New Health Care Standards to Save up to $6 Billion

Today, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced a final rule that will save time and money for physicians and other health care providers by establishing a unique health plan identifier (HPID). The rule is one of a series of changes required by the Affordable Care Act to cut red tape in the health care system and will save up to $6 billion over ten years.

“These new standards are a part of our efforts to help providers and health plans spend less time filling out paperwork and more time seeing their patients,” Secretary Sebelius said.

Currently, when a health care provider bills a health plan, that plan may use a wide range of different identifiers that do not have a standard format. As a result, health care providers run into a number of time-consuming problems, such as misrouting of transactions, rejection of transactions due to insurance identification errors, and difficulty determining patient eligibility. The change announced today will greatly simplify these processes.

The rule also makes final a one-year proposed delay – from Oct. 1, 2013, to Oct. 1, 2014– in the compliance date for use of new codes that classify diseases and health problems. These code sets, known as the International Classification of Diseases, 10th Edition diagnosis and procedure codes, or ICD-10, will include codes for new procedures and diagnoses that improve the quality of information available for quality improvement and payment purposes.

The rule announced today is the fourth administrative simplification regulation issued by HHS under the health reform law:

• On July 8, 2011, HHS adopted operating rules for two electronic health care transactions to make it easier for health care providers to determine whether a patient is eligible for coverage and the status of a health care claim submitted to a health insurer. The rules will save up to $12 billion over ten years.
• On Jan. 10, 2012, HHS adopted standards for the health care electronic funds transfers (EFT) and remittance advice transaction between health plans and health care providers. The standards will save up to $4.6 billion over ten years.
• On Aug. 10, 2012, HHS published an IFC that adopted operating rules for the health care EFT and electronic remittance advice transaction. The operating rules will save up to $4.5 billion over ten years.

More information on the final rule is available in a fact sheet (8/24) at: http://www.cms.gov/apps/media/fact_sheets.asp.

The final rule may be viewed at www.ofr.gov/inspection.aspx or http://www.ofr.gov/(X(1)S(vp32o25ckyhpvspfpzx3owe4))/OFRUpload/OFRData/2012-21238_PI.pdf

Read more ►

States continue to move forward, build Affordable Insurance Exchanges

Today, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that California, Connecticut, Hawaii, Iowa, Maryland, Nevada, New York, and Vermont have received new grants to help support the establishment of Affordable Insurance Exchanges. Starting in 2014, consumers and small businesses will have access to high-quality, affordable health insurance through an Exchange – a one-stop marketplace where consumers can choose a private health insurance plan that fits their health needs and have the same kinds of insurance choices as members of Congress.

“We continue to support states as they move forward building an Exchange that works for them,” Secretary Sebelius said. “Thanks to the health care law, Americans will have more health insurance choices and the ability to compare insurance plans.”

In every state, Exchanges will allow consumers to shop for and enroll in private health plans that meet their needs. Consumers will be able to learn if they are eligible for tax credits and cost-sharing reductions, or other health care programs like the Children’s Health Insurance Program. Small employers will be eligible to receive tax credits for coverage purchased for employees through the Exchange. These competitive marketplaces make purchasing health insurance easier and more understandable and offer consumers and small businesses increased competition and choice.

Today’s awards will give states additional resources and flexibility to establish an Exchange. California, Hawaii, Iowa, and New York today have been awarded Level One Exchange Establishment grants, which provide one year of funding to states that have begun the process of building their Exchange. Connecticut, Maryland, Nevada, and Vermont were awarded Level Two Establishment grants, which are provided to states that are further along in building their Exchange and offers funding over multiple years.

Previously, 49 states, the District of Columbia and four territories received grants to begin planning their Exchanges. With today’s awardees, 34 states and the District of Columbia have also received Establishment grants to begin building their Exchanges.

On June 29, HHS announced a funding opportunity providing states with 10 additional opportunities to apply for funding to establish a state-based Exchange, state Partnership Exchange, or prepare state systems for a Federally-facilitated Exchange. States can apply for Exchange grants through the end of 2014, and may use funds during the initial start-up year. This schedule ensures that states have the support and time necessary to build an Exchange that best fits the needs of their residents.

A detailed breakdown of each grant award and what each state plans to do with its Exchange funding is available through the map tool on Healthcare.gov, http://www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html.

For more information on Exchanges, including fact sheets, visit http://www.healthcare.gov/exchanges.

Read more ►

CMS Announces Primary Care Practices to Participate in Historic Public-Private Partnership to Strengthen Primary Care

In support of more effective, more affordable, higher quality health care, 500 primary care practices in seven regions have been selected to participate in a new partnership between payers from the Centers for Medicare & Medicaid Services (CMS), state Medicaid agencies, commercial health plans,  self-insured businesses, and primary care providers.  This partnership is designed to provide improved access to quality health care at lower costs.

Under the Comprehensive Primary Care Initiative, CMS will pay primary care practices a care management fee, initially set at an average of $20 per beneficiary per month, to support enhanced, coordinated services on behalf of Medicare fee-for-service beneficiaries.  Simultaneously, participating commercial, state, and other federal insurance plans are also offering enhanced payment to primary care practices that are designed to support them in providing high-quality primary care on behalf of their members. 

For patients, this means these physicians may offer longer and more flexible hours, use electronic health records; coordinate care with patients’ other health care providers; better engage patients and caregivers in managing their own care, and provide individualized, enhanced care for patients living with multiple chronic diseases and higher needs.

The initiative started in the fall of 2011 with CMS soliciting a diverse pool of commercial health plans, state Medicaid agencies, and self-insured businesses to work alongside Medicare to support comprehensive primary care. Public and private health plans in Arkansas, Colorado, New Jersey, Oregon, New York’s Capital District-Hudson Valley region, Ohio and Kentucky’s Cincinnati-Dayton region, and the Greater Tulsa region of Oklahoma signed letters of intent with CMS to participate in this initiative.  The markets were selected in April, 2012 based on the percentage of the total population covered by payers who expressed interest in joining this partnership.

Eligible primary care practices in each market were invited to apply to participate and start delivering enhanced health care services in the fall of 2012.  Through a competitive application process, primary care practices within the selected markets were chosen to participate in the Comprehensive Primary Care initiative.  Practices were chosen based on their use of health information technology, ability to demonstrate recognition of advanced primary care delivery by leading clinical societies, service to patients covered by participating payers, participation in practice transformation and improvement activities, and diversity of geography, practice size, and ownership structure. CMS estimates that over 300,000 Medicare beneficiaries will be served by over 2,000 providers through this initiative.

“Primary care practices play a vital role in our health care system and we are looking at ways to better support them in their efforts to coordinate care for their patients” said Acting CMS Administrator Marilyn Tavenner.

The Comprehensive Primary Care initiative is a four-year initiative administered by the Center for Medicare and Medicaid Innovation (CMS Innovation Center).  The CMS Innovation Center was created by the Affordable Care Act to test innovative payment and service delivery models that have the potential to reduce program expenditures while preserving or enhancing the quality of care.

Read more ►

People with Medicare Save Over $4.1 Billion on Prescription Drugs Thanks To the Health Care Law

As a result of the Affordable Care Act – the health care law enacted in 2010 – nearly 5.4 million seniors and people with disabilities have saved over $4.1 billion on prescription drugs since the law was enacted, Health and Human Services (HHS) Secretary Kathleen Sebelius announced today. Seniors in the Medicare prescription drug coverage gap known as the “donut hole” have saved an average of $768.

In addition, during the first seven months of 2012, the new health care law has helped nearly 18 million people with original Medicare get at least one preventive service at no cost to them.

“The health care law has saved people with Medicare over $4.1 billion on prescription drugs, and given millions access to cancer screenings, mammograms and other preventive services for free,” said Secretary Sebelius. “Medicare is stronger thanks to the health care law, saving people money and offering new benefits at no cost to seniors.”

The health care law includes benefits to make Medicare prescription drug coverage more affordable. In 2010, anyone with Medicare who hit the prescription drug donut hole received a $250 rebate. In 2011, people with Medicare who hit the donut hole began receiving a 50% discount on covered brand-name drugs and a discount on generic drugs. These discounts and Medicare coverage gradually increase until 2020 when the donut hole is closed.

The health care law also makes it easier for people with Medicare to stay healthy. Prior to 2011, people with Medicare had to pay extra for many preventive health services. These costs made it difficult for people to get the health care they needed. For example, before the health care law passed, a person with Medicare could pay as much as $160 for a colorectal cancer screening. Thanks to the Affordable Care Act, many preventive services are offered free of charge to beneficiaries, with no deductible or co-pay, so that cost is no longer a barrier for seniors who want to stay healthy and treat problems early.

In 2012 alone, 18 million people with traditional Medicare have received at least one preventive service at no cost to them. This includes 1.65 million who have taken advantage of the Annual Wellness Visit provided by the Affordable Care Act – over 500,000 more than had used this service by this point in the year in 2011. In 2011, an estimated 32.5 million people with traditional Medicare or Medicare Advantage received one or more preventive benefits free of charge.

For state-by-state information on savings in the donut hole, please visit: http://www.cms.gov/apps/files/donut-hole-data-chart.pdf

For state-by-state information on utilization of free preventive services, please visit: http://www.cms.gov/apps/files/preventive-data-chart-first-seven-months-2012.pdf

Read more ►

HHS Partners With Pharmacies to Educate Medicare Beneficiaries about New Health Benefits

Today, Health and Human Services (HHS) Secretary Kathleen Sebelius announced partnerships with several pharmacies to help customers learn about new Medicare benefits available to them under the Affordable Care Act – the health care law. These partnerships – with CVS Caremark, Walgreens, Thrifty White, Walmart, and Sam’s Club – will provide Medicare beneficiaries a range of educational materials on newly available preventive services, as well as savings on prescription drug spending in the “donut hole” coverage gap. At a CVS in Jacksonville, Secretary Sebelius discussed the new preventive services and received a free blood pressure reading at the CVS MinuteClinic.

“Our pharmacy partners are helping their customers make informed health care decisions,” said Secretary Sebelius. “These partnerships will help people with Medicare learn more about new preventive services such as mammograms, and the new Annual Wellness visit that are available at no charge for everyone with Medicare.”

Some examples of how pharmacy partners are working to increase awareness of preventive services available under Medicare include the following:

• CVS Caremark is distributing material about new preventive services covered at no cost to beneficiaries at its more than 7,300 CVS/pharmacy stores and 600 MinuteClinic locations, through brochures, register receipt messages and online.
• Thrifty White Pharmacy is providing information on preventive services through its 85 locations throughout the Midwest.
• Walgreens is distributing information in nearly 8,000 pharmacies and over 350 Take Care Clinic locations, as well as using in-store announcements and providing this information as part of its Walgreens Way to Well Health Tour with AARP.
• HHS is working with Walmart and Sam’s Club to provide healthcare information to their shoppers online.

Other pharmacies or partners can find information on how to work with CMS to educate consumers about the benefits available to them at: http://www.cms.gov/Outreach-and-Education/Outreach/Current-Partnership-Opportunities/index.html

To learn more about Medicare, visit www.medicare.gov, or call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. This announcement is available on the CMS web site at: http://www.cms.gov/apps/media/press_releases.asp.

Read more ►

HHS Adopts Operating Rules for Electronic Funds Transfers/Remittance Advice

ACTION

The Centers for Medicare & Medicaid Services (CMS) today announced an interim final rule with comment period (IFC) under which the Department of Health and Human Services (HHS) adopts operating rules for the health care electronic funds transfers (EFT) and remittance advice transaction under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Section 1104 of the Affordable Care Act (the Affordable Care Act) requires HHS to issue a series of regulations over the next five years for the purpose of streamlining health care administrative transactions, encouraging greater use of standards by providers, and making existing standards work more efficiently.   On July 8, 2011, HHS published the first regulation, an IFC that adopted operating rules for two electronic health care transactions to make it easier for physician practices and hospitals to determine whether a patient is eligible for coverage and the status of a health care claim submitted to a health insurer. On January 10, 2012, HHS published a second regulation, an IFC adopting standards for health care claim payments made via EFT and for electronic remittance advice (ERA).

The regulation announced today is the third in the series. It adopts EFT and ERA operating rules that, when implemented by health plans, are estimated to save the industry, primarily physician practices, between $300 million and $3.3 billion over the next ten years. 

Some of the future administrative simplification rules will address the adoption of:

• A standard unique identifier for health plans;

• A standard for claims attachments; and

• Requirements that health plans certify compliance with all HIPAA standards and operating rules.

 BACKGROUND

Congress addressed the need for a consistent framework for electronic health care transactions and other administrative simplification issues through HIPAA.  HIPAA amended the Social Security Act (the Act) by adding Part C—Administrative Simplification—to Title XI of the Act, requiring HHS to adopt standards for certain electronic administrative health care transactions to enable health information to be exchanged more efficiently and to achieve greater uniformity in the transmission of health information. 

Section 1104(b)(2)(A) of the Affordable Care Act amended section 1173(a)(2) of the Act by adding the electronic funds transfers (EFT) transaction to the list of electronic health care transactions for which the Secretary must adopt a standard under HIPAA. Section 1104(b)(2)(C) of the Affordable Care Act further requires the adoption of operating rules for all HIPAA electronic health care transactions.

Standards include implementation specifications for electronic formats as well as requirements for the data included in that format. By contrast, operating rules include best business practices on how electronic transactions are transmitted and often target obstacles that physician practices, hospitals and health plans encounter in using electronic transactions.  For instance, the EFT & ERA Operating Rule Set adopted in today’s rule requires health plans to offer a standardized, online enrollment for EFT and ERA so that physician practices and hospitals can more easily enroll with multiple health plans to receive those transactions electronically.  Among other requirements, the EFT & ERA Operating Rule Set requires health plans to send the EFT within a certain number of days of the ERA, making it easier for physician practices and hospitals to reconcile their accounts.  The EFT & ERA Operating Rule Set also includes requirements for the initial set-up for the electronic communication between providers and health plans.

In general, the savings and benefits related to use of EFT for business and consumer payments are well established.  The most common savings are in paper, printing, and postage costs, as well as savings in staff time to manually process and deposit paper checks.   Yet adoption and use of EFT by the health care industry has been low, resulting in administrative savings that go unrealized.  The obstacles to greater use of EFT by the health care industry can be lessened by standardization of the EFT transaction and operating rules that target difficulties for physician practices and hospitals in using EFT and ERA.   Beyond the material and administrative time savings for health care providers and health plans, the time and resources that physician practices and hospitals spend on billing and related tasks will be better spent delivering health care to patients.

On March 23, 2011, the National Committee on Vital and Health Statistics (NCVHS) sent a letter to the Secretary recommending that the Council for Affordable Quality Healthcare's Committee on Operating Rules for Information Exchange (CAQH CORE) be named as the authoring entity for operating rules for all health care EFT and ERA transactions.   Between March and August 2011, CAQH CORE held more than 30 open calls and over 15 straw polls with industry and government representatives to discuss and develop operating rules for EFT and ERA.  Over 80 health care entities, including health plans, clearinghouses, providers, and financial institutions, were represented at weekly meetings and worked hard to build consensus on the operating rules. On Dec. 7, 2011, the NCVHS sent a letter to the Secretary recommending that the CAQH CORE EFT & ERA Operating Rule Set be adopted.  Based on that recommendation, HHS is adopting the CORE EFT & ERA Operating Rule Set   and  transaction.

The goal for adopting these operating rules is to support and enhance the health care EFT and ERA transactions and improve the transaction's functionality by applying necessary business rules and guidelines for the electronic exchange of information.

PROVISIONS OF THE IFC ANNOUNCED TODAY

In this interim final rule with comment period (IFC), we are adopting the Phase III Council for Affordable Quality Healthcare (CAQH) Committee on Operating Rules for Information Exchange (CORE) EFT & ERA Operating Rule Set, including the CORE v5010 Master Companion Guide Template, for the health care EFT and remittance advice transaction (hereinafter referred to as the EFT & ERA Operating Rule Set), with one exception:  We are not adopting Requirement 4.2, titled "Health Care Claim Payment/Advice Batch Acknowledgement Requirements," of the Phase III CORE 350 Health Care Claim Payment/Advice (835) Infrastructure Rule because that requirement requires the use of the Accredited Standards Committee (ASC) X12 999 acknowledgement standard, and the Secretary has not adopted standards for acknowledgements.

Covered entities must be in compliance with the EFT & ERA Operating Rule Set by January 1, 2014.

COSTS/BENEFITS

The EFT & ERA Operating Rule Set is expected to have the most substantial cost and benefit impacts on physician practices, hospitals and health plans. For physician practices and hospitals, there is little to no cost to implement the health care EFT & ERA Operating Rule Set, as providers are the receivers of the transaction and not the senders.

This IFC is estimated to have a net savings of between $300 million and $3.3 billion over ten years.   Both costs and benefits are calculated within four areas of administrative tasks:

1. Provider enrollment in EFT and ERA;
2. Implementing connectivity between trading partners;
3. Reassociation of the payment information with the remittance information; and
4. Posting payment adjustments and claim denials.

 Costs will be borne by the health plans, with much of the benefits coming to providers.

• CMS estimates that the cost to implement the EFT & ERA Operating Rules is $1.2 to $2.7 billion for government and commercial health plans, third party administrators (TPAs), and hospitals and physician practices over ten years. 
   
• CMS estimates that the savings and cost benefit to using EFT & ERA Operating Rules is $3 to $4.5 billion for government and commercial health plans, TPAs, hospitals and physician office over ten years.

We anticipate that the use of operating rules may help foster electronic payments.  We had previously estimated that use of the health care EFT standards would save an estimated 800,000 pounds of paper over ten years.

The operating rules build upon industry-wide health care EFT standards adopted in January of this year. Together with the health care EFT standards, the EFT and ERA operating rules are estimated to save between $2.7 billion and more than $9 billion in administrative costs over ten years by reducing inefficient manual administrative processes for physician practices, hospitals, and health plans.

REGULATION EFFECTIVE DATE/COMPLIANCE DATE

The effective date of this regulation is August 10, 2012.  All HIPAA-covered entities must be in compliance with the EFT & ERA Operating Rule Set by January 1, 2014.

The IFC announced today may be viewed at www.ofr.gov/inspection.aspx.  The IFC will be published in the Federal Register on Aug. 10, 2012, and comments are due on Oct. 9, 2012.

A news release on the rule may be viewed at http://www.hhs.gov/news and at  http://www.cms.gov/apps/media/press_releases.asp.

Read more ►

CMS releases SNF payment updates for FY 2013

Late on Friday, July 27th, the Centers for Medicare & Medicaid Services (CMS) officially released an update notice on the SNF PPS for fiscal year (FY) 2013.

According to the notice, SNFs are receiving an approximate 1.8% increase to Medicare payments. That’s a significant relief for those thinking back to last year’s SNF PPS rule, which reduced Medicare payments by more than 11%.

This year, SNFs receive a 2.5% market basket update (cost of living adjustment), but a 0.7% productivity adjustment due to the Affordable Care Act’s 10-year plan to reduce Medicare payments to SNFs by $14.6 billion. This results in a 1.8% increase or approximately $670 million.

The updated payment rates for SNFs are effective October 1. The notice will be published in the Federal Register on August 2.

To download the SNF PPS payment rates for FY 2013, click here. A comparison of these payment rates with those for FY 2012 can be downloaded here. 

It is important to note that this notice is not a proposed rule. Unlike the usually proposed rule process—with the release of the proposed rule, subsequent comment period and then a final rule—CMS is only making statutory update adjustments to Medicare Part A, rather than proposing any new regulations that could radically affect payments. CMS originally announced its intent to forgo the proposed rule process for FY 2013 in April 2012.

To read the complete notice from CMS, click here.

Read more ►