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1. State ordered to retroactively pay providers
$25.8 million for 10% Medi-Cal cut
California Medi-Cal providers recently received checks totaling $25.8 million as retroactive payment for claims processed between July 1 and August 18, 2008.
In February 2008, a 10 percent Medi-Cal provider cut was proposed by the Schwarzenegger administration and agreed to by the state Legislature in an emergency budget session as part of efforts to address a $15 billion budget shortfall. The 10 percent cut took effect July 1, 2008.
The California Medical Association (CMA) filed a federal lawsuit in May 2008 to stop the unlawful cuts. On August 18, 2008, six weeks after the cuts took effect, a federal court issued an injunction ordering the state of California to reverse the 10 percent cut, finding that the cuts would irreparably harm access to health care for nearly 7 million Californians. Unfortunately, at the time the injunction was not retroactive to Medi-Cal services provided between July 1 and August 18.
In January 2010, a federal court ruled that the state was obligated to make retroactive payments to providers for claims processed at the lower rates between July 1 and August 18, 2008. Most physicians impacted by these cuts received checks in April of this year. The checks were not, however, accompanied by a letter of explanation.
Contact: Samantha Pellon, 916/551-2872 or spellon@cmanet.org.
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2. Preliminary list of certified EHRs expected this fall
Medicare and Medi-Cal physicians who demonstrate “meaningful use” of certified electronic health records (EHRs) will qualify for incentive payments under the 2009 federal economic stimulus package.
Federal health officials recently established a temporary EHR certification program. The Office of the National Coordinator for Health IT will immediately begin accepting applications from organizations interested in certifying EHRs under this temporary program. It is expected that lists of certified EHR products will be available in early to mid-fall.
For physicians, now is a good time to prepare for the transition to EHR. Until the first list of certified EHR systems is published, physicians can spend time assessing their practices’ EHR needs, mapping office work-flow, and researching potential vendors. Such preparation will enable practices to move quickly once vendors are certified. For more information, see Chapter 7 of the California Medical Association’s Best Practices toolkit, “Successful Preparation and Implementation of an Electronic Health Records System.”
While the temporary EHR certification program is in place, the federal government will be working on the rules and regulations for a permanent certification program. The permanent program will be more comprehensive and would begin in January 2012.
The way the rules governing the EHR certification program are constructed, an EHR system could potentially be certified under the temporary program, and not under the permanent one. It is also conceivable that a system could be certified to achieve stage 1 of meaningful use, but not stages 2 and 3. This was one of the issues that the California Medical Association (CMA) raised when submitting comments on the proposed rule. Because of this possibility, CMA is recommending that physicians ask EHR vendors for meaningful use guarantees for all three stages of meaningful use.
On July 13, the federal government is expected to release the final “meaningful use” guidelines, which detail the criteria that physicians will have to meet in order to qualify for incentive payments. CMA will be analyzing the 500+ page meaningful use definition and will prepare an analysis for members as soon as possible. Join us for a webinar on July 27, 2010, to hear an overview of the new regulation and find out what physicians and their office staff need to know to qualify for the incentive payments. This webinar will be 12:15 p.m. to 1:15 pm on Tuesday, July 27, 2010. Registration is free to members and their staff. Nonmembers can register for $99. To register, visit the CMA calendar.
Contact: David Ford, 916/551-2554 or dford@cmanet.org.
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3. Legislation allowing hospitals to hire physicians moves to Senate
The California Medical Association (CMA) is fighting state legislation (SB 726) that would erode the ban on the corporate practice of medicine in California by allowing certain hospitals to hire physicians directly.
Under current law, hospitals are barred from hiring physicians as employees. This important protection for doctors and their patients was created to prevent corporations or other entities from unduly influencing the professional judgment and practice of medicine by licensed physicians. Ultimately, California’s ban on the corporate practice of medicine helps to ensure that hospital profits are not put before the quality of patient care.
SB 726 seeks to expand a pilot project that currently allows rural hospitals to employ two physicians, with contracts limited to four years and the total of such hires capped at 20 statewide. The idea behind the pilot project is to help rural hospitals recruit physicians into underserved areas.
Under the legislation, both rural and urban hospitals could hire up to five physicians each, and the hospitals would not need to meet requirements in the current pilot program for treating high numbers of underserved patients. Furthermore, SB 726 does not mandate that hospitals give physicians input on the hirings.
CMA has held several meetings with the proponents of the bill – hospitals, health care districts and unions – trying to reach a compromise that would extend the pilot program, but with proper protections for physicians and their patients.
SB 726 passed the Assembly in a close vote during the last week of June and is now awaiting a hearing in the Senate Rules Committee. CMA will continue to vigorously oppose the bill unless important changes are made.
Thank you to all the CMA doctors and county medical societies who have contacted their legislators encouraging a vote against SB 726. These efforts have played an important part in slowing the progress of this bill and forcing negotiations with the bill’s proponents.
For more information on these and other bills of interest to physicians, see CMA’s Legislative Hot List.
Contact: Dean Grafilo, 916/444-5532 or dgrafilo@cmanet.org.
4. New 2011 Medicare payment rule implements
key provisions of reform law
The Centers for Medicare & Medicaid Services (CMS) recently issued proposed rules detailing Medicare physician payment policies for 2011. The proposed regulations, which will be published July 13 in the Federal Register, implement a number of health reform provisions, including the elimination of deductibles and coinsurance for most preventive services, new coverage of annual wellness visits, and new payment incentives. CMS will be accepting public comment on the proposed rule until August 24.
The proposed rule projects a 6.1 percent reduction to physician payment rates in 2011 under the sustainable growth rate (SGR) formula, absent additional congressional intervention. The rule also contains significant changes to the geographic payment formula. It significantly de-weights the impact of rent on practice expenses, so physicians in regions with higher office rents will be paid less. The rule also uses different data sources to calculate rent, wages and physician work. These geographic payment changes will result in an average payment reduction in California of 4 percent.
The proposed rule also clarifies which physicians qualify for the 10 percent primary care bonus. According to the rule, the 10 percent payment bonus is available to primary care practitioners for whom more than 60 percent of Medicare Part B allowed charges are attributable to a defined set of outpatient and nursing visits. To be eligible in 2011, physicians must have met the 60 percent threshold in 2009 and must have listed family practice, internal medicine, pediatrics or geriatrics as their primary specialty designation at the time the service was provided. The bonus will be paid on a quarterly basis.
Eligibility will be redetermined each year based on claims patterns and specialty designations from two years earlier. This means new Medicare physicians will not be eligible until two years after they enroll in Medicare, although CMS is looking for suggestions on how to get around this problem.
The California Medical Association is doing a thorough analysis of the impact of the proposed rule on California and will report back. In the meantime, additional details on the proposed 2011 payment policies are available at the American Medical Association website.
Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.
5. President Obama highlights insurance market reforms
President Obama recently unveiled a “Patient’s Bill of Rights,” calling attention to the implementation of certain provisions of federal health care reform.
Obama highlighted many of the legislation’s insurance industry reforms and consumer protections in his bill of rights. He said they would put American consumers back in charge of their health coverage and care. Many of the provisions take effect in September.
The announcement drew praise from consumer advocates and health reform advocates, but was criticized by Republicans who called it a publicity stunt.
Obama’s bill of rights focuses on new bans on such practices as excluding children from insurance coverage based on preexisting medical conditions, dropping people from plans when they get sick and issuing limits on lifetime benefits. Plans also cannot restrict choices of primary care physicians from plan networks, require referrals for ob-gyn care, or charge more for out-of-network emergency care.
Those regulations take effect September 23, 2010. Also on that date, children under 26 years of age will be allowed to stay on their parents’ family policy, or be added to it.
Beginning January 1, 2011, individual and small group insurers will be required to spend at least 80 percent, and large group insurers to spend at least 85 percent of premium dollars on direct medical care. The Obama administration says mandating that insurers meet these minimum spending requirements will improve transparency and limit spending on overhead, salaries, and bonuses paid to insurance company executives.
Some provisions of health care reform have already taken effect. Starting July 1, Americans locked out of the insurance market because of preexisting medical conditions could begin enrolling in the Preexisting Condition Insurance Plan (PCIP). The program ends in 2014, when the ban on insurers refusing to cover adults with preexisting conditions takes effect.
The California Medical Association (CMA) strongly supported these insurance market reforms in the health care reform legislation and will work closely with federal regulators to ensure their enforcement.
For more information on health care reform, visit CMA’s health reform resource center.
Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.
6. Webinar: Health Care Reform 2010
Please join us July 22 for an important webinar, “Health Care Reform 2010.” This webinar is free for CMA members and their staff and $99 for nonmembers.
In this webinar, CMA Vice President of Federal Relations Elizabeth McNeil will explain the impact of health care reform legislation on California physicians and CMA’s ongoing advocacy efforts for successful implementation of the bill.
The webinar is offered Thursday, July 22, from 12:15-1:15 p.m. and again from 6-7 p.m. To register, visit the CMA calendar.
Contact: CMA’s member service center, 800/ 786-4CMA or memberservice@cmanet.org.
7. CMS extends PECOS enrollment deadline
The Centers for Medicare & Medicaid Services (CMS) recently extended the PECOS (Provider Enrollment, Chain and Ownership System) enrollment deadline to September 1, 2010, to ensure contractors have adequate time to complete enrollment applications before the January 3, 2011, enforcement deadline.
Between now and January 3, 2011, if claims are submitted with ordering or referring physicians who are not in the system, the billing provider will receive an informational message explaining that the claim failed the “ordering/referring provider edits.” Affected claims will, however, continue to be processed and paid. Claims received on or after January 3, 2011, will not be paid if the ordering or referring provider is not enrolled in PECOS.
Palmetto, California’s Medicare carrier, recently identified California physicians who do not have a record in PECOS. Over the next several weeks, these physicians will receive letters from Palmetto notifying them of the need to enroll.
Physicians are urged to complete the application process as soon as possible, especially those who plan on applying for incentive payments under the health information technology program. Applications are generally processed within 60 days, but can take longer if the application is incomplete or additional information is needed.
CMA has also developed a step-by-step guide to walk physicians through the process, from determining if they are already in PECOS to helping them navigate the Internet-based PECOS enrollment system. This guide is available at the members-only website.
CMA also hosted a PECOS enrollment webinar with Palmetto, California’s Medicare contractor. The previously recorded webinar is available for on-demand viewing at the members-only website.
Physicians who need help with the enrollment process can contact CMA’s member service center, 800/786-4CMA (4262) or memberservice@cmanet.org, for assistance.
Contact: CMA’s member service center, 800/786-4CMA or memberservice@cmanet.org.
8. How will Blue Cross contract amendments impact your practice?
As recently reported in CMA Alert, Anthem Blue Cross has notified contracting physicians of impending changes to its Prudent Buyer Participating Physician Agreement. Physicians are reminded to carefully assess the impact these contract changes will have on their practices.
According to the notice mailed to physicians in late May, the new contract contains several changes to the insurer’s reimbursement policies, including global surgery, anesthesia, modifier -59, sleep studies, multiple surgery reduction, and bundled services and supplies. The contract also includes, among other things, automatic participation in the Blue Cross Medicare Advantage PPO.
Physicians should be aware that they have the right to terminate an agreement if a material change is not beneficial to their practices. If physicians object to the proposed amendments and wish to terminate their contracts, they can do so by notifying Blue Cross in writing within 45 business days of receipt of the notice (or no later than July 30).
To help physicians understand their rights when it comes to health plan contract amendments, the California Medical Association (CMA) has published “Payor Contract Amendments: An Action Guide for Physicians.” The guide is available free to CMA members.
Contact: CMA reimbursement help line, 888/401-5911 or economicservices@cmanet.org.
9. FTC temporarily exempts physicians from ‘red flags’ rule
The Federal Trade Commission (FTC) has agreed to temporarily exempt physicians from the commission’s “red flags” rule, pending a ruling from the U.S. Court of Appeals over the rule’s scope.
The red flags rule requires financial institutions and “creditors” to implement identity theft detection and prevention programs. Despite objections from the California Medical Association (CMA), the American Medical Assocation (AMA), and others in organized medicine, the FTC insists that physicians who regularly bill their patients for services (including copayments and coinsurance) are considered “creditors” and must develop and implement written identity theft prevention programs for their practices by the December 31, 2010, deadline.
CMA believes the red flags rule imposes an unnecessary burden on physician practices, which often already operate under severely strained conditions. CMA also believes the new rule is unnecessary for most physicians because the Health Insurance Portability and Accountability Act (HIPAA) imposes strict requirements to safeguard the confidentiality and security of electronic patient information.
AMA filed a lawsuit to stop the FTC from extending its red flags rule to physicians. The suit, filed May 21, 2010 in the U.S. District Court for the District of Columbia, contends that the FTC, by concluding that physicians are covered by the rule, has exceeded its statutory powers and acted in a way that is “arbitrary, capricious, and contrary to the law.”
The court has already barred the FTC from applying the red flags rule to attorneys in response to a similar complaint from the American Bar Association. The FTC has appealed that decision.
For more information, see CMA’s red flags rule toolkit and webinar, available free to members.
Contact: Samantha Pellon, 916/551-2872 or spellon@cmanet.org.
10. Deadline to opt out of United settlement is July 27
Physicians will soon be able to get their share of a $350 million settlement with UnitedHealth Group. The settlement is the result of a class action lawsuit, initially filed in 2000 by the American Medical Association (AMA) and other health care provider and patient groups, alleging that United conspired to defraud consumers by manipulating out-of-network reimbursement rates, and shortchanging physicians and patients by hundreds of millions of dollars, over the past 15 years.
Physicians will be paid based on their total “recognized loss” between 1994 and 2009, which is calculated based on the difference between a physician’s billed amount and the “allowed amount” that United actually paid for covered out-of-network services. If the total amount of submitted claims exceeds the settlement fund, physicians will receive a pro rata share based on their total recognized loss.
A hearing to determine final approval of the settlement is scheduled for September 13, 2010, in U.S. District Court in New York. Doctors have until July 27, 2010, to file any objections to the settlement or opt out. The deadline to submit claims for payment from the settlement fund is October 5, 2010.
To help physicians understand the settlement and what they need to do to claim their share, the California Medical Association (CMA) has created a settlement resource center. There physicians can find CMA’s United Healthcare/Ingenix Settlement Guide, claim forms, and a number of other helpful resources.
Contact: Samantha Pellon, 916/551-2872 or spellon@cmanet.org.
11. Featured member benefit:
EHR Best Practice Series Webinars: To help members begin to assess their HIT needs, CMA has partnered with Maxwell IT to provide members with complimentary registration to the EHR Best Practices Series webinars. Members can register FREE for “How to Best Select an EHR.” A members-only discount code is required to access this discount. Visit the members-only website or call CMA's member help line (800/786-4CMA) to get the code.
For more information on these and other member benefits, visit http://www.cmanet.org/benefits or contact CMA at memberservice@cmanet.org or 800/786-4CMA.
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