Healthcare Law Update — State of Reform Conference Report

I recently attended the annual State of Reform Health Policy Conference.

I have attended this conference each year since its inception.  This year 293 attended and there were 57 speakers.  Despite the highest attendance on record the mood was noticeably more negative than past years.  Many healthcare policy discussions turned quickly to that of Alaska’s budget crisis and speculation on how the budget will impact both public and private healthcare.  On the global scale much time was devoted to whether or not the ACA will be repealed and replaced and when such action may occur.  Senator Sullivan indicated that he foresees no action on healthcare until after January 1.

The conference is divided into 3 tracks of 5 sessions.  I typically select tracks and sessions that I think relevant to most clients.  This year I found most sessions to be lacking in the practicality and found little advancement of either policy reform or operational reform that a practitioner can implement.

Key takeaways:

1)      Universal concern for Alaska’s budget instability.  While this is no surprise, what is new is that most practitioners are no-longer decoupling the lack of a balanced State budget from the actual health of the Alaska economy.  Now the two are discussed in conjunction and there is real concern.

2)      Commercial payors are acknowledging that Alaska is on an unsustainable trajectory of premium costs.  Payors continue to blame providers for this cost, but now they are openly admitting that the market cannot sustain (in the individual and small group) current or anticipated premiums.  Payors are now suggesting new Coordinated Care Organization and Accountable Care Organization models.  Moda in particular is pressing for the CCO model and points to its early success with this approach in Oregon.  Given Moda’s tremendous instability, it is difficult to look to this payor as a guiding light.  But, the takeaway is that all payors are now openly discussing these alternatives.

3)      Commercial payors are signaling that the fee-for-service contract model will terminate likely in the next 2-3 years.  This means that providers must prepare for value-based contracting and even those providers who are not participating in CMS or the MIPS program will likely have to participate in MIPS-like reporting as a condition of contracting.  The rationale being many providers do participate in CMS and MIPS and that the commercial payors are reluctant to introduce new quality reporting criteria.  So, while the federal healthcare policy is allegedly not a single payor system, we take another step in that direction though the adoption of CMS criteria by commercial payors.

4)      Price transparency. The municipal attorney made a short and concise presentation on AO 2017-26 (the subject of my March 13, 2017 Update).  Representative Andy Josephson (D – Anchorage) presented HB 123, the House price transparency bill.  In sum, HB 123 is not as sophisticated as AO 2017-26 and for those providers in Anchorage, compliance with AO 2017-26 will result in compliance with HB 123.  That said, HB 123 may be taken up in January by the Legislature  and may change in substance before passage.  I’ll keep you posted on developments.

5)      The 80th Percentile Rule. (See my Updates dated December 8, 2016 and January 10, 2017). On the discussion panel was Lauren Cover, a contracting consultant with Aldrich; Dr. Graham Glass, immediate past president of the Alaska State Medical Association, but who quickly clarified that he was appearing in his personal capacity; and Albert Fogel, an employee benefits consultant with Northrim Benefits Group.  Surprisingly Dr. Glass supports significant revision of the rule or even outright repeal.  Not surprising is that Aldrich, which is in the business of negotiating payor contracts, and Northrim Benefits Group, which is in the business of selling health insurance, both support repeal. The push back from the provider attendees was spirited.  Most disheartening on this issue were statements by State Senator Cathy Giessel made during the lunch keynote in which she indicated that she would introduce legislation to repeal the rule this January.  However, Alaska Division of Insurance Director, Lori Wing-Heier, in her closing comments indicated a far more informed understanding of the rule, its intent and effect on the patient. 10 months after the initial scoping hearing on the issue and Director Wing-Heier appears to be supportive of the rule and might turn out to be the most important champion of out of network providers.

6)      Providers seek alternative practice models. While not a topic of any panel, my discussions with clients and non-clients at the conference confirm that providers are becoming exhausted by over-regulation and uncertainty of future regulation.  They seek alternative practice models that avoid participation in government healthcare plans and now even avoidance of commercial payors. Some alternative models include subscriber-based medicine.  This model works best with established volume primary care or occupational medicine practice.  Is this a solution to the Alaska crisis? Likely not on a large scale.  Alaska will continue to need providers willing to participate in government programs due to the sheer numbers of beneficiaries.  However, it may be a solution for some frustrated providers. I am researching various models and will share in a future Update.


Peter M. Diemer


Medicaid ICD-10 Requirement

By Peter M. Diemer, JD
Clayton & Diemer LLC

I have received several questions regarding the new Medicaid ICD-10 requirement for prescriptions in response to my recent healthcare law update.

This requirement is separate from the Alaska Prescription Drug Monitoring Program (AKPDMP) registry requirements.  The AKPDMP applies to all providers with DEC registration and is not Medicaid or Medicare specific.  The AKPDMP does contain several exemptions from the registry requirement.  For example, AS 17.30.200(a) and (b) exempt controlled substances administered to a patient at a health care facility. The AKPDMP also exempts emergency department physicians from reviewing the database prior to prescribing or dispensing inpatient or in emergency department. AS 17.30.200(k)(4)(A)(i) and (iii).

I have not identified any exemptions from the ICD‐10 diagnosis code requirement for Medicaid services.  Earlier this summer I spoke with Erin Narus, the Pharmacy Program Manager, on this issue.  She confirmed that no exemptions exist to the Medicaid requirement.  She also stated that the State is launching a “soft” roll out of the requirement.  Despite this, I emphasize that it remains a current requirement for Medicaid reimbursement.  Narus also invited feedback from providers and stakeholders to assist in refining the requirement and indicated that some exemptions may be considered.

The next Drug Utilization Review Committee meeting is Friday, September 15, 2017 at 1:00 p.m. in the Frontier Building, 3601 “C” Street; Room 880, Anchorage, Alaska. If  you would like to join via teleconference, call 1.800.315.6338, use access code 24251#

The ICD-10 requirement is on the agenda.

Certain provider groups, such as emergency department physicians and chronic pain management physicians, may interface with this requirement more often and should monitor developments.

And in other information…

Aetna to Terminate Pass Through Lab Billing September 1st.
Aetna announced that effective September 1st  it will deny pass-through billing for most laboratory charges from a facility or a non-facility provider. The provider that performs the test must bill for these services.

This change in Aetna policy may have a substantial impact on practices that do not have a physician lab.  Such practices might consider establishing a physician lab or consider a possible block lease of an existing qualified lab.  Under certain circumstances a physician office can block lease a lab during which time it operates as the lessee’s physician lab.  For CMS participating providers block leasing can be complicated but possible.

No Further Action on 80th Percentile Rule
In January the Alaska Division of Insurance held scoping hearings on the so-called 80th percentile rule, 3 AAC 26.110.   The insurers and employee benefit management companies uniformly came out against the rule while providers were mostly in support of maintaining the current rule.  We expected that the Division of Insurance would take no action until Congress had opportunity to make changes to the ACA.  Now that Congress has not acted on the ACA, the Division of insurance may resurrect this matter.  We encourage providers to be vigilant on this issue.

Alaska Prescription Drug Monitoring Program
The Alaska PDMP underwent some changes.  Providers who are licensed by DEA are now required to register with PDMP. Unless an exception applies, prescribing providers are required to check the PDMP database before prescribing.  Providers may delegate database review to only persons who hold a license issued pursuant to Title 8 of the Alaska Statutes (i.e. a nurse, etc.).  Note that Certified Medical Assistants (CMA) are not licensed in Alaska and thus, this task may not be delegated to them.

CMS Merit-based Incentive Payment System (MIPS) 2017 Participation Deadline October 2
For those practices which accept Medicare, time is running out to consider whether there is any advantage to participation in the Merit-based Incentive Payment System (MIPS) introduced through the October 2016 Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

On October 14, 2016, CMS released the final rule for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA repeals the Medicare Part B Sustainable Growth Rate (SGR) reimbursement formula and replaces it with a new value-based reimbursement system called theQuality Payment Program (QPP). The QPP consists of two compliance tracks:

Follow the embedded links for more information directly from CMS.

Most practices will not qualify for Advanced APMs, leaving MIPS as the only practical compliance option.

In sum, MIPS applies to all CMS providers who bill $30,000 or more annually to CMS or treat more than 100 CMS qualified beneficiaries each year.  If your practice falls below the threshold then reimbursements will not be penalized for non-participation.  There are some other notable exceptions such as hospitals and facilities.  Further, a new CMS enrolled provider is not required to participate during the first year of enrollment.

Otherwise, 2017 is the year in which a provider must initiate participation to avoid a future 4% reduction of reimbursements.  A minimum level of participation is required to avoid this reduction.  Further participation is required to achieve an enhancement.

MIPS is comprised of four areas: (1) Quality Measures, (2) Improvement Activities, (3) Advancing Care Information Activity, and (4) Cost.  Initially Cost will not be weighted.

The minimum level of participation in 2017 to avoid a 2019 reduction is to collect and report one Quality Measure or Improvement Activity for one point in 2017.

Positive adjustment may be achieved through a full 90-day participation period in 2017.

This means that a practice must start its collection no later than October 2, 2017, to meet the 90-day requirement for 2017.

Navigation of MIPS is far too complex for this e-mail, but the above links are a good start for a practice to learn more about the four components of MIPS.

State of Reform Conference October 3
The annual State of Reform Conference is scheduled for October 3rd in Anchorage.

Join AK-ACEP Aug. 23 for a Screening of 24/7/365

Bear Tooth Theater
1230 W 27th Ave
Anchorage, AK
Aug. 23
Doors open at 12:30 pm; Show starts at 1 pm
Panel Discussion: 2-3 pm
24/7/365: The Evolution of Emergency Medicine

When you dial 911, someone picks up your call, an ambulance is dispatched, and you are speedily transported to an emergency room. Once there, a team of specially-trained emergency medicine doctors and personnel with an enormous amount of resources at their fingertips care for you. No one asks if you can pay. No one refuses to treat you if you cannot. A generation ago, it was completely different. There was no 911 system, there were no trained pre-hospital personnel, your “ambulance” may have been a hearse, and there may or may not have been any doctor at all in a bare basement room with leaky pipes at the hospital where you were taken.

24|7|365: The Evolution of Emergency Medicine chronicles the emergence of EMS and the specialty of Emergency Medicine, which became the 23rd recognized medical specialty only in 1979.

Panel Discussion

After the screening please join the chapter for a panel discussion featuring the documentary’s producers.

Reserve today!

Reserve your ticket now. The cost is free but a 99-cent processing fee per ticket may apply.