Two-Midnight Rule Deadline Extension

The Centers for Medicare & Medicaid Services (CMS) has extended the deadline for compliance with the two-midnight rule through September 30, 2014. The rule provides that if an inpatient stay crosses two midnights, the admission will be presumed reasonable and necessary, so long as it is also medically necessary. Therefore, any inpatient admission that spans two midnights from the time of admission will not be reviewed, absent evidence of gaming or abuse.Conversely, inpatient stays that do not last two midnights are considered to be more suitable as outpatient observation, a classification under which Medicare reimburses at a substantially lower rate.

During the extension, recovery audit contractors (RACs) will not be permitted to review inpatient stays that last one day or less. However, Medicare administrative contractors (MACs) will be permitted to review small samples of claims for compliance and to aid in education and guidance. These sample claims will not be accessible by RACs during the transition period, nor will they be eligible for look-back review.

Deadlines for Electronic Health Record (EHR) Meaningful Use

Providers will now have until March 31, 2014, to submit data attesting to meaningful use of EHRs.  CMS announced that this extra month will give physicians the opportunity to demonstrate their meaningful use of an EHR system in 2013. The deadline for hospital compliance was December 1, 2013; however, CMS stated that hospitals may retroactively submit their attestation data by March 15, 2014. These extensions come in lieu of the fact that payment adjustments in 2015 will be based on 2013 data.

This year also marks the beginning of Stage 2 for eligible entities that have completed two years of Stage 1. For entities that qualified for the incentive payment before 2013, a demonstration of meaningful use during the entire fiscal year must be provided. However, entities and individuals establishing meaningful use for the first time in 2013 will only be subject to a three-month reporting period.

District Court Upholds Federal Trade Commission’s (FTC’s) Antitrust Challenge to a Hospital System’s Acquisition

The U.S. District Court for the District of Idaho recently deemed an acquisition between a physician practice group and a health system anticompetitive. Saltzer Medical Group, a large multispecialty physician practice group, was acquired by St. Luke’s Health System. However, after the acquisition, federal and state consumer-protection agencies, concerned about the acquisition’s anticompetitive nature, brought claims under the Clayton Act and the Idaho Competition Act.  The court, after calculating market concentration numbers, found that the deal gave Saltzer Medical Group and St. Luke’s nearly 80 percent of the primary-care market in Nampa, Idaho. The District Court agreed with the concerns, ruling that the acquisition would lead to higher expenses for insurers and health care consumers. Therefore, the court found that the arrangement violated federal and state law.

Protections for EHR Donations Extended

The United States Department of Health and Human Services (HHS) has extended legal protections for donated EHR products. The protections provided by the safe harbor under the federal Anti-Kickback Statute and the exception to the federal physician self-referral law, commonly known as the “Stark Law” were due to expire on December 31, 2013, but have been extended to December 31, 2021. The extension will allow physicians to accept donated EHR products for the duration of CMS’s meaningful use incentive program. Newly excluded, however, are donations made by laboratory companies.

HHS Suspends Medicare Appeals

HHS has issued a moratorium on Medicare appeals for at least two years. Appeals rose 184% from 2010  to 2013, and administrative law judges (ALJs) have a large backlog. The current estimated timeline includes 18 to 24 weeks for each appeal to be docketed, along with 24 to 28 months for the appeal to be assigned to an ALJ. The appeals that will be tabled are those initiated by Medicare providers and suppliers and Medicaid state agencies. Appeals filed directly by Medicare beneficiaries will continue to be assigned during the suspension.

CMS Provides Presumptive Eligibility Criteria

CMS has issued a bulletin providing assistance for hospitals in making presumptive eligibility determinations for uninsured individuals seeking medical treatment. This bulletin is intended to aid states in implementing hospital determinations processes, for which a plan must be submitted by March 31. Based on the relevant criteria, if the patient is presumed to be eligible, the individual is temporarily enrolled and the health care provider will receive payment for the services provided.

Court Finds Medical Clinic Is Not Liable for Employee Disclosure

The Second Circuit Court of Appeals ruled that a New York medical clinic will not be liable for its  employee’s disclosure of personal health information. The clinic’s nurse recognized the patient as her sister- in-law’s boyfriend and immediately disclosed to her relative what the patient was being treated for. The court found that the clinic was not liable for the employee’s behavior under respondeat superior or vicarious liability, as it was not foreseeable and was outside the scope of her employment.

House and Senate Agree to Doc Pay Overhaul Deal

A final agreement has been reached by lawmakers in the House and Senate in an effort to repair the Medicare physician reimbursement system. The nearly 200-page bill would overhaul Medicare’s sustainable growth rate formula by phasing in new payment models. The bill effectively combines three former bills approved by the House Ways and Means Committee, the Senate Finance Committee, and the House Energy and Commerce Committee. Physicians will receive a .5% payment increase for five years (2014- 2018) and, in 2018, physicians who receive a large share of revenue through alternative payment models, such as accountable care organizations, will be provided 5% bonuses. The bill also requires HHS to  provide medical professionals’ utilization and payment data on the Physician Compare website.

Physician Compare Website Based on Specific Quality Measures

CMS announced that its Physician Compare website will rate physicians using quality measures specific  to particular conditions based on the Physician Quality Reporting System. Reporting under this system will include care coordination, patient safety, clinical effectiveness and the population to which the treatment is provided.

Proposed Rule for EHR Certification

The Office of the National Coordinator for Health Information Technology (ONC) recently released a proposed rule updating the EHR certification program, marking the first instance of ONC issuing separate certification criteria from CMS’s meaningful use regulations. The proposed rule will include additional  criteria for certification, compliance with which will be voluntary. The additional criteria will reflect the requirements for certification set to take effect in 2017 at the completion of the meaningful use program. ONC’s intention is for EHR programmers to incorporate the 2017 standards early in order for products to be tested and developed ahead of the program deadlines. The proposed rule is set to take effect in 2015 and is expected to be published this summer.