February 2015

Iowa Board of Medicine to adopt a final telemedicine disciplinary rule in April – House Energy and Commerce Committee considers legislation to expand Medicare recognition of telemedicine – IBM pursues Interstate Medical Licensure by Compact to, among other things, facilitate telemedicine practice in Iowa

The Iowa Board of Medicine (IBM) has reviewed public comments received on its proposed disciplinary rule for physicians using telemedicine in Iowa and, in light of those comments, has elected to make changes to those rules. Once drafting is complete, the IBM will post the rule as amended for public comment on the changes. The IBM intends to adopt a final rule at its April 2-3, 2015 meeting.

On the national front, the House Energy and Commerce Committee is looking at draft legislation that would expand upon current geographic and technological parameters for Medicare payment of telehealth services. Medicare now pays for a very limited number (75 service codes) of Part B medical services delivered via telecommunications and only if the system used is real-time interactive audio and video and only if the patient receiving the services is at an originating site located in a rural Health Professional Shortage Area (HPSA) either outside of a Metropolitan Statistical Area (MSA) or in a rural census tract or in a county outside of a MSA (unless a Medicare telemedicine demonstration project).  Originating sites in recognized geographic areas can be in the offices of a physician or other practitioner; a hospital or critical access hospital (CAH); a rural health clinic; a federally qualified health center (FQHC); a hospital/CAH-based renal dialysis center; a skilled nursing facility (SNF); or a community mental health center (CMHC). The following practitioners are recognized by Medicare as providers of telehealth services: physicians; nurse practitioners, nurse-midwives, clinical nurse specialists and CRNAs; physician assistants; clinical psychologists and clinical social workers (subject to limitations); and registered dieticians or nutrition professionals.

The “Advancing Telehealth Opportunities in Medicare” is one section (Section 4181) of the “21st Century Cures Act,” a 400-page bipartisan legislative proposal under discussion in the House. The telehealth portion directs HHS to develop a Medicare telehealth payment methodology that does not increase program costs and gives HHS authority under specified conditions to relax current geographic, site, and practitioner limitations for payment for telehealth services provided to Medicare beneficiaries.

The House Energy and Commerce Committee accepted testimony regarding this draft telehealth proposal in January with a goal of introducing legislation sometime in February. While commenters generally supported the draft’s intent, many suggested that the bill proposal did not go far enough to ease current geographic and site limitations and embrace a broader range of “store and forward” and other telecommunication technologies.

About compact medical licensure in Iowa

The IBM has introduced legislation into the General Assembly seeking authorization for Iowa’s participation in an interstate medical licensure system via compact. Compact medical licensure allows a physician licensed in a “home” state to become licensed in other compact signatory states via the compact process. Senate Study Bill 1019 and House Study Bill 20, companion bills to approve Iowa’s participation in the compact, are now under subcommittee review in their respective legislative chambers.

The design for interstate medical licensure by compact was developed by the Federation of State Medical Boards (FSMB); the IBM was a participant in that process. The compact licensure process is similar in many respects to expedited licensure currently provided for in IBM rules.

At least seven (7) states must pass legislation authorizing participation for the compact to effective. The FSMB reports that in addition to Iowa, ten (10) states have introduced compact legislation: Minnesota, Montana, Nebraska, Oklahoma, South Dakota, Texas, Utah, Vermont, West Virginia, and Wyoming.  An interstate medical licensure compact commission would administer the compact; each signatory state would have two (2) representatives on the commission. Actual licensure and discipline of physicians in compact states remains with the licensing boards.

Organizations in support of Iowa’s legislation include the Iowa Medical Society; the Iowa Hospital Association; the Iowa Academy of Family Physicians; the Iowa Chapter of the American Academy of Pediatrics; the Iowa Psychiatric Society; the Iowa Osteopathic Medical Association; and several health systems, including Unity Point, Mercy Network, Cedar Rapids PHO, Genesis Health System, and Gunderson Lutheran Health. The American Medical Association endorsed the compact in November. The draft federal “21st Century Cures” legislation discussed above includes a “Sense of Congress” provision encouraging compact medical licensure to facilitate multistate practice and the provision of telehealth services across state lines.

See our page dedicated to Telemedicine for all related articles.

HHS sets percentage targets for a Medicare value-based payment system — emphasis on ACOs/bundled payments/integrated care –

HHS calls for coordinated design across all payment sectors.

Secretary of Health and Human Services Sylvia Mathews Burwell announced last week that HHS will expand upon current efforts in transforming Medicare’s fee-for-service (FFS) payment system from one that long has been volume-based to one that is value-based. Payment reform initiatives will build in three ways: 1) increasingly tying payment to medical care received by beneficiaries through alternative payment models; 2) supporting integrated, coordinated care delivery models and provider efforts in advancing population health; and 3) harnessing vast data to improve patient care.  “Today’s announcement would continue the shift toward paying for what works,” HHS said in its January 26, 2015 press release.

The Secretary identified two distinct payment percentage goals —

  • By the end of 2016, 30% of all Medicare FFS payments will be tied to quality through alternative payment models such as accountable care organizations (ACOs), advanced primary care medical homes, and bundled payment mechanisms. By the end of 2018, 50% of all Medicare FFS payments will be made through these mechanisms. HHS says that approximately 20% of FFS dollars in 2014 were paid out through programs such as ACOs in the Medicare Shared Savings and Pioneer ACO programs, bundled payments, and the Comprehensive Primary Care Initiative.
  • By 2016, 85% of all Medicare FFS payments, including those made to ACOs and through bundled payments and similar mechanisms, will be tied to quality or value. Other payment programs added to this percentage mix are the Hospital Value-based Purchasing Program, the Physician Value-based Modifier, the Hospital Readmissions Reduction Program, and other initiatives. By 2018, HHS plans that 90% of all Medicare FFS payments will be tied in some way to programs of quality or value. HHS says that now a majority of Medicare FFS payments have a link to quality or value.

To meet its announced percentage goals, HHS will build upon program initiatives now in place and showing promise but also will develop new payment models, for instance, for specialty care (starting with oncology) and for care coordination for patients with chronic conditions. HHS also will invest $800 million through the Transforming Clinical Practice Initiative to provide hands-on support to 150,000 physicians and other practitioners in developing skills and tools needed to improve care delivery and transition to alternative payment models.

HHS will convene a Health Care Payment Learning and Action Network in March to not only develop sustainable payment models fostering coordinated, high quality medical care but also to align Medicare’s efforts with initiatives in other payment sectors. “Making operational changes will be attractive only if the new alternative payment models and payment reforms are broadly adopted by a critical mass of payers,” HHS notes. Representatives to this new Network have yet to be named but likely will include private payers, large employers, providers, consumers, and state and federal government programs. HHS expects the Network to facilitate joint implementation of agreed-upon models of payment and care delivery and to identify and implement common approaches on core issues like beneficiary attribution, financial models, benchmarking, and risk adjustment.

HHS anticipates an ongoing working alliance with the nation’s health insurance industry.  America’s Health Insurance Plans (AHIP), through its president, Karen Ignani, said that health plans have been on the forefront of implementing payment reforms in Medicare Advantage, Medicaid Managed Care, and the commercial marketplace. “We are excited to bring these experiences and innovations to this new collaboration.”

The American Medical Association (AMA) issued a statement saying that HHS’ efforts to align Medicare payment with innovative, high quality, and efficient health care delivery are consistent with AMA objectives. “We look forward to hearing more details behind the percentages HHS put forward as well as their plans to reach these percentage targets.” The AMA also emphasized the need for SGR payment relief, requiring congressional action before April 1 to avoid a 21% SGR reduction in Medicare payments to the nation’s physicians and loss of the 1.0 Work GPCI floor important to Iowa and other physicians in payment localities that otherwise would suffer Medicare Work GPCI payment adjustments below the national average.

It is not clear the extent to which HHS’ 2016 value-based payment percentage goals of 30%/85% will be reflected in its proposed 2016 Medicare physician payment rule (expected release in July of 2015). HHS emphasizes that these 2016 percentage goals are to be realized by the end of that calendar year, indicating implementation starting in 2016. Time is short to reach specified percentage objectives.

Medicare processes over 1 billion Medicare Part A and Part B FFS claims per year. In 2014, Medicare FFS payment outlays amounted to $362 billion.

This link accesses the HHS Fact Sheet supporting Secretary Burwell’s announcement.

Update – Insurance Commissioner requests CoOportunity liquidation – district court to decide in late February

Concluding that insufficient funds currently exist to meet its obligations to pay medical claims, Iowa Insurance Commissioner, Nick Gerhart, filed a petition in Polk County District Court on January 29, 2015, concluding that further efforts toward rehabilitation of CoOportunity would be futile and asking for court-ordered liquidation of this non-nonprofit insurer. The Commissioner’s petition cites several factors affecting CoOportunity’s asset position, including congressional action placing an estimated $81 million in risk funding CoOportunity was slated to receive at risk; CMS’s decision in December to not advance additional 2014 funds to CoOportunity; and the unavailability of 2015 federal loan funds until late in 2015. The petition concludes that “further transaction of business by CoOportunity would be financially hazardous to policyholders, creditors, and the public.”

A hearing on liquidation is expected to occur in late February, with court-ordered liquidation expected to take effect as of February 28. Upon liquidation, the Insurance Division will take possession of CoOportunity’s assets and will administer those assets under court supervision. State guaranty funds in Iowa and Nebraska will be utilized to meet payment obligations for claims submitted by CoOportunity insureds up to limits set in law.

Commissioner Gerhart continues to advise Iowans with CoOportunity coverage to find other coverage. “Individuals and employer groups are strongly encouraged to find coverage with another insurance company and then cancel their policy with CoOportunity Health as soon as possible.” The Commissioner particularly advises individuals who purchased CoOportunity coverage through Iowa’s marketplace exchange and who are receiving advance premium tax credits and cost sharing reductions to find alternative coverage through the marketplace exchange by March 1, with open enrollment ending on February 15; while there will be a special enrollment period from March 1-April 29, 2015, to avoid having a gap in financial assistance, those individuals must meet March 1 coverage requirements. Individuals are encouraged to call the marketplace center at 1-800-706-7893 or work with an agent, broker, navigator, or consumer assistance counselor.

The Insurance Division has several informational postings, including CoOportunity alerts for persons insured by CoOportunity and for providers, on its website at www.iid.state.ia.us. The Division also has posted the following frequently asked questions (FAQs) and guidance documents.

  • FAQs for individuals.
  • FAQs for small groups.
  • Guidance on tax credits for certain small employers that cannot offer a qualified health plan (QHP) through the Small Business Health Options Program (SHOP) Exchange because  the employer’s principal business address is in a county in Iowa in which a QHP through the SHOP Exchange is not available for all or part of 2015.