New requirements contained in the health care reform legislation increase the pressure on health care providers, suppliers, Medicare Advantage and Part D Plan sponsors, and others to return identified Medicare and Medicaid overpayments in a timely fashion, at risk of being alleged to have violated the False Claims Act.
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The recently enacted federal Patient Protection and Affordable Care Act (PPACA) includes significant fraud fighting and program integrity initiatives, in addition to the more widely publicized provisions dealing with health insurance coverage. Some of these provisions apply to all providers and suppliers under federal health care programs, while others are aimed at specific health industry sectors. By far the most extensive provider-specific terms are aimed at skilled nursing facilities and nursing facilities. These provisions have created greater transparency with respect to complex ownership structures as well as enhanced data available to consumers and regulators on quality of care, staffing profiles and training issues.
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The 340B drug discount program allows certain hospitals and federal-grant-funded clinics to purchase covered outpatient drugs at prices substantially lower than available to other facilities. The Patient Protection and Affordable Care Act expanded the types of hospitals eligible to participate in the program and instituted new programs for ensuring that both pharmaceutical manufacturers and covered entities comply with 340B program requirements.
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The recently enacted Patient Protection and Affordable Care Act has generated significant interest in a new form of integrated delivery system known as an accountable care organization (ACO). The Act specifically creates a separate ACO demonstration project within the Medicare Program, and provides for the implementation of several other coordinated care demonstration programs and the creation of a new entity within the Centers for Medicare and Medicaid Services that has the authority to test proposed methods of coordinated care delivery. All health systems, community hospitals and physician groups should swiftly consider and carefully analyze forming or otherwise participating in an ACO or similar organization in order to respond effectively to the emerging changes in U.S. health care flowing from the new federal health care reform law and related initiatives sponsored by commercial payors.
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On March 23, 2010, President Obama signed into law H.R. 3590, the Patient Protection and Affordable Care Act (the Act). This sweeping health reform legislation requires the U.S. Department of Health & Human Services to develop interoperable and secure standards and protocols to facilitate the enrollment of individuals in federal and state health and human services programs, and authorizes grants to state and local governments to promote the implementation of health information technology to facilitate enrollment in the programs. All stakeholders affected by the federal government’s development of standards and protocols under the Act should closely monitor and, where possible, provide input on their development.
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President Obama recently signed into law the much-anticipated health care reform legislation. This legislation includes significant fraud-fighting and program integrity initiatives, including transparency requirements for pharmaceutical and medical device manufacturers, and amendments to federal enforcement tools, such as the anti-kickback statute, False Claims Act and the physician self-referral law. Providers and industry will need to consider increased rigor in their compliance programs in order to fully integrate and account for the many complex and interrelated health care fraud and abuse reform initiatives under the health care reform legislation.
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The Facts
Recently enacted health reform legislation will establish reimbursement incentives to reward highly efficient hospitals. Under the new law, $400 million has been made available, over fiscal years 2011 and 2012, for hospitals located in counties in the lowest quartile of age-, sex- and race-adjusted Medicare Part A and B spending.
In fiscal years 2011 and 2012, a qualifying hospital will receive, in addition to its regular Medicare reimbursement, a portion of the $400 million based on the ratio of the hospital’s fiscal year 2009 reimbursement relative to total reimbursement in 2009 for all qualifying hospitals.
According to a review of available Medicare databases, hospitals most likely to benefit will be those located in counties in southern, northwestern or midwestern states that are more sparsely populated and that have a lower number of chronically ill enrollees, including Kentucky, Montana, Wisconsin, Nebraska, Colorado and Arkansas.
What’s at Stake
This reimbursement incentive is one of many changes intended to incentivize quality and efficiency over quantity. Although non-qualifying hospitals will not be penalized, this section of the legislation clearly incentivizes greater efficiency and shows a commitment by the U.S. Congress and the Centers for Medicare & Medicaid Services (CMS) to consider new methods of hospital reimbursement.
Steps to Consider
Although CMS will have to create new databases to implement this provision, hospitals can make some early rough predictions about whether they may be located in a qualifying county by consulting the Dartmouth Atlas of Health Care and data available on the CMS website.
The massive health care reform legislation enacted on March 23, 2010, (and subsequently amended on March 30, 2010) includes only a few changes directly affecting Medicare-certified ambulatory surgery centers (ASCs), but these changes will affect Medicare reimbursements in the near-term and may portend even greater reimbursement changes in the future. ASCs should carefully review the legislation to determine how their businesses will be affected.
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The Facts
President Obama is reportedly poised to nominate Don Berwick, M.D., M.P.P., to head the Centers for Medicare & Medicaid Services (CMS). Since 2006, when Dr. Mark McClellan left, CMS has been without a permanent administrator.
Berwick is the current president and CEO of the Institute for Healthcare Improvement, a Cambridge, Massachusetts, organization that seeks to improve health care by "building the will for change, cultivating promising concepts for improving patient care, and helping health care systems put those ideas into action." In its work, the institute seeks to "accelerate the measurable and continual progress of health care systems." For more information about the institute, visit http://www.ihi.org/ihi/about/. Berwick is also a clinical professor of pediatrics at Harvard Medical School and a professor of health care policy at the Harvard School of Public Health. Berwick served as vice-chair of the U.S. Preventive Services Task Force, and chair of the National Advisory Council of the Agency for Healthcare Research and Quality. He also served two terms on the Institute of Medicine’s governing council.
Berwick would have the difficult job of managing and improving Medicare, Medicaid and the Children's Health Insurance Program, while simultaneously implementing much of the recently enacted health reform legislation. While Medicare currently covers 46 million Americans, Medicaid currently covers 43.5 million Americans and is slated to expand to cover an additional 16 million individuals through expanded eligibility in health reform legislation. However, in light of Berwick’s vast experience in the area of health quality improvement, he seems well-positioned to lead CMS as the agency positions itself to increasingly focus on paying for value as opposed to volume.
What’s at Stake
As the new head of the largest medical payer in the nation, Berwick’s leadership and decisions would significantly affect almost everyone in the health care sector. With the enactment of health reform legislation, implementation is the primary focus of the Obama administration. Berwick would have a vital role in determining how this reform is rolled out and ensuring that this reform meets U.S. Department of Health and Human Services Secretary Kathleen Sebelius’s goal of HHS becoming “the face of competent government — the face of a help desk that can really respond to personal issues and questions.”
Steps to Consider
The post of CMS administrator requires U.S. Senate confirmation, a process that may reignite the deep political and philosophical divisions about the newly passed health reform legislation. Thus, all in the health care sector should monitor the nomination and Senate confirmation process.
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