December 2014


On December 21, the federal Centers for Medicare & Medicaid Services (CMS) began issuing letters to physicians and other health professionals eligible to participate in the Medicare EHR Incentive Program notifying them of a 1% Medicare payment penalty they will incur in 2015 for failing to meet Stage 1 meaningful use (MU) benchmarks for use of electronic health records (EHRs). More than 257,000 eligible professionals (EPs) are slated to receive penalty notification letters, a number the American Medical Association (AMA) says is “worse than we anticipated.” Physicians facing the 1% penalty in 2015 will experience an additional 1% payment reduction in each subsequent year they fail to meet EHR MU objectives, up to a maximum of 5%. A physician who also fails to meet MU e-prescribing objectives set through the Electronic Prescribing Incentive Program will experience an additional 1% penalty reduction in Medicare payment. Of the 257,000 EPs scheduled to be penalized under the EHR meaningful use program in 2015, approximately 28,000 also face the 1% e-prescribing penalty.

Data has not yet been made available to show how many Iowa physicians and other health professionals eligible to participate in these two Medicare incentive programs are facing the 2015 Medicare payment penalties. CMS data does show, however, that from January 2011-October 2014, EPs in Iowa received total incentive payments of $350,896,401 for meeting Stage 1 EHR MU objectives either through Medicare ($244,634,629) or Medicaid ($106,261). National data also indicates that Iowa providers have made substantial progress in implementing and using e-prescribing.

The AMA issued a statement saying that it was “appalled” that more than 50% of all EPs will face MU penalties in 2015. “The penalties physicians are facing under the Meaningful Use program are part of a regulatory tsunami facing physicians,” including potential payment reductions from the Physician Quality Reporting System (PQRS) and the Value-based Modifier Program (VBM) as well as ongoing application of budget sequester cuts. Effective April 1, 2015, physicians also face a 21.2% Medicare payment reduction absent corrective congressional action on the SGR.

Not all physicians are eligible to participate in these Medicare MU incentive programs and many eligible physicians applied for and received hardship exemptions making the 2015 penalties inapplicable to them. Of those who are eligible, many elect not to participate, believing the payment penalties they would incur are far less than the costs, burdens, and problems they would face in purchasing and implementing electronic health record systems at this time. An AMA-RAND study released in October 2013 showed that EHR implementation was a significant factor in growing physician dissatisfaction with medical practice. Physicians say that EHR systems interfere with face-to-face physician-patient interactions; are more cumbersome and expensive to implement than projected; often are not interoperable; and are fraught with operational failings.

The AMA continues to advocate for suspension of EHR MU penalties while promoting EHR MU program improvements to better reflect the current state of EHR system functionality, interoperability, workability, and costs. (Link to October 13, 2014 letter:

Physicians receiving letters will have until the end of February to challenge CMS’ determination.

Iowa Board of Medicine’s proposed telemedicine rule has been filed – hearing and public comments set for January 15

At its December meeting, the Iowa Board of Medicine (IBM) voted to formally file its proposed rule establishing standards of practice for physicians who use telemedicine. A public hearing on the proposed rule will be held on January 15, 2015, at 1:00 pm in the Wallace State Office Building Auditorium, 502 E. 9th St, Des Moines. Written comments are due by 4:30 pm on January 15, 2015. The text of the proposed rule, filed as ARC 1769C, is available from the IBM’s website at That site also provides a means for submitting comments electronically and for reviewing all comments received by the IBM on the proposed rule. To read Brick Gentry’s web postings regarding the many requirements of the proposed rule, click on ­­­­this blog’s topic “Telemedicine.”

CMS announced in November the formation of a new Office of Enterprise Data Analytics (OEDA) and named Niall Brennan as the OEDA’s chief data officer. The OEDA’s overarching goal is to harness CMS’ vast data resources for internal and external use as CMS continues to move away from volume-based to value-based care.

Brennan, who has served in various data analytic roles with CMS, will oversee the OEDA’s collection and dissemination of information in several areas of CMS activity, including the ACA’s marketplace exchanges and Medicare’s Shared Savings and quality incentive programs. CMS’ Principal Deputy Administrator, Andy Slavitt, said this new office “signals to the industry that there is no turning back from the health care data agenda.”


On December 1, 2014, CMS released a rule proposing several significant changes to the Medicare Shared Savings Program (MSSP) and calling for input on options under consideration to encourage greater participation in two-sided risk sharing models. The proposed rule was published in the Federal Register, December 8, 2014, pp. 72759-72872 Comments on the rule are due by 5:00 pm on February 6, 2015.

CMS proposes these changes as program refinements based on its experiences and stakeholder suggestions. The proposed changes also formalize guidance CMS has issued previously regarding the program, and the proposed changes further seek to reduce administrative burdens in MSSP operations. The proposed rule changes address the following areas:

  • Data sharing requirements;
  • Requirements for ACO participant agreements, the ACO application process, and CMS review of applications;
  • Identification and reporting of ACO participants and ACO providers/suppliers and managing changes to these lists;
  • Eligibility requirements related to the ACO’s number of beneficiaries, required processes, the ACO’s legal structure and governing body, and the ACO’s leadership and management structure;
  • Modification to assignment methodology;
  • Repayment mechanisms for ACO’s in two-sided performance-based risk tracks;
  • Alternatives to encourage participants in risk-based models;
  • ACO public reporting and transparency;
  • ACO termination process; and
  • The reconsideration review process.

The rule proposes new or changed definitions; adds a process for ACO renewal of participation agreements; clarifies and revises the beneficiary assignment algorithm; expands on beneficiary reporting data CMS would provide to ACOs; and simplifies the claims data sharing opt-out process to provide more timely access to claims data.

CMS believes greater efficiencies and savings remain to be realized by encouraging ACOs to move from Track 1 (shared savings) to Track 2 (shared savings/shared losses) models of operation. CMS proposes mechanisms to ease an ACO’s transition from Track 1 to Track 2, to reduce an ACO’s risk under Track 2, and to establish an alternative Track 3 risk-based model. Much early criticism has focused on CMS’ proposal to allow Track 1 ACOs to remain in Track 1 for an additional 3-year period rather than transitioning to Track 2 as now required; however, those ACOs remaining in Track 1 for a second 3-year period would experience annual reductions in their percentage share of earned savings (i.e., from 50% shared savings to 40% in year 4, to 30% in year 5, to 20% in year 6). Initial stakeholder reaction notes that to-date, most Track 1 ACOs have not met minimum savings thresholds and have not shared in savings; reducing the potential of shared savings in years 4-6 likely means that many Track 1 ACOs simply will not sign up for a second round of MSSP participation. CMS and stakeholders continue to assess long-term, sustainable MSSP operational ACO models.

The MSSP now includes more than 330 ACOs functioning in 47 states, Puerto Rico and the District of Columbia, with 125,000 Medicare enrolled practitioners providing services and impacting roughly 4.5 million Medicare beneficiaries. On November 7, 2014, CMS issued its first financial reconciliation and quality performance results for 220 ACOs with start dates in 2012 and 2013; in that report, CMS identified more than $460 million in qualified shared savings payments to these 220 ACOs as well as 23 Pioneer ACOs. Of the 220 MSSP ACOs, 58 kept spending below their benchmarks and earned shared savings of more than $315 million while 60 ACOs reduced their costs in comparison to their benchmarks but did not meet minimum savings thresholds needed to qualify for shared savings.

Five ACOs serving Iowa beneficiaries were included in the November 7 report. Two of those ACOs generated shared savings.

Accountable Care Clinical Services, PC: Iowa (Heartland Rural Physician Alliance), California, Connecticut, Massachusetts, Pennsylvania; start date 1/1/13; Track 1; earned shared savings of $5,157,823.

Genesis Accountable Care Organization: Iowa, Illinois; start date 7/1/12; Track 1; no earned shared savings.

Mercy ACO, LLC: Iowa; start date 7/1/12; Track 1; earned shared savings of $4,426,331.

Mercy Cedar Rapids/University of Iowa Health Care Accountable Care Organization: Iowa; start date 7/1/12; Track 1; no earned shared savings.

Unity Point Health Partners: Iowa, Illinois, Missouri; start date 7/1/12; Track 1; no earned shared savings.

A separate report issued by CMS in October of 2014 on Pioneer ACOs showed that Iowa’s Trinity Pioneer ACO experienced earned shared savings of $1,218,812 in its second year of performance.

Physician Practices Must Remain Vigilant in Responding to Subpoenas for Mental Health Information

Review of In the Interest of A.M. v. Thomas, Iowa Supreme Court, November 21, 2014

Summary. In a case it calls one of first impression, the Iowa Supreme Court upheld a subpoena to compel the testimony of a psychotherapist regarding the mental health condition of her patient, the mother of three children, in a Child in Need of Assistance (CINA) adjudicatory custody hearing. The therapist had objected to giving testimony, citing the patient/mental health professional privilege of Iowa Code section 622.10; the prohibitions against disclosure of mental health information of Iowa Code chapter 228; and the federal HIPAA Privacy Rule. The Supreme Court concluded, however, that the specific statutory language of Iowa Code section 232.96(5), stating that the privilege protections for mental health communications shall not be grounds for excluding evidence in a CINA adjudicatory hearing, prevailed.

Background and Analysis – Why the Court landed where it did. This case involved a mother who had temporarily lost custody of her three minor children due to mental health issues and improper supervision. After receiving therapy, the juvenile court returned custody of the children to the mother under supervision of the Department of Human Services. Prior to a subsequent review hearing, however, the guardian ad litem (GAL) appointed by the juvenile court to represent the children’s interests received reports of concern regarding the mother’s behavior and demeanor. As a result, the GAL subpoenaed the mother’s psychotherapist to testify at the review hearing and to produce her therapy notes. The psychotherapist objected and moved to quash the subpoena, citing privilege and confidentiality under Iowa Code chapter 228, prohibiting disclosures of mental health information; Iowa Code 622.10, the patient-health professionals evidentiary privilege statute; and the federal HIPAA Privacy Rule. In response, the GAL argued that Iowa Code section 232.96(5), authorizing admission of otherwise privileged mental health communications in CINA proceedings, supported the subpoena.

The juvenile court upheld the therapist’s motion to quash the subpoena’s request for disclosure of psychotherapy notes; that ruling was not appealed and, as such, not addressed by the Supreme Court.  However, the juvenile court denied the therapist’s motion to quash the subpoena’s request for testimony on the mother’s mental health condition; the therapist appealed this ruling. The Iowa Supreme Court agreed with the juvenile court, ruling that the narrowly-drawn statutory language of section 232.96(5) supported the subpoena and testimony by the psychotherapist.

Section 232.96(5), found in Iowa’s Juvenile Justice Code, specifically directs that the privilege attaching to confidential communications between a patient and a health practitioner or mental health professional shall not be grounds for excluding evidence in a hearing on a petition alleging a child to be in need of assistance. The Court said it is clear from the language of this statute that the legislature intended to create a statutory exception to the patient-psychotherapist privilege of Iowa Code section 622.10. The policy behind the limited statutory exception of 232.96(5) in CINA custody matters makes sense; here, the therapist’s testimony regarding the mother’s mental health and treatment goals is highly relevant to the best interests of the children.

The Court then turned to Iowa Code chapter 228 and its prohibitions against disclosure of mental health information. Section 228.2 directs that mental health information shall not be disclosed, “except as specifically authorized.” Here, section 232.96(5) grants such authorization. Too, section 228.6(1) allows disclosure of mental health information to meet the disclosure requirements of other state or federal laws relating to the protection of human health and safety. Section 232.96(5) grants specific authority for disclosure of mental health communications in CINA adjudicatory proceedings to protect the health and safety of the children. Also, the Court said, under rules of statutory construction, section 232.96(5), a more specific statute, prevails over the general non-disclosure prohibitions of chapter 228.

The Court then looked to the HIPAA Privacy Rule and its prohibitions against disclosure of protected health information and concluded that Iowa’s laws prohibiting release of mental health information are more stringent than HIPAA’s disclosure prohibitions. When state law provides greater privacy protection, HIPAA says that state law prevails. Since the Court had concluded that Iowa’s laws on confidentiality and privilege gave way to the specific authority of Iowa Code section 232.96(5), HIPAA would not compel a different conclusion. After further analysis of the Privacy Rule’s exception for disclosures in judicial and administrative proceedings, the Court concluded that HIPAA does not supersede Iowa Code section 232.96(5) allowing evidence of otherwise privileged mental health communications in CINA proceedings.

The Supreme Court’s ruling in this case principally focused on the interplay between the section 232.96(5) exception allowing admission of otherwise privileged communications in CINA hearings and the privilege and non-disclosure provisions of section 622.10 and chapter 228. The Court, however, went on to say that its statutory conclusions also made policy sense.

The confidentiality interests advanced by section 622.10 and chapter 228 are important to effective mental health treatment, including for parents whose mental health struggles impeded their parenting abilities. “The American Psychiatric Association has recognized that confidentiality is essential to effective treatment, a view that has been confirmed by numerous empirical studies.” At the same time, “the protection of children is one of the most well-established duties and public policies of the State of Iowa.” Juvenile courts are duty bound to intervene and, if necessary, remove a child from the care and custody of parents. Here, the Court said, the Iowa General Assembly prioritized these competing policy interests in favor of access to evidence in CINA proceedings. “It is not our role to second-guess the policy choices of the elected branches.”

The Court also noted that even though section 232.96(5) abrogates the statutory psychotherapist privilege for purposes of CINA adjudicatory hearings, juvenile court records are automatically kept confidential without the need to obtain a protective order. While juvenile court proceedings are generally open to the public, the juvenile court may close a hearing upon motion of either party.

In its analysis of the interplay between the CINA statute permitting disclosure and Iowa statutes on privilege and confidentiality, the Court offered several instructive points, serving as reminders of already established law and legal principles in our state.

  • Iowa has no common law physician-patient privilege; the privilege is strictly statutory.
  • A privilege created by the legislature can be limited by the legislature.
  • While statutes creating privileges are liberally construed, the evidentiary privileges of section 622.10 are narrowly construed because they impede the full and free discovery of the truth.
  • Whether viewed broadly or narrowly, the language and plain meaning of section 232.96(5) is dispositive; courts are not free to rewrite statutes under the guise of liberal construction.
  • Here, the legislature, itself, has specifically directed that chapter 232 shall be liberally construed to best serve the child’s welfare.

Vigilance in responding to subpoenas for mental health information remains important. Physicians and medical clinics receiving subpoenas for release of mental health information must remain vigilant in their review of the subpoena, the communications and records being requested by that subpoena, and the context in which the subpoena has been issued. Again, this Supreme Court ruling is narrowly focused. Differences in facts and circumstances compel different results. The Iowa Supreme Court in no way intended to diminish the vitally important privilege and confidentiality protections of either section 622.10 or chapter 228.

Iowa’s physician practices know full well that mental health information is particularly sensitive. Risks of liability and/or negative treatment outcomes for inappropriate disclosure of mental health information are high. Physician practices are well advised to continue to seek legal counsel before responding to subpoenas for release of mental health information. Medical practices cannot ignore a subpoena but they also must assure that any release of mental health information is clearly supported in fact and law.