Payment Matters

December 9, 2010

CMS Releases Final Rule for IME/GME Provisions in the Health Care Reform Legislation

By: Thomas W. Coons and Mark A. Stanley

CMS's 2011 OPPS Final Rule [PDF] gives effect to the IME/GME provisions contained in the new health care reform legislation. The Final Rule follows the framework laid out in the legislation, which we discussed in our Health Care Legislation Update. Nevertheless, teaching hospitals will be interested in the details of how CMS will implement the changes under the legislation, particularly those pertaining to the redistribution of residents from closed hospitals and from hospitals that have not "used" all of their FTE slots.

Congress Passes Legislation Exempting Health Care Providers from “Red Flags� Rule

By: Julie E. Kass and Joshua J. Freemire

On December 7, 2010, the U.S. House of Representatives passed S.3987, the Red Flag Program Clarification Act of 2010, exempting healthcare providers from the Red Flags identity-theft prevention program requirements (Rule). The U.S. Senate passed S.3987 late on November 30, 2010. The bill limits the definition of "creditor" to a person who obtains or uses consumer reports in connection with a credit transaction, furnishes information to consumer reporting agencies in connection with credit transactions, or advances funds based on the recipient's obligation to repay (or permits the fund to be repaid through specific property of the recipient). The bill specifically excludes from the definition of "creditor" persons who "advance funds" by providing services in advanced of receiving payment. This provision appears to exempt physicians and other businesses who accept payment after the provision of services. The bill does, however, include language permitting relevant government agencies to designate "creditors" subject to the Rule where the agencies determine that the person in question maintains accounts that are subject to a reasonably foreseeable risk of identity theft. Designations must be made through agency rule making. The bill will now be sent to President Obama for his signature.

Say Goodbye to Physician-Owned Hospitals

By: Julie E. Kass and Joshua J. Freemire

The final version of CMS’s revisions to the whole hospital and rural provider exceptions to the Stark prohibitions (the Rule) changes little from the proposed version of the Rule. The Rule closely follows the statutory mandate of the Affordable Care Act, that there be no new physician-owned hospitals (POHs) after December 31, 2010, and those that exist generally will not be permitted to expand. Providers that have historically relied on either the rural provider or whole hospital exception to the Stark prohibitions should review their structure carefully to ensure that they will remain in compliance when the Rule takes effect.

Physicians Note: PQRI Is Now PQRS

By: Paul W. Kim

Just when PQRI, the acronym for physician quality reporting initiative became a household name, CMS has renamed PQRI to PQRS, physician quality reporting system. As part of the CY 2011 physician fee schedule final rule published in the Federal Register on November 29, 2010, CMS also revised the program, in part pursuant to the requirements of the Affordable Care Act. The major changes include the following:

• Extending the incentive payment program through 2014 for eligible practitioners submitting quality measure data
• Offering incentive payment of 1% for next year and 0.5% effective 2012
• Decreasing Medicare payment for practitioners not entering measures beginning 2015
• Requiring reporting for 50% of Medicare patients, rather than 80%, for claims-based reporting of individual measures