Question: I know that the Stark in-office ancillary services exception is important to our practice being able to profit from certain services we provide in our office. But I’ve heard that it is under attack. Is that exception still available?

Answer: The in-office ancillary services exception (“IOASE”) is perhaps the most important exception to the Stark law’s prohibition on physician self-referrals of certain health services. But you are wise to keep your eye on its continued viability for your practice as there are renewed efforts to restrict its application. President Obama’s Fiscal Year 2014 Budget contains several proposals intended to encourage “more appropriate compensation for the efficient provision of services under the Medicare program.” The Budget cites prior reports by MedPac and the GAO that physician self-referral of ancillary services leads to a higher volume when combined with fee-for-service payments. The Budget proposes narrowing the IOASE by allowing only physicians who meet certain undefined accountability standards to self-refer radiation therapy, therapy services, and advanced imaging services such as CT and MRI services. In addition, the Simpson-Bowles Deficit Commission recently issued a report that includes the recommendation that physician self-referrals should be further restricted and better monitored, including narrowing the IOASE.

While it is unclear whether, or in what fashion, these proposals will be acted upon, it is certainly clear that radiation therapy, physical therapy and advanced imaging services are at risk of losing the protection of the IOASE. If you are currently providing these services, or are considering a new investment in such in-office services, you would be wise to remain aware of the progress of these initiatives and how they will affect your practice if they result in new restrictions on self-referrals.

If you have any further questions, please contact our Managing Partner, Michael J. Schoppmann, Esq at 1-800-445-0954 or via email at MSchoppmann@DrLaw.com.

WASHINGTON (AP) – It’s not a “Star Trek” tricorder, but by hooking a variety of gadgets onto a smartphone you could almost get a complete physical – without the paper gown or even a visit to the doctor’s office. READ MORE HERE

On April 24, Representative Ted Poe (R-TX-2) introduced S. 1701, the “Cutting Costly Codes Act,” which would prohibit the Secretary of the U.S. Department of Health and Human Services from replacing the current International Classification of Diseases, 9th Revision (ICD-9) with the ICD-10 diagnostic code set.  The bill also would require the Government Accountability Office to conduct a study on ways to mitigate the disruption to health care providers resulting from a replacement of ICD-9 with new coding standards required by the Health Insurance Portability and Accountability Act (HIPAA).

The transition from ICD-9 to ICD-10, scheduled for October 1, 2014, will create substantial financial and administrative burdens for physician practices by increasing diagnosis codes from 13,000 to 68,000.  Implementation will not only affect physician claims submissions but most business processes within practices as well including verifying patient eligibility, obtaining pre-authorization for services, documentation of the patient’s visit, research activities, public health reporting, and quality reporting.  This will require education, software, coder training, and testing with payers.  The transition costs are also significant with implementation costs ranging from $83,290 to $2.7 million depending on the size of the medical practice.

As HIPAA covered entities, physicians must comply with the ICD-10 mandate and will bear the entire costs of the transition.  Additionally, under ICD-10 if physicians submit the wrong seven digit diagnosis code they risk non-payment altogether.  The transition to ICD-10 is also ill-timed given the current and future Medicare program requirements that physician must comply with or face financial penalties, including the meaningful use of electronic health records, electronic prescribing, quality reporting and the value-based modifier programs.  These new Medicare program requirements and penalties for non-compliance are on top of a 24.4% Medicare sustainable growth rate formula cut scheduled for January 1, 2014, and a 2% sequester cut that is already in place.

Representative Poe’s legislation is consistent with AMA policy.  Attached, please find a letter that the AMA sent to Rep. Poe today.  We would encourage each of your organizations to contact your legislators and encourage them to cosponsor the bill.

FROM THE AMA:

SGR

The budget overview contains the following language on the SGR:

“The Administration supports a period of payment stability lasting several years to allow time for the continued development of scalable accountable payment models. Such models can take different forms, but all will have several common attributes such as encouraging care coordination, rewarding practitioners who provide high-quality, efficient care, and holding practitioners accountable through the application of financial risk for consistently providing low quality care at excessive costs. HHS will welcome input from physicians and other professionals in designing these models. Following the period of stability, practitioners will be encouraged to partner with Medicare by participating in an accountable payment model, and over time, the payment update for physician’s services would be linked to such participation. Those that successfully participate could receive larger payments under Medicare, while those who provide lower quality, inefficient care would receive lower payments. To complement these changes, the Administration also supports immediate reforms to improve the accuracy of Medicare’s current physician payment system.” (pg. 100)

The Budget establishes a baseline that assumes the cost of repealing the SGR and a ten year payment freeze ($249 billion over 10 years).

Medicare, Medicaid, and Other Health Savings

The President’s Budget includes proposals that would create more than $401 billion in savings in Medicare, Medicaid and other health programs over 10 years ($307 billion would come from Medicare providers and $68 billion from Medicare structural reforms). Some of the proposals that are of interest to physicians include:

Medicare Provider Savings

· GME: This proposal would reduce IME payments beginning in 2014 (Savings of approximately $11 billion over 10 years).

· Bad Debt:  Would reduce the bad debt reimbursement for eligible Medicare providers from 65% to 25% over three years starting in 2014 (Savings of $25.49 billion over 10 years.

· Medicaid/Medicare Drug Payment Policies:  requires Medicare to get same drug rebates that Medicaid receives for brand name and generic drugs provided to beneficiaries who receive the part D low-income subsidy.  Accelerates drug rebates to Medicare beneficiaries in the coverage gap. (Savings of $134.38 billion over 10 years).

· Reduction in payment of physician administered Part B drugs from 106 percent of average sales price to 103 percent of average sales price (savings of $4.48 billion over 10 years).

· Delinquent Tax Debt: Increases the levy authority for payments to Medicare providers with delinquent tax debt. (Savings of $707 million over 10 years).

· Exclusion of certain services for in-office ancillary services: The Budget encourages more appropriate use of ancillary services by only allowing providers who meet certain accountability standards to self-refer radiation therapy, therapy services, and advanced imaging services. (savings of $6.05 billion over 10 years)

Medicare Structural Reforms

· Income Related Part B and Part D premiums: (Savings of $50 billion over 10 years)

· Medigap reform: introduces a Part B premium surcharge for beneficiaries that purchase near first dollar Medigap coverage (savings of $2.91 billion over 10 years.)

· Modify Part B deductible for new enrollees (savings of $3.32 billion over 10 years)

· Home health co-payments for new beneficiaries (savings of $730 million over 10 years)

· Encourage generic drug by low-income beneficiaries (savings of $6.73 billion over 10 years)

· Strengthen IPAB by reducing the target growth rate from GDP per capita plus 1% to plus 0.5% (savings of $4.1 billion over 10 years, with $3.48 billion of those savings coming in FY 2023).

Medicare and Medicaid Fraud Proposals:  Includes proposals that total $4.1 billion in savings over 10 years.  Highlights include:

· Allow civil monetary penalties or intermediate sanctions for providers who do not update enrollment information.

· Require prior authorization for advanced imaging (no score)

· Direct States to track high prescribers and utilizers of prescription drugs in Medicaid to identify aberrant billing and prescribing patterns

· Expand authorities to investigate and prosecute allegations of abuse or neglect of Medicaid beneficiaries in additional health care settings

· Affirm Medicaid’s position as a payer of last resort by removing exceptions to the requirement that State Medicaid agencies reject medical claims when another entity is legally liable to pay the claim

· Alleviate State program integrity reporting requirements by consolidating redundant error rate measurement programs to create a streamlined audit program with meaningful outcomes, while maintaining the Federal and State Government’s ability to identify and address improper Medicaid payments.

Mental Health: The Budget includes a new $130 million initiative to expand mental health treatment and prevention services.

Gun Violence Prevention and Research: The Budget includes an additional $20 million for the National Violent Death Reporting System to expand the surveillance system to all States in 2014 to improve our understanding of violence. The Budget also includes $10 million within the Centers for Disease Control and Prevention (CDC) to support research on the causes and prevention of gun violence.

Chained CPI : The Budget proposes changing the measure of inflation used by the Federal Government for most programs and for the Internal Revenue Code from the standard Consumer Price Index (CPI) to the alternative, more accurate chained CPI, which grows slightly more slowly. The proposal includes protections for the very elderly and others who rely on Social Security for long periods of time, and only applies the change to non-means tested benefit programs. (Savings of $230 billion over 10 years)

Medicare Data: The Budget would “expand the availability of Medicare data released to physicians and other providers for performance improvement, fraud prevention, value-added analysis, and other purposes.”

OCO: The Budget assumes OCO savings of $508 billion from 2014-2023.  The proposal would use $167 billion of the OCO savings to partially offset a surface transportation proposal.

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Q. Are RRGs eligible for protection by the NYS Property/Casualty Insurance Security Fund (guaranty fund) in the event of their insolvency?

A. Because almost all professional liability RRGs are not licensed by New York State, their policyholders are not protected by the State’s $1 million per claim guaranty fund in the event the RRG becomes insolvent.  The guaranty fund, which acts as a safety net, protects MLMIC’s insureds for the risks covered by their policies.

Q. Can physicians still get free excess coverage if they become insured by an RRG?

A. Physicians who purchase primary coverage from an RRG not licensed by New York State do not have access to $1 million of excess coverage provided by the State.  Excess coverage is currently provided at no cost to physicians who 1) have professional privileges granted by a New York State general hospital, 2) purchase primary limits of $1.3 million each person and $3.9 million total aggregate from a New York State licensed insurer and 3) complete the required risk management course.

Q. Is the occurrence form of coverage available with an RRG?

A. Typically, no.  In fact, RRG premium quotes may appear to be a fraction of current MLMIC premiums due to the fact that RRGs are not comparing “apples to apples.”  They typically  propose to move the insured from the occurrence form of coverage to either a first year claims made or claims paid (sometimes referred to as “paid claims”) policy.  Because claims made and claims paid policies cover a subset of the claims covered by an occurrence policy, each costs less than the occurrence form for the first few years.  Both the claims made and claims paid form only give the illusion of cost savings, because both forms would require the purchase of a “Tail” to protect for any subsequently reported claims should the policy be cancelled.

Q. What coverage forms are offered by MLMIC?

A. MLMIC offers a choice of either the occurrence or claims made coverage forms as required by New York Insurance Law.  The claims paid (or “paid claims”) form is not offered by carriers licensed in the state because this form of coverage is not permitted by New York Insurance Law.

Q. What is the difference in protection afforded by the occurrence, claims made, and claims paid policy forms?

A. Occurrence coverage offers the most comprehensive protection, covering an insured when an incident occurs while the policy is in effect, regardless of when it is reported or paid.  Claims made covers an insured when an incident is reported while the policy is in effect, regardless of when it is paid.  It is less comprehensive than occurrence, since it does not cover unreported claims if continuing coverage is not maintained, and, therefore, it costs less than occurrence for the first few years.  If the insured wishes to be protected for unreported events, “Tail” coverage must be purchased.  Claims paid, a new form of coverage offered by some RRGs, is the least comprehensive.  It covers an insured only when an incident is paid while the policy is in effect. Because it covers considerably less insurance risk initially than claims made or occurrence, it is considerably less expensive than either of these forms for several years; however, it is the insured who assumes the responsibility of unpaid and unreported claims if continuing coverage is not maintained.  Obviously, this creates significant risks for the insured, which they would then bear. Like claims made coverage, the insured could opt to purchase “Tail” coverage to be covered for unpaid or unreported claims.

Q. Does New York State regulate RRGs?

A. The policy forms and premium rates of an RRG not licensed by New York State are not subject to New York Insurance Law.  Therefore, unlike licensed New York State carriers, unlicensed RRGs may change their policy terms or premium rates without first filing and receiving approval from the New York State Department of Financial Services.  Furthermore, policy and rate changes may be implemented without meeting the policyholder notice requirements found in New York Insurance Law.

Q. Are there any other fees required to become insured by an RRG?

A. In many cases, yes. By law, RRGs must be owned by their insureds and most require insureds to make a capital contribution for several years, in addition to their annual insurance premiums.  This money is at risk and its return is not guaranteed.

Q. Will insuring with an RRG jeopardize a physician’s privileges at affiliated hospital(s)?

A. Possibly. Since insurance purchased from an RRG that is not licensed by New York State is not regulated by the State, it may differ from what is customarily offered in New York and may well be of significant concern to hospitals granting staff privileges, particularly if the hospital believes it increases its exposure by accepting RRG coverage.  It also depends upon the medical staff by-laws and the hospital’s credentialing requirements.

The answers to the questions posed above indicate that a number of issues and concerns are present with the RRG form of insurance.  Therefore, it is very important for physicians to thoroughly analyze all aspects of this type of insurance before deciding to make any changes to their current program.  In many cases, what appears to be a more cost effective option could, ultimately, lead to even higher costs and greater risks to the physician.  Physicians who are considering transferring their coverage to an RRG should first contact a MLMIC underwriter at one of the offices listed below.  MLMIC underwriters are available to answer any questions physicians may have and can be reached at an office nearest your practice location.

New York 212-576-9670

Syracuse 315-428-1188

Latham 518-786-2700

East Meadow 516-794-7200

Answer: No. The privacy and security requirements for Stage 1 of Meaningful Use include Core Objective & Measure 15 (http://ow.ly/ipolP), which is to “protect electronic health information created or maintained by the certified EHR technology through the implementation of appropriate technical capabilities.” This requires conducting a security risk analysis in accordance with the requirements of the HIPAA Security Rule, implementing security updates as necessary, and correcting identified security deficiencies as part of a risk management process.

But the Meaningful Use requirements are not intended to supersede or substitute for compliance required under HIPAA. If you are a HIPAA covered entity, you are still required to comply with the HIPAA Privacy and Security Rules. It’s not easy to keep all of this straight. If you are preparing for the chance that a Meaningful Use audit is coming your way, take a look at this table of Security Risk Analysis Myths and Facts: http://ow.ly/ipfvD. It’s taken from the Office of the National Coordinator for Health Information Technology’s Guide to Privacy and Security of Health Information. While the Guide was written prior to adoption of the HIPAA Omnibus Rule (meaning some of its guidance is not up-to-date), this clarification of the interplay between Meaningful Use and HIPAA remains helpful.

For assistance with Meaningful Use audits or with HIPAA compliance, please contact our Managing Partner, Michael J. Schoppmann, Esq at 1-800-445-0954 or via email at MSchoppmann@DrLaw.com.

Developed through the offices of New York State Attorney General Eric T. Schneiderman, a new law¹ has been passed by the State Legislature and signed by Governor Cuomo that would “exponentially enhance the effectiveness of New York’s existing PMP to increase detection of prescription fraud and drug diversion.”²

The Internet System for Tracking Over-Prescribing Act, (I-STOP), establishes an on-line, real-time, controlled substance reporting system that requires prescribers (including physicians) to consult the prescription monitoring registry prior to prescribing or dispensing Schedule II,III or IV Controlled Substances. In addition, pharmacists, who did not previously have access to the registry, as a result of I-STOP will have access to the registry in order to review the controlled substance history of an individual for whom one or more prescriptions for controlled substances are presented to the pharmacist.

“I-STOP”

• Requires the Department of Health to establish and maintain an on-line, real-time controlled substance reporting system to track the prescription and dispensing of controlled substances;
• Requires practitioners to review a patient’s controlled substance prescription history on the system prior to prescribing;
• A practitioner may authorize a designee to consult the registry on his or her behalf, provided that the practitioner takes reasonable steps to ensure that the designee is sufficiently competent to use the registry, and the practitioner remains ultimately responsible to ensure that the registry is used for authorized purposes and is used in a manner that protects the confidentiality of the information obtained from the registry;
• A practitioner is not required to consult the registry prior to dispensing a controlled substance, provided that all other requirements pertaining to dispensing controlled substances are followed;
• There are a number of exceptions whereby the duty to consult the registry does not apply, such as (A) it is not reasonably possible to access the registry in a timely manner; (B) no other practitioner or designee who is authorized to access the registry is reasonably available; and (C) the quantity of the controlled substance prescribed does not exceed a 5 day supply (regulations of the NYS DOH will provide more specific information regarding the exceptions); and
• The duty to consult the registry does not apply to Schedule V Controlled Substances.

Unknown to most physicians, the New York Department of Health (NYDOH) already maintains an on-line database accessible to the 49,000 DEA-licensed practitioners throughout New York known as the Prescription Monitoring Program (PMP). In fact, only 3,600 prescribers have ever accessed the PMP to obtain patient information. Moving forward, NY DOH will update the current PMP in an attempt to increase participation, however, compliance with I-STOP is not being delayed pending that update to the PMP.

However, what is being overlooked by most practicing physicians who seek to comply with I-STOP is that they must first have an active “Health Commerce Account” with The State of New York, Department of Health’s Health Commerce System. Physicians seeking to establish such an account must go to:

https://hcsteamwork1.health.state.ny.us/pub/top.html

Given that electronic prescribing will be mandatory for all physicians as of December 31, 2014, coupled with the incredible magnitude of this issue (termed an “epidemic” by Gov. Cuomo and Attorney General Schneiderman) every physician throughout New York should take immediate note of their prescribing protocols and begin whatever process is necessary to comply with the law and maintain that compliance without fail or exception.

Unknown to most physicians, the New York Department of Health (NYDOH) already maintains an on-line database accessible to the 49,000 DEA-licensed practitioners throughout New York known as the Prescription Monitoring Program (PMP). In fact, only 3,600 prescribers have ever accessed the PMP to obtain patient information. Moving forward, NY DOH will update the current PMP in an attempt to increase participation, however, compliance with I-STOP is not being delayed pending that update to the PMP.

-Report of the New York State Office of the Attorney General, “internet System for Tracking Over-Prescribing (I-STOP)”

Of significant note, the duty for physicians to comply is strict and mandatory, carrying severe potential penalties for any failure to comply, including but not limited to, loss of license, civil penalties and/or criminal charges. To avoid the possibility of such dire events, plans for compliance with I-STOP must be built, implemented and adhered to immediately, and without fail, by every physician throughout New York.

²Report of the New York State Office of the Attorney General, “internet System for Tracking Over-Prescribing (I-STOP)”

A Citywide Collaboration to Help Fight Obesity

Albany, NY – Eat Healthy Albany, the first citywide initiative to help fight obesity and inspire healthy eating changes, has been endorsed by the Medical Society of the County of Albany, Inc. Eat Healthy Albany was launched in September 2012, by Mayor Gerald D. Jennings and Chef Gail Sokol. Its mission is to inspire children, adults and families to make healthier choices in eating through education, motivation, participation and inspiration. This initiative empowers people to become “healthy ambassadors” and is an investment in Albany’s present and future generations. It is the continuing goal to become New York State’s first healthy city.

“We have a challenge from across America to fight obesity and Albany is taking the lead with Eat Healthy Albany. The physicians of the Capital District have endorsed Eat Healthy Albany and encourage everyone to learn from Mayor Jennings and Chef Gail Sokol by discovering ways to enjoy the foods we love by cooking smarter and making better choices,” stated Brian Murray, MD, President – Medical Society of the County of Albany, Inc. Thirty seven percent of Americans who are challenged by obesity can change their world by using healthy cooking ingredients. In truth, this is good advice for all of us. As physicians who care about you and have seen how obesity can negatively impact on the quality and longevity of life, we encourage everyone to watch video segments, read literature and have a dialogue with your physician about how to Eat Healthy Albany.”

“Gaining the endorsement of a respected organization like the Medical Society of the County of Albany shows the level of quality programs included in Eat Healthy Albany. In learning about healthier eating options, recipes and activities, families in our Capital City are taking steps towards a healthier lifestyle. It is my hope that children, parents, friends and neighbors will take an active part in this growing initiative, helping to improve our community’s overall quality of life,” stated Mayor Jennings.

Eat Healthy Albany and Thinking Outside the Lunchbox with Chef Gail have moved into the community and schools with programs that will continue to take place throughout the year. Targeting children of all ages, adults and families, the programs are interactive, engaging people of all ages to develop a greater understanding of delicious healthy foods and help them to make better choices.  Recipes and tips for Eat Healthy Albany are designed to be easy, delicious, healthy and inexpensive.

“Eat Healthy Albany is an ongoing initiative aimed at getting people excited about introducing healthy foods into their diets,” said Chef Gail Sokol. “Having the endorsement of the Medical Society of the County of Albany is really tremendous. Mayor Jennings and I enjoy getting people involved in the programs and showing them that eating healthy foods can be exciting and delicious. Involving children specifically helps empower them to become ‘healthy ambassadors’ within their homes.” Gail Sokol is a featured guest chef and speaker at events around the country. She has appeared on television and radio presenting healthy cooking and baking options and starred in the kids’ cooking series “Feed Your Brain with Chef Gail Sokol,” a project of Time Warner Cable. She is a chef educator teaching baking, nutrition, and sanitation for the Culinary Arts program at Schenectady County Community College.

“As a proud sponsor of Eat Healthy Albany, CDPHP is thrilled that The Medical Society of the County of Albany has recognized the efforts of Chef Gail Sokol and Mayor Jerry Jennings to improve the eating habits of children and families in our community,” said John D. Bennett, CEO and president, CDPHP. “We applaud Eat Healthy Albany’s continued drive to promote healthier living.”

Helping children and adults to develop healthy habits can last a lifetime. In the past four decades, obesity rates in the United States have soared in all age groups.  Childhood obesity has increased more than fourfold among those ages six to 11. More than 23 million children and teenagers in the United States ages two to 19 are obese or overweight, a statistic that health and medical experts consider an epidemic.

Sponsors for Eat Healthy Albany include: CDPHP, SEFCU and Shop Rite.

For further information regarding Eat Healthy Albany, or to schedule an Eat Healthy Albany community or school event call 518-339-4027. Recipes and tips for Eat Health Albany can also be found on facebook.

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TALLAHASSEE Brace yourself for longer lines at the doctor’s office.

Whether you’re employed and insured, elderly and on Medicare, or poor and covered by Medicaid, the Florida Medical Association says there’s a growing shortage of doctors — especially specialists — available to provide you with medical care.  Read more HERE.

Over the past several decades, treatment for a variety of conditions has begun to shift from a “one size fits all” approach to a more personalized one: the right dose of the right drug for the right patient at the right time. Read more HERE