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June 9, 2000

WEEKLY UPDATE for June 16, 2000

***LEGISLATIVE UPDATE
Patient Protections
Labor-HHS Appropriations
***REGULATORY UPDATE
OIG Issues Draft Compliance Program Guidance for Physicians MedPAC Issues Report to Congress on Medicare
OIG Issues Guidance on Corporate Integrity Agreement Compliance

LEGISLATIVE UPDATE

Patient Protections

The patients' bill of rights conference has been at a stand still since the failed attempt to amend the Defense Authorization bill (see June 9 Weekly Update). No meetings of the conference committee are scheduled. The authorization committees are addressing HCFA oversight and Medicare prescription drug issues this week.

Despite the setback, there are some in the Congress and in the White House who still believe an agreement can be reached this year. The White House has indicated that it is willing to compromise on patient liability, one of the most contentious issues. The White House plans to bring pressure to bear on five vulnerable Republican Senators who are up for reelection. They include Sens. Spence Abraham (R-MI), Rick Santorum (R-PA), John Ashcroft (R-MO), Slade Gorton (R-WA), and Bill Roth (R-DE).

House and Senate Republicans may try to come together on an agreement that builds on compromises reached thus far. They may also incorporate an appeals process that resembles the language of Coburn-Shadegg (suits may only be filed in federal court with limits on damages). No mention has been made of how the Republicans might solve the scope issue (every House bill covered all insured Americans but the Senate bill covered only self-insured plans.)

Conferees continue to hear from constituents about the difficulties that the tentative agreement on post- stabilization (1-hour/3-hour provisions) presents. The American Hospital Association has joined ACEP in requesting that the provision be changed. Senate leadership staff have indicated that they may be willing to reduce the post-stabilization time to 1-hour/1-hour.

Labor-HHS Appropriations

The Labor-HHS Appropriations bill passed the House floor this week with all House Republicans voting for the bill along with a handful of Democrats. The Senate version of the bill is expected to reach the Senate floor within the next two weeks. The House bill kept to the rigidly low budget numbers, while the Senate bill is anticipated to contain significantly increased spending amounts. Conferees will then be appointed to reconcile the differences between the two bills. The funding bills contain two provisions of particular importance to ACEP members:

• Poison Control Centers-- Centers would receive $6.6 million under the House-passed bill. The Senate committee bill sets a $6 million level. This is a significant increase over last year's appropriations of $1.3 million. ACEP is working with other interested organizations for the increased funding.
• Trauma Care Systems Planning and Development-- In November 1998, President Clinton signed into law P.L. 105-392, the "Health Professions Education and Partnership Act." The "Trauma Care Systems Planning and Development Act," (TCSPDA) was one of the programs included in this public law. This title of P.L. 105-392 authorizes federal grants to states for planning, implementing, and developing statewide trauma care systems. Last year's House/Senate conference agreement on the Labor-HHS Appropriations bill dropped all funding for this federal grants program. This year, ACEP is working with the Trauma Care Coalition in support of funding for the TCSPDA. Funding in the House was omitted again because of strict spending limits. The Senate committee bill however contains $3 million.

After the conferees are appointed on the Labor- HHS bill we will be asking you to call or write your Representatives to urge the conferees to retain the Senate language for Trauma Center Funding.

REGULATORY UPDATE

OIG Issues Draft Compliance Program Guidance for Physicians

On June 12, the Office of Inspector General (OIG) published draft compliance program guidance for individual and small group physician practices. Comments on the draft must be submitted to the OIG by July 27. While the OIG's compliance program guidance is not mandatory, it represents the OIG's recommendations regarding how individual and small group physician practices can best establish internal controls to prevent fraudulent and other improper activities. The OIG notes that the applicability of its recommendations will depend on the circumstances of the particular physician practice. To date, the OIG has issued compliance program guidance for the following sectors of the health care industry: hospitals; home health agencies; clinical laboratories; third-party billing companies; suppliers of durable medical equipment, prosthetics, orthotics and supplies; hospices; Medicare+Choice organizations; and nursing facilities.

Like the OIG's previous compliance program guidances, the draft guidance for physicians contains the seven elements set forth in the Federal Sentencing Guidelines: implementation of written policies; designation of a compliance officer or contact; comprehensive training and education; accessible lines of communication; internal monitoring and auditing; enforcement of standards through well publicized disciplinary guidelines; and prompt response to detected offenses and corrective action.

The OIG identified potential risk areas for which physicians should develop written policies. These risk areas include coding and billing; reasonable and necessary services; documentation; and improper inducements, kickbacks and self-referrals. The OIG identified physician's relationships with hospitals as an additional risk area. This category included the role of the physician in EMTALA, with a focus on the responsibilities of on-call physicians; teaching physicians; and gainsharing arrangements. The draft compliance program guidance is available on the OIG's web site at: http://www.dhhs.gov/progorg/oig/oigreg/cpgphysiciandraft.pdf.

MedPAC Issues Report to Congress on Medicare

The Medicare Payment Advisory Commission (MedPAC) recently issued its annual report to Congress on issues affecting Medicare. The report contains recommendations regarding prescription drug coverage for Medicare beneficiaries and Medicare's quality assurance system. The report also addresses several Medicare payment policy issues, including the hospital outpatient prospective payment system, payments to teaching hospitals and payment updates for physician services.

Regarding the hospital outpatient prospective payment system (OPPS), MedPAC supports the goals and broad outlines of the OPPS, but has concerns about elements of its design and implementation. MedPAC notes that the administrative burden on hospitals of moving to the new system should not be underestimated. MedPAC stated that HCFA must ensure adequate payment levels to hospitals so that beneficiary access to care and quality of care are not compromised. MedPAC makes the following specific recommendations:

• The Secretary should monitor changes in practice patterns across ambulatory care settings to ensure that differences in payment do not lead to inappropriate shifts in site of care.
• The Secretary should study the accuracy of and changes in coding practices with the implementation of the outpatient prospective payment system.
• The Congress should enact legislation to accelerate the rate of beneficiary coinsurance buy down under the OPPS and establish a date certain for achieving a coinsurance rate of 20 percent. This date should result in a time frame for implementation consistent with other Medicare payment policy changes.
• The Secretary should carefully monitor implementation of the OPPS to ensure that:
• it does not have unintended, adverse consequences on beneficiaries' access to care,
• it does not compromised the quality of care delivered, and
• the annual reductions in beneficiary coinsurance as a share of total payment are realized.

Regarding payments to teaching hospitals, MedPAC provided additional detail regarding its August 1999 recommendations to Congress that Medicare's payments for inpatient hospital care be revised to recognize the higher value of patient care services provided in teaching hospitals. MedPAC recommends combining Medicare's current additional payments to teaching hospitals into a single adjustment to PPS payments for patient care. The new adjustment would replace the current IME adjustment and direct GME payments for residents providing inpatient care. Hospitals would, however, continue to receive direct GME payments for care provided by residents in outpatient and other settings. MedPAC's specific recommendation is:

• The Congress should fold inpatient direct graduate medical education costs into prospective payment system payment rates through a revised teaching hospital adjustment. The new adjustment should be set such that the subsidy provided to teaching hospitals continues as under current long-run policy. This recommendation also should be implemented with a reasonable transition to limit the impact on hospitals of substantial changes in Medicare payment and to ensure that beneficiaries have continued access to the services that teaching hospitals provide.

Regarding payment updates for physician services, MedPAC reviewed HCFA's recently released preliminary estimate of the update for payments to physicians in 2001. HCFA preliminarily estimated that the sustainable growth rate (SGR) for 2001 will be 2.8 percent. MedPAC is concerned that one of the factors for calculating the SGR, growth in traditional Medicare enrollment, is too low. HCFA's estimate of the change in traditional Medicare enrollment in 2001 appears too low because its estimate of the change in Medicare+Choice enrollment is too high. MedPAC notes that if HCFA continues to underestimate the growth in traditional Medicare enrollment, conversion factor updates will be too low. MedPAC's specific recommendation is:

• When preparing the final 2001 update to the physician fee schedule's conversion factor, the Secretary should review the data and methods used to project growth in the enrollment in traditional Medicare and explain the methods used to project that growth. The report is available on MedPAC's web site at: http://www.medpac.gov/.

OIG Issues Guidance on Corporate Integrity Agreement Compliance

The OIG recently issued guidance to health care providers that are operating under corporate integrity agreements. The OIG typically requires health care providers that settle civil fraud cases to operate under corporate integrity agreements. The corporate integrity agreement is usually in place for five years and requires specific compliance measures to be adopted. The recently issued guidance includes and annual report checklist and answers to frequently asked questions about corporate integrity agreements. These documents are available on the OIG's web site at: http://www.dhhs.gov/progorg/oig/new.html.