The MACRA Link to Population Health

The Medicare Access & CHIP Reauthorization Act (MACRA) became effective Jan. 1, 2017, making it imperative that rural providers and hospitals leverage some practical application so the promise of tying a greater percentage of payment to performance can be sought and achieved.   

No matter the noble the intent, this nonetheless has several rural providers and critical access hospitals (CAHs) concerned. The Merit-Based Incentive Payment System (MIPS) Quality Payment Program (QPP) is where rural providers will see the most participation/eligibility, while the Alternative Payment Model (APM) offered via Medicare will be limited to fewer providers.  

While the Centers for Medicare & Medicaid Services (CMS) has stated that MACRA isn’t about implementing a new score system that would in essence add more complexity to an already cumbersome system, many within rural healthcare believe that MACRA is putting providers on a “scoring scale” – and that a negative score will come back to haunt them. Or, if it is a good score, it could illuminate an easier pathway to success, because the scoring will be tied to National Provider Identification (NPI) numbers. The scores could very well impact providers’ respective ability to negotiate employment contracts and insurance compensation in the future.

A few other things to consider:

  • Many small rural providers include the Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs), and clinicians with low volumes of Medicare patients are exempt in 2017.
  • If eligible, rural providers can choose how much data they would like to report to avoid penalties and potentially earn a bonus.
  • Those who have Patient Centered Home Models (PCHMs) will already be foundationally aligned with MACRA principles, including ensuring patient access, care coordination, and population health.

What does MACRA success look like for rural healthcare, if providers want to participate?

MACRA success won’t be framed by just one story – it will be an evolution as time passes, updates happen, and policy changes are implemented. So consider this an eight-point roadmap to success:

  1. Population health is “in.” Rural healthcare needs to recognize that payment models will change and become more defined and refined over time via new initiatives and phases, but the transformation of population health is the new frontier in healthcare at large – and it’s here to stay. In fact, focus on population health diminishes the impact of chronic disease, improves patient health and quality of life, and can indeed help providers actually meet their respective value-based goals.
  2. In eligibility, pay attention to the details. Many rural providers have been given a “MIPS reprieve” in 2017, as this initiative focuses on Medicare Part B (this includes those aforementioned RHCs and FQHCs, which have low Medicare volumes and bill less than $30,000 worth of Medicare services and see fewer than 100 Medicare patients per year. Such providers will be exempt from MIPS participation in 2017).

Remember that the devil is in the details of the eligibility note: MIPS might apply to the CAHs, but this only applies if they are participating in the Method II billing, in which the participating CAH bills for both the professional services and for the facility. That said, for MIPS to apply to the CAH, providers must have reassigned their respective billing rights to the CAH, and if they haven’t done so, the CAH is not subject to MIPS.

  1. Focus on employment status. In addition to the billing and numbers of patients, remember that there are more providers and specialists included in this program than initially thought – based not only on the aforementioned, but also the “employment” status. There is also the inclusion of clinicians, or non-physician providers such as physician assistants, registered nurse anesthetists, clinical specialists, and nurse practitioners.
  2. Conduct an assessment. Remember that there are three MIPS categories, including improvement activities, quality, and advancing health information. Rural providers will be assessed on cost measures beginning in 2018. Rural healthcare did get another reprieve, though, as they only have to report on two improvement activities instead of the original mention of four.
  3. Transition and transform; don’t hesitate and procrastinate. While rural healthcare does get to select how much data to report in 2017, not being strategically and systematically prepared to provide a year’s worth of data in 2018 will put providers at risk for a 2020 penalty.
  4. Determine the cost of participation. Do the math – providers and CAHs should consider the costs and benefits associated with MIPS bonuses, which can account for 4 percent or lower in 2017. Determine the funding necessary and weigh it against the cost to implement the necessary processes and systems, because the costs may be more than what entities might be able to receive, leaving the bottom line struggling and other healthcare leaders (and even board members) disengaged. A living example might be a CAH with $50,000 in Part B billing, as outlined under MIPS, having to spend $50,000-$60,000 on data analytics and information technology just to have the potential to earn a 4-percent 2017 bonus. 
  5. Engage and communicate with your providers and among your providers. There needs to be a deliberate focus on building a strong team, with strategic planning, to successfully guide the next steps. There should also be at least one internal champion who is keeping his or her finger at the pulse of information for their respective rural entities – and a provider champion. MACRA not only needs to be on the agenda; it needs to be the agenda, along with the inclusion of population health. Optimizing preventive care is a good step to take, not only in patient care and reimbursement and measuring outcomes, but permeating the everyday language aspects of practicing medicine, including the culture, vision, mission, and planning steps. Assess the technology and resources needed to achieve the next steps and mitigate any barriers either in cost or information-gathering so that planning and deliverables can be mapped and achieved.
  6. Increase primary care (PC) needs resources. Remember that nearly 40 percent of all PC providers see anywhere between 22-35 patients each work day, leaving less than 20 minutes per patient face-to-face, plus the behind-the-scenes time necessary to document, write prescriptions, and return calls (plus attending provider meetings and attending to contingencies). Additionally, 30 percent of rural primary care physicians are at or nearing retirement age, while younger physicians (under 40) account for only 20 percent of the current workforce. With the rural population of 55-75 patients growing (people are living longer, needing more services, and more returning baby boomers are leaving urban areas to retire in rural areas), this means there are increased needs, demands, and stresses for more primary care physicians. Above all, primary care physicians must receive more support and excellence from physician assistants and nurse practitioners, especially where the scope of practice has been legislated. No matter what, there are increasing demands for PC that are outpacing the numbers of those being recruited and retained.  

The bottom line is that rural providers need extra support to do all they are called to do – primary care represents our first patients. If we don’t take care of them, it won’t matter how many patients are lining up for other services. As we tend to population health, let’s remember the primary care population health – it’s in a different context, but just as important.

About the Author

Janelle Ali-Dinar, PhD is a rural healthcare expert and advocate with more than 15 years of healthcare executive experience in many key areas, addressing critical access hospitals (CAHs), rural health clinics (RHCs), physicians, and patients. Dr. Ali-Dinar is also a sought-after speaker on Capitol Hill. A former hospital CEO and regional rural strategy executive, Janelle is also a past National Rural Health Association rural fellow, Rural Congress member, and Nebraska Rural Health Association president. She is currently the Nebraska DHHS chair of The Office of Minority Health Statewide Council. Janelle is currently the vice president of rural health for MyGenetx.  

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Benchmark Survey Addresses Most Challenging Aspects of ROI

HCPro’s HIM Briefings published its first release of information (ROI) benchmarking survey of 2017 last month. The survey, conducted in December 2016, explored health information management (HIM) and ROI professionals’ challenges, triumphs, and insights, covering U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) patient access guidance, hybridization of medical records, ROI staffing, billing and requests, and patient authorizations and logging.

Of special interest was the coverage of patient access. Forty-eight percent of respondents modified patient access fees after the OCR released its guidance. Some survey respondents experienced greater difficulty handling attorney requests as a result of the OCR guidance, specifically citing difficulty with requests from attorneys believing they are entitled to copies of protected health information (PHI) at the new OCR patient rate, or even for free. According to the OCR, further guidance related to patient access and third-party requests will be issued in the coming months.

Another topic of interest was patient authorizations and logging of disclosures in electronic health records (EHRs). When asked if physician offices need to provide patient authorizations when requesting copies of records for continuation of care, 33 percent of respondents said they do not if the requesting physician is on staff and/or is mentioned in the requested copies of records; 32 percent said they required patient authorizations if the requesting physician is not on staff; and 28 percent said that as long as a request is on the requesting physician’s letterhead, they release the copies of records.

Challenges of ROI

According to the survey, the most challenging aspect of ROI is record requests from adult children not noted as contacts or next of kin. Forty-one percent of survey respondents listed this as the most challenging aspect, which is consistent with the results from the 2014 (38 percent) and 2015 (41 percent) surveys.

Other challenges include requests from adult children for a deceased parent’s records (16 percent), requests from quality organizations (35 percent), and requests for a child’s records from divorced parents (28 percent).  

These are certainly challenging aspects of ROI, and below are some brief guidelines for handling these difficult requests:

Adult children not noted as contacts or next of kin

Although HIPAA permits physicians to share certain medical information with caregivers, it is crucial that children responsible for care of their elderly parents obtain healthcare powers of attorney so they can make healthcare decisions for their parents if necessary.

Adult children of deceased parents

After a patient dies, his or her PHI cannot be disclosed unless authorized by his or her personal representative; however, there are a few exceptions. The HIPAA Privacy Rule permits healthcare providers to disclose any relevant PHI of a deceased patient to family members or other persons involved in the patient’s healthcare or payment of care prior to the patient’s death, unless doing so is inconsistent with any previously expressed preference of the deceased.

Additionally, the PHI of a deceased patient can be disclosed without the patient’s personal representative’s authorization in certain instances: a) law enforcement, in the event of suspicion that death resulted from criminal conduct; b) coroners, medical examiners, or funeral directors; c) researchers working solely on the PHI of deceased patients; and d) organ procurement organizations for the purpose of facilitating organ donation and transplantation.

Healthcare providers should familiarize themselves with the definition of “personal representative” under applicable state law to ensure that their policies and procedures are compliant. 

Quality organizations

The HIPAA Privacy Rule (45 CFR § 164.512(d)(1)) permits covered entities to disclose PHI to health oversight agencies for oversight activities authorized by law, including Quality Improvement Organizations (QIOs), which are nonprofit organizations contracted with the Centers for Medicaid & Medicare Services (CMS) to improve healthcare quality. 

Divorced parents of minors

In most states, both parents, regardless of custody arrangement, are permitted to authorize the disclosure of their minor child’s PHI, provided that the requesting parent’s parental rights have not been terminated.

In conclusion, to best handle these and any challenges, healthcare providers should familiarize themselves with applicable state law to ensure that their current policies and procedures align with the law.

About the Author

Sara Goldstein, Esq. is an established author and speaker on health information privacy and security compliance. As general counsel for MRO, she is responsible for providing legal direction and guidance for the company and overseeing MRO’s compliance with HIPAA. She is also an adjunct professor of law at Drexel University, where she teaches a course on HIPAA and patient privacy.

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Why You Should Use the New Request for Hearing Form

The advent of revised regulations for administrative law judge (ALJ) hearings of Medicare appeals includes a new request for ALJ hearing or review of dismissal form.

Because the new form — governed by 42 C.F.R. § 405.1014 — provides a logical flow of information for you and the public servants handling your appeal, you should use the form for every new appeal you file. The form, Office of Medicare Hearings and Appeals No. OMHA-100, is available online at

Section 1 identifies the part of Medicare under which you are appealing. In Section 2, you are asked to tell OMHA who you are and outline your role in the case. Section 2 also helps OMHA expedite individual beneficiaries’ appeals, which OMHA still expects to decide within 90 days of filing.

Pursuant to 42 C.F.R. § 405.1014(a)(1)(i) through –(iii), all appellants must provide a telephone number in Section 3 or 4 of the form. This includes individual beneficiaries.

Representatives must complete Section 4 and attach a CMS-1696 appointment of representative form or other appointment of representative documentation if they answered “no” to the last question in Section 4, asking whether they previously submitted and detailing the appointment of a representative. Privacy rules require an appointment of representative if you want OMHA to talk with you about a case you file for someone else.

In Section 5, you must provide the Medicare appeal or qualified independent contractor (QIC) number assigned to the QIC reconsideration or notice you are appealing (see 42 C.F.R. § 405.1014(a)(1)(iv). Why do you have to provide the QIC number? OMHA needs it to request the case file from the QIC.

42 C.F.R. § 405.1014(a)(1)(v) now requires appellants to specify the dates of service (DOS) of the claims they are appealing. Because beneficiaries may have been hospitalized more than once, in home health, therapy, or hospice for multiple periods, or received more than one shipment of supplies or durable medical equipment (DME), providing dates of service and the QIC number ensures that the ALJ or attorney adjudicator will review and decide the correct claims. 

Healthcare professionals asking for an expedited hearing arising out of a Part D drug denial must explain in Section 6 why waiting the standard 90 days for a decision may jeopardize the beneficiary’s health, life, or ability to regain maximum function. 

In Section 7, explain why you disagree with the denial or dismissal. It’s acceptable to write: “the record supports payment for the services appellant provided the beneficiary on (DOS); please refer to attached letter (or proposed decision).” 

If you are submitting new evidence and are a provider or supplier (or a provider or supplier representing a beneficiary), you must indicate that in Section 8 – and explain why you didn’t previously submit the evidence before the QIC’s reconsideration decision, per 42 C.F.R. § 405.1018(d) and 42 C.F.R. § 405.1028(d). You must submit that “good cause” statement with the request for a hearing, or if you submit the evidence later, with the evidence. You cannot wait until the hearing to submit your good cause statement – the ALJ or attorney adjudicator cannot consider it if you wait. 

In Section 9, you advise if you are aggregating claims to meet the amount in controversy requirement, waiving an oral hearing and requesting an “on-the-record” decision issued without a hearing, or filing a statistical sampling claim. Waiving an oral hearing and requesting an on the record means your case may be assigned to an attorney adjudicator, who is a licensed attorney knowledgeable about Medicare coverage and payment policy, per 42 C.F.R. § 405.902, 42 C.F.R. § 405.1036(b)(2), and 42 C.F.R. § 423.2036(b)(2). 

42 C.F.R. § 405.1014(d)(1) and –(2) – and the new request for hearing form – require you to recite to whom and when you mailed a copy of your request for hearing, including the recipient(s) name, mailing address, city, state, and ZIP code. Your mailing must also include a copy of your position paper, brief, or proposed decision. Providing information about who you served with copies, and when, allows your hearing request to be placed in line for processing.        

Hearing requests that do not include service of copy information will be further delayed while OMHA asks for that information, typically with a notice to correct deficiency. Failure to correct the deficiency in the allowed time will result in dismissal of the request for hearing, per 42 C.F.R. § 405.1014(d)(3), 42 C.F.R. § 405.1052(a)(7), and 42 C.F.R. § 405.1052(b)(4). Dismissal for failing to document providing a copy does not apply to individual beneficiaries. 

Send your request for hearing to the entity specified in the reconsideration decision. If the reconsideration denial or other order directs you to send it to OMHA, Section 11 provides addresses and mail stops.

Using the new form ensures that you provide all the information you need to perfect your appeal. Using the form helps the intake clerks in centralized docketing and eventual ALJ legal assistants quickly input your appeal information. Help yourself, and help OMHA help you. Use the form. 

About the Author 

Bob Soltis is a success coach and the author of How to Handle Your Medicare Hearing. A former U.S. Navy officer, he decided 4,500 cases during eight years as an ALJ at OMHA. 

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The Rules Don’t Apply: Private Payers

A client called me this week after receiving the results of an audit by a private insurer. While I have done Medicare audits for clients in nearly every state, audits by private insurers are rare. They happen, but they are atypical.

If you are used to dealing with Medicare audits, it is important to understand that private pay audits, while similar, are not identical. The first major difference is that the private payor is not automatically entitled to use Medicare rules to recoup money, and similarly, you are not entitled to automatically rely on a Medicare-based defense. 

Instead, the rules contained in the payor’s contract, if there is one, apply. Assuming any contract incorporates the plan’s policy manuals, as nearly every contract does, the manuals therefore are equally important. Determining which rules and policies will apply can require some detective work, and locating the manuals isn’t always easy. Absent a contract, industry norms control how things work. This is one reason audits by non-contracted insurers are rare.

This particular audit denied every single claim, asserting that the services were neither documented nor medically necessary. The insurer’s position was particularly puzzling because the letter described the “nonexistent” documentation in detail. For example, it recounted an encounter for which the practitioner spent 50 minutes counselling a patient about a sleep disorder, irritable bowel syndrome, and mood issues, and provided nutritional counseling beforehand; I am not making this up, but the insurer asserted that there was no documentation of the service.

Obviously, an appeal is warranted. How is it done? While Medicare has a clearly defined appeals process, the situation with private payors is largely up to the insurer. They have the ability to determine who will hear the appeals and how they will work. That does not mean, however, you are totally dependent on the insurer’s mercy. You have at least two options to push back. First, insurers are regulated. Identify the state agency (likely to be the insurance commissioner or commerce commissioner) that oversees the plan’s regulation. Government agencies often will rein in abuses, particularly when they are egregious. One huge advantage of this option is that it is free. The other option is going to court. This approach is may cost you, but it will require the plan to explain its position. Note that if you have agreed to arbitration in your contract, you may be required to use that private dispute resolution mechanism rather than a court. Mediation provides another alternative to resolve a dispute. When a plan is taking an irrational position, sometimes an independent mediator can help them see reason. 

It is important to consider what laws or contractual terms limit the insurer’s ability to recoup funds. Some contracts place limits on a plan’s ability to recoup overpayments. For example, many Blue Cross contracts limit recovery to 12 months, absent fraud. It is common for the time limits to be expanded when there is fraud (or, in some cases, abuse). That can make the determination of whether conduct is fraudulent or abusive very important. Even in the absence of a contractual limitation on recovery, state law almost always has a statute of limitations that will limit recovery, thought that limit may be as long as four to six years, and possibly longer. 

If you have a contract with the insurer, the contractual statute of limitations should apply. In the absence of agreement, the limitation for torts likely governs. 

When the dispute involves a Medicare Advantage plan, it seems that the plan’s appeal mechanism governs, not the typical Medicare appeal rules. However, here is an important difference between Medicare Advantage appeals and other private disputes: Medicare Advantage contractors must provide coverage that is no less restrictive than Medicare. This should prevent the plan from recouping from you in situations where Medicare is prohibited from making a recovery. 

Private insurance audits remain less common, but they definitely happen. If you conclude that the audit findings are incorrect, you can and should challenge the payor. 

About the Author

David M. Glaser, Esq., is a shareholder in Fredrikson & Byron’s Health Law Group. David helps clinics, hospitals, and other healthcare entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David’s goal is to explain the government’s enforcement position and to analyze whether the law supports this position. David is a popular panelist on Monitor Mondays and is a member of the RACmonitor editorial board.

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What Are We to Do About Condition Code 44?

Sept. 10, 2004 was a day of mixed blessings in the case management world. On that day, the Centers for Medicare & Medicaid Services (CMS) released MLN Matters SE 0622, titled Clarification of Medicare Payment Policy When Inpatient Admission is Determined to be Not Medically Necessary, Including the Use of Condition Code 44: Inpatient Admission changed to Outpatient.

With this, finally, after years of write-offs, CMS gave hospitals a way to correct the status of a patient who was incorrectly admitted as an inpatient and still get paid for the services provided to the patient. But it was not met with solely celebration, since CMS set strict criteria for these changes. That included requiring that any change from inpatient to outpatient include review by a physician member of the utilization review (UR) committee, even when the physician who ordered inpatient admission decided themselves to change the status to outpatient.

This created the need for ready access to a UR committee physician at all times, including weekends, when the most incorrect status determinations seemed to happen. It also required written notification to the patient, the hospital (how exactly do we notify a building?), and the physician. For many hospitals, the logistics limited the use of Condition Code 44, with resulting loss of revenue.

In 2013, after several administrative law judges awarded Part B payment as a consolation prize to hospitals that had appealed denials of their Part A admissions, CMS issued CMS-1455-R, which allowed hospitals to rebill denied inpatient Part A admissions to Part B and get paid for all eligible services instead of a limited number of services (which were previously allowed). The next change occurred soon thereafter as part of the 2014 Inpatient Prospective Payment System (IPPS) Final Rule. Here CMS allowed hospitals to review inpatient admissions after discharge, admit that inpatient admission was inappropriate, self-deny by filing a provider liable claim, and then rebill for all applicable services. Since this self-denial-and-rebill process did change the patient’s liability from Part A to Part B, CMS required that it follow the standard utilization review process, with review by a UR physician and written notification to all involved parties (with another letter addressed to a building).

Then, out of the blue, in sub-regulatory guidance issued Jan. 30, 2014 as part of the two-midnight rule education outreach, CMS stated that “if the physician or other practitioner responsible for countersigning an initial order or verbal order does not agree that inpatient admission was appropriate or valid (including an unauthorized verbal order), he or she should not countersign the order and the beneficiary is not considered to be an inpatient. The hospital stay may be billed to Part B as a hospital outpatient encounter.” This came along with the requirement that all admission orders be authenticated prior to discharge as a condition of payment.

Putting this all together, if a patient is admitted as inpatient by a written order from a practitioner with admitting privileges and it is determined that the inpatient admission was improper, the Condition Code 44 process is required to convert that patient to outpatient. But if that same practitioner gave the inpatient admission order as a verbal order and it is determined that the inpatient admission is improper, the practitioner can simply not sign the order and now the patient is an outpatient, with no UR review or notification. A patient who was formally admitted as inpatient, given a copy of the Important Message from Medicare informing them of their appeal rights, and whose financial liability was inpatient Part A now can become an outpatient, with financial liability shifting to outpatient Part B.

CMS has stated that it wants patients to be fully informed about their financial obligations, yet this new policy allows an inpatient to become an outpatient without their knowledge. And unless they receive more than 24 hours of observation services, in which case the Medicare Outpatient Observation Notice (MOON) would be required, that patient would never know their stay was an outpatient stay until they received a bill.

This policy does open wide a potential Condition Code 44 work-around for hospitals. If all admission orders are entered as verbal orders, the UR staff then can review the admissions and either clear the order for authentication, making it a valid inpatient admission, or block the order from authentication and request an order for observation, reverting the patient to outpatient and starting the billing for observation services and counting hours for the MOON delivery. The admitting doctor can enter all the orders directly into the computer, but the admission order must be given verbally to a nurse or another provider standing nearby who would then enter that single order as a verbal order. With this policy, there is no need to ever use Condition Code 44. The UR physician does not need to be bothered and there is no need to worry about the patient being fully informed about the change in their status since, according to CMS, they were never an inpatient in the first place.

Of course, I find this policy ridiculous. If there is an admission order of any type effectuated and the patient is formally admitted and starts receiving care as an inpatient, the lack of authentication on that order cannot possibly make that admission disappear. It violates patients’ rights, specifically taking away their discharge appeal rights without any notification, and it violates their right to be aware of their status and the financial ramifications.

One day CMS will realize this and reverse its stance, perhaps quoting Gilda Radner’s Emily Litella, saying “never mind.”

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays.

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