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Pernicious Payor Behaviors &
Strategies to Address
Ed Gaines, JD, CCP
Chief Compliance Officer
Emergency Medicine Division
Zotec Partners, LLC &
Chair of the ACEP/EDPMA Joint Task Force (JTF) on
Reimbursement Issues
Greensboro, NC
919-641-4927 1
The Caveats ……
2
Objectives
➢ Describe & define 5 payor & market dynamics that are impacting EM.
1. Pt. is 1 of the largest payors & she’s worried;
2. Out of network (OON) is now a federal & state leg. issue;
3. CMS coding & reimbursement issues;
4. Commercial coding & reimbursement issues;
5. Prudent lay person (PLP) is under assault across the payor world.
➢ Strategies to address the issues
➢ Q&A throughout3
Emergency Medicine (EM) Stakeholders—
in addition to the Pt.1. ACEP:
a. Reimbursement Committee
b. State Leg. Committee
c. Coding & Nomenclature Committee.
d. ACEP/EDPMA Joint Task Force (JTF) on Reimbursement.
2. EDPMA:
a. State Reg. & Insurance Comm. (SRIC)
b. Federal Health Policy Comm. (FHP)
c. Quality Coding & Documentation Comm. (QCDC)
3. Physicians for Fair Coverage (PFC)
4. “Tuesday Group”—ACEP, EDPMA, PFC, ASA, AAEM, ACR,
ASPS, Ortho & Psych.
5. State medical societies, e.g. Medical Assoc. of GA (MAG)
4
Issue 1:
The Patient (Pt)—we’ll call her
Penny Lane (see appendix)-- is 1
of the largest payors (multiple
causes), she’s worried about
costs, the politicians are really
beginning to notice & taking
excess costs out is attracting big
tech.5
https://www.kff.org/slideshow/2018-employer-health-benefits-chart-pack/6
In the ACA, she sees narrower networks & in some plans
no OON coverage=more costs & less benefit coverage for
her premiums.
Avalere Study, “The High Cost of Healthcare:
Patients See Greater Cost Shifting and
Reduced Coverage in Exchange Markets 2014-
2018”https://www.endtheinsurancegap.org/sites/default/files/reso
urces/the_high_cost_of_healthcare_2014-2018_-
_report_and_state_vignettes_final_0.pdf 7
Case study: BCBSNC’s
attempt to < ED visits &
make ACA Pts pay >.
8
2018 mid terms & 2020 elections show the
importance of healthcare and costs.
9
https://www.kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-late-summer-2018-the-
election-pre-existing-conditions-and-surprises-onmedical-bills/
10
So where does that leave the clinicians?
➢ Market dynamics—HDHPs, “surprise coverage gaps” & Pts. essentially self insured except for major procedures /hospitalization—driving calls for transparency & protection
11
https://www.bloomberg.com/news/articles/2018-11-
15/doctors-are-fed-up-with-being-turned-into-debt-
collectors
Amazon=Creative Destruction—Prime Health coming soon?
AMZN, JPM and BRK Joint Venture in healthcare est. 2018
12
https://www.beckershospitalreview.com/healthcare-information-
technology/amazon-moves-into-healthcare-a-2018-timeline.html
Summary:
➢ Hospitals & physicians are being pushed to
post charge masters & enhance cost
transparency (see appendix);
➢ Revenue cycle management (RCM) must be re-
designed & deployed to engage the Pt.
➢ Charges & RCM practices are scrutinized by
hospitals and community stakeholder like
never before b/c the Pt is so much more
responsible for the costs.
➢ And the “poster child” of creative destruction
is likely entering healthcare in a big way.
13
Issue 2:
Since the Pt has become one of our largest
payors, the health plans have effectively used
that to “blame” clinicians for the out of
network (OON) conundrum.
What’s at stake? Ask your colleagues in NJ
14
NJ case study:
what’s the downside?
➢ Coalition of clinicians fought against this bill for > 10 yrs.
➢ NJ stat. effective 8/29/18.
➢ No minimum benefit std. (MBS)— “reasonable reimbursement” as determined by health plans.
➢ 1 week after the law became effective, Horizon BCBS announced that standard was 110% of Medicare.
➢ No EM access to arbitration b/c of the way the standard was written.
http://www.roi-
nj.com/2018/06/01/healthcare/murphy
-signs-out-of-network-bill-still-the-
subject-of-contention/
15
Why EM & the “House of Medicine”
need to continue to advocate for fair
coverage
16
17
Causes of the OON conundrum--what do the health plans
want & why?
Medicare Trustees
Report—physician
reimbursement >
0.4% per yr. vs. costs
of running a practice
at 1.7% per yr.
18
What do clinicians want and why?
19
Hospitals are increasingly threatening or going OON.
➢ Per article,
hospital was
charging 12X
Medicare.
➢ Premera BCBS
claims it
reimbursed
claim at 2X
Medicare.
20
https://www.vox.com/policy-and-
politics/2019/1/7/18137967/er-bills-
zuckerberg-san-francisco-general-hospital
3 federal bills on OON services
that could impact EM
21
Summary of chief proposal
➢ Sen. Cassidy (R-LA) “discussion draft”
➢ Bipartisan Senators’ “Health Care Price Transparency Initiative”—Sens. M. Bennet (D-CO), L. Murkowski (R-AK), T. Carper (D-DE), T. Young (R-IN) & M. Hassan (D-NH).
➢ Why “the Gang of 6” proposal may have more “juice” vs. others.
➢ Reimbursement standards: OON services for EM would be the > of1. Average in network rates; or,
2. 125% of the median allowable benefit based on a non-profit “benchmarking database” specified by the state .
➢ “Allowable benefit” is in network allowables.22
Out of network (OON) Updates: pro-forma on how ED would be impacted under the Cassidy formula
23
Pro-forma analysis on blended rate formulas—
using state wide FH data
24
Case study: NY’s IDR for Emerg. Svs. Cases
➢ 2017: 429 decided cases:➢ Plans won 42%
➢ Providers won 14%
➢ Split dec. 21%
➢ Settled 23%
25https://www.dfs.ny.gov/reportpub/fraud/ffcpd_annualrep_20
17.pdf
➢ 2016: 358 decided cases:➢ Plans won 43%
➢ Providers won 11%
➢ Split dec. 30%
➢ Settled 15%
OON Summary--2019 is expected to be very
active at the state level as well
26
➢ GA, MA, NM, NV, OH, PA, VA & WA bills expected
early 2019.
➢ED standard vs. House of Medicine &
mediation/arbitration are major issues.
➢ ACEP has fed. and state OON toolboxes on its
website—
➢www.goo.gl/WVjUjM
➢ Joint Task Force Technical Teams assembled.
➢ Tuesday Group & PFC (red states are #1 priority).
➢ ACEP State Leg. grants + PFC fund raising, grass
roots & PR in priority states
Mirth Break!
27
Issue 3: Gov’t payors
CMS/Medicare MAC coding &
reimbursement hot topics & Medicaid
reform issues.
➢ “Currently, the Medicare program only
reviews less than 3/10 of 1% of the nearly 1.5
billion Medicare claims that CMS pays
annually.” CMS Administrator Seema
Verma, July 25, 2018, speech to the
Commonwealth Club of CA
28
CMS’ Medicare Administrative Contractors (A/B MACs)
29
https://medicare.fcso.com/Medical_review/273195.asp
CMS’ “targeted probe & educate”
(TPE) Process: ➢ Per discussions w/ MACs & CMS, MACs will mail TPE notification letter to the practice location/hospital.
➢ EDPMA has requested that they also mail to the pay to address.
➢ If claim error rate is at or above 20%, then clinician goes to the next round per Palmetto GBA.
➢ Non-responses are counted as “errors”.
➢ 3 rounds and then extrapolation?
➢ Strategies: 855 Medicare enrollment addresses are current + follow timelines + take the education/use it to educate
30
https://www.cms.gov/Regulations-and-
Guidance/Guidance/Transmittals/2017Downloads/R1919
OTN.pdf
Prepayment reviews of CPT 99285 in addition
to TPE process for WPS J8B
➢ 100 CPT 99285s were selected
prepayment review in IN & MI.
➢ 3 services were allowed as billed
➢ WPS is using that as justification to
conduct 99285 prepayments for all.
➢ No extensions for prepay review for
records-- https://goo.gl/houQGP
➢ Palmetto GBA/RR Medicare also
conducting prepayment reviews:
➢ https://goo.gl/pK7rqS
31
Summary of key TPE points: from EDPMA’s RCM
workshop in May 2018--
➢ 2 Medicare MAC (Noridian and FSCO) medical directors & a VP of medical review from FSCO.1. MACs are targeting the
highest variances from a peer group;
2. “Education” session w/ clinician is NOT an opportunity for rebuttal by the clinician/RCM staff;
3. MAC web portals are best practice to submit records & to track the TPE review—despite what the MAC letter may say for record submission.
4. Tip—designate one of your CPC coding managers to be the “new best friend” (NBF) of the MAC TPE coordinator.
32
Appeal backlog will be resolved eventually—
it’s the federal gov’t “do as I say, not as I do”
➢ After 5 solid years of
non-compliance w/
federal statute, US
District Ct ordered HHS
to come into
compliance w/ federal
law by the end of FY
2022!
➢ AHA and hospitals case
was filed in 2014.
https://www.aapc.com/blog/44595-medicare-to-
eliminate-appeals-backlog/
33
33
Issues 4 & 5:
Prudent lay person (PLP) is under assault by the
commercial plans—we know about Anthem &
Centene—but there are a couple of plans contending
for new “worst actor” on the scene & the commercial
“Whack-A-Mole” continues + helping our partner
hospitals.
34
PLP Primer:
➢ Federal statute: Balanced Budget Act of 1997 (BBA ‘97):
1. Applicable to Medicaid MCOs Oct. 1997 & Medicare May 1998.
2. Prior authorization for ED svs cannot be required**
3. Defines the “emergency medical condition” (EMC)—
a. EMTALA EMC is different—stable for discharge.
b. “Severe pain” is key—health plans fought us.
c. “reasonably expect the absence of immediate medical
attention”
d. could lead to “serious impairment or dysfunction of a bodily
organ or part.”
e. Section 1852(d) and 1932(b) of Social Sec. Act
4. Then HCFA (now CMS) Letters interpreting PLP—1998, 1999
and 2000 (see also the Appendix)
5. **So what? No prior authorization concept enacted in ACA.
35
Applicability of PLP to other payors:
➢ Federal Employees Health Benefit Plan (FEHBP): 1998
Executive Order /s/ by Pres. Clinton.
➢ VA: Vet. Millennium Health Care and Benefits Act of
1999—and 38 CFR 17.1002 (b) & (c)
➢ ACA: Section 2719A extended PLP to enrollees in ACA
exchange plans, 42 CFR 2590.715-2719A.
➢ ERISA plans: 29 CFR 2560.503-1.
➢ SCHIP: 42 CFR 457.10
➢ State laws generally cover commercial health plans
licensed in that state, and may apply to PPOs and TPAs
➢ Source: EDPMA memo from Hart Health Strategies, Inc.,
6/16/2017
36
CMS Medicaid Managed Care Final Rule 2016
➢ “The final determination of coverage and payment must be made taking into account the presenting symptoms rather than the final diagnosis. The purpose of this rule is to ensure that enrollees have unfettered access to health care for emergency medical conditions, and that providers of emergency services receive payment for those claims meeting that definition without having to navigate through unreasonable administrative burdens.” (emphasis added) (81 FR 27749 (May 16, 2016)
37
Case study--
Centene=larg
est Medicaid
MCE in US
38
Implementation
Dates
FL, NV &TX 11/1/17
IL 11/8/17
GA 11/5/18
Centene’s modifier
policy w/ E/M services.
39
Case study--Can’t fight & win against “the Man”?
ACEP & EDPMA did with Centene in CA & IN in ‘18 & KS
Medicaid in ‘17
http://www.cmanet.org/news/detail/?article=health-net-to-rescind-modifier-25-and
http://www.edpma.org/downloads/MHS_EDPolicy.pdf
40
After a couple of yrs. of joint advocacy by ACEP &
EDPMA, Centene’s CMO finally responds 12/12/18
41
“Dear Mr. Dole,I am in receipt of your request for a meeting, and aware of EDPMA’s prior correspondence.Centene adopted a policy to address an identified trend in improper upcoding by emergency room providers. The policy provides appropriate levels of reimbursement for services billed as complex or severe when the member’s visit to the emergency room involved lower levels of complexity or severity. A copy of Centene’s most recent policy is attached.Centene disagrees that the policy violates, or even implicates, the prudent layperson standard. The policy does not question whether the member had a reasonable belief that he/she was experiencing an emergency medical condition. The policy also provides for an appropriate level of reimbursement to the provider, regardless of whether the member’s medical condition was truly emergent.We are amenable to scheduling a meeting to explain the policy, answer your questions, and discuss your concerns.Thank you,KenKen Yamaguchi, MD, MBAExecutive Vice President, Chief Medical OfficerCentene Corporation”
Update on Anthem lawsuit & new JAMA study
➢ ACEP and MAG sued Anthem
in fed. ct. summer of 2018
over “non-emergent” diag.
list.
➢ New JAMA study by Drs.
Chou, Gondi et al. published
Oct. 2018:➢ If Anthem diag. lists were
implemented by commercial health
plans, 1 in 6 ED pts would be
impacted & possibly denied care.
➢ Of the folks impacted by the list,
over 40% of Pts. received
“substantial ED care”https://jamanetwork.com/journals/jaman
etworkopen/fullarticle/2707430
42
Our partner hospitals are being hit on all sides.
➢ AHA data shows that OP revenue is now 95% of IP revenue in 2018.➢ https://www.modernhealthcare.com
/article/20190103/TRANSFORMATION02/190109960/aha-data-show-hospitals-outpatient-revenue-nearing-inpatient
➢ OP rev. increased from 83% in 2013.
➢ Admissions <1% from 2016 to ’17 & IP surgeries and births declined slightly during this period.
➢ Certificate of need (CON) is under assault--https://www.modernhealthcare.com/article/20181208/NEWS/181209933
43
Case study--Glens
Falls, NY hospital
➢ “System conversion” in ‘17
➢ Claims for $38M in charges were sent out “late or not at all” per an audit by KPMG.
➢ Platform is one of the major hospital EHR vendors.
➢ Hospital resorted to sending claims out by hand.
➢ Pres. Reagan’s truism “trust but verified”
44
https://poststar.com/
news/local/audit-
bad-billing-system-
costs-glens-falls-
hospital-million-
in/article_4b430f4f-
859f-59ba-bac0-
5e886c8b9d85
Helping our partner hospitals--UHC adopts SEPSIS 3
(SEP-3) 1/1/19
➢ Bulletin says its
targeting hospital DRG
claims.
➢ Issues:
➢ Medicare & no other
health plan has
adopted SEP-3.
➢ EM was not consulted
on SEP-3 in advance.
➢ Double
documentation?
➢ EMTALA—knowing
that the Pt has UHC
➢ SEP-3 eliminated
“severe sepsis” as a
diagnosis.
➢ Impact on CC services &
CPT 99285s?
https://www.beckershospitalreview.com/quality/is-united-health-care-uhc-standing-hospital-
drg-reimbursements-on-its-head-for-sepsis-care-and-what-are-the-other-potential-
consequences-of-uhc-s-unprecedented-decision.html45
Summary:
➢ Penny Lane is worried about healthcare costs
& access--& she’s right to be concerned.
➢ Her & millions of others worries are attracting
Congress & big tech w/ “solutions” including
restrictions on OON billing.
➢ Train your RCM team on the MAC TPE audits
& how to respond—remember your appeal
rights.
➢ “Whack-a-mole” with the payors continues w/
health plans like BCBSTX taking non-
emergent PLP & ED coding reviews to “the
next level.”
46
Contact information:
Ed Gaines, JD, CCP
Chief Compliance Officer,
Emergency Medicine Div.
Zotec Partners
Greensboro, NC
919-641-4927
Follow me on Twitter:
@EdGainesIII
http://twitter.com/EdGainesIII
47
Appendix: material that we
don’t have time to discuss
but is worth a look.
48
James Cordan Carpool Karaoke w/ Sir Paul McCartney
49
https://www.youtube.com/watch?v=QjvzCTqkBDQ
AHA & Federation Joint Statement on
the AHIP coalition on the OON issues
50
CMS reiterates the federal PLP std as recently as
March ’18 to EDPMA
51
What are the potential other data sources if not CMS:
➢ Fair Health
➢ All payor claims databases (APCDs):
➢ OR and several states.
➢ Plans subject to state regulation can be mandated to provide data to the APCD.
➢ APCDs cannot mandate ERISA plans to provide data per SCOTUS ruling.
➢ Health Care Cost Institute (HCCI)
➢ 2017 NORC report commissioned by PFC.
52
TPE Notification Letter Example—MI MAC,
WPS
➢ After the clinical
education, the clock
begins on appeal
rights—same as
Medicare appeals
generally.
➢ Process is new to the
MACs & to clinicians.
➢ CMS to give providers
add’l chances to
submit records for
CERT review,
Transmittal 800 June
‘18
53
Strategies: How to respond to TPE
audits—the 42 reasons
54
➢ EDPMA Quality, Coding & Documentation (QCD) co-chair Mark E. Owen’s “42
reasons” for E/M coding variety.
➢ https://mcscodes.com/blog
➢ Strategy: make the case for why EDPs would skew right—it really can work
when the comparative data set is “all clinicians” billing the 9928X codes & all
hospitals, i.e. critical access or community vs. Level I trauma centers.
55
“I am not a clinician but these injuries sound like
PLP to me”
➢ Harvard Pilgrim: 180 pages where if the diag. is primary, the Pt will pay ½ of the co-insurance after deductible
56
If the plans can’t have CMS as reimbursement
std. then what do they want? Answer: HCCI
➢ Established in 2011
➢ $30 Million in capital contributions through 2012-2016 per IRS Form 990s from major health plans:
➢UHC=$13.23 Million
➢Aetna=$9.06 Million
➢Humana=$3.91 Million
➢Kaiser=$2.05 Million
➢ Foundations=$$
➢ Optum Health is the backend data platform for HCCI—and proudly part of UHC.
57
NJ Senators Seek to Undo the Damage.
58
https://www.becker
shospitalreview.co
m/finance/new-
jersey-bill-aims-to-
clarify-out-of-
network-billing-
rules-5-things-to-
know.html
59
http://www.modernhealthcare
.com/article/20160407/NEWS
/304079996
Sen. Hassan (D-NH) & Sen. Shaheen (D-NH)
bills➢ Hassan’s Senate bill 3592:
➢ Bans OON billing ED care & other care where Pt notice & consent not obtained.
➢ NO MBS.
➢ “Baseball arbitration” (ADR) where the health plan & clinicians disagree on reimbursement.
➢ ADR may consider in-network rates, Medicare and “Gould criteria” in determining OON reimbursement.
60
➢ Shaeen’s Senate bill 3541
➢ OON balance billing banned above a rate determined by the state.
➢ State may set rate at:1. 125-200% of Medicare
(higher rate for critical access areas);
2. 80% of charges per a charges database (not defined); or
3. In-network rates.
➢ Default rate if not set = Medicare or rate set by feds.
Case study: Victory in KS!
➢ July 2017: KS Medicaid implements
ED diag. list.
➢ Claims w/ CPT 9928X codes that hit
the diag. list were down-coded to
99281.
➢ ACEP/EDPMA Joint Task Force (JTF)
KS-ACEP, KS Med. Society &
coalition engaged w/ in joint
advocacy.
➢ Result: full reversal of prior policies.
➢ Retro-active application of new
policy for down-coded claims to
7/1/17.
61
Potential physician & hospital anti-trust class action against
BCBS
➢ 6 year case
➢ “Pre-trial
appeal” by
BCBS of trial
judge decision.
➢ Potential per se
anti-trust
violations by
Blue.
62
https://goo.gl/NBcJ5i
Appendix: Hospital transparency
requirements FAQs
63
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/Downloads/Additional-Frequently-Asked-Questions-Regarding-Requirements-for-Hospitals-To-Make-Public-a-List-of-Their-Standard-Charges-via-the-Internet.pdf
