The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act, both passed in March 2010 among much fanfare, are collectively known as Healthcare Reform. While healthcare reform will affect physicians as employers, insured, and taxpayers, these reforms will also impact the operations of physician offices in a variety of ways. The 2000+ pages of law have yet to yield much in the way of regulations, the volumes of which are expected to dwarf the actual legislation. However, a lot of the reforms provisions are clear enough for the physician community to understand many of the major components that affect them.

 

One of the best provisions in healthcare reform for Mississippi physicians was increases in the Geographic Practice Cost Indices (GPCIs). Three components of most Medicare fees are work, practice expense, and malpractice, and each is multiplied by a GPCI in determining the amount of the fee. Many locations including Mississippi have GPCIs less than one, meaning Mississippi physicians are paid less than states where the GPCI is 1 or greater. Healthcare reform extended the work GPCI minimum, or “floor”, of 1 enacted several years ago. The reforms also increased the practice expense GPCI for both 2010 and 2011 for states below 1. These are effective January 1, 2010, so every claim affected by these changes that has been processed so far this year is underpaid. CMS has yet to issue instructions to the carriers on how to pay physicians for these additional amounts.

 

The acts contain several provisions affecting imaging. Effective July 1, 2010, payment for the technical component of diagnostic imaging will be reduced 50 prcent for subsequent procedures on consecutive body parts. This is up from 25 percent currently. In 2011 payment for CT and MRI will decrease due to the utilization assumption of the equipment being increased to 75 percent. The more a piece of equipment is assumed to be used, the less the per test cost and thus the less Medicare has to reimburse the provider. Finally, for physician offices relying on the in-office Stark exception for advanced imaging, the office must notify the patient of alternatives to their imaging services before the test is scheduled. While no regulations have been issued yet, this provision is effective immediately.

 

The Physician Quality Reporting Initiative (PQRI) was extended. Physicians will receive an incentive payment of 1 percent (2 percent in 2010) of their total Medicare allowed charges in 2011 for successful participating in the PQRI program. The incentive falls to .5 percent in 2012 through 2014 and then physicians who do not successful participate will be penalized 1.5 percent in 2015 and 2 percent in 2016 and beyond.

 

Primary care physicians could see several payment boosts. In each year of 2011 through 2016, primary care providers who charge at least 60 percent of their Medicare charges as office, nursing home, or home visit charges will receive a 10percent bonus payment. Also, for 2013 and 2014, Medicaid payments to primary care physicians will be equal to Medicare rates. Currently in Mississippi Medicaid rates are statutorily set at 90 percent of Medicare rates. On a related note, general surgeons who practice in Health Professional Shortage Areas (HPSA) will receive a 10 percent bonus payment.

 

One provision that could have the most profound effect on physician operations in the future is the creation of the Independent Payment Advisory Board (IPAB). The IPAB will be required to develop proposals to reduce Medicare expenditures if such expenditures exceed specified targets. CMS is required to implement the IPAB proposals unless Congress enacts an alternative. The physician community opposes this provision especially in light of recent SGR battles. 

 

There are numerous provisions in the area of fraud and abuse regulations that make it easier for the government to identify and prosecute fraud. This includes extending Recovery Audit Contractors (RACs) to Medicaid, revised documentation requirements for DME and home health services, and increased penalties for violation of the False Claims Act. Overpayments not refunded within 60 days of discovery are now considered a false claim.

 

Finally, in the claims filing arena, two significant provisions were included. Effective January 1, 2010, physician offices now have twelve months from the date of service to file a claim. This is a significant decrease from prior years but more in line with other payers. On a more favorable note, over the next few years guidelines will be developed to simplify claims filing. This includes standardizing health plan enrollment and creating unique health plan identifiers (like physician NPIs).

 

Much of the details of healthcare reform will be developed by the Department of Health and Human Services over the coming years. With many of the reimbursement and regulatory provisions having current implementation dates, physician offices need to plan now how to be successful in this post healthcare reform landscape.