EisnerAmper Blog

An EisnerAmper Health Care Services Blog

Medicare Continues Effort to Reduce Fraud and Abuse

(Medicare and Medicaid) Permanent link

April 18, 2014

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

McLafferty_MikeA new frontier in the battle against fraud, waste and abuse was opened up with the widely reported April 9 release of Medicare payment data on 888,000 physicians and other clinicians who received $77 billion in Medicare Part B payments in 2012. The data also compares 6,000 types of services and procedures and provides the names of physicians who collect millions of dollars a year from Medicare, which may be a program-integrity red flag depending on their specialty and the degree of treatment their patients require.

The Centers for Medicare and Medicaid (CMS) is hailing the transparency because Medicare is taxpayer funded and because it opens doors for researchers to address important policy questions, such as why there are different spending trends by service codes and providers and geography.

One CMS chart shows the 10 specialties with the highest Medicare allowed payments per physician. They collectively made up 57% — $44 billion — of the total Medicare Part B payments included in the new data set. According to the website, the top specialties are:

  • Hematology/oncology: The average amount collected from Medicare in 2012 was $463,844 per physician. The number of physicians was 7,373 and the average number of unique types of items, services or procedures billed was 24.
  •  Radiation oncology: The average Medicare allowed amount per doctor was $458,222, for 4,135 physicians who billed for 17 unique types of items, services or procedures.
  •  Ophthalmology: $429,657 on average was paid to each of 17,067 physicians who billed for 14 unique types of items, services or procedures.
  •  Medical oncology: $390,992 for each of 2,612 physicians who billed for 21 unique types of items, services or procedures.
  •  Rheumatology: $333,000 on average paid to each of 4,053 physicians who billed for 17 unique types of items, services or procedures.

The data provided by CMS to the public will provide more transparency to taxpayer funds spent on health care. Health care providers should review the information as it pertains to their practice and them individually. This will assist them with any questions from their patients as they are providing needed medical services to them.

A link to the CMS report can be found here.

Names of Health Plans on State Exchanges Confuse Consumers

 Permanent link

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

McLafferty_MikeA number of insurers sell their plans under names like Select, Preferred, Premier, Exclusive, Enhanced, Essential, Essential Plus, Prime, Ultimate and Deluxe. Multiple offerings from one company may have the same benefits and cover the same share of a consumer’s costs, but go by different names.

Sometimes the names assigned to a plan can be misleading. For example, a plan named “exclusive” can be interpreted by the consumer to mean the plan has comprehensive coverage with major access to medical providers. However, on most exchanges a plan described as “exclusive” typically means the consumer has a “limited” choice of doctors or hospitals.

America’s Health Insurance Plans, a trade group, said that companies did not sell their plans based on one or two-word names. Insurers display online detailed information about their benefits, premiums, deductibles and copayments data that consumers need to make a decision.

Health care providers should provide counsel to their patients regarding their insurance coverage. This service can best be provided at the time of enrollment to avoid any misunderstandings of financial responsibility. Health insurance is complicated even for consumers who have had it for years. Many consumers seeking coverage under the Affordable Care Act (ACA) have not had insurance, and for them, the choices can be particularly challenging.

The ACA helps consumers compare health plans by classifying them in four categories, from least to most generous: bronze, silver, gold and platinum. In some markets, however, consumers have dozens of choices in the same category. 

ICD-10 Implementation Delayed Until October 2015

 Permanent link

April 3, 2014

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

Clark_NancyOn April 1, President Obama signed into law H.R.4302  the Protecting Access to Medicare Act of 2014.  This bill was introduced to the House of Representatives on March 26, with the primary intent of repealing the 1997 budget cap calculation called the Sustainable Growth Rate (SGR) and replacing it with a .5 percent increase for each of the next five years, during which Medicare will transition to an alternate payment model.

The law now extends Medicare’s SGR current rate to April 15, 2015 and delays other Medicare deadlines. The law also postpones ICD-10 implementation until October 1, 2015, and restricts the Centers for Medicare and Medicaid Services (CMS) from acting without congressional approval.

Primary arguments cited for delaying the ICD-10 implementation included lack of readiness surrounding clinical documentation, vendor solutions, and systems testing.  With this in mind, a huge opportunity has now opened up for those who were not previously prepared.  Sufficient time now exists for adequate ICD-10 implementation and training.

The delay of ICD-10 was not a primary consideration in passing the law.  According to Kelly Driscoll, Director of Business Development at e2o Health , “It took the Senate nearly five hours Monday to debate and approve a bill that would temporarily fix the SGR and also delay ICD-10 one year…During that time not a single senator made mention of the ICD-10 provision included in the bill…”

Regardless of whether the intent of the enacted law was to delay ICD-10 implementation, ultimately, all providers and hospitals will need to convert to the new coding system.   Many providers, clearinghouses and payers have already begun implementation.  Providers need to take advantage of the increased time frame and review their implementation plans and training schedules.   If ICD-10 implementation and training plans are not in place, now is the time to make them.  

Home Health Reimbursement Reductions by Medicare

(Medicare and Medicaid) Permanent link

March 28, 2014

By Steven Bisciello, MBA, CMPE

Bisciello_StevenAccording to recent Medicare news, home health care agencies will be reimbursed at a lower rate from Medicare beginning in November 2014.

The reimbursement rate currently provided by Medicare will be reduced by 14 percent over the next four years, the maximum reduction allowed under the Affordable Care Act.

While the owners of home health care agencies state that they fully expected some form of a reimbursement reduction, they did not expect or prepare for the cut to reach 14%.  Some owners state that this reduction will result in their profitability margins crossing over to the negative side and ultimately result in the closure of their agencies over this time.  Senior citizens and advocates for senior citizens fear that this reduction will result is less availability of home health aides to care for them.  One such advocate, AARP, has responded to this announcement by lobbying Medicare to reconsider this reimbursement reduction to ensure senior citizens are able to access home health care.

According to a Bloomberg Businessweek article, in previous years the federal government reports that Medicare “spent more than $18 billion to send nurses, therapists, and health aides to the homes of about 3.5 million Americans too sick or frail to leave the house.”  The same article also reports that from “2004 to 2012 the number of home health agencies in the U.S. increased by 57 percent.” And that these for-profit companies “have been paid well in excess of their costs” and have “added an average 4,500 jobs a month in 2013.”

However, according to data from the Department of Labor, this past December 2013 the home health industry recorded a large reduction of home health positions.  3000 jobs were eliminated, the industry’s first such decline in some time.

In response to this reduction, the home health industry, led by the Partnership for Quality Home Healthcare, has hired a lobbyist to “press Congress to roll back at least some of the Medicare cuts."
In the interim, we have recommended to our Home Health Care clients that they take a hard look at their business model to see if it is sustainable in a soon-to-be high-volume, low-margin industry as well as ensure they have a cash-flow monitoring plan put into place immediately.

Health Insurance Standards Modified

 Permanent link
March 21, 2013

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

McLafferty_MikeThe administration issued new standards last week for health insurance to address complaints from consumers. The complaints are that the cost of insurance is too high, and the choice of physicians, hospitals and prescription drugs are limited. The administration will require insurers to provide a link from healthcare.gov  to a current list of providers accepting new patients and the cost of prescription drugs.

Administration officials will review which products can be sold in the federal marketplace for 2015. There will be less reliance on state insurance regulators and private groups that accredit health plans.

Federal officials also said that insurance plans must not discriminate against people with “significant health needs.”  The administration plans to analyze co-pays and requirements for “prior authorization.”

Consumer advocates welcomed the standards, but insurers and employer groups complained of burdensome overregulation. The federal government sets standards for insurers in the federal exchange, which serves about two-thirds of the nation’s population.

Office of Civil Rights – HIPAA Privacy Investigation

 Permanent link

McLafferty_MikeMarch 12, 2014

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

Skagit County, Washington, has agreed to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy, Security, and Breach Notification Rules.  Skagit County agreed to a $215,000 monetary settlement and to work closely with the Department of Health and Human Services (HHS) to correct deficiencies in its HIPAA compliance program. Skagit County is located in Northwest Washington, and is home to approximately 118,000 residents. The Skagit County Public Health Department provides essential services to many individuals who would otherwise not be able to afford health care.

The Office of Civil Rights (OCR) opened an investigation of Skagit County upon receiving a breach report that money receipts with electronic protected health information (ePHI) of seven individuals were accessed by unknown parties after the ePHI had been inadvertently moved to a publicly accessible server maintained by the County.  OCR's investigation revealed a broader exposure of protected health information involved in the incident, which included the ePHI of 1,581 individuals. Many of the accessible files involved sensitive information, including protected health information concerning the testing and treatment of infectious diseases.  OCR's investigation further uncovered general and widespread non-compliance by Skagit County with the HIPAA Privacy, Security, and Breach Notification Rules.

Skagit County continues to cooperate with OCR through a corrective action plan to ensure it has in place written policies and procedures, documentation requirements, training, and other measures to comply with the HIPAA Rules.  This corrective action plan also requires Skagit County to provide regular status reports to OCR.

Hospitals to Invest in New EMR Purchase

 Permanent link

March 7, 2014

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

By 2016, nearly half of U.S. large hospitals (200 or more beds) will be making a new EMR purchase finds a new report from Orem, Utah-based research firm KLAS. Only 22% of those buying decisions may be undecided according to an announcement from the firm.

KLAS interviewed 277 providers from large hospitals across the country, who indicated which vendors they are considering, why they are considering those companies, and what their timeframes are for making their buying decisions.

In those cases where providers are looking to make a new EMR purchase, 34% said they have already selected a vendor while 44% are strongly leaning toward a specific vendor. EMR vendors compared in the KLAS report include Allscripts, Cerner, Epic, McKesson, MEDITECH and Siemens.

The last round of EMR purchases was fueled by meaningful use requirements and enticing reimbursements. The next round is being driven by concerns about outdated technology and health system consolidation.

EisnerAmper is an independent member of PKF North America.
PKF North America is an independent member of PKF International.