Highlight on Kentucky: What’s for breakfast? Country ham and a side order of Obamacare

While Kentucky’s Democrat Governor Steve Beshear and Republican U.S. Senator Mitch McConnell jousted about the Affordable Care Act (ACA) (P.L. 111-148) at the Kentucky Farm Bureau Federation’s annual Country Ham Breakfast at the Kentucky State Fair, Republican state Senator Ralph Alvarado surprisingly advocated expanding Kentucky’s successful state exchange (Kynect) to other states to help pay for Kentucky’s Medicaid expansion.

Breakfast Fun

According to Kentucky Health News (KHN), Beshear told a breakfast crowd of 1,500  that the share of uninsured Kentuckians has been reduced by 56 percent through “our aggressive embrace of federal health reform. And we’ve done so without jeopardizing our budget. Oh, I know, I know the political rhetoric you hear from health-reform opponents who say it’s costing us thousands of jobs and we’re gonna bankrupt our state. Well, as I’ve said a lot of times, everybody is entitled to their own opinion but nobody is entitled to their own facts.”

Beshear cited a state-funded study by Deloitte Consulting, which found that Kentucky created 12,000 new jobs in the first full year of health care reform, with over 40,000 new jobs predicted by 2021. Those figures, however, do not reflect job losses at hospitals, which, according to KHN, blame Medicaid managed-care companies and health reform for their layoffs.

Beshear also cited a Deloitte prediction of a positive $820 million impact over eight years on state and local governments. That prediction, according to KHN, is based upon Deloitte’s belief that the Medicaid expansion is increasing health-care payrolls and generating more tax revenue. However, KHN notes that in 2021, Deloitte said the expansion would cost more than it actually brings in.

When it was his opportunity to speak, McConnell responded that “[t]he governor and I have debated Obamacare at this breakfast the last two or three years. I’ll spare you my rebuttal other than to say higher premiums, higher co-payments, higher deductibles, lost jobs and a big bill is coming to the state government for Medicaid expansion in a couple of years.”

Success of Kynect

According to a Deloitte client spotlight, in just one year, Kentucky’s Cabinet of Health and Family Services (CHFS) and Deloitte designed and deployed Kynect, which logged over 10,000 applications for coverage in less than two days after launch and averaged 1,000 enrollments per day in the first few weeks. Since then, more than 421,000 Kentuckians have enrolled in new health coverage and 2,045 business have completed applications and are eligible to offer coverage to employees.

Exporting Kynect

At a recent legislative committee meeting, Alvarado, a physician, suggested that Kynect become a regional exchange and charge other states for its services, using the profit to pay for Kentucky’s Medicaid expansion.

According to KHN, Alvarado’s concerns are that the state will have to start paying 5 percent of the Medicaid expansion costs in 2017, rising to the ACA’s limit of 10 percent in 2020. “We are looking at about a little over one billion dollars to find between 2017 and 2021, and we are going to have to find a way to pay for that,” said Alvarado. “There are states that want a good state exchange, but haven’t been able to run one. And there are several that are about to expand Medicaid and are looking at the federal exchange. So my thought was, why not approach those states that are going to expand Medicaid, offer to do the same services that a federal exchange would do, and run the exchange for them for a fee?”

Alvarado is encouraged that there has been bipartisan support of his plan. KHN reports that Beshear’s Chief of Staff has called it a “novel idea” and democrat colleagues have said the proposal should be looked at.

Kusserow on Compliance: Tips for determining sanction-screening costs

The majority of HHS Office of Inspector General (OIG) compliance guidance documents are advisory, not mandatory, however there are exceptions. One such exemption is sanction-screening. The OIG makes it clear that it is an obligation to screen employees, physicians, vendors, contractors against the List of Excluded Individuals and Entities (LEIE) and failing to do so could result in all claims and costs associated with that excluded party being viewed as false and fraudulent, which, in turn, could result in significant financial penalties.

This obligation began during my watch as the Inspector General when the OIG developed what is now referred to as the LEIE. CMS requires proper screening as well as enrollment as a condition of payment, mandates that states develop their own sanction databases, and requires enrolled providers to screen against these databases on a monthly basis. Thirty-six states have already moved to establish their own Medicaid sanction list with many now mandating monthly screening against it, as well as the LEIE. All this has increased the burden on compliance officers greatly. It also leads to a lot of questions about best practices. No matter how the compliance officers meet this obligation, proper analysis of the process should be executed. The following are some question and thoughts to consider.

Analytical steps to evaluating sanction-screening

  • Identify those who have personal responsibility for controlling the entire process.
  • List all federal databases that are used to screen (e.g. LEIE, FDA, Excluded Parties List System (EPLS), Drug Enforcement Administration (DEA), etc.).
  • Note the number of state Medicaid databases against which there must be sanction-screening.
  • Determine the proper frequency of screening (e.g. monthly, quarterly, annually, at the time of engagement).
  • Note all of the functions involved in screening efforts (e.g. procurement, compliance office, HRM, medical credentialing).
  • Assess the level of time and effort supporting the sanction-screening program by each function.
  • Compile the time and effort contributed by those involved in the process, including resolving potential “hits.”
  • Identify how sanction-screening reports and documents are maintained.
  • Identity those who sign off on sanction-screening report results.
  • Ensure policies are in place that provide guidance on the entire process.
  • Review how and how long “potential hits” are resolved and by whom.

After conducting the evaluation of the process as it now exists, consideration may be given to alternative and more economical means to accomplish the same or better ends by employing a vendor. There are generally two types of services: (1) paying to use a vendor tool to conduct sanction-screening across multiple databases; and (2) outsourcing the entire process to a vendor.

Today, thousands of health care providers rely on vendor search engine tools to carry out sanction screening in-house. It saves them from developing their own search engine, as well as maintaining and collecting sanction data monthly. If using a vendor tool, the cost should be a fixed rate that can be budgeted; and not one that charges upon a “per click” basis which may prove to be very expensive. Using a vendor tool is only a small part of the sanction-screening burden. The bulk of the screening effort remains for the organization to handle and that effort includes conducting the actual screening, resolving potential “hits,” and preparing a report for the record to evidence it was all done correctly. The alternative may be to “outsource” the entire process to a vendor who will:

  • keep all sanctioned data up to date;
  • continue servicing and improving the search engine technology and capabilities;
  • perform the screening as often as needed (preferably monthly);
  • use its own professionally trained staff to resolve potential hits; and
  • provide a certified report for the record.

The cost to using a vendor tool should be less than what it is costing the organization to do the same work without it. The same hold true for fully outsourcing the sanction screening process; it should be less than what organizations may already be paying to simply access a vendor’s search engine tools. As such, deciding upon a vendor should be a “shopping expedition” to compare services and costs.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.


The doctor will see you on screen, after math class

Texas is making access to health care much more convenient for the parents of children enrolled in the state’s Medicaid program. Through new legislation effective September 1, 2015, providers will be able to bill the program for telemedicine appointments after “seeing” the patients over video chats during school hours, with the help of the school nurse. If a diagnosis is made, parents will be able to pick up a prescription later that day.


State Representative Jodie Laubenberg (R-89) authored the legislation in an effort to increase access to health care while limiting work and school disruptions for parents and students. Laubenberg pointed to programs like the one organized by Children’s Health(SM), which provides 27 grade schools in the Dallas-Fort Worth area with electronic access to a doctor and two nurse practitioners. A local school nurse (who may or may not have a nursing degree) examines the child, and then schedules an appointment with Children’s if a problem is observed. Due to the success of the program, Children’s will deploy to an additional 30 schools. This program was limited to five years of funding through a Medicaid 1115 waiver, so the new law is vital to continuing to provide this type of access. The Texas program follows similar laws in Georgia and New Mexico.

Although some point out that the vast majority of things seen in a pediatric clinic, like sports injuries, strep throat, and mental illnesses, can be handled via telemedicine, others have raised concerns about these programs. Even those who find health intervention in school “effective” are concerned about equity and access for children who get sick in school but are not enrolled in Medicaid. Others pointed out that these busy doctors may not have a full picture of the child’s health, and children cannot be expected to understand risks and report allergies and medical histories appropriately.


The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) incorporates telemedicine in several sections, paving the way for the increased use of this method of providing care. For example, section 3021 of the ACA created the Center for Medicare and Medicaid Innovation (CMMI) in an effort to test new payment models, including ways of using telehealth services to treat behavioral health issues (see Are we there yet? Telehealth, telemedicine, and the ACA, Health Reform WK-EDGE, April 22, 2015). As states embrace new ways of delivering care and explore payment strategies, the ACA can serve as a guide for reform.

Providers still have time to prepare for ICD-10, say experts

There is still time to prepare for International Classification of Diseases, Tenth Revision (ICD-10) before the October 1, 2015 implementation date, presenters emphasized during the MLN Connects National Provider Call, “Countdown to ICD-10.” In advance of the implementation, just over a month away, presenters discussed coding and documentation requirements, billing and reporting guidelines, and testing results.


CMS adopted ICD-10-CM (Clinical Modification) for diagnosis coding and ICD-10-PCS (Procedure Coding) for hospital inpatient procedure coding to replace ICD-9. CMS initially set an implementation date of October 1, 2013 (see Final rule, 74 FR 3328, January 16, 2009) but later extended it to October 1, 2014. Pursuant to section 212 of the Protection Access to Medicare Act (P.L. 113-93), CMS established October 1, 2015, as the final implementation date for ICD-10 (see Final rule, 79 FR 45128, August 4, 2014).

ICD-10 preparation

The ICD-10 Quick Start Guide outlines five steps for providers to prepare for ICD-10: (1) make a plan by assigning target dates for completing each step; (2) train staff on the fundamentals of ICD-10 and identify the top ICD-9 codes that the provider uses; (3) update processes, including updates of hard copy and electronic forms; (4) talk to vendors and health plans to confirm their readiness for ICD-10; and (5) test systems and processes to verify ICD-10 readiness.

Stacey Shagena, a technical advisor for CMS, described CMS’s four-pronged approach to testing for ICD-10 and noted that the national acceptance rate for acknowledgment testing ranged from 76 percent in November 2014 to a high of 91.8 percent in March 2015. No system errors were found in the July 2015 end-to-end testing, and according to CMS, “testing demonstrated that CMS systems are ready to accept ICD-10 claims.”


Sue Bowman, senior director, Coding Policy and Compliance, for the American Health Information Management Association, noted that the determination of which code set to use depends on the date of service, not the billing date. Claims for dates of service on or after October 1, 2015, must be coded in ICD-10, while claims for dates of service before October 1, 2015, must be coded in ICD-9. The date of service for inpatient facility reporting is the date of discharge. The claim submission date is irrelevant in the determination of which code set to use. MLN Matters SE1408 describes how to handle claims that span October 1.

The increased specificity of ICD-10 codes requires more detailed clinical documentation, according to Nelly Leon-Chisen, Director, Coding and Classification, for the American Hospital Association. She advised providers to assess their current documentation practices and resolve documentation gaps.

Transition flexibility

CMS is, however, offering some flexibility to physicians and other practitioners paid under the physician fee schedule who are transitioning to ICD-10. For 12 months after the ICD-10 implementation, if a valid ICD-10 code from the right family (i.e., the ICD-10 three-character category) is submitted, Medicare will process the code and will not audit based on specificity. In addition, for quality reporting completed for program year 2015, physicians and other eligible professionals (EPs) will not be subject to the Physician Quality Reporting System, value-based modifier, or meaningful use penalties during primary source verification or auditing related to additional specificity of the ICD-10 code as long as the physician/EP used a code from the correct family of codes. An EP will also not be subject to a penalty if CMS has difficulty calculating quality scores due to the transition.


Acting CMS Administrator Andy Slavitt announced that CMS is setting up and staffing an ICD-10 resource center, which will be operational in September, and named Dr. William Rogers as the ICD-10 ombudsman. The ombudsman, whose email address is icd10_ombudsman@cms.hhs.gov, will be a “one-stop shop” for providers, said Slavitt.

The fiscal year 2016 ICD-10 code set is available from the Centers for Disease Control and Protection.