You are reading the online version of the Health News Update—subscribe now to have it delivered to your inbox every month.

CCH Health NetNews

January 2017

In This Issue

Welcome to Health News Update

On the Front Lines

Trump Administration previews health care plans with Executive Order, regulatory freeze


Compliance

$1.7B returned to Medicare Trust Funds in 2016

Companies must implement ePHI safeguards or risk extensive HHS oversight

Compliance hot topics: Voluntary repayment, AKS and CMPL, organizational security values, the Pareto Principle


Reimbursement

Hospitals receive instructions on preparing for MOON sighting in March

Strike balance in proposals to modify private physician contracts, KFF warns


Coding

AMA Coding Guidance: November 2016 CPT® Assistant


Reform

Congress intended for HHS to make ACA risk corridor payments each year to insurers

Court’s halt of Medicaid expansion request may span presidential administration change


Life Sciences

Product use intent key component in tobacco product regulation

ANDA applicants see some clarity with RLDs


How can being right today put you at risk tomorrow?

Confidently manage risk and drive compliance with ComplyTrack.

What you don't know can hurt you. Proactively assess, understand, communicate and, most importantly, mitigate risk across your entire enterprise with our complete end-to-end solution.

www.complytrack.com

About This Newsletter

To access IntelliConnect or MediRegs full text documents you must be a subscriber to the related IntelliConnect or MediRegs products:

The first time you click on a link you will be taken to the standard IntelliConnect login page or MediRegs login page, where you will need to enter your ID and password. Subsequent links will take you directly to the desired document.


Contact Us

For all customer service inquiries, please call 800-449-9525.


Welcome to Health News Update

We have updated and consolidated our Health NetNews emails into one of the most comprehensive sources of professional health care information and solutions. Covering important monthly developments in the areas of Health Care Compliance, Medicare and Medicaid Reimbursement, Coding, Health Reform, and Food and Drug Law, we hope this resource provides useful content and features.

You can use the convenient links in the left column to navigate between topics, find related resources, and learn more about products and solutions from Wolters Kluwer.

Can you place a dollar amount on your reputation?

Effectively manage and mitigate IS risk with Information Security Assessment Manager from Wolters Kluwer.

Get clear visibility into your information security risk and remediation stance with our complete solution, combining the industry-leading power of ComplyTrack with the broadest set of controls and frameworks in the industry.

www.wolterskluwerlb.com/health/product/isam

On the Front Lines

Trump Administration previews health care plans with Executive Order, regulatory freeze

By Kathryn S. Beard, J.D.

One of President Donald Trump’s first official acts was signing an Executive Order (EO) titled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.” The EO, signed January 20, 2017, says it is the Trump Administration’s policy to seek the prompt repeal of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). It further gives executive agencies and departments the authority and discretion, to the maximum extent permitted by law and in compliance with the Administrative Procedure Act (APA), to waive, defer, grant exemptions from, or delay the implementation of many ACA provisions and requirements. That same day, Reince Priebus, the president’s chief of staff, instituted a regulatory freeze pending review to all executive agencies and departments.

Executive Order. The EO, which has the full force of law but is subject to judicial review, states that while the Trump Administration is seeking the prompt repeal of the ACA, the Executive Branch must ensure that the law is being implemented efficiently and take steps to minimize the economic and regulatory burdens of the ACA. It also previews the Administration’s view of what an ACA replacement may look like, directing executive agencies and departments to make preparations to give states more flexibility and control of the health care market, including encouraging health insurers to provide policies across state lines.

ACA burdens. Under the EO, the HHS Secretary and the heads of all other executive departments and agencies with authorities and responsibilities under the ACA—that is, the Departments of Labor and the Treasury—are directed to use all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose (1) a fiscal burden on any state; or (2) a cost, fee, tax, penalty, or regulatory burden on any of the following:

  • Individuals,
  • Families,
  • health care providers,
  • health insurers,
  • patients,
  • recipients of health care services,
  • purchasers of health insurance, or
  • makers of medical devices, products, or medications.

Practically speaking, this means that the Secretaries of HHS, Labor, and the Treasury are required, as permitted by law and in accordance with the APA, to do everything in their power to end implementation of the ACA, including provisions covering the individual and employer mandates, Medicaid expansion, contraception coverage, changes to Medicare payments, the medical device tax, and more. The EO, however, does not repeal the ACA, which must be done by the legislature, and major changes will require notice-and-comment procedures to revise regulations.

State flexibility, open market. The remainder of the EO deals with making agency preparations for certain changes to health care programs and the health insurance market that the Trump Administration will likely try to include in future laws to replace the ACA or otherwise reform health care and insurance. First, executive departments and agencies are directed to exercise available authority and discretion to provide states with cooperation and greater flexibility in implementing health care programs. This would affect state Medicaid programs and Children’s Health Insurance Programs (CHIP), including section 1115 waivers. The change aligns with policies announced by Trump during the campaign and presidential transition period, as well as those of Congressional leaders and Trump’s nominee for HHS Secretary, Rep. Tom Price (R-Ga) (see Health and Life Sciences Implications of the Trump Administration, December 28, 2016).

Department and agency heads with responsibilities relating to health care or health insurance are also required to encourage development of “a free and open market in interstate commerce” for both health care services and health insurance. According to the EO, the goal is to achieve and preserve maximum options for patients and consumers. Selling health insurance across state lines has been a talking point for Trump, as well as House Speaker Paul Ryan (R-Wis) and other members of Congress. However, this directive could also impact the Federal Trade Commission (FTC) and Department of Justice (DOJ), for example, as four of the nation’s five largest health insurers are pursuing mergers (see DOJ lawsuit steps in between Aetna-Humana and Anthem-Cigna mergers, July 21, 2016).

Regulatory freeze. In a January 20, 2017, memorandum to the heads of executive departments and agencies, Priebus communicated Trump’s plan to manage the federal regulatory process while the Administration is in its early days. With exceptions for regulations subject to statutory or judicial deadlines, and for emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters, there is an immediate regulatory freeze pending review in effect. The freeze affects regulations and guidance documents that (1) have not yet been sent to the Office of the Federal Register (OFR); (2) have been sent to the OFR but not yet published in the Federal Register; and (3) have been published in the Federal Register but have not yet taken effect.

Regulations that have not yet been sent to the OFR should not be sent until Trump’s appointed or designated department or agency head, or his or her designee, reviews and approves the regulation. Regulations that have been sent to the OFR but not yet published should be immediately withdrawn from the OFR consistent with OFR procedures, and then similarly reviewed and approved before being resubmitted for publication.

Regulations that have been published in the Federal Register but have not yet taken effect will have, as permitted by law, a temporary 60-day postponement of the effective date—the earliest effective date for such regulations will now be March 21, 2017. The purpose of the postponement is to review questions of fact, law, and policy raised by each regulation. Agency and department heads are further directed to consider proposing further notice-and-comment rulemaking for regulations that have been delayed to review questions of fact, law, or policy. According to the memorandum, regulations that do raise substantial questions of law or policy after review require notifying the Office of Management and Budget (OMB) and taking further appropriate action in consultation with the OMB Director. Executive Order, January 20, 2017


The Journal of Health Care Compliance is the smart way to stay up-to-date on current and emerging compliance issues and avoid inquiries, penalties, and losses.


Compliance

$1.7B returned to Medicare Trust Funds in 2016

By Anthony H. Nguyen, J.D.

During fiscal year (FY) 2016, HHS Office of Inspector General (OIG) investigations resulted in over 690 civil actions, which include false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters. In a joint report highlighting accomplishments of the Health Care Fraud and Abuse Control (HCFAC) program in FY 2016, the Departments of Health and Human Services (HHS) and Justice also noted that the investigations led to over 765 criminal actions against individuals or entities engaged in crimes related to Medicare and Medicaid. Overall, $3.3 billion was returned to the federal government, with $1.7B going to the Medicare Trust Funds (Health Care Fraud and Abuse Control Program Annual Report for FY 2016, January 19, 2017).

Background. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) (P.L. 104-191) established the national HCFAC program under the joint direction of the Attorney General and HHS, acting through the Inspector General. HCFAC is designed to coordinate federal, state and local law enforcement activities with respect to health care fraud and abuse. Money is appropriated from the Medicare Hospital Insurance Trust Fund to an expenditures account to finance anti-fraud activities. The funds are "available until expended" and the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) extended permanently the yearly increases to the expenditures account based upon consumer price index changes.

CMS, under the ACA, is authorized to suspend Medicare payments to providers during an investigation of a credible allegation of fraud. CMS also has authority to suspend Medicare payment, if reliable information of an overpayment exists.

Enforcement actions. In FY 2016, the Department of Justice (DOJ) opened 975 new criminal health care fraud investigations. Federal prosecutors filed criminal charges in 480 cases involving 802 defendants. A total of 658 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2016, DOJ opened 930 new civil health care fraud investigations and had 1,422 civil health care fraud matters pending at the end of the fiscal year. In FY 2016, the FBI investigative efforts resulted in over 555 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 128 health care fraud criminal enterprises.

For instance, Regent Management Services L.P., a Galveston, Texas skilled nursing facility company, paid $2.7 million to settle civil False Claims Act (FCA) allegations that it received kickbacks from various ambulance companies in exchange for rights to Regent’s more lucrative Medicare and Medicaid transport referrals (see Medical institutions now accountable for ambulance swapping kickback deals, December 1, 2015). The alleged remuneration included patients at facilities receiving free or heavily discounted ambulance transports that Regent would otherwise have been financially responsible for at higher Medicaid rates. According to the HCFAC report, the settlement was the first in the nation to hold accountable the medical institution as opposed to the ambulance in a "swapping" arrangement. As a part of settlement, Regent also entered into a five-year corporate integrity agreement with the OIG.

In another example, Genentech, Inc. and OSI Pharmaceuticals, LLC paid $62.6 million to resolve civil FCA allegations that they caused the submission of false claims to the federal health care programs when making misleading statements to market and sell the drug Tarceva (see Drug companies pay $67M for Tarceva® misrepresentation, false claims allegations, June 7, 2016). The FDA approved Tarceva to treat certain patients with non-small cell lung cancer or pancreatic cancer. However, studies revealed that Tarceva was not generally effective for the treatment of nonsmall cell lung cancer for certain patients. Only those patients who had either never smoked or whose cancer contained a certain protein mutation were likely to respond. Despite these findings, the companies promoted Tarceva for use in patients in which the drug was not likely to be effective. The report also noted other criminal and civil investigations in a wide range of areas, including clinics, device companies, physicians, health maintenance organizations, home health providers, and hospitals and health systems, among other entities.

Monetary impact. As a result of investigations and actions, the federal government won or negotiated over $2.5 billion in health care fraud judgments and settlements. In FY 2016 over $3.3 billion was returned to the federal government or paid to individuals. Of this amount, the Medicare Trust Funds received transfers of approximately $1.7 billion during this period, and an additional $235.2 million in Medicaid money was transferred separately to the Treasury. The return on investment for the HCFAC program from 2014 to 2016 was $5 returned for every $1 expended.

Sequestration. The report noted some challenges in FY 2016 were a consequence of sequestration of $20.6 million in HCFAC funding, which impacted the program’s ability to combat fraud and abuses against Medicare, Medicaid, and other health care programs.


Companies must implement ePHI safeguards or risk extensive HHS oversight

By Lindsey Firnbach, J.D.

HHS recently entered into a resolution agreement with MAPFRE Life Insurance Company of Puerto Rico (MAPFRE) regarding possible noncompliance of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In the settlement, MAPFRE agreed to pay a resolution amount of $2.2 million and implement a corrective action plan (CAP). The CAP requires MAPFRE to take substantial measures to protect electronic protected health information (ePHI) and prevent future potential noncompliance with HIPAA. The settlement indicates that companies must safeguard ePHI or may be subject to extensive oversight from HHS.

Results of an investigation. On August 5, 2011, a USB data storage drive containing ePHI was stolen from the IT department of MAPFRE. This USB was left overnight, and contained PHI of over 2,000 individuals. HHS, after receiving a report from MAPFRE of this incident, initiated an investigation to determine if MAPFRE had complied with HIPAA. The investigation indicated that MAPFRE did not comply with HIPAA by impermissibly disclosing the ePHI, as well as failing to conduct assessments and implement measures to safeguard the ePHI. As a result, HHS and MAPFRE agreed to enter into the settlement in which MAPFRE is required to pay a significant fine and be subject to vast oversight.

The corrective action plan. The CAP agreed to by the parties requires MAPFRE to assess current procedures, implement plans, and report said plans and compliance to HHS. This plan is to last three years and, within the first 220 days, MAPFRE must conduct a risk analysis of ePHI security risks and vulnerabilities, and must develop a complete inventory of all equipment that will be incorporated in the risk analysis. This analysis must be sent to HHS for approval and must be changed if not approved by HHS.

Risk analysis. After HHS approves the risk analysis, MAPFRE must develop a risk management plan, which also is subject to HHS approval. Under the plan, MAPFRE must conduct an assessment of potential risks and vulnerabilities annually and must document any security measures implemented or being implemented. Additionally, MAPFRE must: (1) develop a process to assess any environmental or operational changes that affect security of ePHI, (2) revise the process if suggested by HHS, and (3) implement this process.

Policies and procedures. MAPFRE is required to review and, if necessary, revise its policies and procedures based on the findings of the risk analysis. These policies and procedures must conform to HIPAA requirements, are subject to the review and approval of HHS, must be implemented within sixty calendar days of HHS approval, and must be reviewed annually. All members of the MAPFRE workforce, as well as all business associates, must receive these new policies and procedures and sign a compliance certification. If any member or associate fails to comply with these polices, MAPFRE must notify HHS in writing and must not involve any member or associate if he or she has not signed the certification.

Training. HHS also must be provided with training materials for all members of the MAPFRE workforce, and upon approval of the training materials, MAPFRE is required to provide training to all members. These training materials must be reviewed annually, and MAPFRE shall not provide ePHI access to any member that refuses to sign a certification.

Implementation report. Finally, MAPFRE must send HHS an implementation report annually that contain an attestation by an owner or officer of the company stating that all the requirements have been met by all MAPFRE locations. The report must contain the training materials, a description of the training sessions, and an attestation by an owner or officer of a company that all persons are receiving training and signing training certifications and that all members have completed the initial training. The report must also include a summary of any reportable events as well as the status of any corrective and preventive action.

If MAPFRE fails to meet the requirements of the CAP, HHS can move forward with the imposition of a civil money penalty. This agreement indicates that noncompliance with HIPAA regarding ePHI may result in broad oversight by HHS, and suggests that a company must take precautions to prevent noncompliance of HIPAA. Resolution Agreement, January 11, 2017


Compliance hot topics: Voluntary repayment, AKS and CMPL, organizational security values, the Pareto Principle

The January/February 2017 issue of the Journal of Health Car Compliance feature articles explore voluntary repayments, anti-kickback safe harbors and civil money penalty (CMP) regulations, developing and implementing security practices, and developing and implementing an effective compliance program.

Voluntary replacement rules. The voluntary repayment rules have changed the compliance landscape for anyone submitting claims to Medicare Part A and Part B, according to the article written by Alice G. Gosfield titled Voluntary Repayments: The Physician Perspective. Many commentators have addressed what the rules say, but, there is much to be found in the implications of the rules. Although there is less than one page of text in the Federal Register, based on only 200 comments received, the regulators spent 25 pages in the Federal Register discussing their responses to comments made. There are real distinctions between the significance of these rules for Part A providers, who generally have their own in-house billing personnel, and physician practices, which often outsource those functions. This article provides a summary of the rules and then addresses six specific implications of the voluntary repayment rules from the physician practice perspective.

CMP regulations and AKS safe harbors. In the article, OIG Finalizes Wide-Ranging Amendments to Civil Monetary Penalties Regulations and Anti-Kickback Statute Safe Harbors, authors Thomas Beimers, Jonathan Diesenhaus, Sheree Kanner, Craig Smith, Helen Trilling, Ronald Wisor, Eliza Andonova, Andrew Furlow and David Thiess address the HHS Office of Inspector General’s release of two long-awaited final rules on December 7, 2016, related to its enforcement of the Anti-Kickback Statute (AKS) and Civil Monetary Penalties Law (CMPL). The final regulations adopt new safe harbors to the AKS and new exceptions to the Beneficiary Inducement CMPL, some that were added by the Affordable Care Act (ACA) and other statutes, and some created by OIG in its discretion. These new protections seek to promote the objectives of health reform by reducing patient costs and improving access to better-quality care. The final regulations also provide new guidance on the factors OIG will consider in imposing penalties and exclusions under the CMPL, including aggravating and mitigating factors, and implement several new CMPL provisions added by the ACA. Together, the final regulations make wide-ranging changes to key fraud and abuse laws that affect nearly every sector of the health care industry.

Developing cultures of security. In his article, Employee Compliance and Developing Cultures of Security in the Health Care Industry, Mark Lanterman explains that security experts often point to employees as being the weakest links in upholding and maintaining information security measures, this attention tends to be directed toward them. As an example, he says, think of that unfortunate post-it note with the quickly written message “PASSWORD: 12345” stuck to the front of a computer as you walk by someone’s untidy cubicle. With this kind of inattention to best security practices, it seems that an obvious answer is that the root of the security problem is at the employee-level. In spite of high-profile security breaches, there remains a pervasive attitude of “that wouldn’t happen to me.” Though perhaps most felt at the employee-level, this attitude evidences more expansive and engrained organizational values regarding security. This is especially true in the health care sector as patient data is now primarily stored in a digital form. While security is everyone’s responsibility, all levels must work to convey organizational security values and promote employee compliance. With this in mind, the health care industry can optimize both reactive and proactive security practices at all levels.

Compliance program effectiveness. Kashish Chopra, discusses the Pareto Principle in leveraging dynamic compliance program effectiveness. The Pareto Principle, also known as the 80/20 Rule, generally states that 20 percent of your activity is responsible for 80 percent of your outcomes. The Pareto Principle is valuable to compliance officers in that, theoretically, 80 percent of a compliance program’s effectiveness comes from 20 percent of compliance department actions. Further, compliance officers can identify the 20 percent of tasks that their limited resources should focus on to attain 80 percent of their compliance program’s ongoing effectiveness. Applying the Pareto Principle to compliance program management, compliance officers must prioritize the tasks associated with running both day-to-day compliance operations as well as building strategic compliance program growth. Compliance programs, structured to embody the seven elements, can leverage the Pareto Principle to prioritize and focus annual work plan tasks to capture the greatest impact in combating compliance program risks.


Health Care Fraud and Abuse Compliance Manual will make you aware of your crucial obligations and options—each chapter describes what the law requires, how it applies in context, and what the penalties are for failure to comply.


Back to Top

Reimbursement

Hospitals receive instructions on preparing for MOON sighting in March

By Kayla R. Bryant, J.D.

By March 8, 2017, hospitals must provide the Medicare Outpatient Observation Notice (MOON) to Medicare beneficiaries receiving observation services on an outpatient basis for more than 24 hours by at least 36 hours after these services begin. The hospital must provide an oral explanation of the standardized written notice. The MOON is provided to clarify patient status, the reason the hospital chose not to admit the patient, and the possible financial consequences of remaining in observation status. CMS has issued an update to Chapter 30 of Pub. 100-04, the Medicare Claims Processing Manual, to prepare for required use of the MOON, effective February 21, 2017, although CMS guidance states that hospitals are required to provide the MOON no later than March 8, 2017.

Observation. The way observation status is managed has evolved over the past few years. Patients are financially impacted by being placed on observation status, which is billed under Medicare Part B. Part B billing may result in greater out-of-pocket costs, even though the services provided may be very similar to services provided to inpatients and billed under Part A. CMS first set forth the Two-Midnight Rule, which provided that inpatient admission is reasonable if an inpatient stay spans two nights or if the admitting practitioner reasonably expects that the patient would need to receive care for two nights (see As observation regulation grows, ambiguity in application hinders NOTICE requirements, October 4, 2016). The Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) (P.L. 114-42) was passed in an effort to improve beneficiary understanding of their care.

MOON. CMS originally proposed the MOON as a way to standardize notice for all applicable hospitals and critical access hospitals (CAHs). According to the instructions, hospitals must only deliver the MOON to patients receiving outpatient observation services for over 24 hours, but a hospital may deliver the MOON before the 24 hour mark has passed. This flexibility was designed to allow for any state law that requires notice within a 24 hour period, and to allow a hospital to use discretion on when to provide hospital paperwork to beneficiaries to reduce confusion.

Delivery and format. The MOON must be two pages, unless inclusion of permitted additional information results in additional pages. A standardized, written MOON must be explained to the patient orally. Although the use of alternative formats, such as videos, are at a hospital’s discretion, a staff member must be available to answer questions. The standardized form is available in English and Spanish. If a beneficiary or representative is unable to understand the notice, the hospital must use procedures to ensure comprehension.

The beneficiary or representative must sign and date the MOON. A MOON may be delivered and signed electronically. If the beneficiary refuses to sign, and no representative is available, the staff member must annotate the form with the date and time of delivery and sign it. If a representative is not physically present to receive delivery, the hospital or CAH may provide the information over the phone, and annotate the form to reflect delivery. A hard copy must be mailed the same day via a method that can provide signed verification, or a copy may be faxed or emailed if the hospital systems meet privacy and security requirements. CMS Transmittal, Transmittal 3695, January 20, 2017


Strike balance in proposals to modify private physician contracts, KFF warns

By Sheila Lynch-Afryl, J.D., M.A.

Policy makers considering proposals to ease Medicare private contracting rules should strike a balance between ensuring doctors and practitioners receive fair payment and helping beneficiaries face predictable and affordable medical care, a Kaiser Family Foundation (KFF) issue brief concluded. While proponents of such proposals may tout increased physician autonomy, easing private contracting rules could lead to "an unraveling of financial protections" currently in place

Options for charging Medicare patients. Currently, physicians and practitioners have three options for charging patients in traditional Medicare—by registering as a participating provider, a nonparticipating provider, or an opt-out provider who privately contracts with Medicare patients. Participating providers (see Social Security Act (SSA) Sec. 1842(h)(1)) agree to accept the Medicare physician fee schedule amount as payment in full for all Medicare services, and patients are liable for a 20 percent coinsurance. Nonparticipating physicians may choose, on a service-by-service basis, to charge Medicare beneficiaries higher fees, up to a limit of 115 percent of the fee schedule amount (see SSA Sec. 1848(g)).

Opt-out providers with private contracts may charge Medicare patients any fee they feel is appropriate, as agreed upon in the contract, and Medicare does not cover or pay for such services (see SSA Sec. 1802(b)). Less than 1 percent of physicians in clinical practice chose to opt out of Medicare in 2016.

Patient protections. Before providing services, physicians must inform a beneficiary in writing that they opted out of Medicare (see 42 C.F.R. Sec. 405.415). The physician is prohibited from entering into a private contract when the beneficiary needs emergency or urgent care. Also, a physician must opt out of Medicare for all of his or her Medicare patients and for all services provided to them. A two-year opt-out period is automatically extended for two-year periods.

Proposals to change Medicare private contracting. The issue brief described various proposals to modify private contracting in Medicare, including legislation introduced by Rep. Tom Price (R-Ga): (1) allowing physicians to contract more selectively, on a patient-by-patient or service-by-service basis; (2) allowing patients and physicians to seek Medicare reimbursement for an amount that Medicare would normally pay under the physician fee schedule; and (3) allowing patients and physicians to seek reimbursement from supplemental insurance, such as Medigap policies and employee-sponsored retiree coverage.

KFF noted the arguments in favor of these proposals. First, lifting restrictions on private contracting would allow physicians to receive higher payment for services, which could offer practitioners greater autonomy. Second, the proposals could increase the number of physicians willing to accept Medicare patients because they could charge higher fees to some Medicare patients. Third, the proposals could reduce beneficiary out-of-pocket costs because beneficiaries entering into private contracts would be able to seek Medicare reimbursement for part of the physician’s bill.

KFF raised concerns, however. For example, liberalizing private contracting rules could increase costs for beneficiaries. In addition, some beneficiaries could lose access to affordable services, particularly for less common physician specialties.


What does it really cost you to get it wrong?

Drive coding compliance and accurate reimbursement with Coding Suite.

When every reimbursement and coding decision you make is backed up by the most complete and up-to-date regulatory information, organized to support your entire workflow, improved compliance, efficiency, and accuracy will follow.

www.wolterskluwerlb.com/health/product/coding-suite

Back to Top

Coding

AMA Coding Guidance: November 2016 CPT® Assistant

By Paul Clark

Coding Brief: Reporting Code 40650 in the Emergency Department

Current Procedural Terminology® (CPT®) code 40650, Repair lip, full thickness; vermillion only, has a 90-day global period assigned by the Centers for Medicare and Medicaid Services (CMS). Although this procedure is often per-formed in the emergency department (ED) by emergency physicians, it is not typical for the ED physician to pro-vide the full 90-day global follow-up patient care, which typically includes three office visits. If ED physicians or other providers in the ED setting are not planning to provide the follow-up care, which is included in the payment for code 40650, they should append modifier 54, Surgical Care Only, when reporting the code to indicate that they have only performed the surgical procedure.

New Codes for Health-Risk Assessments (96160, 96161)

For CPT® 2017, two new codes (96160 and 96161) have been created to replace code 99420. Code 99420 was previously used to report the administration and interpretation of a health-risk assessment. However, assessment of the patient’s caregiver for the benefit of the patient is also an important service, which was not captured in the previous code. To address this, beginning in 2017, new codes 96160 and 96161 will distinguish between the focus of the assessment: the patient and the caregiver. In addition, the new codes have been moved from the Evaluation and Management section to the Medicine section to align with other assessment services. A new parenthetical note following code 99409 has been created to instruct users not to report additional alcohol and/or substance abuse screening services in conjunction with either code 96160 or 96161, as these new health risk assessment codes include substance abuse screening.

Hypoglossal Nerve Stimulator

New Category III codes have been established in the CPT® 2017 code set to report implantation of a hypoglossal nerve stimulation system that includes the placement of a chest wall sensor. Previously, this entire service was reported with code 64999, Unlisted procedure, nervous system (see CPT Assistant September 2011). This article provides an overview of these changes.

Therapy for Incompetent Veins

The CPT® 2016 code set includes a number of CPT codes to report the treatment of venous disease, such as varicose veins and incompetence of truncal veins (e.g., great and small saphenous veins), including: direct puncture sclerotherapy with or without local anesthesia (36468, 36470, 36471); stab phlebectomy under local anesthesia (37765, 37766); laser or radiofrequency thermal ablation utilizing tumescent anesthesia (36475, 36476, 36478, 36479); and surgical vein ligation and/or vein stripping under monitored or general anesthesia (37700-37761, 37780-37785). Effective January 1, 2017, two new CPT codes (36473, 36474) will be added to this family of codes to allow reporting of a new procedure utilizing a combination of both mechanical and chemical techniques under local anesthesia to achieve venous occlusion. Before 2017, these procedures were reported with unlisted code 37799, Unlisted procedure, vascular surgery.

Frequently Asked Questions

An article by the CPT® Editorial Panel answers questions posed to the panel regarding the subjects of Musculoskeletal System, Ophthalmology, Special Dermatological Procedures, and Physical Medicine and Rehabilitation. The responses answer multiple questions including:

  • What is the appropriate code to report the excision of heterotopic ossification of soft tissues, left knee area?
  • What are the specific elements of a complete visual system examination as part of the comprehensive ophthalmological services?
  • What is the appropriate code to report when narrowband UVB (NB-UVB) phototherapy is performed by a registered nurse after the patient applies mineral oil to her skin lesions?

To view these articles via Coding Comply, search from the Search Code Sets tab in Coding Comply for any of the codes listed above, view the Related Documents by clicking on the paper icon next to the code, then select the article. To view these articles in The Coding Suite, go to the CPT® Assistant Archives folder and in the Search field within this folder and enter “November 2016.”


Who do you depend on for answers when others depend on you?

Keep pace with the ACA—using the insights and tools found only in the Health Reform KnowlEDGE™ Center from Wolters Kluwer.

View every evolving aspect of health reform from the unique vantage point of our single-source solution. Every feature, every link, every individual bit of coverage lets you launch directly into detailed information and analysis on the key areas—and latest developments—most important to you.

www.healthreformknowledge.com


Back to Top

Reform

Congress intended for HHS to make ACA risk corridor payments each year to insurers

By Jeffrey H. Brochin, J.D.

The risk corridor program, as one of three premium stabilization programs under the Patient Protection and Affordable Care Act (ACA) (P. L. 111-148), was intended to reimburse insurers that covered high-risk individuals on an annual basis during the three-year period beginning January 1, 2014, the U.S. Court of Federal Claims ruled. Congress created the temporary risk corridors program to provide relief to insurers who, in the first three years of insurance market reforms, underestimated their allowable costs and accordingly set their premiums too low.

Background: When Congress enacted the ACA it provided benefits and risks for health insurance companies. Insurers would have access to a market of previously uninsured individuals, likely resulting in more customers, but because insurers lacked the data with which to predict the needs of the newly-insured individuals, they would be hampered in their ability to price qualified health plans to reflect the medical costs associated with the new and untested marketplace. To mitigate the risk faced by insurers, the ACA established three premium stabilization programs including a temporary risk corridors program. The Congressional Budget Office had assumed that collections under the program would equal payments to insurers and that therefore the program would be ‘budget neutral.’ However, after it was determined that certain policy changes affecting the 2014 market rules would lead to unexpected losses, HHS announced in October, 2015 that it would prorate risk corridors payments owed to insurers.

An Oregon insurer that provided health insurance on Oregon’s exchange in 2014 and 2015 calculated that it was entitled to payments of $7,884,886.15 for 2014. Because the risk corridors payments owed to insurers ($2.87 billion) greatly exceeded the risk corridors charges due from insurers ($362 million), HHS announced that each insurer entitled to a risk corridors payment for 2014 would receive only 12.6% of what it was owed. The Oregon insurer also estimated that for 2015 it was owed a risk corridors payment of approximately $15 million. In September, 2016, HHS announced that based on its preliminary analysis, all 2015 benefit year program collections would be used towards remaining 2014 benefit year risk corridors payments, and that no funds would be available at that time for 2015 benefit year risk corridors payments. The insurer filed suit in February, 2016 alleging that HHS did not fully pay the risk corridors payments to which it was entitled under the ACA and it also claimed consequential damages. The U.S. moved to dismiss the complaint contending that the court lacked subject matter jurisdiction because the insurer did not have a claim for presently due money damages and that the court lacked jurisdiction to grant the consequential damages. The court granted the motion as to the consequential damages but denied the motion as to the money damages.

Money-mandating provisions. The court found that section 1342 of the ACA and the regulations implementing the payment requirements were money-mandating provisions that entitled the insurer to seek money damages from the U. S. They referenced the statutory provisions that HHS "shall pay" specified amounts to eligible qualified health plans, and the implementing regulation which used the language that HHS "will pay" specified amounts to issuers of eligible qualified health plans. The U.S. contended that the court’s jurisdiction was limited to claims for presently due money damages, and that the insurer had not established that its damages were presently due because it had not yet obtained declaratory judgment for an amount. The court rejected the argument and found that the insurer’s entitlement to unpaid risk corridors payments was not dependent upon the insurer first obtaining a declaratory judgment. Furthermore, the court noted that the requirement that money damages be presently due was more a ripeness issue than one of jurisdiction.

Lack of payment deadline. The U.S. disputed the ripeness of the claim because HHS had not yet determined the total amount of payments due to the insurer, nor to other insurers under the risk corridors program. The argument was based on the fact that neither the ACA nor the implementing regulation expressly included a deadline for HHS to make risk corridors payments to insurers. In the absence of an explicit deadline, they asserted, HHS could defer payment to insurers until the conclusion of the three-year risk corridors program, or to whenever it had the funds available to make full payment. Because HHS was not under any present obligation to make risk corridors payments, and would not know the total amount owed to each insurer until 2017, the insurer’s claim was premature. This raised the primary issue as to whether risk corridors payments were due annually or at the end of the three year period.

Determining Congressional intent. Although the ACA did not explicitly provide a deadline for HHS to make risk corridors payments to insurers, it did contemplate that HHS would calculate risk corridors payments separately for each year of the program by incorporating the language directing HHS to "establish and administer a program of risk corridors for calendar years 2014, 2015, and 2016," as opposed to mandating a program for calendar years 2014 through 2016. In addition, Congress required HHS to calculate ‘payments in and payments out’ for each year of the program. Taken together, the court found a basis for reliable statutory construction as to Congressional intent approving a risk corridors payment program that provided for annual payments.

The court noted that Congress created the temporary risk corridors program to provide relief to insurers who, in the first three years of insurance market reforms underestimated their allowable costs and accordingly set their premiums too low. If the program did not provide for prompt compensation to insurers upon the calculation of amounts due, insurers might lack the resources to continue offering plans on the exchanges, and if enough insurers left the exchanges, one of the goals of the ACA, namely, the creation of effective health insurance markets, would be unattainable. Health Republic Insurance Company v. U.S., No. 1:16-cv-00259-MMS, January 10, 2017


Court’s halt of Medicaid expansion request may span presidential administration change

By Bryant Storm, J.D.

North Carolina’s request to expand its Medicaid program under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) may be decided by incoming Trump Administration officials after a federal district court granted a temporary restraining order (TRO) preventing HHS from acting on the request for 14 days or until the court takes further action. The temporary halt was initiated by a complaint filed by state Senate Leader Phil Berger (R) and state House Speaker Tim Moore (R).

Complaint. The complaint alleges the incoming North Carolina administration, led by Governor Roy Cooper (D), unlawfully worked together with the outgoing Obama Administration to expand the state’s Medicaid program. In addition to violating state law requiring general assembly approval of Medicaid expansion, the complaint alleges, the Medicaid expansion request would "saddle North Carolinians with hundreds of millions of dollars of annual Medicaid expenses." The lawsuit, which does not name Cooper as a defendant, asserts that he has exceeded his executive authority.

Next steps. Before the court are HHS’ motion to vacate the TRO and the North Carolina lawmakers’ motion for preliminary and permanent injunctive relief. The court heard additional motions on Friday, January 20, 2017. Berger v. Burwell, No. 5:17-cv-25-FL, January 14, 2017


Law, Explanation and Analysis of the Affordable Care Act, 2014 Update delivers clear, credible analysis on the continuing effects of the most sweeping law passed by Congress in the past 50 years.


Introducing Health Reform Topic Pages

Wolters Kluwer has created a new online resource, Topic Pages, now available on wklawbusiness.com! Topic Pages are developed by Wolters Kluwer editorial experts, who select relevant topics using data collected from our users, the industry, and search patterns from the open web. These pages are curated by our leading experts to ensure they contain the most important and timely content Wolters Kluwer has available on the topics that concern our customers the most.

You can access Topic Pages by clicking on the website above. Once at the website, click on the “Explore Practice & Subject Areas” drop down menu and select “Health Reform.”

Alternatively, you can click on one of the links below. From these pages you can see all other Topic Pages listed under “Related Topics.”

Health Reform topics: http://www.wklawbusiness.com/subjects/health-reform

Wolters Kluwer would appreciate your comments on the pages themselves and your suggestions for other topics you would like to see covered in the future. Please send your feedback to Nicole.stone@wolterskluwer.com.


Back to Top

Life Sciences

Product use intent key component in tobacco product regulation

By Kayla R. Bryant, J.D.

Products made or derived from tobacco will be regulated as a drug, device, or combination product if: (1) the product is intended for the diagnosis, cure, mitigation, treatment, or prevention of any disease; or (2) the product is intended to affect the body in a way that is different from the commonly marketed effects of nicotine. The FDA believes that this new rule will clarify regulatory status, reduce ambiguity, and improve efficiencies as well as clarify intended uses of tobacco products for consumers.

Intended use. The FDA issued a Proposed rule (80 FR 57756) in September 2015 outlining its intention to consider a product’s intention when deciding how to regulate a tobacco-derived product (see Regulation as a medical product would simplify development, marketing, September 25, 2015). The FDA will look to any relevant source when determining intended use, including promotional statements as well as circumstances and context surrounding distribution and sale of the product. As proposed and finalized, the “commonly marketed” prong will consider the claims of nicotine effects included in marketing materials in cigarettes and smokeless tobacco prior to March 21, 2000.

Response to comments. Multiple commenters stated that the FDA should not be permitted to regulate electronic nicotine delivery systems (ENDS) as medical products because the FDA is not permitted to regulate nicotine in cigarettes as a drug. The FDA pointed to the definitions of drug and device in the federal Food, Drug and Cosmetics Act (FDC Act) (21 U.S.C. §301 et seq.), noting that these definitions include articles intended for the diagnosis and treatment of disease. Although some commenters believed that there was no need for additional clarity, the FDA noted that it receives frequent inquiries on this matter. The FDA also clarified that smoking cessation claims are evidence of intended use and these claims may render a product subject to medical product authority.

Costs to manufacturers. The FDA assumes that manufacturers will incur a one-time “learning cost” as well as some additional one-time costs incurred through reviewing and revising communications, including labeling and promotional materials. The mid-point estimate totaled about $1.7 million. Final rule, 82 FR 2193, January 9, 2017


ANDA applicants see some clarity with RLDs

By Anthony H. Nguyen, J.D.

Abbreviated new drug application (ANDA) applicants were offered additional guidance and recommendations on the usage of reference listed drug (RLD) in applications to the FDA. In two related draft guidance documents ANDA applicants were provided information on identifying and assessing factors when seeking approval of a generic combination product and how to identify and use the known RLD.

Background. The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98–417), known as the Hatch-Waxman Act, allows an ANDA applicant to rely on the FDA’s previous finding that a reference listed drug (RLD) is safe and effective as long as the ANDA applicant demonstrates that the proposed generic drug and the RLD are the same with respect to active ingredients, dosage form, route of administration, strength, and certain labeling.

Combination products. The general principles apply to products submitted in ANDAs, including drug-device combination products. A generic drug-device combination product classified as therapeutically equivalent to the RLD can be expected to produce the same clinical effect and safety profile as the RLD under the conditions specified in labeling. The FDA recognized that an identical design is not always feasible and, in certain instances, differences in the design of the user interface for a generic drug-device combination product as compared to the RLD may exist without precluding approval of the generic combination drug-device product under an ANDA. The draft guidance will assist potential applicants who plan to develop and submit an ANDA to seek approval of a generic combination product that includes both a drug constituent part and a delivery device constituent part.

The draft guidance document guidance provides general principles, including recommendations on threshold analyses, which are intended to assist potential applicants in the identification and the assessment of differences in the design of the user interface of a proposed generic drug-device combination product when compared to the user interface for its RLD. The FDA also provides recommendations on the design and conduct of comparative use human factors studies that may help applicants determine whether design differences identified between the proposed generic drug-device combination product and its RLD would preclude approval as an ANDA.

Approved product references. The FDA provides potential ANDA applicants guidance information on how to identify a “reference listed drug,” “reference standard,” and the “basis of submission” in ANDA submissions. According to the agency, a variety of factors has led to industry confusion on what these terms mean and how an ANDA applicant should use them.

Most notably, the discontinued marketing of many approved drug products and the FDA’s identification of reference standards with the RLD symbol (“+”) in the printed version, and under the “RLD” column in the electronic version, of FDA’s “Approved Drug Products with Therapeutic Equivalence Evaluations” (Orange Book). The draft guidance explains what these terms mean and clarifies the differences. In addition, the draft guidance provides recommendations on how to accurately use these terms in an ANDA, how persons can request FDA designation of an RLD, and how persons can request FDA selection of a reference standard. Notice, 82 FR 4890, and Notice, 82 FR 4894, January 17, 2017


Back to Top

Wolters Kluwer Legal & Regulatory U.S., a leading global provider of intelligent information, connects healthcare, legal and business professionals to timely, authoritative content, and specialized solutions.

Privacy Policy | © 2017 CCH Incorporated and its affiliates. All rights reserved.

health.wolterskluwerlb.com mediregs.com