Beginning in January 2011, entities covered under the Health Insurance Portability and Accountability Act (HIPAA) should be ready to test with their trading partners the functionality of the entities’ practice management and/or other related software featuring Version 5010 standards. Use of the Version 5010 standards for HIPAA electronic healthcare transactions—including claims, remittance advice, eligibility inquiries, and referral authorizations—will be mandatory on Jan. 1, 2012. The Version 5010 standards also provide the framework needed to use the revised medical data code sets (ICD-10-CM and ICD-10-PCS) that must be implemented on Oct. 1, 2013.

A fact sheet describing the two regulations governing the ICD-10 code set and Version 5010 electronic transaction standards is available on the CMS website.

Not necessarily.

In a recent New Jersey Appellate decision, the court held that a physician-employee was responsible for purchasing her own “tail” coverage on her medical malpractice insurance policy when she terminated her employment — even though the tail coverage would have covered the time when she was working at the job. The employer medical practice had a contractual obligation to “provide and pay the premium for malpractice insurance coverage covering Employee,” but the contract did not specifically address extended reporting period (tail) coverage. Thus, the doctor was not entitled to recover any of the $146,000 she paid for tail coverage.

Group Exposure

While there is substantial risk placed on the employed physician by a poorly worded employment agreement, there may be even greater risk for the medical practice. Notwithstanding the appellate decision discussed above, a medical practice can have significant exposure when a former employee has a gap in malpractice coverage since, under a legal theory known as vicarious liability, an employer is ultimately responsible for the acts of its employees.

So, even if your contract explicitly and unambiguously states that employees are responsible for their own tail coverage, a practice may still be liable for claims that are not covered, if the employee fails to obtain that coverage. Contractual terms between a medical group and a physician-employee generally have no impact on a plaintiff, and ordinarily will not negate vicarious liability. Consequently, good contracts should spell out who is responsible for purchasing a tail, and address the contingencies in case the employed physician or the employing practice breaches that duty.

For example, a contract that requires an employee to purchase her own tail could also give the employer the right to purchase a tail on that physician’s behalf if she fails to do so on her own. A clause to that effect would give the practice the ability to purchase a tail on behalf of the physician, then seek payment from her for the cost of the premium. Another issue can arise when a physician insured on a claims-made policy leaves a group and transfers coverage to a new claims-made policy. The risk in this instance may not present until years later when the physician may cease practice and again have the need to buy a tail. If the tail is not purchased and coverage lapses, any lawsuit brought that involved the timeframe that the physician was employed by the practice would not be covered.

These issues can be avoided if the medical group secures occurrence coverage, which automatically includes a tail. When occurrence coverage is not a viable or practical option though, good employment agreements are essential. As always, practices should retain specialized attorneys to draft employment agreements so that all contingencies are addressed.

However, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 administrative simplification rules require a covered entity, such as a physician billing Medicare, to retain required documentation for six years from the date of its creation or the date when it last was in effect, whichever is later. HIPAA requirements preempt State laws if they require shorter periods. Your State may require a longer retention period.

The Centers for Medicare & Medicaid Services (CMS) requires records of providers submitting cost reports to be retained in their original or legally reproduced form for a period of at least 5 years after the closure of the cost report. This requirement applies to hospitals and not physician practices.

CMS requires Medicare managed care program providers to retain records for 10 years.

Privacy must be maintained even after record retention timelines have expired. While the HIPAA Privacy Rule does not include medical record retention requirements, it does require that covered entities apply appropriate administrative, technical, and physical safeguards to protect the privacy of medical records and other protected health information (PHI) for whatever period such information is maintained by a covered entity, including through disposal.

Additional information:

• Providers/suppliers should maintain a medical record for each Medicare beneficiary that is their patient.
• Medical records must be accurately written, promptly completed, accessible, properly filed and retained.
• Using a system of author identification and record maintenance that ensures the integrity of the authentication and protects the security of all record entries is a good practice.
• The Medicare program does not have requirements for the media formats for medical records. However, the medical record needs to be in its original form or in a legally reproduced form, which may be electronic, so that medical records may be reviewed and audited by authorized entities.
• Providers must have a medical record system that ensures that the record may be accessed and retrieved promptly.

Providers may want to obtain legal advice concerning record retention after CMS-required time periodshave been met.

• For professional claims (CMS-1500 Form and 837P) submitted by physicians and other suppliers that include span dates of service, the line item“From” date will be used to determine the date of service and filing timeliness. (This includes supplies and rental items).  For physicians and other suppliers that bill claims with span dates, these span date services cannot exceed one month.
• For institutional claims that include span dates of service (i.e., a “From” and “Through” date span on the claim), the “Through” date on the claim will be used to determine the date of service for claims filing timeliness.
• BE AWARE: If a line item “From” date is not timely, but the “To” date is timely, Medicare contractors will split the line item and deny untimely services as not timely filed.
• Claims having a date of service of February 29th must be filed by February 28th of the following year to be considered as timely filed. If the date of service is February 29th of any year and is received on or after March 1st of the following year, the claim will be denied as having failed to meet the timely filing requirement.

Change request (CR) 6960 specified the basic timely filing standards established for FFS reimbursement, which are a result of Section 6404 of the Patient Protection and Affordable Care Act of 2010 (ACA) that states that claims with dates of service on or after January 1, 2010, received later than one calendar year beyond the date of service will be denied by Medicare.

The section of the survey that examines financial operations found that medical groups were still faced with significant financial challenges. Most regions were doing better than in 2008, but margins are thin. In 2009, organizations in the Eastern and Western regions were operating at break even. Organizations in the Southern region continue to operate at a loss (-$1,034 per physician in 2009, -$120 per physician in 2008). Groups in the Northern region continued to experience significant losses (-$9,943 per physician in 2009, -$3,254 per physician in 2008).

In researchers’ sampling of 10 nonprofit BCBS plans, seven held more than three times the amount of surplus that regulators consider to be the minimum amount needed for solvency protection. For example, BCBS of Arizona has surplus more than seven times the regulatory minimum as of the end of 2009. Health Care Service Corporation, a mutual insurer doing business as BCBS of Texas, Illinois, New Mexico and Oklahoma, has five times the regulatory minimum. Meanwhile, over the past three years both insurers continued to raise their rates.

The report calls on state insurance regulators to scrutinize surpluses when considering rate increases and set maximum limits for surpluses. 

• Eligible professionals, eligible hospitals, and critical access hospitals that are meaningful users of certified EHR technology
• Eligible professionals and hospitals for efforts to adopt, implement, upgrade, or demonstrate meaningful use the technology

The fact sheets summarize:

• CMS’s final definition of meaningful use 
• Requirements for the Medicare EHR incentive program 
• Provisions in the final rule that affect state Medicaid programs and Medicaid providers

New changes to the Interpretive Guidelines for the Anesthesia Services Condition of Participation (CoP) were released in a May 21 transmittal from CMS that provide further clarifications in two areas of concern. The latest changes refine the changes made earlier this year (see APCPS, 3/10).

Immediately available. In its latest tweak to the definition of when an anesthesiologist is considered “immediately available,” CMS now defines the term as “physically located within the same area as the CRNA, e.g., in the same operative/procedural suite, or in the same labor and delivery unit, and not otherwise occupied in a way that prevents him/her from immediately conducting hands-on intervention, if needed.” Previous language restricted the anesthesiologist to the same procedural room rather than suite. This small wording change allows the anesthesiologist a bit more freedom of movement while medically directing multiple cases.

Post-anesthesia evaluations. Previous language in the CoP required the anesthesia provider’s documentation be completed before the patient is discharged from the hospital. CMS deleted the requirement that “for outpatients, the post-anesthesia evaluation must be completed prior to discharge.” The deletion means that, while the post-anesthesia evaluation still has to be performed within 48 hours of the completion of surgery, there is no requirement that the anesthesiologist complete the evaluation form before the patient is discharged.

Comments and assistance from ASA

The American Society of Anesthesiologists (ASA) notes that CMS should be issuing further clarifications to the Interpretive Guidelines in the future. The recent changes were minor clarifications and ASA states it is working with CMS to further clarify responsibilities and guidelines for anesthesiologists in a hospital setting. In response to the ongoing changes from CMS, the ASA has created documentation checklists to help practices ensure they are complying with the new clarifications, including:

A pre-anesthesia evaluation policy and note provides information detailing what must be included in the pre-anesthesia evaluation, such as:

• review of the medical history, including anesthesia, drug and allergy history;
• interview and examination of the patient;
• notation of anesthesia risk according to established standards of practice (e.g., ASA classification of risk);
• identification of potential anesthesia problems, particularly those that may suggest potential complications or contraindications to the planned procedure; and
• the timing of a qualified pre-anesthesia evaluation.

 A post-anesthesia evaluation policy and note provides assessment of stability or satisfactory control of:

• respiratory function (respiratory rate, airway patency, oxygen saturation);
• cardiovascular function (pulse rate, blood pressure, hydration status);
• temperature;
• mental status – patient participates in the evaluation;
• pain; and
• nausea and vomiting.

An intra-operative anesthesia record policy includes a checklist of information that must be included on the anesthesia record, such as:

• name and hospital identification number of the patient;
• name(s) of practitioner who administered anesthesia, and as applicable, the name and profession of the supervising anesthesiologist or operating practitioner;
• name, dosage, route and time of administration of drugs and anesthesia agents;
• technique(s) used and patient position(s), including the insertion/use of any intravascular or airway devices;
• name and amounts of IV fluids, including blood or blood products if applicable;
• timed-based documentation of vital signs as well as oxygenation and ventilation parameters;
• any complications, adverse reactions or problems occurring during anesthesia (including time and description of symptoms, vital signs, treatments rendered); and
• patient’s response to treatment.

The Food and Drug Administration (FDA) is aware of the difficulty many anesthesia professionals and facilities are experiencing in maintaining their propofol supplies.  According to FDA officials, the Agency continues to authorize the importation of Fresenius Propoven 1% (propofol 1%) by APP. APP is also increasing production of APP Diprivan® and generic propofol.  In addition, FDA is hopeful that Hospira will be releasing new product shortly, since the company has recently instituted manufacturing changes in an effort to alleviate previous production problems.

Anesthesia providers and facilities should still attempt to obtain propofol through their normal distribution chains.  Those who are experiencing difficulties, however, may contact APP to arrange direct shipments. Please see the following link for a “Dear Health Care Professional Letter” from APP regarding ordering information.

Order propofol directly from APP: http://www.fda.gov/downloads/Drugs/DrugSafety/DrugShortages/UCM215027.pdf

As always it is important for FDA to understand the extent of all drug shortages. Therefore, if you or your facility are experiencing difficulty obtaining any medication, please contact the FDA Drug Shortage Division to let them know.

Contact information for the FDA’s Drug Shortage Division: http://www.fda.gov/Drugs/DrugSafety/DrugShortages/ucm142398.htm.

Additional information on the propofol shortage from the FDA can be found at the following website, which also contains answers to some frequently asked questions.

FDA Propofol Shortage Website: http://www.fda.gov/Drugs/DrugSafety/DrugShortages/ucm207290.htm

The most recent incarnation of the Medicare reimbursement formula is called the Sustainable Growth Rate (SGR), put in place in 1998. The government uses the formula to set an overall target amount of spending for certain types of medical goods and services. Using Medicare spending in the late 1990s as a baseline, the SGR factored in overall economic growth to create a yearly budget. “It was enacted during a time period when physician payments were not growing rapidly,” said Paul Van de Water, an economist at the Center for Budget and Policy Priorities. “It was assumed that the relative slowdown was likely to continue.”

While the SGR formula seemed sound in 1997, it didn’t account for one huge detail. Overall medical spending grew much faster than inflation. The SGR turned out to be totally unsustainable, leaving physicians with a reimbursement rate that did not keep pace with increasing medical costs, thus requiring a fix — not of the formula but of the payment.

The problem first became apparent in 2002, when Medicare costs outpaced the SGR. A Republican-led Congress stepped in with extra funding the following year, preventing a reduction in physician payments. Congress has continued to do so for seven years now.

Under both Democratic and Republican leadership, Congress has consistently delivered the necessary funds to avoid cuts to physician payments. A CBO report this month estimated that $276 billion would be required to shore up Medicare for the next decade. Not surprisingly, no politician wants to get stuck with that check. So they’ve all politely deferred from the financial commitments in order to avoid the appearance of adding billions of dollars to the national deficit.

But the “doc fix” actually fixes nothing. Health policy experts agree that health spending is not slowing down, so the short-term patches only “kick the can down the road,” as Van de Water put it. “They want to have their cake and eat it, too.” In other words, it’s a face-saving gimmick that makes it look like Congress is sticking to Medicare cost controls when it isn’t, despite numerous red flags over the years. A CBO report in 2006 suggested that “the SGR mechanism … will substantially reduce payment rates for physicians’ services over the next several years. Payment rates could decline by a total of 25% and 35% during that period if physicians continue to provide services at the current rate.”

A 2007 report from MedPac, which advises Congress on Medicare, found that, in addition to failing to keep pace with spending, the SGR had not tamped down physician spending. “The SGR does not appear to have limited the growth in volume — that is, the number of services being furnished to each patient and the level of service intensity provided,” the report concluded.

One option would be to ditch SGR and find a new, better formula that would make the “doc fix” ritual obsolete. The American Medical Association, which has previously supported temporary “doc fix” legislation, has demanded this kind of permanent action, so the short-term fix that landed in the House proposal left them unsatisfied. “The pending Medicare proposal treats the symptoms,” AMA President J. James Rohack said in a statement late last week. “It’s not a cure for the disease. We urge Congress to take action well before the next deadline to cure this problem once and for all to preserve access to care for seniors and military families and enable the success of health system reform and delivery innovations.”

But Congress has declined to move in that direction, and, for now, the exercise carries on. In 2010 alone, Congress has already headed off three scheduled payment drops — in January, March and April. This week, if all goes as the Democrats planned, they will extend the “doc fix” for an additional three years. The problem will be settled in the short term — until the 112th Congress takes up the issue all over again.