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1. Audits of Medicare Physicians to Go Nationwide this Fall
The Medicare Modernization Act of 2003 established the Medicare Recovery Audit Contractor (RAC) program to identify fraud and waste in the Medicare system. The program, initially launched as a pilot project, has now been made permanent and the Centers for Medicare & Medicaid Services (CMS) will be expanding the program to all 50 states by the end of the year.
Although the California RAC program will be officially rolled out on August 9, CMS has said that physician services will not be targeted for audits until October. Once CMS identifies which services will be targeted, that information will be posted on the RAC website. Audit contractors are expected to focus on companies and individuals whose billings for these Medicare services are higher than the majority of providers in their communities. Auditors cannot request more than 10 patient records from a practice in any 45-day period.
CMA is working closely with AMA to ensure that the program is not overly burdensome for physicians. CMA is also developing a toolkit to help physicians understand the program and, if necessary, navigate the audit process. The toolkit will be available free to members next month.
Stay tuned for more information.
Contact: CMA's reimbursement help line, 888/401-8911 or fnavarro@cmanet.org.
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2. State Budget Cuts $1.5 Billion from Health Care;
Denies Care to State's Most Vulnerable Residents
The state Legislature on Friday passed a budget intended to close the state's projected $26 billion deficit through a mix of revenue accelerations, funding shifts, and spending cuts, including nearly $1.5 billion in health care cuts.
CMA is gravely concerned by the deep health care cuts, which could prevent hundreds of thousands of the state's most vulnerable residents – children, the elderly, and the poor – from getting the health care they need.
The budget slashes almost 40 percent of the funding for the Healthy Families program, which provides health care to nearly one million children from low-income families. The $400 million cut means 450,000 kids will have to be dropped from the program.
"This is a devastating blow to the swelling ranks of California's needy, who are struggling to get through the worst economic crisis in a generation," says CMA President Dev GnanaDev, M.D. "These cuts dramatically increase the long-term health care costs borne by taxpayers, as the patients shut out of these programs now must turn to costly and overcrowded emergency rooms for care."
The good news for physicians is that thanks to CMA's legal advocacy, this budget does not include a Medi-Cal provider rate cut. A federal appeals court recently upheld the merits of the preliminary injunction issued last year that forced the State of California to immediately reverse the 10 percent Medi-Cal reimbursement cut that took effect on July 1, 2008. This ruling came on the heels of a recent Supreme Court decision to let stand an appeals court ruling that upheld providers' standing to enforce federal Medicaid law and challenge state cuts to Medi-Cal provider reimbursement.
The budget assumes $1 billion in Medi-Cal savings that would come from shifting some of the costs for Medi-Cal/Medicare dual-eligibles to the federal government. The Schwarzenegger Administration has been working with the Obama Administration to resolve the long-standing issue of costs borne by Medi-Cal for dual-eligibles that should be paid by Medicare. This budget assumes that the federal government will agree to pick up more of the tab for providing care to dual-eligible patients. If this additional funding does not materialize, additional cuts will have to be made.
The budget also cuts funding for skilled nursing facilities, disproportionate share hospitals, and distressed hospitals.
Contact: David Ford, 916/551-2554 or dford@cmanet.org.
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3. Dept. of Insurance Regulations Would Halt Illegal Rescissions
The California Department of Insurance recently introduced regulations that will put an end to the illegal practice of insurers cancelling individual health insurance coverage after policyholders get sick and file an expensive claim.
The practice, known as “rescission,” not only puts patients at risk, both financially and medically, but it also leaves physicians and hospitals holding the bag for services rendered in good faith, often with prior authorization.
Over the last few years, rescissions have become a common practice as insurers have taken advantage of ambiguity in existing laws. The reprehensible conduct has produced lawsuits, fines, legal settlements, and a congressional investigation. The problem, however, remains. Patients can still have their health coverage pulled out from under them just when they need it most, when they are severely sick and their medical bills are mounting.
As written, the new regulations would, among other things: stop post-claims underwriting by requiring insurers to conduct medical underwriting upfront; standardize health insurance applications to avoid confusing and ambiguous health history questions; and require insurers before rescinding a policy to demonstrate that the policyholder knowingly misrepresented or omitted material health information on the insurance application. The regulations also require insurers to provide a written notice to consumers who are being investigated for possible rescission.
CMA testified last week at a public hearing on this issue, telling regulators that while the draft regulations are an excellent starting point, the language should be strengthened and clarified to further protect patients and physicians from this unfair business practice. CMA also urged DOI to seek the legislative authority to establish an independent review process. CMA believes that because of the inherent and inescapable conflict of interest, insurers must not be allowed to be the final arbiters in determining whether a patient’s policy should be rescinded.
CMA commends DOI for taking steps to provide regulatory protections for PPO patients, and urges the Department of Managed Health Care (DMHC) to do the same so that HMO patients have equal protection under the law. Despite announcing two years ago plans to jointly craft regulations with DOI to stop this unlawful practice, DMHC has not followed through on that promise.
CMA has been fighting for three years to pass legislation that would put an end to illegal rescission. Health insurers have vigorously opposed our efforts. Currently, CMA is sponsoring AB 2, which is a reintroduction of last year’ legislation that passed with bipartisan support through the Senate and Assembly, only to be vetoed by Governor Schwarzenegger. The legislation addresses all health plans and insurers, not just those regulated by the Department of Insurance or Department of Managed Health Care.
Contact: Armand Feliciano, 916/551-2552 or afeliciano@cmanet.org.
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4. CMA Supports Ban on Sale of Tobacco in Pharmacies
CMA recently submitted a brief in support of a San Francisco city ban on tobacco sales in pharmacies. The city ordinance, the first of its kind in the nation, is being challenged by Walgreen Co as unconstitutional and anticompetitive.
The pharmacy chain is arguing that San Francisco’s ordinance violates equal protection laws because the ban exempts supermarkets and “big box” retail stores like Costco, which also contain pharmacies and sell cigarettes.
CMA in its brief defended the exemption, telling the court that pharmacies, which market themselves as institutions where customers can receive trustworthy health care advice, should not implicitly endorse cigarette smoking. The brief was filed jointly with the San Francisco Medical Society.
CMA believes that the marketing of cigarettes and other deadly tobacco products by health-promoting businesses sends the wrong message about the dire health consequences of smoking. CMA and others in organized medicine steadfastly support bans on the sale of tobacco products in pharmacies. In 2008, CMA’s House of Delegates passed a resolution calling for such a ban. This year, AMA’s House of Delegates did likewise.
CMA has for decades been a tireless advocate for stronger restrictions on the tobacco industry. In 1970, 1978, and 1980, CMA supported ballot initiatives that would have banned smoking in many public places. In 1987, CMA took on its biggest tobacco-related challenge and won, with the passage of Proposition 99, which established a 25-cents-per-pack tax on cigarettes and a tax hike for other tobacco related products.
Joining with labor, the California Restaurant Association and health-related groups in 1993, CMA worked to pass the Indoor Clean Air Act, a law banning smoking in California workplaces, including restaurants and bars. The passage of this law struck a huge blow against the scourge of cigarettes and sparked a nationwide trend. In recent years, CMA has sought to increase the legal age for tobacco purchases from 18 to 21 years of age.
Contact: Clarisa Sanchez, 916/551-2867 or csanchez@cmanet.org.
5. Blue Cross Updating Payment Policies
Physicians contracted with Anthem Blue Cross will soon receive a notice detailing upcoming changes to its reimbursement policies, effective January 1, 2010. Blue Cross has informed CMA that it will be also updating its fee schedule on January 1, and physicians will receive a notice of those changes at the end of August.
CMA reminds physicians to carefully review any proposed contract changes. Physicians do not have to accept bad contacts or contracts that are not mutually beneficial. You should also be aware that you have the right to terminate an agreement if any “material change” to the contract terms is not acceptable to your practice.
CMA is currently reviewing the new payment policies and we will let you know if there are any onerous provisions. Physicians should also calculate the impact the payment policy changes will have on their practices. Although most of the changes will result in higher reimbursement for physicians, it appears that payment for some services will be cut.
Physicians should also be aware that Blue Cross is switching to a new claim editing software effective November 7. Because of this change, physicians may notice a difference in how certain codes and code pairs are adjudicated. Physicians will be able to prospectively and retrospectively screen claims via Blue Cross’s “Clear Claim Connection” portal to determine if and how the claim auditing rules impact their claims.
For more information, visit Blue Cross’s provider portal. Questions about these new payment policies should be directed to Blue Cross Provider Relations at 800/677-6669.
Contact: CMA's Reimbursement Help Line, 888/401-5911 or awetzel@cmanet.org.
6. CMA Urges Physicians to Correct Data
Used to Grade their Performance
This week, some 13,000 California physicians will be sent letters from the California Physician Performance Initiative (CPPI). These letters contain raw and relative performance scores for physicians on 16 quality measures based on claims data from United Health, Anthem Blue Cross, and Blue Shield PPOs as well Anthem Blue Cross and Blue Shield HMOs. The letters do not contain the underlying data.
CMA continues to have concerns about the accuracy and integrity of the data used to establish these scores and the potential use of these scores by payors for pay-for-performance, economic profiling, or tiered networks. In order to address some of CMA’s concerns and to improve the quality of the data, CPPI has again provided a reconsideration process that physicians can use to verify their data.
CMA urges all physicians who receive the letter to request their data from CPPI and verify its accuracy. (Instructions for doing so are available here.) The deadline to request your patient data is August 28, but CMA urges you to do so as soon as possible. Physicians must submit their corrected data by September 11.
In checking the data, physicians should check whether CPPI correctly listed the patient name, physician name and specialty, and whether the physician performed the procedure. If you did not perform the procedure, make sure to indicate why the particular metric does not make sense as a measurement of the quality of care you provided to your patient.
We understand that this may be a time-consuming process, but it is critical for physicians to take the time to verify their data. If you do not raise concerns now, payors could use this data in the future to adjust your reimbursements and change the flow of patients to your practice.
Once you have completed the reconsideration process, please also take CMA’s online survey to tell us what, if anything, was wrong about your performance scores. This step is important to ensure that CMA has the information needed to advocate on your behalf.
CMA is working with CPPI to identify individual CMA physicians impacted by this report so that we can assist members with the data reconsideration process.
CMA is also hosting a webinar on this issue to help physicians understand the program and what they need to do to ensure the accuracy of the data being used to grade their performance. The 45-minute webinar is scheduled for Wednesday, August 5 at 12 pm. Registration is free for members.
Contact: Armand Feliciano, 916/551-2552 or afeliciano@cmanet.org.
7. Health Reform Bill Would Require IOM to Study Socioeconomic
Factors behind Regional Medicare Cost Variations
Late Friday, House Democrats appear to have come to an agreement on one of the most contentious issues holding up the House health reform bill—how to reduce regional disparities in Medicare payments.
Blue Dog (fiscally conservative) Democrats from Midwestern states wanted to dramatically change the Medicare physician payment formula to reward physicians who practice in “low spending” regions and cut payments to physicians in higher cost states, like California. They had proposed creating a Medicare “value index” that would have cut payments to California physicians by an average 10 percent and disproportionately harmed access to care in California and other states.
CMA aggressively fought the proposal, arguing that it is unacceptable to consider such fundamental changes to the Medicare geographic payment formula without further study to understand what accounts for the differences in medical practice costs by region.
California has some of the highest rents and wages in the country. CMA believes that lowering payments in high cost areas without adjusting for practice costs, would undermine quality care and drive more physicians out of these high cost areas.
California also has an extremely diverse patient population. Numerous studies have found that low-income and ethnically diverse patients have a lower health status and can be more costly to treat for a variety of reasons. CMA told Congress that changing Medicare law based solely on cost data without a more thorough understanding of the socioeconomic factors could harm patients and penalize those who care for the most complex cases.
The new agreement between House Democratic leaders and the Blue Dog Democrats sets aside the “value index” concept and gives the Institute of Medicine (IOM) one year to complete a study on regional variations in costs and quality of care, including an analysis of practice costs and patient socioeconomic and health status factors, and make recommendations to the Department of Health and Human Services. DHHS would then propose new payment rates taking based on the IOM recommendations. Absent objection from Congress, those rates would automatically take effect the following year.
The proposal also calls for a second study on ways to reward value and quality care over quantity. The second report would be due by September 2011.
With this agreement, the House may vote on the health reform legislation as early as this week. The Senate has already announced that they would not take a floor vote until after the August recess.
CMA is asking physicians to meet with their Representatives while they are in their home districts during the August recess. CMA will have talking points prepared next week after we review the final House bill.
Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.
8. Help Make the CMA Foundation Annual Dinner a Success
The CMA Foundation’s 13th Annual President’s Dinner and Awards Gala is October 18 in Anaheim, during CMA’s annual meeting. Proceeds will support CMA Foundation, a charitable organization that links physicians and their communities to raise awareness about important public health issues.
Honored at the dinner will be incoming CMA President J. Brennan Cassidy, M.D., and the recipients of the CMA Foundation leadership awards.
Even if you will not be able attend, please consider placing an ad in the dinner program. The foundation is a nonprofit charitable organization, and all ads are tax deductible.
Tickets will go on sale soon. For more information, visit the CMA Foundation Website.
Contact: Nela Lee, 916/779-6639 or nlee@thecmafoundation.org.
9. Don't Forget: Red Flag Rules Take Effect August 1
UPDATE: FTC announced today (7/29/09) it would again delay enforcement of the Red Flag Rules. The new effective date is November 1, 2009. Read more here.
The Federal Trade Commission (FTC) has implemented a new regulation known as the Red Flag Rule, which requires "creditors" – including many physicians – to develop and implement identity theft detection and prevention programs by August 1, 2009. CMA has published a toolkit to help physicians and their staff understand the scope and requirements of the Red Flag Rule.
The toolkit provides guidance on designing and implementing an identity theft detection and prevention program for the physician practice. It also explains how the Red Flag Rule interacts or overlaps with other legal requirements governing the safeguarding of patient information, particularly the federal Health Information Portability and Accountability Act (HIPAA).
CMA's Red Flag Rules Toolkit is free to members at the members-only website.
Members can also view CMA's Red Flag Rules webinar on-demand in the webinar archives at the members-only website.
Contact: Samantha Pellon, 916/551-2872 or spellon@cmanet.org.
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Members-only codes are needed to take advantage of these discounts. Visit the CMA website or call the member service center at 800/786-4262 (4CMA) to get your code.
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Kid Smart enrollments. MedicAlert provides 24-hour emergency identification and family notification services. Click here for more details.
Click here for more information on your membership benefits.
Contact: CMA's member help line, 800/786-4CMA or memberservice@cmanet.org.
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