On Thursday April 16th, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”). Pub.L. 114-10. In two previous posts, we discussed MACRA’s repeal of the Sustainable Growth Rate formula (the “SGR”) and physician payment reform, and the payment provisions and offsets established by MACRA. This third post will detail the Program integrity and fraud and abuse provisions of MACRA.
Section 101(e)(7): Promoting Alternative Payment Models – Study and Report on Fraud Related to Alternative Payment Models under the Medicare Program
Buried within Section 101, which is the provision repealing the SGR and authorizing various reforms to physician reimbursement, Subsection (e)(7) includes a required study and report on fraud related to alternative payment models under the Medicare Program. This study will be conducted by the Secretary of the Department of Health and Human Services (the “Secretary”) and examine the applicability of Federal fraud prevention laws to the items and services furnished to Medicare beneficiaries for which payment is made under an alternative payment model defined by MACRA. In addition, this study will identify aspects of those same alternative payment models that are vulnerable to fraudulent activity and consider the implications of waivers of federal fraud prevention laws in support of such alternative payment models.
Within two years of the enactment of MACRA, the Secretary is required to submit to Congress a report providing the results of this study, which will include recommended actions to reduce the identified vulnerabilities of the alternative payment models and, as appropriate, recommendations from the Inspector General of the Department of Health and Human Services (“HHS”) regarding possible changes in Federal fraud prevention laws to reduce those vulnerabilities.
Section 104: Empowering Beneficiary Choices Through Continued Access to Information on Physicians’ Services
Section 104 requires that beginning in 2015, the Secretary make publicly available on an annual basis, through a searchable database, information regarding physicians and, as appropriate, other eligible professionals (which are defined to include physicians, physical or occupational therapists, qualified speech-language pathologists, qualified audiologists, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, clinical psychologists, and registered dietitians or nutrition professionals) on items and services furnished to Medicare beneficiaries.
Section 104 of MACRA requires the Secretary to provide at least the following types of information:
- The number of services furnished to beneficiaries of Medicare Part B by physicians or other eligible professionals (which may include information on the most frequent services furnished or groupings of services);
- Submitted charges and payments for services; and
- A unique identifier for the physician or eligible professional that is available to the public (e.g., NPI number).
Additional requirements of Section 104 include that the information made available under this Section must be searchable by at least:
- The specialty or type of physician or other eligible professional;
- Characteristics of the services furnished (e.g., volume or groupings of services); and
- The location of the physician or other eligible professional.
Beginning in 2016, the Secretary is required to integrate the information made available under this section on the Physician Compare website hosted by the Centers for Medicare & Medicaid Services (“CMS”).
This required publication of data will be similar to the 2012 Medicare Provider Utilization and Payment Data information made public by the Secretary in April 2014. As we discussed in a previous post dated April 10, 2014, HHS’s original and historic release of Medicare payment data last year was the result of multi-year litigation, which resulted in a federal judge overturning an injunction that had been in place since the late 1970s prohibiting HHS from disclosing information about Medicare payments to individual physicians.
Even recognizing the general merits of annual publication of this type of data, the information has the potential to cause confusion. For example, certain physicians, notably oncologists and retinal surgeons, dispense drugs through their practices. Because Medicare pays these physicians directly for these drugs, without a detailed look at the CPT codes in the published data, it appears at first glance that these physicians receive disproportionately large incomes from treating Medicare patients.
Another example of problems caused by this data is the publication of charges. Only those who follow reimbursement closely understand that charge data is almost meaningless. This is because very few patients pay providers based on charges, but rather payment is typically based on a fee schedule set by third party payors. As a result, providers set their charges based on a variety of measures. In some cases charges are very close to the payment rates, and in some cases they are set well above payment rates in order to recoup from a small number of charge-paying patients losses the provider incurs from private payor reimbursement. All this appears to have been irrelevant to Congress as it has now mandated annual publication of providers’ charge data. Continue Reading