Much has been written about the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and its repeal of the Sustainable Growth Rate formula for physician compensation and the potential gainsharing safe harbor. But the Act also includes certain Medicare program integrity provisions that may have an impact on health industry providers.

These three implications are of particular concern for those who provide Medicare services.

1. CLAIM EDITS AND INTEROPERABILTY

MACRA requires the US Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) to establish automated claim edits that would identify payments made for services provided to individuals who are incarcerated, deceased or not lawfully present in the United States and ineligible for coverage.  Any improper payments identified through these edits must be recouped, either through RAC audits or other recovery activities.  The Act also requires CMS to specify incentives that would encourage states to participate in a data match and data mining program for Medicaid. 

Similarly, MACRA includes a Congressional declaration of its national objective to achieve the widespread exchange of health information through interoperable certified electronic health record technology.  CMS must establish metrics to evaluate progress toward this objective and report to Congress whether its efforts have succeeded or whether further measures are necessary.  Such measures may include decertification of a provider’s certified EHR technology or the adjustment of payments to providers who are not meaningful EHR users. 

Taken together, these measures may indicate increased governmental reliance upon data mining to identify potential fraud or abuse and to support enforcement initiatives.  Data mining efforts are dependent upon the interoperability of electronic health records.  Algorithms and claim edits are ineffective if the data fields are populated inconsistently or otherwise inaccessible.  The HITECH incentive program provided a carrot to encourage the adoption of electronic health record systems.  MACRA provides a stick to ensure that those systems are interoperable. 

Another pending bill, the 21st Century Cure Act, may reinforce the Congressional objectives by increasing requirements for interoperability and strengthening penalties for noncompliance.  This bill is still undergoing active revisions, and it will be worthwhile to monitor its proposed provisions.  As interoperability increases, so does the potential for government interception of payment for claims that are flagged by edits or algorithms, thus increasing the risks of enforcement and sanctions.

2. IMPROPER PAYMENT OUTREACH AND EDUCATION

MACRA requires each regional Medicare Administrative Contractor (MAC) to establish an improper payment outreach and education program.  The MAC must provide every provider and supplier with a quarterly report reflecting its most frequent and expensive payment errors.  The MAC must also provide each provider and supplier with specific instructions on how to correct or avoid those errors. 

The quarterly report will include a notice of new topics that have been approved by CMS for RAC audits, along with specific instructions on how to prevent future issues related to those audits.  CMS will also supply a complete list of the types of improper payments identified by RAC auditors in that region.  The MAC  quarterly report will prioritize items or services that have the highest error rates, highest dollar amount of improper payments, are due to clear misapplication or misinterpretation of law or policy, or are due to common administrative errors. 

The preventative value of the  MAC reports is readily apparent.  The reports may also be used retroactively, however, to support enforcement efforts.  For example, a provider may be liable for civil monetary penalties if it “engages in a pattern or practice of presenting or causing to be presented a claim for an item or services that is based on a code that the person knows or should know will result in a greater payment” than the proper code.  It may be difficult for the government to prove such a violation merely in reliance upon published policies and manuals.  But if the government produces prior reports demonstrating that this particular provider had been repeatedly warned about this specific erroneous billing issue, it is far more likely to prevail in its penalty assessments.  The MAC quarterly reports provide actual notice of claim errors, and effectively create a burden on the provider to cure known deficiencies. 

3.  THE SENIOR MEDICARE PATROL 

Congress has required CMS to develop a plan to revise the incentives for encouraging individuals to report Medicare fraud and abuse and to develop a public awareness and education campaign to publicize the Senior Medicare Patrols.  CMS must recommend ways to enhance the rewards for reporting individuals, include rewards based on information that leads to an administrative action, and extend the incentive program to Medicaid. 

The federal False Claims Act currently generally applies to knowing conduct involving material false statements.  Thus, most improper Medicare payments may be more accurately characterized as clerical or administrative errors.  If  incentive payments are awarded for reporting any information that leads to a simple administrative recoupment, individuals will find it much easier to qualify for an award. Patients and their caregivers may be much more motivated to scrutinize each bill or explanation of benefits, looking for reportable errors. 

Similarly, extension to the Medicaid program would significantly increase the number of potential whistleblowers.  As a result of the Affordable Care Act, the number of Medicaid and CHIP enrollees increased from 57.8 million to 70 million over a 19-month period.  Analysts expect Medicaid enrollment to exceed 80 million by 2020. 

HEALTH INDUSTRY PROVIDERS TAKE NOTE

In summary, the program integrity provisions of MACRA may have far-reaching implications for health industry providers.  Medicare providers should implement internal claim edits, conduct their own data analysis and develop processes to incorporate quarterly RAC report findings into their compliance work plans.  Providers should also invest in educational materials that clarify and explain all charges to patients and their caregivers.  A careful consultation and review could prevent future enforcement surprises.