ED Coding and Reimbursement Alert

Look for minimal payment updates and changes to incentive programs to help pay for the fix.

Physicians were facing yet another Medicare payment cut of more than 20 percent beginning April 1, 2015; however, on March 26th the House of Representatives overwhelmingly approved legislation, later also passed by the Senate, which  repeals the flawed Sustainable Growth Rate (SGR) formula used to calculate Medicare reimbursements.  Read on for the scoop on what that means to ED providers.

The bill, H.R. 2, the “Medicare Access and CHIP Reauthorization Act” (MACRA), does ends the annual fear of SGR formula driven steep cuts to the conversion factor. Additionally, here are significant provisions of interest to emergency physicians, says Michael A Granovsky MD, FACEP, CPC, President of LogixHealth a national ED coding and billing company.  

The trade-off for avoiding the deep cuts is a provision to significantly limit provider payment “updates” for the next 11 years, says Granovsky.  “As written, we would see annual physician payment updates of 0.5% from 2015 through 2019 and zero percent updates from 2020 through 2015. Starting in 2026, we would see two conversion factors, one that applies to providers that participate in advanced payment models such as an ACO, with a 0.75 percent annual update. A second conversion factor with a 0.25 percent yearly increase would apply to providers who do not participate in advance payment models,” he adds.

Incentive Programs To Be Combined

The bill calls for consolidation of three current incentive programs, PQRS, HER meaningful use and the value based modifier program into the new Merit-Based Incentive Payment System (MIPS).  

MIPS will assess performance of eligible professionals in four categories (quality, resource use, meaningful use of EHRs and clinical practice) and provide a payment adjustment, which could be positive or negative depending on your composite performance score. 

The current penalties in play for meaningful use, PQRS and Value based modifier, would be replaced by MIPS which rapidly escalates form 4% in 2019 to 9% in 2022, Granovsky explains.

Other Key Provisions For Emergency Medicine

According to Granovsky, the Medicare Access and CHIP Reauthorization Act  contains other provisions important to emergency medicine reimbursement, including:

Extension of Work Geographic Practice Cost Index (GPCI) floor.  

This provision extends the existing 1.0 floor on the “physician work” cost index work component of physician fees in areas where labor cost is lower than the national average until Jan. 1, 2018. This is a big win for EDs in rural areas.

Two Year Extension of the CHIP. 

Children’s Health insurance program (CHIP) covers more than 8 million children and pregnant women in families that earn income above Medicaid eligibility levels. While the CHIP program is authorized through 2019, no new funding is available after fiscal year 2015. This provision preserves and extends CHIP, funding the program through fiscal year 2017. This is also a significant win for EDs with a large payer mix of low income patients.

Income-Related Premium Adjustment for Parts B and D. 

This provision increased means testing for the portion of the Medicare Part B premium that a beneficiary pays based on the beneficiary’s income. Beginning in 2018, it would increase the percentage that Medicare beneficiaries with modified adjusted gross income (MAGI) between $133,501 and $160,000 ($267,001-$320,000 for a couple) from 50 percent to 65 percent. Beneficiaries that earn $160,001 and above ($320,001 and above for a couple) would pay 80 percent. This provision would also apply to Part D premiums, meaning that beneficiaries who have income above the set thresholds are assessed an income-related monthly adjustment amount in addition the base Part D monthly premium. This is one way to offset the cost of the SGR fix.

Delay of the Two-Midnight Rule

Current CMS regulation requires a patient stay of two-midnights in a hospital to qualify for inpatient status in most instances.  Stays that are less than that will be paid as an outpatient visit such as observation. This provision allows CMS to continue use of the Medicare Administrative Contractor (MAC) “probe and educate” program to assess provider understanding and compliance with the “two-midnight rule,” on a pre-payment basis, through Sept. 30, 2015.

Delay In Elimination of The Global Surgical Packages. 

This provision reverses the CMS 2015 final rule decision to eliminate the bundled payment for surgical services that span a 10 and 90-day period. It requires CMS to periodically collect information on the services that surgeons furnish during these global periods beginning not later than 2017 and use that information to ensure that the bundled payment amounts for surgical services are accurate. The Secretary of HHS has the authority to delay a portion of payment for services with a 10 and 90-day global period to incentivize reporting of information. The Secretary can stop the collection of information from surgeons if the needed information can be obtained through other mechanisms, such as clinical data registries and electronic medical records.

Medicaid DSH. 

Medicaid Disproportionate Share Hospital (DSH) payments provide additional payments to hospitals that serve a disproportionate number of low-income patients. Reductions in state DSH allotments were scheduled to begin in fiscal year 2017. This new proviso would delay Medicaid DSH cuts until fiscal year 2018 and add another year of DSH cuts in 2025. Delaying these cuts is good news for DSH hospitals and the providers they employ. If those hospitals had closed, their patients would be forced to seek care elsewhere, further straining the system.