Delay Announced in CMS Star Rating System for Hospitals

Originally, the Centers for Medicare and Medicaid Services (CMS) intended to release a star rating system on hospitals, beginning April 21, 2016. However, CMS recently announced plans to delay the rating system until July, or potentially later. The exact timing will depend upon the development of the methodology for rating a hospital.

When the star rating system was designed, the purpose was to create a simple tool for consumers to evaluate hospitals. This system largely incorporated the previous, more complicated, performance measures that follows more than 100 quality measures. While the new star system will not replace the more complicated system, it will be in addition to the prior measures and make the review process simpler for consumers. The new star system incorporates factors such as readmission rates, mortality rates, timeliness of care, safety of care, and other patient driven statistics.

The delay is largely attributed to hospital and lawmaker complaints that the new rating system will impact consumer perceptions, when it may not have a direct bearing on the specific services sought. Moreover, a concern regarding the quality of the data, including the methodology for ensuring accuracy, remained a significant worry for the hospitals. It is unclear when the star rating system will be implemented, but hospitals and consumers should expect further information, if not the unveiling of the star rating system, this summer.

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ICD-10 Deadline Delayed at Least 1 Year

The implementation deadline for ICD-10 has been delayed to at least October 1, 2015.  Congress has previously pushed back the deadline several times, most recently to October 1st, 2014.  The law provides that the implementation date may not be prior to October 1^st, 2015, leaving open the possibility of it being further extended.  President Obama signed the bill into law on April 1^st, 2014.

© 2014 Parsonage Vandenack Williams LLC

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How Does the Affordable Care Act (Obamacare) Affect My Business?

 

How the Affordable Care Act will affect your business depends, in part, on the size of your business. If you are a business that has 50+ employees then you have certain requirements regarding proving health insurance or paying a penalty. If you are an employer who has less than 50 employees, there are some tax credit opportunities available to you if you do provide health insurance to your employees.

© 2014 Parsonage Vandenack Williams LLC

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New IRS Guidance Clarifies Tax Treatment of HSAs

Health savings accounts (HSAs) are a useful tool for employees and employers because of their tax-favored status. The IRS has recently clarified that certain Affordable Care Act rules will not affect the tax treatment of HSAs.

An HSA must be paired with a high-deductible health plan (HDHP) to receive tax-favored treatment. The Affordable Care Act requires health plans to provide certain preventive services with no deductible or cost-sharing. There was some concern that this rule would result in loss of HDHP status with the effect of HSAs losing tax favorable treatment. The IRS, however, has indicated that HDHPs will not lose their status as HDHPs solely because they offer the preventive services required by the Affordable Care Act. Thus, HSAs will still be a strong, tax-favored tool for dealing with medical expenses.

© 2013 Parsonage Vandenack Williams LLC

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Nondiscriminatory Wellness Incentives

Federal agencies have issued final regulations for the Patient Protection and Affordable Care Act (PPACA).  Group health plans may not discriminate against individuals on the basis of health factors.  However, there is an exception to the nondiscrimination rules for wellness programs.  Wellness programs have been divided into two categories: (1) participatory wellness programs and (2) health-contingent wellness programs.

Participatory wellness programs must be set up to improve the health risk of all similarly situated individuals and not simply reward those who are already in good health.

Health contingent wellness programs must be designed to promote good health and prevent disease.  The program must not be overly burdensome, used to implicitly discriminate based on a health factor, and highly suspect in the method chosen.  The reward must allow a reasonable alternative standard, if it is unreasonably difficult because of an individual’s existing medical condition and it is medically inadvisable for an individual to attempt to satisfy the normal standard.  A plan does not need a specific reasonable alternative standard, but only the disclosure that one can be made available.

© 2013 Parsonage Vandenack Williams LLC

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Deadline for Patient Centered Outcomes Research (PCOR) Fee

July 31^st is the deadline to pay Patient Centered Outcomes Research “PCOR” fees established under the Patient Protection and Affordable Care Act (“PPACA”),   This deadline applies to all health insurance plan sponsors and health care insurers for a plan year that ends after Sept. 30, 2012 and before Jan. 1, 2013. The fee is paid with Form 720. The IRS has recently posted an updated of such form and a payment voucher on the IRS website.

The fee will be used to fund research regarding clinical effectiveness relating to patient centered outcomes. This research institute conducts research to help assist patients, clinicians, purchasers, and policy-makers in making informed health decisions.

© 2013 Parsonage Vandenack Williams LLC

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HHS Waives Opt-in Deadline for Exchanges

States have been slow to buy into the state-run Exchange model. Exchanges—online health insurance portals—are a key part of the Affordable Care Act. They will allow consumers to learn more about insurance options, compare plans, and purchase coverage. HHS originally thought that many states would choose to manage their own Exchanges. However, many states have not opted in for a variety of reasons. In response, HHS has waived deadlines for states to announce their intention to adopt their own Exchanges.

The Affordable Care Act requires all states to have an Exchange by October 2013. If states choose not to manage their own, the federal government will manage the Exchange. To date, 17 states will administer their own Exchange. Prior estimates indicated that many more states would opt in. Because of this, the federal government may have to pay more to administer Exchanges than estimated.

© 2013 Parsonage Vandenack Williams LLC

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Final HIPAA/HITECH Rule Released

HHS has recently released final rules modifying HIPAA under the HITECH Act. The rules make several changes for both providers and business associates. First, the regulations expand the definition of business associate. Thus, businesses need to figure out whether they are now subject to HIPAA. Business associates may face up to $1.5 million in fines per year if they do not comply with the new rules.

Providers will have to make several changes as well. The new rules give providers less flexibility to decide when to report a breach and restrict when PHI can be used for marketing. Providers must provide patients with records in electronic form on request. Also, they must revise their Notices of Privacy Practices. If providers do not comply, they will face harsher fines and new enforcement tools. Providers should start revising their business associate agreements, NPPs, and other policies to comply by September 23.

© 2013 Parsonage Vandenack Williams LLC

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Congress Passes “Doc Fix”

Physicians can rest easy, at least for a while. On New Year’s Day, Congress passed a bill preventing certain Medicare cuts in 2013. This delay will come at the expense of future reimbursement rates for some providers. The fix will delay the previously expected 27% cut to physician rates until 2014. It will also temporarily prevent a 2% cut for all Medicare providers. However, other changes to reimbursement rates are still likely, and renegotiated cuts are still possible.

Several other provisions taking effect in 2013 and 2014 are also included in the bill. The bill delays another major reimbursement cut to rural physicians, ambulance services, low-volume hospitals, and others until 2014. However, effective April 1, 2013, reimbursement rates will be cut by 25% for certain therapy services. Reimbursement rates will also be cut for certain advanced imaging services in 2014. While the long-term effects of these provisions are unclear, Congress has delayed the worst for physicians for the time being.

© 2013 Parsonage Vandenack Williams LLC

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State-based Healthcare Exchange Blueprint Deadline Extended

The President has announced that states will be allowed more time to provide plans for implementing healthcare exchanges under the Patient Protection and Affordable Care Act.  Under the Act, states must indicate whether they will create health insurance exchanges.  If a state does not opt to create an exchange, the federal government will supply health insurance to its citizens through a federal exchange.  At present, 20 states have adopted some sort of plan for a state healthcare exchange, 11 have opted not to create a state exchange, and the remainder are undecided.  The deadline to opt into the state healthcare exchange system remains November 16, 2012.

While states must still act promptly to determine whether they will participate, they now have additional time to plan for implementation.  Before the extension was granted, states would have been required to submit a Blueprint application, detailing implementation of the healthcare exchange, by November 16, 2012.  Now, however, Blueprints must be submitted by December 14, 2012.  Kathleen Sebelius, the Secretary of Health and Human Services, has indicated in a letter to state governors that the extension was granted to provide states with additional support in developing implementation plans.  However, some commentators argue that the extension was granted in response to the “wait-and-see” approach adopted by the states in light of the recent election.

© 2012 Parsonage Vandenack Williams LLC

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