after October 1, 2013. Otherwise, claims and other transactions may be rejected, delaying reimbursement.

AAOMS offered a webinar on September 15, 2010 to introduce OMS offices to ICD-10. For questions and answers from the webinar, or to order an audio recording, visit the Practice Management Workshops & Webinars page of the AAOMS Web site.

Quality incentive programs

While the following are currently quality "incentive" programs under CMS, they will carry penalties for non-participation or not satisfactorily reporting as early as 2012 for e-Prescribing and, in 2015, for the PQRI and Medicare EHR Incentive Programs.

Physician quality reporting initiative

The 2006 Tax Relief and Health Care Act (TRHCA) (P.L. 109-432) required the establishment of a physician quality reporting system, including an incentive payment for eligible professionals (EPs) who satisfactorily report data on quality measures for covered professional services furnished to Medicare beneficiaries. CMS named this program the Physician Quality Reporting Initiative (PQRI).

The PQRI incentive payments are available until 2014. Beginning in 2015, EPs who do not satisfactorily report PQRI measures will be subject to payment decreases.

EPs who satisfactorily report on PQRI quality measures will earn an incentive payment based on a percentage of their total estimated Medicare Physician Fee Schedule (MPFS) allowed charges processed not later than two months after the end of the reporting period. For reporting year 2011, EPs who satisfactorily report PQRI measures will earn an incentive payment equal to 1.0 percent of allowed charges. For reporting years 2012 through 2014, EPs who satisfactorily report PQRI measures will earn an incentive payment equal to 0.5 percent of allowed charges. Additionally, for reporting years 2011 through 2014, EPs who satisfactorily report PQRI measures can qualify to earn an additional 0.5 percent incentive payment by participating more frequently than is required to qualify for or maintain board certification status, in a maintenance of certification program and successfully completing a qualified maintenance of certification program practice assessment. Beginning in 2015, EPs who do not satisfactorily report under the PQRI program will be subject to a payment adjustment equal to 1.5 percent of their Medicare PFS allowed charges. The payment adjustment increases to 2.0 percent in 2016 and beyond.

For more information on the PQRI Incentive Program visit http://www.cms.gov/PQRI/.

e-Prescribing (eRx) Incentive Program

Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) authorized a new and separate incentive program for EPs who are successful electronic prescribers as defined by MIPPA. The program, which began on January 1, 2009, is separate from and in addition to the PQRI program. Eligible professionals do not need to participate in PQRI to participate in the eRx Incentive Program. Note: Medicare EPs may not earn incentives under the eRx and Electronic Health Records incentive programs at the same time.

The eRx incentive payments are available until 2013. Beginning in 2012, payment will be reduced for EPs who are not successful e-prescribers.

EPs who are successful e-prescribers can qualify to earn an incentive payment based on a percentage of their total estimated Medicare physician fee schedule allowed charges processed not later than two months after the end of the reporting period. For reporting years 2011 and 2012, EPs who are successful e-prescribers can qualify to earn an incentive payment equal to 1.0 percent of allowed charges. For reporting year 2013, EPs can qualify to earn an incentive payment of 0.5 percent of allowed charges. Beginning in 2012, EPs who are not successful e-prescribers in 2011 and do not qualify for a hardship exception will be subject to a payment adjustment equal to 1.0 percent of their Medicare physician fee schedule allowed charges. The payment adjustment increases to 1.5 percent in 2013 and 2.0 percent in 2014.

For more information on the e-Prescribing Incentive Program visit http://www.cms.gov/ERxIncentive/.

Electronic Health Record Incentive Program

The American Recovery and Reinvestment Act of 2009 (Recovery Act) includes the Health Information Technology for Economic and Clinical Health Act, or the "HITECH Act," which established programs under Medicare and Medicaid to provide incentive payments to EPs, hospitals, and critical access hospitals for the "meaningful use" of certified EHR technology. Note: Medicare EPs may not earn incentives under the eRx and Electronic Health Records incentive programs at the same time.

The EHR Incentive Program begins in calendar year 2011. EPs can earn incentive payments for up to five years if they elect to receive their incentive payment through Medicare or up to six years if they elect to receive their incentive payment through Medicaid. However, no Medicare EHR incentive payments will be made to EPs whose first year of participation in the Medicare EHR Program is 2015 or later, and beginning in 2015 payment adjustments will take effect for Medicare FFS EPs who cannot successfully demonstrate meaningful use of certified EHR technology. EPs can begin to participate in the Medicaid EHR Incentive Program until 2016, and there are cur-rently no penalties for not demonstrating meaningful use for Medicaid EPs.

EPs may receive an incentive payment based on the criteria of the program under which they elect to receive payment (Medicare or Medicaid). Before 2015, an EP may switch between the programs one time after the first incentive payment is initiated.

Medicare EPs who successfully demonstrate meaningful use of certified EHR technology during the relevant EHR reporting period may be eligible to receive an incentive payment, subject to an annual limit, equal to 75 percent of the EP's allowed charges submitted not later than two months after the end of the calendar year. The amount of the annual EHR incentive payment limit for each payment year will be increased by 10 percent for EPs who predominantly furnish services in an area that is designated as a geographic health professional shortage area (HPSA).

Medicaid EPs who adopt, implement, upgrade, or meaningfully use certified EHR technology in their first year of participation in the program, and successfully demonstrate meaningful use in subsequent years, may be eligible for an incentive payment amount, subject to an annual limit.

For more information on the EHR Incentive Program visit http://www.cms.gov/EHRIncentivePrograms/.

Initiatives for consumers to compare quality

The Affordable Care Act was designed not just to control healthcare costs, but also to improve quality of care. The Federal government is creating tools to allow people to compare a variety of provider quality measures.

The Hospital Compare Web site is a tool to assist consumers in comparing the quality of care that hospitals provide. It provides a list of US hospitals, including hospital demographics (location, hospital type) and ratings on 44 quality-of-care measures. It also includes data on some Department of Veterans Affairs medical centers. Information is available at http://hospitalcompare.hhs.gov/hospital-search.aspx?AspxAutoDetectCookieSupport=1.

The Affordable Care Act requires CMS to establish a Physician Compare Web site by January 1, 2011. It will contain information on physicians enrolled in the Medicare program and other eligible professionals who participate in the Physician Quality Reporting Initiative (PQRI). Section 10331 of the Affordable Care Act also requires CMS to implement a plan to make information on physician performance publicly available through the Physician Compare Web site no later than January 1, 2013 (and for reporting periods beginning no earlier than January 1, 2012).

Affordable Care Act initiatives

Other provisions of the Affordable Care Act establish new entities to test innovative payment and service delivery models to improve quality of care while reducing health spending. AAOMS is monitoring these initiatives closely as the findings of the groups studying them will ultimately pave the path for the future of healthcare reimbursement.

Patient-Centered Outcomes Research Institute (PCORI)

  • Comparative effectiveness research

Center for Medicare and Medicaid Innovation (CMI)

  • Alternative payment models
  • Value-based purchasing (VBP)
  • Accountable care organizations (ACOs)
  • Bundled payments
  • Episode groupers/acute care episode (ACE) demonstration
  • Value-based payment modifier (under the Physician Fee Schedule)
  • Medical Home Shared Savings Program demonstration