Key Regulatory Updates for the Healthcare Industry

The Baker Newman Noyes Healthcare Advisory Group is always working to stay current on regulatory and legislative updates. In addition to our previous analyses of The Centers for Medicare & Medicaid Services’ (CMS) inpatient and outpatient rule updates, we have provided several updates on key regulatory proposals impacting providers in the coming years below. These updates include:

Summary of Proposed Patients Over Paperwork Rule

Stakeholders have provided comments and concerns relative to Evaluation and Management (E/M) service documentation requirements. Recommendations from specialists related to documentation requirements for the history and exam portion range from no action, to simplifying or reducing, to eliminating documentation requirements all together. Medical decision-making is another area of concern as to whether or not there should be increased reliance on medical decision-making and/or the time spent with patients.

CMS has indicated that the purpose of the proposed changes is to reduce the administrative burden while improving care coordination, health outcomes and patients’ ability to make decisions about their own care. In addition, the proposed rules suggest ways of streamlining documentation requirements to focus more on patient care and to modernize payment policies that include the latest technologies.

At this time, changes would apply to office/outpatient visit Current Procedural Terminology (CPT) codes only (CPTs 99201-99215). Details related to program integrity and ongoing refinement are anticipated to be developed over time.

Topics included in the Proposed Patients Over Paperwork Rule:

Eliminating prohibition on billing same-day visits by practitioners of the same group and specialty

  • Currently, the Medicare Claims Processing Manual prohibits MACs from paying two E/M office visits billed by a physician (or physician of the same specialty from the same group practice) for the same beneficiary on the same day. The proposed rule eliminates this policy, recognizing the changing practice of medicine while reducing administrative burden.

Eliminating extra documentation requirements for home visits (CPTs 99341-99350)

  • Currently, documentation must support the medical necessity of a home visit made in lieu of an office/outpatient visit. CMS is proposing to remove the requirement that the medical record must document the medical necessity of furnishing the visit in the home rather than in the office.

Providing choices in documentation

  • Current E/M documentation guidelines are outdated compared to current medical practices. The alternatives would allow practitioners in different specialties to choose to document the factor(s) that matter most to their clinical practice.
  • Currently, the 1995 E/M Guidelines or 1997 E/M Guidelines are utilized for determining levels of service.  CMS is proposing to allow practitioners to choose one of the following as a basis to determine the appropriate E/M level of service:
    • Medical Decision Making
      • Medical decision-making is part of the current framework.  The change would allow providers to select their level of service using only the medical decision making component.
    • Time
      • Currently, time or duration of visit may be used as the governing factor in selecting the appropriate E/M visit level (only when counseling and/or coordination of care accounts for more than 50% of the face-to-face physician/patient encounter). CMS is proposing to allow practitioners the option of using time as the single factor in selecting the visit level and documenting the E/M visit, regardless of whether counseling or care coordination comprises the majority of the visit. Under this framework, total time would be documented and would eliminate the requirement in which counseling and/or care coordination accounts for more than 50% of time.

Removing redundancy in E/M visit documentation

  • CMS specifies in the proposed rule a change to Documentation Guidelines: The Review of Systems (ROS) and/or Past Medical, Family and Social History (PFSH) may be recorded by ancillary staff or on a form completed by the patient. To document that the physician reviewed the information, there must be a notation supplementing or confirming the information recorded by others. Under current practice, History of Present Illness (HPI) must be collected and documented by the provider.

CMS is proposing new, single blended payment rates for E/M services

Applies to new and established patients (Level 2-5):

single blended payment rates for E/M services

Other areas of interest in the proposed rule include the following:

  • Remote pre-recorded services;
  • Brief Communication Technology-based Service (virtual check in);
  • Add-on code to be reported with an E/M service to describe additional resource costs for specialties for whom E/M visit codes make up a large percentage of their total allowed charges; and
  • Add-on code to be reported with an E/M service when the visit involves primary care focused services.

Summary of proposed changes for 2019 impacting home health agencies and home infusion suppliers

On July 2, 2018, CMS released a proposed rule that, if finalized, would increase overall payments to Home Health Agencies (HHAs) by approximately 2.1% or $400 million for calendar year 2019. A key provision related to this increase includes reducing the standardized episode payment timeframe from 60 to 30 days within the Home Health Prospective Payment System. Reimbursements would no longer be based on the volume of services provided to beneficiaries, but would rather focus on the beneficiaries’ unique care needs. Beginning in 2020, the Patient-Driven Groups Model (PDGM) would make case-mix payment adjustments based on categories such as diagnosis, functional level and comorbidities rather than on the volume of services provided. This proposed payment change is aligned with Medicare’s pledge to reward value over volume.

Under the proposed rule, CMS would allow HHAs to report the cost of remote patient monitoring as allowable costs on the organization’s Medicare Cost Report (MCR). CMS anticipates that by allowing such costs to be reflected on the HHAs’ MCR, HHAs would be encouraged to adopt remote monitoring technologies, as it is seen as having a positive impact on patients’ health outcomes. CMS is also proposing to define remote patient monitoring in the regulation for the home health benefit, which involves using digital tools to remotely collect data such as blood pressure, heart rate, weight, etc.

As required by the Bipartisan Budget Act of 2018, CMS proposes to implement temporary transitional payments for home infusion therapy beginning January 1, 2019 and continuing through December 2020. Under the 21st Century Cures Act, a new benefit category for coverage of home infusion therapy services was created, with full implementation of a home infusion benefit beginning in 2021. Included in the benefit category for coverage are certain associated professional services with home infusion therapy, remote monitoring services, and training and education. CMS is seeking comment on this home infusion benefit to aid in the development of the permanent payment system. The proposed rule also outlines standards for home infusion therapy suppliers and accrediting organizations of these suppliers.

Summary of proposed physician fee schedule changes

Shared Savings Program – quality measures

CMS is proposing to remove ten current quality measures, and add three new quality measures to the Medicare Shared Savings Program, resulting in a net decrease of seven quality measures. The changes are proposed to further the Meaningful Measures Initiative, which was implemented to increase focus on only the most essential measures relating to patient outcomes and high-quality care.

Appropriate Use Criteria (AUC)

CMS is proposing to add three scenarios that would qualify for the hardship criteria in the AUC program. CMS is also proposing to add Independent Diagnostic Testing Facilities (IDTFs) as an applicable setting under the program, and to allow AUC consultations to be performed by auxiliary personnel.

Quality Payment Program

CMS is proposing to include several new clinician types in the definition of a Merit-Based Incentive Payment System (MIPS) eligible clinician. They are also proposing to add the “Number of Covered Professional Services” as an element in the determination of whether clinicians meet the low-volume threshold for participation in MIPS. Providers meeting one or two of the elements for low-volume determination would also have the option to participate in MIPS.

Summary of CMS reports on insurance exchanges and the individual health insurance market

On July 2, 2018, CMS released three reports that, taken together, demonstrated a significant decline in the enrollment in individual health insurance plans, particularly unsubsidized plans, beginning in plan year 2016, further declining in plan year 2017. The three reports were the Early 2018 Effectuated Enrollment Snapshot, Exchange Trends Report, and Trends in Subsidized and Unsubsidized Enrollment. For plan year 2017, there was a 20% decline in the enrollment in unsubsidized plans, and a three percent decline in subsidized plan enrollment. During this same period, average monthly insurance premiums increased by 21 percent.

In 2017, in order to mitigate the enrollment decline in individual health insurance plans, CMS introduced the following changes to the Federal platform insurance Exchanges:

  • Expanded role of health insurance agents and brokers; and
  • Enhancement of eligibility rules for Special Enrollment Periods (SEPs), thereby improving risk pools.

As a result of these changes, enrollment in Federal and state-based Exchanges experienced a slight increase from 2017 to 2018 (for those individuals receiving a subsidy). However, during this time, average monthly premiums increased another 27 percent. This effected the average federal premium subsidy, which increased 39 percent from $373 in 2017 to $520 in 2018, for an estimated total year-over-year increase in federal subsidies of more than $17 billion. Based on the increase in average monthly premiums, it is estimated that unsubsidized market enrollment declined dramatically in 2018.

CMS concluded that many Americans are being priced out of the health insurance market, including those that are employed and earning too much to qualify for tax credits, and those having no access to employer-sponsored coverage.

Summary and analysis of CMS early 2018 report of effectuated enrollment changes

  • For coverage to be considered effectuated, individuals generally must pay the first month’s premium for the plan.
  • Nationally, 10.6 million individuals enrolled through Federal and State-Based Exchanges as of February 2018 (it is worth noting that 11.8 million individuals had plan selections during the 2018 Open Enrollment period, indicating a 9% drop off rate between Open Enrollment and February 2018).
  • Effectuated Enrollment increased by 5% (Feb 2017 – Feb 2018) nationally.
  • Effectuated Enrollment increased by 3% (Feb 2017-Feb 2018) in New England overall:
    • RI and CT increased 9%, MA increased by 5%; and
    • ME and VT decreased by 2%, and NH decreased by 9%.

Be aware of historical enrollment trends

  • Historical trends have shown us that effectuated enrollment tends to decrease throughout the year due to increasing individual plan premiums.

historical enrollment trends

Changes in monthly insurance premiums

  • CMS reports increasing monthly insurance premiums for Federal and State-Based health insurance exchange plans.
  • Nationally, the average monthly premium increased from $471 to $597, a 27% increase.
  • New England states experienced similar increases, with the average monthly premium increasing from $438 to $559 (a 28% increase):
    • NH (↑61%), ME (↑38%), CT (↑26%), MA (↑20%), RI (↑16%), VT(↑6%)
  • Average monthly premiums vary greatly around the country.  Iowa has the highest average monthly premium at $988, while Massachusetts carries the lowest at $383.

Advanced Premium Tax Credits (APTC)

  • As monthly premiums have continued to increase, the average monthly amount of APTC has also increased significantly (39% over 2017).
  • APTC is a tax credit you can take in advance to lower your monthly health insurance premium. When you apply for coverage in the Marketplace, you estimate your expected income for the year. If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium.
  • Nationally in 2017, 84% of enrollees utilized APTC.  This increased to 87% in 2018.

If you would like to discuss any of these topics further, contact your BNN healthcare advisor at 800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

Looking for more?