EisnerAmper Blog

An EisnerAmper Health Care Services Blog

The Department of Justice sues Anthem and Aetna

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July 22, 2106

By Michael J. McLafferty, CPA, MBA, FACHE, FHFMA, FACMPE

Anthem and Aetna representatives have been meeting with members of the Department of Justice (“DOJ”) for months. The purpose of these discussions was to develop business deals that would satisfy the DOJ’s antitrust concerns.  The announcement that the DOJ plans to sue both firms indicates that the configuration of the current business deals has not accomplished the goal of reducing antitrust concerns.

Anthem is in the process of a $48 billion merger with Cigna. Aetna is working towards a $37 billion merger with Humana. If these mergers go forward, the current 5 largest insurance companies would be reduced to the 3 largest insurance companies. The DOJ believes these mergers will raise prices and reduce access to care for consumers.

Three of the 4 companies are in the process of fighting the DOJ lawsuit. Cigna said that it is reviewing its options before it decides if it should enter a challenge to the DOJ.

The current administration has consistently focused on the need for competition in the insurance industry. We have observed that premiums are lower for consumers in the state exchanges where there is insurance competition.


Merit-Based Incentive Payment System

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May 18, 2016

Michael J. McLafferty CPA, MBA, FACHE, FACMPE, FHFMA  

The Centers for Medicare and Medicaid (“CMS”) issued a proposed rule featuring information related to the Merit-Based Incentive Payment System (“MIPS").

The following is an overview of some key areas: 

  1. The targeted effective date is 1/1/2017.
  2. Eligible providers who report using claims-based reporting will have an increased threshold from 50% to 80%. 
  3. Eligible providers who report using a registry will have an increased threshold from 50% to 90%. 
  4. Most Medicare-enrolled providers will be considered eligible for MIPS.
  5. The one exception to a provider being eligible is to have fewer than 100 Medicare patients and bill less than $10,000 in 2017.
  6. One scorecard will replace the current 3 quality-reporting programs of (1) meaningful use, (2) physician quality reporting system (“PQRS”) and (3) the value-based modifier (“VBM”).
  7. Providers’ performance can result in either an incentive payment or a penalty, either of which could range from 4% to 9% per year.
  8. There are 4 new reporting categories:
    • Quality – replaces PQRS – 50% of total performance score.
    • Advancing clinical information – 25% of total performance score.
    • Value-based modifier – 10% of total performance score.
    • Clinical practice improvement activities – 15% of total performance score. 
  9. The new clinical practice improvement activity category relates to practice improvement activities (e.g., expanded practice access, population management, care coordination, etc.). 

The MIPS program will have a significant and enduring impact on how health care is delivered in our society. We will continue to update you on any changes to this important proposal. 

Proposed Rule Continues Shift to Value-Based Care

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April 22, 2016

By Nancy Clark, CPC, COC, CPB, CPMA, CPC-I

On April 18, the Centers for Medicare and Medicaid Services released a fact sheet  on the proposed rule for the 2017 Hospital Inpatient Prospective Payment System (“IPPS”).  If adopted, the changes would affect patients discharged on or after October 1, 2016.  

IPPS reimburses hospitals for services using a national base payment rate that is adjusted for the geographic market and patient’s condition. The current objectives include moving towards a measurable set of quality goals and no longer focusing on the quantity of care given to patients.

Proposed changes would increase payment by .9% for those acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting (“IQR”) program and are meaningful electronic health record (“EHR") users. However, those who do not successfully participate in the Hospital IQR Program and do not submit quality data will receive a reduction in reimbursement.

Highlights of the proposed rule include: 

Hospital Acquired Conditions (“HAC”) Reduction Program
  • This program creates an incentive to reduce hospital-acquired conditions by imposing a negative adjustment to the poorest performing hospitals. Proposed measures would change the existing ranking system to a continuous scoring methodology and incorporate additional patient safety standards.       
Hospital Readmissions Reduction Program (“HRRP”)
  • Under this program, a reduction is applied to the hospital’s base operating Diagnosis-Related Group (“DRG”) payment for excess readmissions with selected medical conditions, including heart failure and attacks, pneumonia and chronic lung disease, hip and knee replacement and artery bypass grafts.        

Notification Procedures for Outpatients Receiving Observation Services

    • The Notice of Observation Treatment and Implications for Care Eligibility act (“NOTICE”), enacted in August of 2015, requires facilities to notify individuals who are receiving observation services for more than 24 hours. Under NOTICE, the patient will be given the Medicare Outpatient Observation Notice (“MOON”) and both the reason for and possible financial and post-hospitalization consequences of his observation status will be explained. 

IQR Program

  • IQR is a pay-for-reporting program that was established by the Medicare Prescription Drug, Improvement and Modernization Act.  As part of the proposed modifications, additional electronic clinical quality measures (“eCQMs”) will be adopted and the validation process will be changed. 

The proposed rule can be found in the Federal Register Here

ICD-10 Code Changes

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April 18, 2016
By Melissa Pizor, COC, CPC, CPCO, CPMA, CPRC 

On October 1, 2015, we in the health care industry transitioned to the new ICD-10 code set. And just in case you thought everything was now settled…it’s not; be ready for more changes. In March 2016, 1,900 code changes to ICD-10-CM were proposed by stakeholders at the ICD-10 Coordination and Maintenance Committee meeting, in addition to several more changes to the ICD-10-PCS code set, which itself already has more than 3,600 new codes approved for October 1, 2016 implementation.

Typically, the ICD-9-CM and ICD-10 code sets are updated annually; however it’s been 4 years since the last update occurred. Both code sets received only limited updates between 2012-2014 to encompass new technologies and diseases. The partial code freeze ends October 1, 2016. The majority of the changes-to-come were requested by specialty groups such as obstetrics and gynecology.


There are also 1,900 new ICD-10-CM codes proposed for the October 2017 release. That number includes 313 deletions and 351 revised codes. These codes are posted on the Centers for Disease Control and Prevention National Center for Health Statistics website.

A few codes will be released early, most notably the Zika virus code (A92.5), with even more codes proposed for the 2017 release.


There are 75,625 ICD-10-PCS codes for fiscal year 2017. That number includes 3,651 new codes and 487 revised codes. Many of these changes revolve around cardiac coding and providing options that were available in ICD-9 but are missing in ICD-10. The cardiovascular system section has 3,549 additions.

The complete list of proposed new and revised codes for ICD-10-PCS is available on the CMS.gov  website. The final rule, with codes to be implemented October 1, 2016, will be released August 1, 2016.

Health Care is a Hot-Bed for Employment

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April 13, 2016

By Steven Bisciello, CMPE

Some very interesting statistics were recently released by the U.S. Bureau of Labor Statistics (PDF) for the health care industry’s first 3 months in 2016.  

These statistics show that the health care industry is on pace to break 2015’s number of jobs created in the economy.  In 2015, the health care industry added 438,800 jobs.  In only the first 3 months of 2016, the industry has already created 118,000 jobs!  Newly created health care jobs also account for 1 out of 6 total jobs that were created last month in the entire U.S. economy

Another interesting statistic is that the new jobs created in the health care industry reside predominantly on the outpatient/ambulatory side vs. hospital-based. These statistics support the continued trend towards outpatient/ambulatory care in efforts to continue to lower costs, reduce admissions and readmissions to hospitals, etc.   

Breaking it down further, 27,400 jobs created last month alone were for positions at physician practices, ambulatory centers and outpatient centers. Of those 27,400 jobs created last month, 35% of those were created at home health agencies (both skilled and unskilled home health care).

It is also worthy to note that while the job boom was not as prevalent in hospital settings, hospitals in the U.S. still added 10,200 jobs in the month of March alone. Also, hospital payrolls have increased, even amidst the continued hospital/hospital system consolidation in the past 12 months.  

The sector within the health care industry where we did not see growth was in the residential care facilities (nursing homes, etc.). This sector actually experienced a reduction in jobs; about an 800 job reduction.


2016 OIG Work Plan Areas of Focus

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March 3, 2016

Clark_NancyBy Nancy Clark, CPC, CPOC, CPB, CPMA, CPC-I

The 2016 Office of Inspector General (“OIG”) Work Plan indicates the areas that will be targeted in the near future.  Be aware of these highlights from the physician portion of the work plan.

Physician home visits 

Since January 2013, Medicare has paid $559 million to physicians for evaluation and management home visits. These physicians are required to document the medical necessity for a home visit. The OIG will review documentation to see if payments for these services are “reasonable and necessary.”   

Prolonged services  

Current Procedural Terminology (“CPT®”) codes for prolonged evaluation and management services may billed when a physician spends additional time with a patient and that service is medically necessary. The Medicare Claims Processing and CPT® manuals include requirements that must be met in order to bill these services. These requirements include spending additional time that is reasonable for the specific encounter and the patient’s condition.  CMS  indicates that it is “rare and unusual” to bill these codes, and will be reviewing documentation to ensure those codes reimbursed have the appropriate supporting documentation. See more

Anesthesia for non-covered services 

Claims for anesthesia services will be cross-walked to ensure that a medically necessary claim for a related service was also submitted for the patient on the same date of service and at the same location. CMS will not reimburse anesthesia services for procedures that are not considered “reasonable and necessary.” 

Referring and ordering physicians

CMS requires that physicians and nonphysician practitioners be Medicare-enrolled in order to legally refer or order services, supplies and durable medical equipment for a Medicare beneficiary. The OIG will review claims for certain supplies and services to ensure that the referring or ordering provider on the claim is enrolled in the Medicare program.

Histocompatilbility laboratories

From March 2013 through September 2014, histocompatibility laboratories (facilities that perform tissue-typing and other advanced cellular services) reported $131 million in reimbursable costs.  The OIG will review these costs to ensure that they are related to the care of the beneficiaries, and are “reasonable, necessary, and proper.”

Physicians should review their documentation to ensure that the above criteria are met, or risk losing revenue for improperly documented services.

CMS 60-Day Repayment Final Rule

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February 29, 2016

McLafferty_MikeBy Michael J. McLafferty, CPA, MBA, FACHE, FHFMA, FACMPE  

CMS issued its final rule for the 60-day repayment regulation on February 12, 2016. The final rule requires the timely refund of any overpayment identified by a provider. The effective date of the final rule is March 14, 2016.

Most health care attorneys believe the final rule is a fair approach to this issue. The various health care business groups will monitor how each Medicare contractor implements the final rule.

Highlights of the final rule are as follows: 

  1. Any Medicare payment received or retained by a provider organization that they are not entitled to is an overpayment. This could be receiving a payment in error from a Medicare contractor.
  2. The 60-day period starts after a provider has identified and quantified the overpayment amount using reasonable due diligence.
  3. To exercise reasonable due diligence you need to conduct proactive and reactive investigations.
  4. Most investigations are expected to be complete in 8 (6 months to investigate and quantify the amount, plus the 60-day repayment period).
  5. If CMS determines that no reasonable due diligence has taken place, then the 60-day period starts at the date of identification.
  6. If a repayment issue is based on a systemic problem, the provider has to go back 6 years to calculate the repayment amount. The proposed rule called for a 10-year look back period, so the Final Rule was less punitive.
  7. All report and refund forms plus procedures should be used by the Medicare contractor who made the overpayment to the provider.


EisnerAmper is an independent member of Allinial Global.
EisnerAmper is an independent member of EisnerAmper Global.