Economic Stimulus Package: Funding for the Adoption of Health Care IT

Congress has taken several significant steps toward its long-stated objective of promoting the electronic exchange of health care information to reduce medical errors, improve quality of care and eliminate waste. Last week, the House of Representatives passed the Health Information Technology for Economic and Clinical Health Act (the HITECH Act) as part of the larger economic stimulus package. In addition, the Senate Appropriations Committee approved the HITECH Act as part of its version of the stimulus package. The full Senate is expected to vote on the package sometime this week or next.

The stated goal of the HITECH Act is to promote the adoption of electronic health records technology (EHR Technology) by all hospitals and physicians by 2015. In order to achieve this goal, the HITECH Act provides for the establishment of industry standards for integration and implementation of EHR Technology to remove technical obstacles to its widespread adoption. The HITECH Act also includes significant financial incentives to hospitals and other providers to adopt EHR Technology by 2015, as well as penalties that will apply if they fail to do so.

The key provisions of the HITECH Act include:

  • Direct and state block grants to help fund regional and state initiatives to promote the adoption of EHR Technology and best practices;
  • An appropriation of $2 billion to $5 billion to support regional and state initiatives to promote the adoption of EHR Technology and best practices;
  • An estimated $18 billion in Medicare and Medicaid incentive funds payable to certain or eligible hospitals and providers that adopt HR Technology before 2015;
  • Medicare and Medicaid reimbursement penalties for physicians and hospitals that fail to adopt EHR Technology before 2015;
  • Improved privacy and security protections for health information as health IT usage increases;
  • The formal establishment of the Office of the National Coordinator for Health Information Technology;
  • Creation of the Health Information Technology (HIT) Policy Committee and the HIT Standards Committee; and
  • A process for industry and provider stakeholders to participate in the development of national HIT policies and standards.

The HITECH Act, as part of the stimulus package, is expected to pass both houses of Congress by Presidents Day and to be signed into law by President Obama before the end of February.

Click here for information from the House Committee on Energy and Commerce on the Stimulus Bill and Health IT.

New York Medicaid Inspector General Announces Self-Disclosure Protocol

New York State Medicaid Inspector General, James Sheehan has announced the development of a protocol for providers to self-disclose incidents of fraud and abuse discovered in advance of a formal State audit. New York has the largest Medicaid program of any state, with an annual budget of approximately $48 billion. Sheehan expects the protocol to be released at the end of February. We will provide additional details when the protocol has been released.

President Obama Expands SCHIP

President Barack Obama signed into law an expansion of the State Children's Health Insurance Program (SCHIP) that authorizes spending an additional $32.8 billion to include coverage for approximately 4 million children in addition to the 7 million currently insured under the program. The increase in coverage will be funded through increases in the federal excise tax on cigarettes (from 39 cents per pack to $1). The most significant change from previous versions of the law will allow states to end the five-year waiting period for low-income, uninsured children who are legal residents. SCHIP was to expire on March 31, 2009. The program, created in 1997, is intended for children from in families that earn too much to qualify for Medicaid, but too little to afford private health insurance. For more information on the Act, please click here.

HHS Seeking Guidance on Handling New Technology

Providers and others have an unusual opportunity to influence government health policy on issues related to new technology. New technology issues have long been an area of great controversy as industry representatives and providers have complained that federal government policies, especially those pertaining to coverage and pricing, stifle innovation and prevent products from reaching patients who need them most.

The Department of Health and Human Services (HHS) has issued a Request for Information (RFI) to solicit ideas and information regarding how HHS can improve "its use of resources and authorities to encourage the development and use of new medical technologies, consistent with the goals of (a) maintaining and improving the quality of health care, (b) controlling overall health care costs, and (c) using timely and practical administrative procedures." In particular, HHS would like to hear from the public regarding challenges in the current marketplace for medical technology development and application, potential options to reduce or eliminate those challenges, and the likely costs and benefits of those options.

The agency is asking for comments "on ways to improve the application of those methods as new medical technologies emerge," including:

  1. Are there specific CMS (Centers for Medicare and Medicaid Services) coverage or payment policies that should be considered to help assure timely, affordable access to effective new technologies for beneficiaries?
  2. Are there specific refinements within CMS's control, or that would require rulemaking to the criteria or methods used, to determine eligibility for Medicare inpatient add-on payments, outpatient new medical technology, Ambulatory Payment Classification payments or pass through payments that may potentially be modified to potentially improve access to new medical technologies and provide greater value for the program and its beneficiaries?
  3. Is there research on medical technology, tools or funding that is not currently being conducted that potentially could be conducted and/or funded by Agency for Healthcare Research and Quality?

The RFI is the result of a series of conferences hosted by HHS held around the country in the latter half of 2008 to discuss how various agencies facilitate the development of innovative medical technologies.

Comments must be submitted by 5 p.m. (Eastern time) on April 16, 2009, and may be submitted electronically. For more information, please click here and here.

Senate Bill Would Require Disclosure of Payments

Sens. Chuck Grassley (R - Iowa) and Herb Kohl (D - Wis.) have proposed legislation that would require drug, device and biologics manufacturers to disclose payments made to physicians exceeding $100 annually. The legislation, known as the Physician Payments Sunshine Act of 2009, will amend Title XI of the Social Security Act to require disclosure of all payments made to physicians related to products for which payment is made under Medicare, Medicare or SCHIP. Compensation subject to disclosure would include consulting fees, gifts and charitable contributions. Not included are product samples for patient use, educational materials, and in-kind items used for charity care. The information disclosed would be publicly available, and would include the identity of the recipient and the nature of each payment made. Failing to disclose payments could result in civil monetary penalties of up to $1 million.

Settlement of MRI Kickback Case

The Illinois Attorney General has reached a settlement with MIDI, LLC (MIDI), a company operating a nationwide network of diagnostic imaging centers, concerning allegations that 14 of the company's Illinois MRI centers paid kickbacks to physicians. Under the settlement, MIDI will pay a total of $1.2 million to settle the state's lawsuit. The settlement also explicitly prohibits the radiology centers from entering into any kickback arrangements with referring physicians in Illinois. The case stemmed from a whistleblower's allegation that the MRI centers had entered into lease arrangements which were purported shams used to pay doctors to refer patients to the centers. This recent settlement is yet another clear indication that arrangements between imaging centers and physicians are under increasing scrutiny not just from the federal government, but the states as well. Please read the state's news release here.

Significant Rise in Outpatient Surgeries

According to a report from the Centers for Disease Control and Prevention (CDC), outpatient surgeries increased from 20.8 million visits in 1996 to 34.7 million visits in 2006, and now account for approximately two-thirds of all surgeries. Data was collected from approximately 150 hospitals and 300 freestanding surgery centers.

Among other things, the report also found:

  • Female patients had significantly more ambulatory surgery visits (20 million) than males (14.7 million);
  • The procedures performed most often during outpatient surgery visits included endoscopies of the large intestine (5.8 million) and small intestine (3.5 million), and extraction of lens for cataract surgery (3.1 million);
  • The leading diagnosis for outpatient surgery visits was cataract, with 3 million visits, followed by benign tumor (neoplasm) with 2 million visits, and malignant tumor with 1.2 million visits; and
  • More than half of outpatient surgery visits (53 percent) were paid for by private insurance.

The report underscores the importance of providers such as ambulatory surgical centers (ASCs) in providing primary care to many Americans. As surgical care continues to shift from traditional hospitals to ASCs, coverage and reimbursement issues will become increasingly contentious as payment systems attempt to adjust to the new clinical realities. You can read the full report here.

Source: Health Law Regulatory Update