Editor’s note: The first five of Howard Bogard’s top 10 health law developments for 2009 were published in the December Birmingham Medical News.

Another year is coming to a close and that means it is time again for my year-end review of events and legal changes effecting Alabama health care providers. In many ways, 2009 will be remembered as a year that set in motion events that will transpire in 2010 and beyond, including a new Blue Cross Blue Shield of Alabama physician fee schedule, RAC audits, HIPAA Privacy Rule changes, and of course health care reform. As I have said before in this column, there is always an opportunity for those who embrace the pending challenges through careful planning. With that in mind, following are the last five of my top 10 health law developments for 2009 (with a look ahead to 2010).

5. Fraud and Abuse Enforcement on the Rise. The Associated Press recently reported that the federal government paid more than $47 billion in questionable Medicare claims, representing 12.4 percent of the annual Medicare fee for service and managed care payments. In response, the Obama Administration is expected to announce new anti-fraud and abuse initiatives with the goal of recovering $9.7 billion in improper payments per year. In October of 2009, a new bill was proposed in the Senate to strengthen the Government's capacity to investigate and prosecute waste, fraud and abuse in government health care programs. The proposed bill expands the scope of the fraud and abuse laws and adds another $20 million per year to Medicare's existing fraud investigation budget, which is estimated at $500 million. Finally, CMS recently announced it is creating a giant repository of claim and payment data from all federal health programs that will allow it to identify fraud and abuse. Between the RACs (see paragraph 3 below) and the various Government agencies involved in fighting fraud and abuse, providers should brace themselves for a busy "enforcement" year.

4. New Blue Cross Physician Fee Schedule. On September 1, 2009, Blue Cross Blue Shield of Alabama ("BCBS") announced a new payment methodology for physicians. The methodology follows the Resource Based Relative Value Scale and the National Correct Coding Initiative edits used by a majority of the nation's commercial payers and Medicare. The new fee schedule met with harsh criticism from many in the physician community who projected decreases in reimbursement of up to twenty percent, with the greatest anticipated losses in the specialties of otolaryngology and neurosurgery. BCBS recently announced that it will delay the planned December 1, 2009 effective date for the fee schedule until no later than July 1, 2010.

3. RAC Audits. Bolstered by a 3-year Recovery Audit Contractor ("RAC") demonstration program in California, Florida, New York, Massachusetts, South Carolina and Arizona which collected over $900 million in Medicare overpayments, CMS launched a permanent RAC program in 2009. Connolly Consulting Associates, Inc. of Wilton, Connecticut is the assigned RAC for Alabama. RAC automated audits have begun, which involve a claims history review from the CMS database. Complex audits (i.e., those involving RAC requests for medical records) will follow. It is important that providers have in place a detailed process to respond to RAC medical record requests and to challenge any adverse findings.

2. The Economy. The current economic crisis has had (at least) a two-fold impact on health care providers. First, the bleak economy has forced many patients to forego non-essential health care services, such as hip and knee replacements, hernia repairs and preventative care. The result is a general decrease in patient volumes, with an increase in bad debt. With unemployment now over 10%, more individuals have joined the ranks of both the unemployed and uninsured. According to a survey by the American Hospital Association, six out of ten hospitals have seen an increase in emergency room patients without insurance, while nearly half of all hospitals have cut staff. Second, the rising cost of borrowing, and the lack of access to capital has required providers to use cash reserves to fund operations and to delay capital expenditures. Some facilities have sold assets in order to raise capital. 

1. Health Care Reform. On November 7, 2009, the House of Representatives approved its version of health care legislation, H.R. 3962, the Affordable Health Care for America Act. The Bill passed by a vote of 220 to 215, with all Alabama House Members (both Democrat and Republican) voting against the Bill. The new law would create a Health Insurance Exchange through which individuals and small employers can comparison shop among private and public insurers and purchase health coverage. Subsidies for insurance would be available based on an individuals/families income level. Within the Health Insurance Exchanges would be the so-called public health insurance option. The anticipated price tag for the health care bill is $1.1 trillion and is expected to achieve health coverage for 96% of Americans. As I am writing this article, the Senate is currently debating the Bill, and the public option has lost some of its support. A clearer picture of health care reform will occur in the next month or two as the Bill undergoes further review and a Senate vote. One thing appears certain, however, that sometime in 2010 many of the 50 million currently uninsured Americans will have some form of health insurance and those individuals will seek treatment from existing providers.

May each of you have a happy and healthy 2010!

Howard E. Bogard is Chair of the Health Care Practice Group at Burr & Forman LLP and exclusively represents health care providers in regulatory and corporate matters.

Tags:

Bookmark:

Digg

Facebook

Technorati

Newsvine

Google

Related: