Iowa Behavioral Health Association Hosts Jeanine Freeman & Paul Drey

HIPAA presentations for IBHA by Paul Drey, Jeanine Freeman
Paul Drey, Jeanine Freeman present HIPAA education to Iowa Behavioral Health Association.

 

On July 23rd the Iowa Behavioral Health Association (IBHA), Iowa’s statewide association of substance use disorder agencies, addiction treatment programs and community mental health centers, hosted prominent health care attorneys Paul Drey and Jeanine Freeman of the Brick Gentry Law Firm to provide training on the Health Insurance Portability and Accountability Act (HIPAA).

This educational session centered around HIPAA requirements and regulations, new updates to the law, and its intersection with 42 CFR, the regulation governing substance use related health information.

Ms. Freeman and Mr. Drey answered questions from the audience, presented information and resources on compliance and best practices, and offered valuable insights from their own experiences. Participants clarified issues through lively discussion. Attendees left the session feeling confident and empowered in their understanding of HIPAA and its implementation and enforcement in their own organizations.

Upon generously contributing this photograph and information, Kelsey Clark, Interim Executive Director of the Iowa Behavioral Health Association, added, “IBHA very much appreciates Mr. Drey and Ms. Freeman providing this session and looks forward to future endeavors with these top notch legal experts.”

If your association or practice group could benefit from a customized presentation on healthcare law topics, we invite you to contact Paul Drey to discuss your needs and scheduling.  We appreciate the efforts of the healthcare community and stand ready to assist.

A Topical Rundown

On July 8, 2015, CMS released its calendar year (CY) 2016 proposed Medicare physician payment rule in prepublication form; the rule will be formally published in the July 15 Federal Register. Comments on the proposed rule are due on September 8, 2015.

The prepublication version of the proposed rule can be found at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16875.pdf.  A CMS fact sheet on the proposed rule is available at http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-08.html.

The proposed rule implements statutory requirements set forth in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the legislation that permanently repealed the sustainable growth rate (SGR) formula; the Protecting Access to Medicare Act of 2014 (PAMA); the Achieving Better Life Experience Act of 2014 (ABLE); and other statutory directives impacting upon the Medicare physician fee-for-service payment system (PFS). With this rulemaking, CMS proposes and builds upon several policies and programs that move toward implementation of MACRA’s Merit-based Incentive Payment System for Medicare physician payment in CY 2019.

As directed by MACRA, physician payment in CY 2016 will be increased by 0.5%. The proposed rule estimates a conversion factor of $36.1096; the estimated conversion factor for anesthesia services is $22.6296. The final CY 2016 conversion factors, however, likely will vary somewhat from these estimates.

Several changes are proposed for Medicare’s quality reporting initiatives, including the Physician Quality Reporting System (PQRS), the Physician-Value-Based Payment Modifier (Value Modifier), and the Medicare Electronic Health Record (EHR) Incentive Program. As proposed, there would be 300 PQRS measures in CY 2016 and a proposed reporting option would allow groups to report quality measures data through a qualified clinical data registry (QCDR). CMS also proposes several new policies affecting the Physician Compare public reporting program, including incorporation of a benchmark reporting methodology.

Considerable discussion in the proposed rule is dedicated to proposed adjustments to relative values in codes identified as “misvalued.” ABLE directs a CY 2016 1% target reduction in Medicare physician fee-for-service (PFS) expenditures through adjustments to relative values of misvalued codes; if CMS cannot achieve the full 1% reduction through adjustments to misvalued codes, then the balance in reductions must be spread out among all PFS codes. CMS estimates a net expenditure reduction of 0.25% if RVU misvalued code adjustments are made as proposed in this rule, noting, however, that it may make further misvalued codes adjustments in the final rule. As such, CMS did not incorporate this 0.25% target reduction into the proposed rule’s estimated CY 2016 conversion factors.

To help interested readers to walk through this massive rulemaking, the following is a listing of major topics and the pages in the prepublication version of the rule where those topics can be found. Note: the format and pagination of the proposed rule changes upon July 15 publication in the Federal Register but the content remains the same.

  • Determination of practice expense (PE) RVUs (pp.23-55)
  • Determination of malpractice RVUs (pp. 55-63)
  • Potentially misvalued services under PFS (pp.64-83)
  • Refinement panel (proposed elimination) (pp. 84-85)
  • Improving payment accuracy for primary care and care management services (pp.86-96)
  • Target for RVU adjustments for misvalued services (pp. 97-105)
  • Phase-in of significant RVU reductions (pp.106-111)
  • Changes for (CT) computerized tomography (CY 2016 only) (pp. 112-113)
  • Valuation of specific codes (pp. 114-276), including proposed codes for advance care planning services subject to local coverage decisions (pp. 246-247)
  • Medicare telehealth services, adding codes 99356-57 and 90933-36, rejecting others, including CRNAs as distant site providers who can furnish Medicare telehealth services) (pp. 277-288)
  • Incident-to proposals, including clarification that the billing physician also must be the supervising physician (pp. 289-294)
  • Portable x-ray: billing for transportation services (pp. 295-296)
  • Waiver of deductibles for anesthesia services furnished on the same day as a planned colorectal cancer test (pp.297-298)
  • Proposed provisions re: ambulance fee schedule (pp. 299-319)
  • Chronic care management (CCM) services for rural health clinics (RHC) and federally qualified health centers (FQHC) (pp. 319-334)
  • HCPS coding for RHCs (pp. 334-338)
  • Payment to grandfathered tribal FQHCs (338-346)
  • Part B drugs – biosimilars (pp. 346-350)
  • Productivity adjustments for ambulance, clinical laboratory, and DMEPOS fee schedules (pp. 350-351)
  • Appropriate use criteria for advance diagnostic imaging services (pp. 352-369)
  • Physician Compare Website (pp. 370-396)
  • Physician Quality Reporting System (PQRS) (pp. 397-504)
  • Electronic Clinical Quality Measures (ECQM) and certification criteria and EHR incentive program – comprehensive primary care (CPC) initiative and Medicare meaningful use (MU) aligned reporting (pp. 505-510)
  • Potential expansion of the comprehensive primary care (CPC) initiative (pp. 511-520)
  • Medicare Shared Savings Program (MSSP) (pp. 521-545)
  • Value-based payment modifier and physician feedback program (pp. 546-605)
  • Physician self-referral updates (pp. 606-679)
  • Private contracting opt-out (pp. 680-681)
  • CY 2016 PFS proposed estimated impact on total allowed charges by specialty (Table 45, pp. 711-712)
  • CY 2016 PFS proposed payment impact for selected procedures (facility and non-facility), Table 46 (pp. 715-716)

Several specific issues are addressed within each of these broad topics requiring review and impact analyses prior to the September 8 comment deadline.

US Supreme Court Upholds ACA Tax Credits for All Qualified Individuals Purchasing Health Insurance Through a Marketplace Exchanges

In King v. Burwell, the Court’s 6-justice majority concludes that denying ACA tax credits to individuals on federally-facilitated State exchanges is contrary to what Congress intended.

King v. Burwell, U.S. Supreme Court No. 14-114, decided June 25, 2015.

In another major challenge to the Patient Protection and Affordable Care Act (“ACA”), the federal health reform law, the U.S. Supreme Court, on a 6-3 vote, upheld the Internal Revenue Service’s regulation extending federal tax credit support provided under the ACA to all qualified individuals enrolled in a marketplace Exchange regardless of whether the State elected to operate its own Exchange or exercised its option to have the federal government do so.

The Court’s decision rests on its interpretation of the law’s language rather than on constitutional grounds. Chief Justice Roberts, writing for the majority, said the challenged language is ambiguous; however, reading that language within the context of the ACA’s overall statutory framework compels an interpretation extending availability of the law’s tax credits to all qualified individuals purchasing coverage through an Exchange whether state-operated or federally-facilitated. The limited reading furthered by the petitioners “would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress intended the Act to avoid.”

The limited reading furthered by the petitioners “would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress intended the Act to avoid.”

The petitioners in King v. Burwell specifically pointed to ACA language making tax credits available to low and moderate income individuals purchasing health insurance coverage through an “Exchange established by the State.” The government argued in response that each State is required by the ACA “to establish” a marketplace Exchange and may do so, as allowed by the ACA, by either operating its own Exchange or defaulting to operation by the federal government. Facts before the Court showed that in 2014, 16 states operated their own Exchanges while 34 were federally facilitated. Of the 7.3 million individuals who purchased health insurance coverage through an Exchange, 5.4 million did so through federally-facilitated Exchanges and approximately 87% of those individuals were eligible for tax credits.

Petitioners’ arguments about the plain meaning of the challenged language are strong, the Court said, when viewed in isolation, but other language in the law, as highlighted by the Court, supports tax credit availability to qualified individuals purchasing insurance coverage on an Exchange regardless of operational source. Its task is to establish meaning within context. “A fair reading of legislation demands a fair understanding of the legislative plan.”

The Court noted that Congress based the ACA on three major reforms:

1) guaranteed issue and community rating requirements; 2) mandated individual insurance coverage at the risk of tax penalty; and 3) tax credits for individuals with household incomes between 100%-400% of federal poverty. Denying tax credits, a fundamental aspect of the ACA’s reform strategy, to individuals in federally-facilitated Exchange states would lead to substantially different operations and outcomes under this law in some states than in others, an implausible reading of what Congress intended. The Court referenced a study predicting that denying tax credits in federally-facilitated Exchange states would result in premium increases of 47% and enrollment decreases of 70% while another study predicted premium increases of 35% and enrollment decreases of 69%; collateral impacts also would result in insurance markets outside an Exchange. “[Tax] credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”

The Court’s ruling is important to Iowa.

Iowa’s Exchange is federally-facilitated. Technically, Iowa operates a partnership Exchange, relying upon the participant enrollment technology of the federal government while retaining plan management and consumer assistance functions through the Iowa Insurance Division. Of the 45,000 Iowans on Iowa’s marketplace exchange in 2015, more than 33,000 were eligible for tax credit support.

Iowa Supreme Court says portions of the Iowa Board of Medicine’s rule, not consistent with standards of medical practice, place an unconstitutional burden on a woman’s exercise of her constitutional rights to an abortion.

Planned Parenthood of the Heartland v. Iowa Board of Medicine, No. 14-1415, filed June 19, 2015

The Iowa Supreme Court, on a 6-0 vote, invalidated as unconstitutional those portions of the IBM’s telemedicine medication abortion rule prohibiting physicians from inducing an abortion by providing an abortion-inducing drug without first providing a physical examination of the woman, without being physically present with the woman at the time of abortion-inducing drug is provided, and without scheduling a follow-up appointment with the woman at the same facility where the abortion-inducing drug was provided. In that case, Planned Parenthood of the Heartland v. Iowa Board of Medicine, portions of the IBM rule defining “abortion-inducing drug” and requiring compliance with Iowa’s law on parental notification prior to performing an abortion on a minor were not challenged on appeal and, as such, the Court affirmed them.

The Court looked to the IBM’s stated purposes for adopting its medication abortion rule (found at Iowa Administrative Code (IAC) 653-13.10 but put on hold by the Court pending the outcome of this appeal). The IBM particularly emphasized the need to protect the health and safety of women seeking a drug-induced, or medication, abortion. The Court engaged in extensive discussion of each patient health and safety interest asserted by the IBM for its rule. In doing so, the Court also looked to the IBM’s more recently adopted general standards for telemedicine practice in Iowa (IAC 653-13.11, a rule now in effect and not affected by this decision). The Court noted that physicians are required by the IBM’s general telemedicine rule to “utilize evidence-based telemedicine practice guidelines and standards of practice, to the degree they are available, to ensure patient safety, quality of care, and positive outcomes” and to perform “a physical examination, when medically necessary, sufficient for the diagnosis and treatment of the patient.”

In examining standards of medical practice for medication-induced abortions, the Court looked to practice standards of the American College of Obstetricians and Gynecologists (ACOG) which provide that a physical examination by the physician prior to proceeding with a medication termination of pregnancy is not medically necessary. Rather, ACOG says, the medical information necessary to performing a medication abortion is contained in the patient’s history, blood work, vital signs, and ultrasound images which can be accessed by reviewing the patient’s records remotely or in person. The Court also found that the weight of the evidence indicates that a pelvic examination prior to administering the abortion-inducing medication does not provide any measurable gain in patient safety. The Court further looked to FDA protocol for administration of mifepristone and misoprostol to induce an abortion, noting that FDA approved protocol does not prohibit physicians from using drugs in a different, “off-label,” manner; that additional studies have led to the development of safer and more effective administration protocol; and it is that newer protocol the IBM’s rule is meant to preclude.

The Court found little medical practice or drug regulatory support for the IBM’s asserted interests in adopting its medication abortion rule but substantial challenges for a woman seeking an abortion under the rule’s physician examination and in-person requirements. “It is not disputed the rule would have the effect of prohibiting telemedicine abortions in Iowa.” In balancing the IBM’s purposes in adopting the rule, which are not supported by the medical record, in light of the burdens the rule places upon a woman seeking to exercise her constitutional rights, the resultant consequences for the woman unconstitutionally outweigh the IBM’s asserted interests.

“Most significantly,” the Court went on to say, “the Board has adopted a rule that generally approves the use of telemedicine.” Yet, in its medication abortion rule, “the Board appears to hold abortion to a different medical standard than other procedures.” As such, the Court also hinted at constitutional equal protection issues.

The IBM issued a release on June 19, the same day the Court filed its opinion, noting the Court’s decision and stating that the IBM would discuss ruling at its July 9-10, 2015 meeting.

IMS President Jeff Maire, D.O., FACOS, FACS presents Paul Drey the 2015 John F. Sanford Award
Attorney Paul Drey Receives 2015 John F. Sanford Award from Iowa Medical Society President, Dr. Jeff Maire. Photo courtesy of Iowa Medical Society.

Attorney Paul A. Drey was honored with the John F. Sanford Award during the Dinner Gala at the Iowa Medical Society’s 165th Annual Conference, Saturday, May 2, 2015, at the DoubleTree by Hilton, Cedar Rapids Convention Complex.  The Gala serves as a time to network with peers, to celebrate the accomplishments of the Iowa Medical Society (IMS), and to set the course for the coming year with the induction of a new president.

The John F. Sanford Award is the only award presented by the Iowa Medical Society to a non-physician. It honors the memory of the Keokuk physician who was a pioneer in the field of medicine, a champion of organized medicine on behalf of the physicians in Iowa, and a founder of the Iowa Medical Society in 1850. The award recognizes a layperson who has made outstanding contributions to health care on behalf of both the Iowa Medical Society and the physicians in the State of Iowa.

In his introduction of the award, IMS President Jeff Maire, D.O., commended Paul Drey for his long service as parliamentarian to the IMS House of Delegates, for his invaluable outside legal counsel to the Iowa Medical Society, for his efforts on behalf of the Iowa Medical Society, and for his work with physicians and physician groups throughout the state. Dr. Maire announced,

“There is a reason Paul is the ‘go to’ attorney for medical groups and physicians in Iowa – he truly cares about Iowa physicians, and understands how complex our world can be.”

The Iowa Medical Society also presented a number of awards to physicians. Thomas Evans, M.D., received the Distinguished Service Award for creating the Iowa Healthcare Collaborative. Paul Mulhausen, M.D. received the Presidential Citation Award for his efforts as the chair of the Iowa Medical Society Ad Hoc Task Force for Policy and Governance.  Michael McCoy, M.D. received the Merit Award for his work on medical liability reform and his leadership of the Iowa Medical Society Tort Reform Task Force.  William E. Scott, M.D. received the Physician Community Service Award for his selfless dedication to the children of Iowa through his work with Iowa Kid Sight.  In addition, the presidency of the Iowa Medical Society passed from Dr. Jeffrey Maire to Dr. K. John Hartman.

K John Hartnan MD, PAD, Jeff Maire DO FACOS, FACS
New Iowa Medical Society President, K John Hartnan MD, Paul Drey and Past IMS President Jeff Maire, DO. Photo courtesy of Iowa Medical Society.

Some time ago, we were asked by a reader, “Is an employer self-funded medical plan required to have a Health Plan Identifier (HPID)?”

We thought this general information might be helpful. Please remember this information and blog is NOT LEGAL ADVICE, and you should consult with your own attorney. The inquirer correctly notes that the underlying question is whether an employer-sponsored self-funded plan is a controlling health plan (CHP) required to obtain an HPID. CMS regulations and guidance indicate that employer-sponsored self-funded health plans are CHPs and must obtain a HPID.

Before providing support for this response, please note that on October 31, 2014, CMS issued an enforcement delay on its HPID rule “until further notice.” There is a reasonable chance that the HPID, as now defined, may be eliminated. CHPs need not obtain a HPID until further notice from CMS.

Here is the background re: regulatory need for an employer-sponsored self-funded health plan to obtain a HPID.

CMS published its final regulations setting forth requirements for health plan receipt of an HPID on September 5, 2012. CMS also developed frequently asked questions (FAQs) giving guidance on compliance with its HPID requirements. One FAQ specifically addresses whether a self-insured health plan must obtain an HPID.

To determine the answer, a self-insured health plan must ask if it meets the HIPAA regulatory definition of a “health plan.” A health plan is an individual or group health plan that provides or pays the cost of medical care. Assuming that the employer self-funded medical plan does so, the next question is whether that self-funded plan meets the regulatory definition for a “controlling health plan” (CHP). A CHP is a health plan that controls its own business activities, actions, or policies, or is controlled by an entity that is not a health plan. An employer’s self-funded medical plan generally would satisfy this definition of a CHP.

It can be confusing because most self-funded plans work with third party administrators (TPAs) which sometimes, themselves, are health plans. TPAs, however, are not CHPs when acting in their roles as TPAs (i.e., providing eligibility, claims administration, and other administrative services). The sponsor of the self-insured plan is responsible for obtaining the plan’s HPID. The sponsor could ask that its TPA obtain a HPID on the plan’s behalf, but the HPID would belong to the sponsored self-funded health plan.

Advisors to the industry also say that employer-sponsored health plans are HIPAA-covered entities and that employers with self-funded health plans are required under the final regulations to obtain an HPID.

HPID compliance deadlines set forth in the September 5, 2012 rule are as follows –

• CHPs are required under the regulation to obtain their HPIDs by November 7, 2014.
• Small CHPs, however, have until November 7, 2015, to obtain a HPID. A CHP is a “small” CHP if its annual receipts are $5 million or less. CMS advises CHPs on processes to utilize in determining whether its receipts are $5 million or less.
• HIPAA-covered entities are required to use HPIDs in HIPAA-covered transactions effective November 7, 2016.

Now, about the delay identified above.

As noted above, shortly before the first HPID regulatory deadline, CMS issued a “discretionary delay” in enforcement of the HPID rule “until further notice.” This delay has been read by the field as putting on hold not only enforcement actions CMS might have taken against health plans that failed to timely obtain their HPIDs, but also putting on hold the need for a health plan to obtain a HPID until further directed by CMS to do so. The HIPAA statute requires CMS, in adopting HPID regulations, to obtain and consider the advice of the National Committee on Vital and Health Statistics (NCVHS). CMS did so in finalizing its HPID rule and, further, in issuing this indefinite delay. NCVHS has advised CMS against use of the HPID in HIPAA standard transactions. It is possible, according to some industry commentators, that the HPID will be done away with in favor of some other form or processes of unique health plan identification.

One other HIPAA regulatory requirement for health plans to be aware of and to watch.

CMS issued regulations on January 2, 2014, requiring all HIPAA covered entity health plans to certify compliance with HIPAA standard transactions for eligibility, health claims status, and electronic payment/electronic remittance advice by December 31, 2015. In certifying compliance, this rule requires health plans to use their HPIDs. The rule’s certification deadline remains in effect. CMS will need to address the rule’s requirement for use of the HPID at some time.

We hope this response is helpful to the inquirer and to others.

Licensing Boards with a majority of members actively practicing in the regulated profession are vulnerable under the antitrust laws.

North Carolina State Board of Dental Examiners v. Federal Trade Commission, U.S. Supreme Court No. 13-534 (decided February 25, 2015).

Iowa health professional licensing boards, by law, are comprised of a majority of actively practicing licensed members of their professions appointed by the governor and approved by the Senate. For instance, the Iowa Board of Medicine (IBM) has 10 members, seven (7) of whom must be licensed physicians active in medical practice in this state. The Iowa General Assembly has determined that the expertise of licensed and practicing professionals is critical to informed board decision-making in setting parameters of practice, establishing qualifications for licensure, and determining appropriate grounds for licensee discipline.

Professional licensing boards in Iowa also are agencies of state government. They must exercise their authority and meet their responsibilities consistent with processes and procedures and powers and duties set forth in laws passed by the General Assembly. The legislature grants authority to licensing boards to assure that only appropriately educated, trained and qualified individuals practice in the profession. Periodically, licensing boards like the IBM issue cease and desist orders against persons for unlawfully practicing in the profession absent medical licensure.

A recent case decided by the U.S. Supreme Court examined enforcement actions of a state licensing board for the unlicensed practice of the profession under the microscope of the federal antitrust laws. In North Carolina State Board of Dental Examiners v. FTC, the Court examined the extent to which professional licensing boards enjoy “state action” immunity from federal antitrust liability. The case centered on alleged anticompetitive behaviors of the North Carolina Dental Board against non-licensed providers of teeth whitening services and products.

Dentists had been providing teeth whitening services in North Carolina since the 1990s. Starting in 2003, however, non-licensees began offering these services at prices substantially lower than those charged by dentists. The Dental Board received complaints from its licensees, most of which focused on the lower charges and not on harmful impacts to the public. The Board investigated and then, without adopting a rule, took aggressive action through cease and desist letters issued to non-dentist teeth whitening service providers and product manufactures; letters to shopping malls advising them that kiosk providers of teeth whitening services were in violation of the practice of dentistry; and warnings it convinced the cosmetology licensing board to send its licensees against teeth whitening practice. As a result of the Board’s actions, non-dentists ceased offering teeth whitening services in North Carolina.

The Dental Board is an agency of its state government with eight members, six of whom are actively practicing licensed dentists; one is a licensed dental hygienist; and one is a public member. Members of the dental profession elect the dentist members; dental hygienists elect the dental hygienist member; and the governor appoints the pubic member. Eight of the ten dentists who were members of the Board during the time of this dispute earned substantial fees from teeth whitening services.

In 2010, the Federal Trade Commission (FTC), a federal antitrust enforcement agency, filed an administrative complaint against the Dental Board. After motions and hearings, the FTC concluded that the Dental Board’s enforcement actions against teeth whitening competitors had unreasonably restrained trade in violation of the antitrust laws. The FTC rejected the Board’s public safety justification, saying that a wealth of evidence suggested that tooth whitening by non-dentists is a safe cosmetic procedure. The FTC also rejected the Board’s claims that as an agency of the state, it had state action immunity from federal antitrust liability.

The Board challenged the FTC’s decision in federal court. The 4th Circuit Court of Appeals, however, found in favor of the FTC. The Board then took its case to the U.S. Supreme Court.

A significant fact permeating the Supreme Court’s analysis of state action antitrust immunity for this licensing board was its composition. A majority of member decision makers from among the regulated dental profession created the potential for concerted action against competitors. It seemed to make no difference to the Court that the Dental Board members were elected by other dentists rather than appointed by the governor with approval authority from the legislature, as is the case in Iowa.

The Court explained two ways in which state action immunity from federal antitrust enforcement may attach. The first is immunity afforded to anticompetitive conduct by states acting in a sovereign capacity. In its 1943 case, Parker v. Brown, the Supreme Court explained that state action immunity from antitrust liability is accorded to states without need for further proof so long as the challenged activity is an exercise of the State’s “sovereign” power, such as legislation passed by a state general assembly or decisions entered by a state supreme court. “[T]he Sherman Act confers immunity on the State’s own anticompetitive polices out of respect for federalism.”

The Dental Board argued that as an agency of state government, it could claim Parker state action immunity without need for further proof. The Supreme Court disagreed. “State agencies are not simply by their governmental character sovereign actors for purposes of state-action immunity.” State action immunity for state agencies, the Court said, requires more to ensure that the State sovereign accepts political accountability for the agency’s challenged anticompetitive behavior.

The Court then turned to the second path for claiming state action immunity from federal antitrust liability. A non-sovereign entity, to claim state action protection, must meet a two-part test established by the Supreme Court in its 1980 case, California Retail Liquor Dealers Assn. v. Midcal Aluminum Assoc. The Midcal test requires a non-sovereign actor to prove that 1) the challenged restraint is a clearly articulated and affirmatively expressed state policy which 2) is actively supervised by the State. Successfully meeting this two-pronged test solidifies that the State, in its sovereign capacity, has accepted political accountability for the anticompetitive conduct, thereby justifying state action immunity from antitrust liability for the non-sovereign’s challenged activity.

The Court moved from speaking generally about agencies of state government to focus particularly on those non-sovereign government actors, like the Dental Board, comprised of a majority of active market participants from within the profession. “Limits on state-action immunity are most essential when the State seeks to delegate its regulatory power to active market participants, for established ethical standards may blend with private anticompetitive motives in a way difficult even for market participants to discern.” To claim state action immunity, then, the Dental Board was required to meet the two-pronged Midcal test, thereby showing that it did not act on its own but, rather, was clearly and affirmatively carrying out state policy and, in doing so, was actively supervised by the State.

The FTC did not make an issue of whether the Board’s cease and desist actions against non-licensee teeth whitening providers met the first Midcal test so the Court moved to the second, “active state supervision,” prong. The Dental Board, however, never argued that its cease and desist actions were actively supervised by the State; instead, it unsuccessfully relied on Parker immunity. As such, the Court had no facts to analyze on this point. Even so, it noted that the North Carolina legislature had not defined teeth whitening as a practice requiring a dental license nor had the Board used “any of the powers at its disposal that would invoke oversight by a politically accountable official.”

The Court’s final holding or ruling was narrowly focused: “The Court holds today that a state board on which a controlling number of decisionmakers are active market participants in the occupation the board regulates must satisfy Midcal’s active supervision requirements in order to invoke state-action antitrust immunity.” Whether the test is met depends upon the circumstances of each case. While day-to-day involvement of the State in the agency’s challenged action is not required, “active supervision” calls for State review of the substance of the board’s anticompetitive decision, along with the power to veto or modify that decision.

In addressing the uncomfortable facts in this case, the Court issued a ruling of significant implication for all professional licensing boards. Whether this decision will deter qualified professionals from serving on state licensing boards for fear of antitrust liability remains to be seen. More importantly, however, may be the extent to which licensing boards with majority membership and essential expertise from active participants in the regulated profession will be chilled by this decision in making tough enforcement judgment calls on non-licensee practice of the profession.

The Court gave some counsel. If a licensing board’s enforcement action is supported by specific state law directing what otherwise might be viewed as anticompetitive activity, the board likely meets the Midcal test. Yet, it is not realistic to expect a state legislature to define with specificity all acts that fall within the scope of a regulated profession; indeed, that is one of the functions delegated by the Iowa General Assembly to its licensing boards. Rulemaking, the Court seems to hint, also may provide effective support for licensing board immunity from antitrust challenge under the Midcal test. In Iowa, a licensing board’s proposed rule is subject to review by the Iowa Administrative Rules Review Committee, composed entirely of lawmakers from both the House and the Senate and with authority to delay a rule and refer it to the General Assembly for its review and action.

The behavioral checks imposed by the Supreme Court make sense under the bothersome facts of this case. A strident reading of Midcal by regulators and courts in future licensing board cases, however, risks shifting the pendulum of free market health care practice too far away from the critical role professional licensure plays in assuring quality, competent and safe medical care. In that regard, the consumer the antitrust laws seek to protect is not well served.

The Senate passed H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA), on a vote of 92-8. Iowa’s Senators Joni Ernst and Charles Grassley voted in favor of the bill. The Senate considered amendments to the bill as passed by the House, but none were adopted. The H.R. 2 now goes to the President who has said he will sign the bill.

The bill immediately repeals the SGR and, of interest to Iowa physicians, extends the 1.0 Work GPCI floor through 2017. Physicians will receive an annual update of 0.5% for the next five (5) years, with the first update slated for July 1, 2015, and annual 0.5% updates effective on January 1 in each year 2016-2109. A fuller explanation of the bill is available from an earlier posting: click here to read.

CMS had placed a 10-day hold on submitted claims for services provided on April 1 and after which otherwise would have been paid at a rate reflecting the 21% SGR cut and loss of the 1.0 Work GPCI floor, both of which were effective as of April 1. Those claims, however, now can be paid at the same rate as in effect on March 31. Any claims that may have been paid at a rate reflecting the 21% SGR cut will be reprocessed by CMS and do not require further action by providers who submitted the claims.

BIPARTISAN HOUSE VOTE TO REPEAL THE SGR – 0.5% PHYSICIAN INCREASE EACH YEAR THROUGH 2019 — EXTENSION OF THE 1.0 WORK GPCI FLOOR THROUGH 2017 – NO ICD-10 DELAY

Senate to Vote When It Returns – CMS Issues Payment Advisory

The House of Representatives took what the House of Medicine rightfully can call a historic vote late in the evening of March 26 to really, truly repeal the SGR and to provide the nation’s physicians with minimal but predictable 0.5% Medicare physician payment increases beginning July 1, 2015, and continuing for each year through calendar year 2019.

H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA), passed the House on a strong bipartisan vote of 392-37. Iowa’s congressional delegation split. Iowa Representatives David Loebsack and David Young voted in favor of the bill; Representatives Rod Blum and Steve King voted against it.

H.R.2 moved to the Senate on the heels of the congressional April recess. The Senate took no action but Senate leadership indicated the likelihood of passage of SGR repeal upon the Senate’s April 13 return. It is not clear whether the Senate will support all other provisions now in H.R. 2 or seek to amend the bill. The President has indicated his support for permanent SGR repeal.

The 21% SGR payment reduction will go into effect on April 1. CMS issued a payment advisory on March 24 in light of the looming April 1 date, clarifying that all claims for services rendered on or before March 31 would not be affected if the SGR went into effect on April 1; those claims would be paid under the physician fee schedule now in effect. Under current payment processes, CMS would not pay claims for services rendered on or after April 1 until 14 calendar days after electronic receipt or 29 calendar days after paper receipt of such claims. In light of the Senate’s decision to not take a vote on H.R. 2 prior to recess, CMS has advised Medicare carriers to hold claims for services provided on or after April 1 for 10 days to avoid any need to make payment adjustments in this interim time period. The Iowa Medical Society’s website (www.iowamedical.org) provides billing guidance to its physician members for services provided on April 1 and onward until repeal legislation is finally approved.

H.R. 2, the MACRA bill, is a “bill within a bill,” incorporating Medicare physician payment reform provisions set forth in H.R. 1470, a bipartisan, bicameral committee bill, and including provisions of its own addressing Medicare extenders and payment offsets. Key provisions of H.R. 1470/H.R. 2 include the following:

  • Immediate and permanent SGR repeal.
  • A positive 0.5% annual physician Medicare payment update, with the first update to occur on July 1, 2015, and then in each of calendar years 2016-2019. MedPAC must submit reports to Congress in 2019 evaluating the impact of the 2015-19 updates on beneficiary access and quality care and making recommendations on further updates. Medicare rates in effect in 2019 would be maintained through 2025, shifting focus to payment increases through incentives for achieving identified quality program goals.
  • Consolidation of three current Medicare quality reporting programs – the Physician Quality Reporting System (PQRS), the Value-Based Modifier (VBM), and Meaningful Use for EHRs (EHR MU) – into a simplified, merit-based incentive payment system (MIPS), effective in calendar year 2019. Eligible professionals, including physicians and several other health professionals, will be measured on four areas of performance: quality; resource use; EHR meaningful use; and clinical practice improvement. Public reporting of results is addressed.
  • A 5% incentive payment to those physicians who participate in alternative payment models and meet certain performance thresholds.
  • The 1.0 Work GPCI floor is extended through December 2017, a provision of benefit to Medicare Part B payment localities like Iowa with labor costs set by CMS at lower than the national average.
  • The therapy cap exceptions process is extended through December 2017, allowing patients who exceed Medicare’s annual per-patient therapy expenditure limit to ask for an exception based on medical necessity.
  • Funding for Community Health Centers (CHC) and National Health Service Corps Fund (NHSC) and Teaching Health Centers is extended through fiscal year 2017.
  • The Children’s Health Insurance Program (CHIP) program and funding for it is extended through fiscal year 2017. While CHIP has been authorized through 2019, current funding for CHIP is slated to end at the close of the 2015 fiscal year. H.R. 2 also extends funding support for several CHIP-related programs.
  • Guidelines or standards developed and/or implemented under any Federal health care provision, including Medicare, cannot be construed on their own as standards or duties of care owed by a health care professional to a patient in any medical malpractice action or claim. This provision is not meant to preempt any state or common law governing medical malpractice actions or claims.
  • Electronic health records must be interoperable by 2018.
  • The Government Accounting Office (GAO) shall issue a report on barriers to expanded use of telemedicine and remote patient monitoring.
  • Funding offsets to meet the $140 billion estimated costs of this legislation require, among other things, that effective with new plans sold in 2020, beneficiaries new to Medicare must have the same deductible under their private Medigap insurance policies as they have under Medicare Part B; currently that amount is $147 per year. In addition, beginning in 2018, bump-up Part B and Part D premium amounts that Medicare beneficiaries with higher annual incomes now must pay would be increased. Too, a scheduled one-time 3.2% hospital payment increase in fiscal year 2018 would instead by phased-in at 0.5% increases each year over 6 years beginning in fiscal year 2018.

H.R. 2 does not extend the October 1, 2015 effective date for implementation of ICD-10. The ICD-10 Coalition, with membership including the American Hospital Association (AHA), American’s Health Insurance Plans (AHIP), the American Health Information Management Association (AHIMA), and the BlueCross and Blue Shield Association (BCBSA) – hailed the lack of extension, claiming that ICD-10 coding will assure the availability of data needed to accurately assess quality and value.

Further details about H.R. 2 and incorporated provisions of H.R. 1470 can be found in summaries prepared by staff of the House Committees on Energy and Commerce and Ways and Means.

http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/114/Analysis/20150324-HR2-SectionbySection.pdf

The text of the bill is available at http://www.gpo.gov/fdsys/pkg/BILLS-114hr2ih/pdf/BILLS-114hr2ih.pdf

The Iowa Board of Medicine (IBM), at its April 3, 2015 meeting, approved a final rule setting forth disciplinary standards applicable to physicians who use telemedicine in diagnosing and treating patients located in Iowa.

That rule also includes standards and prohibitions that all physician licensees must comply with in providing patient care whether by telemedicine or not. The adopted Rule will be published in the April 29 Iowa Administrative Bulletin and then reviewed by the legislature’s Administrative Rules Review Committee at a time yet to be set. The rule is slated to go into effect on June 3, 2015.

The IBM, in the final rule, made several changes to its proposed telemedicine practice rule.  Those changes reflect the IBM’s responses to public comments on its originally noticed proposed rule and its next draft.  Changes, for the most part, bring clarity to the rules and their expectations.

The final rule primarily addresses requirements for physicians who use telemedicine. Those requirements are substantial. Failure to satisfy any of these requirements subject the physician using telemedicine to IBM discipline. Failure to comply with the rules also might be claimed by plaintiffs alleging medical negligence in the delivery of telemedical care.

It is critical that physicians using telemedicine understand the IBM’s substantial expectations of them. The fact that a hospital or other telemedicine site ordinarily is operationally responsible for certain of the IBM’s proposed requirements (i.e., equipment compliance with safety codes, HIPAA privacy and security compliance), standing alone, does not relieve the telemedicine physician from assuring compliance with such requirements as set forth in the IBM’s telemedicine rule. The final rule made changes to reflect this concern, yet physicians continue to face discipline for non-compliance on each of the final rule requirements.

The following is a summary of the IBM’s final rule. Click here to read the final rule.

The IBM defines telemedicine by clarifying what telemedicine means and includes as well what it does not include for purposes of this rule.

  • Telemedicine means the practice of medicine using electronic audio-visual communications and information technologies or other means, including interactive audio with asynchronous store and forward transmission, between a physician licensee in one location and a patient in another location with our without an intervening health care provider. Telemedicine includes store-and-forward technologies, remote monitoring, and real-time interactive services, including tele-radiology and tele-pathology.
  • Telemedicine does not include the provision of medical services only through an audio-only telephone, email messages, facsimile transmissions, mail service, or any combination thereof.

For physicians using telemedicine, the rule makes it clear that –

  • Physicians using telemedicine will be held to the same standards of care and professional ethics as physicians using traditional in-person encounters with patients.
  • Physicians using telemedicine must do so within the physician’s scope of practice and the physician’s education, training, experience, ability, and licensure/certification.
  • Physicians using telemedicine in the diagnosis and treatment of a person located in Iowa must have an active Iowa medical license consistent with federal and state law (unless an exception to licensure already provided in the IBM’s licensure rules applies) regardless of the in-state or out-of-state site from which the physician provides those telemedicine services.
  • Physicians using telemedicine must utilize evidence-based telemedicine practice guidelines and standards of practice to the degree they are available.

Physicians using telemedicine must establish a valid physician-patient relationship with the person who receives telemedicine services. For purposes of this rule —

  • The physician-patient relationship begins when 1) a person with a health-related matter seeks assistance from a physician; 2) the physician agrees to undertake diagnosis and treatment of that person; and 3) the person agrees to be treated by the physician even if there has not yet been an in-person encounter between the physician and that person.
  • A valid physician-patient relationship may be established in one of three ways: 1) an in-person encounter with an in-person medical interview and physical exam where standards of care would require an in-person encounter; 2) consultation with another physician or other health care provider who has an established relationship with the patient and who agrees to participate in or supervise the patient’s care; or 3) a telemedicine encounter if standards of care do not require an in-person encounter and consistent with evidence-based telemedicine practice guidelines.
  • An “in-person encounter” is defined to mean the physician and the patient are in the physical presence of each other and in the same physical location during the physician-patient encounter.

Further, physicians using telemedicine must –

  • Ensure that systems are in place to ensure that non-physician health care providers whom the physician relies upon or delegates to in the provision of a telemedical service are qualified and trained to provide such service within the non-physician’s scope of licensed practice; further, the physician must be available either in-person or electronically to consult with non-physician health care providers, particularly in the event of an injury or an emergency in the course of telemedicine service delivery.
  • Verify the identity of the patient receiving the telemedicine services and ensure the patient can verify the identity, licensure status, certification and credentials of all health care providers involved in providing the telemedical service prior to the provision of that care.
  • Ensure the patient is interviewed to collect the patient’s relevant medical history, receives a physical examination when medically necessary, sufficient for diagnosis and treatment prior to providing treatment via telemedicine, including issuing a prescription electronically or otherwise. The medical interview and physical examination need not be in-person if the telemedical encounter is sufficient to establish an informed diagnosis as though the medical interview and physical exam had been performed in-person.  A static Internet questionnaire alone cannot suffice for the medical interview and physical exam prior to treatment, including issuing a prescription either electronically or otherwise.  “Static” is defined in the rule.
  • Ensure that patient informed consent is provided, including consent for the use of telemedicine, and that such consent is timely documented in the patient’s medical record.
  • Identify and provide the patient’s medical record to the patient’s treating physician and/or medical home, when available and medically appropriate, where in-person medical services can be delivered in coordination with the telemedicine services the patient receives.
  • Have access to or adequate knowledge of local medical resources for appropriate follow-up care.
  • Refer a patient receiving telemedical services to an acute care facility or emergency department in the event of an emergency or for the safety of the patient.
  • Ensure complete, accurate, and timely medical records, as appropriate, including notation of when telemedicine is used and other matters set forth in the rule, and, further, ensure that the patient and other health care providers have timely access to such information and that the patient, upon request, receives a timely summary of each telemedical encounter.
  • Ensure that all telemedicine encounters comply with HIPAA privacy and security measures.  Written protocol must be established and periodically reviewed, addressing measures specified by the IBM in its proposed rule to assure the confidentiality and integrity of patient-identifiable information.
  • Equipment and technology used in the telemedical encounter must comply with safety laws and codes and are of sufficient quality/size/resolution/clarity to safely and effectively provide the telemedicine service.
  • Ensure that information is disclosed to the patient re: the type of services to be provided via telemedicine; contact information, identity and credentials of all health care providers involved in the provision of the telemedical service; limitations, if any, on drugs and services as provided via telemedicine; fees/costs sharing if different than in an in-person encounter; financial interests, if any; limitations on the use of the telemedicine technology; and other information as detailed in the proposed rule.
  • Ensure the patient’s ability to amend their patient information, to provide feedback on the quality of the telemedical encounter, and to register complaints.

For all physicians, whether in the course of using telemedicine or otherwise, the final rule –

  • Sets forth several circumstances under which standards of medical care may not require a physician licensee to personally examine a patient. Circumstances include where the physician prescribes medications on a short-term basis for a new patient and has scheduled or is in the process of scheduling an appointment to personal examine the patient; call or cross-coverage situations in which a physician licensee is taking call or is covering for the other physician licensee who has an established physician-patient relationship with the patient; situations in which the patient has been examined in person by an advanced registered nurse practitioner or physician assistant or other licensed practitioner with whom the physician licensee has a supervisory or collaborative relationship; and other circumstances set forth in the rule.
  • Prohibits physician licensees from prescribing based solely on an Internet request or an Internet questionnaire. An internet questionnaire is defined to mean a static questionnaire provided to a patient to which the patient responds with a static set of answers, in contrast to an adaptive, interactive and responsive online interview.
  • Prohibits physician licensees from prescribing based solely on a telephonic evaluation for any person absent a valid physician-patient relationship.

See our page dedicated to Telemedicine for all related articles.