Washington Update

1. Washington Update Jennifer Gasperini MGMA Senior Government Affairs Representative jgasperini@mgma.com Jeb Shepard MGMA Government Affairs Representative jshepard@mgma.com

2. Agenda • 2013 political outlook • ACA implementation • Medicare payment issues & proposed Medicare Physician Fee Schedule changes for 2014 • Compliance

3. Political Outlook

4. 2013 Political Outlook • 113th Congress: • Budget (FY14) • Debt Ceiling • Sequestration • SGR

5. SGR • Updated CBO budget outlook significantly lowers the cost of SGR repeal to $139 billion over 10 years (down from $245 billion) • Latest action: • House Energy & Commerce Committee’s H.R. 2810 passed by Health Subcommittee • Senate Finance Committee’s request for information from stakeholders on SGR replacement • MGMA letter to House E&C, Senate Finance • SGR may be addressed as part of a larger deficit reduction effort • 24.4% cut scheduled for 2014

6. Advocacy- Get Involved! Your help is needed! Contact your lawmakers MGMA Advocacy Initiatives: • Stop the upcoming Medicare reimbursement cuts • Stop the sequester cuts now!

7. Affordable Care Act Implementation

8. ACA Implementation The Kaiser Family Foundation State Health Facts Source: Data compiled through review of state legislation and other exchange documents by the Kaiser Family Foundation. “State Decisions For Creating Health Exchanges, as of May 28, 2013.” 2014 implementation of state-based ACA insurance exchanges • Enrollment began Oct. 1, coverage as early as Jan. 2014

9. ACA implementation Resources • MGMA ACA Resource Center • MGMA member benefit: Insurance Exchange Essentials for Practice Executives • HHS website on ACA and factsheet for providers • Interactive implementation timeline for key ACA provisions Advocacy • Ongoing evaluation of new ACA regulations • Continued discussions with HHS and CMS on key practice concerns • Example: 90-Day exchange grace period • MGMA LEARN on impact of ACA exchange implementation on practices

10. ACA Medicaid Issues • 2014 Medicaid expansion (optional), learn more • Medicare/Medicaid Payment Parity: Raises Medicaid payment rates to Medicare levels in 2013 & 2014 • Increased payments for certain PC providers for specific services (E&M, vaccine administration, etc.) • Eligible specialties: family medicine, general internal medicine, pediatrics (including related subspecialists) • Physicians must self-attest eligibility based on: Board certification or providing 60%+ primary care for Medicaid • MGMA resource on key points of the final rule

11. Physician Payment Sunshine Rule Payments received from drug & device manufacturers (and physician ownership in drug & device manufacturers or GPOs) must be reported by manufacturers to CMS • Payments over $10 (or $100 aggregate during calendar year) must be reported • Information will be published on a public website beginning Sept. 2014 • CMS website (“open payments”) and mobile device app • New member benefit memo & fact sheet at mgma.com/open-payments, webinar

12. Administrative Simplification • CMS final regulation for January, 2013 implementation of operating rules for eligibility & claim status make it easier for practice to: • Check patient eligibility & financial responsibility • Monitor status of submitted claims • Interim final rule standardizes electronic funds transfers / electronic remittance advice, IFC on operating rules (Jan. 2014 implementation) • New CAQH EFT Enrollment Tool • Significant fines on health plans for noncompliance • Action item: assess PM software capability and change if needed • Member benefit webinar

13. Medicare Payment Issues

14. 2014 Proposed Medicare Physician Fee Schedule • Proposed rule was released in July 2013 • Sets proposed 2014 payment rates • Estimated impact chart • Comprehensive analysis of the proposed rule • MGMA’s comments to CMS on the proposed rule • Final rule to be released in November 2013

15. 2014 Proposed Medicare Physician Fee Schedule Proposed changes: • Continue implementation of the physician value-based payment modifier & changes to other quality reporting programs • MGMA’s comments: Immediately address the burdensome and complicated nature of CMS's multiple federal quality reporting programs • Increase the amount of physician information on the Physician Compare website • MGMA’s comments: Address existing deficiencies with the Physician Compare website before adding additional information

16. 2014 Proposed Medicare physician fee schedule Proposed changes: • Limit the payment for certain services where the physician fee schedule non-facility payment is higher than the total payment to furnish the same service in a facility setting (either a HOPD or ASC) • MGMA’s advocacy: MGMA and 39 other medical organizations sent a letter to CMS opposing this proposed payment cap • MGMA’s comments: Withdrawal this proposal • Establish a separate payment beginning in 2015 for complex chronic care management services • MGMA’s comments: Establish these services but reconsider the complexity of the requirements

17. Federal Quality Reporting Programs

18. E-prescribing Program • E-prescribing Bonus 2013 • EP must submit 25 instances of e-prescribing during the calendar year • 2013: .5% bonus (last year for bonus) • Report using claims, registry, or EHR • Must have 10%+ of Medicare allowed charges from denominator codes • 2014: last year of penalties, based on 2013 reporting (Jan-June) • MGMA E-Prescribing Penalty Tip Sheet Denominator Code List: 90801, 90802, 90804, 90805, 90806, 90807, 90808, 90809, 90862, 92002, 92004, 92012, 92014, 96150, 96151, 96152, 99201, 99202, 99203, 99204, 99205, 99211, 99212, 99213, 99214, 99215, 99304, 99305, 99306, 99307, 99308, 99309, 99310, 99315, 99316, 99324, 99325, 99326, 99327, 99328, 99334, 99335, 99336, 99337, 99341, 99342, 99343, 99344, 99345, 99347, 99348, 99349, 99350, G0101, G0108, G0109

19. Physician Quality Reporting System (PQRS) Incentive for 2013: 0.5% bonus • Report 3 individual measures, or 1 measures group (for individual EPs only) • via claims, registry, or EHR • Use 2013 CMS measure specification data • Use our new tool! The Interactive PQRS Impact Assessment • Additional 0.5% for also participating in the Maintenance of Certification Program (MOC)

20. PQRS: GPRO PQRS Group Practice Reporting Option, GPRO: • Open to groups w/ 2 or more providers • Requires self-nominationby Oct. 15, 2013 • Report via new web-based PV-PQRS system (see appendix) • 2013 GPRO reporting mechanisms: must elect mechanism through PV-PQRS registration system 1) GPRO registry 2) GPRO web-interface (25 or more EPs only) 3) Administrative claims (new!)

21. 2013 PQRS: Administrative Claims Option Administrative Claims Option: open to individuals and GPRO, for avoiding the penalty only, no reporting on claims required • 17 total measures (14 process/ 3 outcome) • For example: • Use of High-Risk Medications in the Elderly • Antidepressant treatment for depression • Must elect by Oct. 15, 2013 • Elections made via new PV-PQRS registration system, opened July 15 • MGMA/CMS webinar July 24 walks through registration system • Update IACS accounts! Must add PV-PQRS registration system user to current IACS profiles to be able to register in the new PV-PQRS system

22. PQRS: Avoiding the 2015 penalty PQRS Penalties begin in 2015! • 2015 Penalty = -1.5% • 2015 penalty 2013 reporting period • Criteria: report 1 measure, or 1 measures group in 2013 • Report via: claims, registry, EHR ,GPRO web-interface, or administrative claims • No patient volume reporting thresholds required

23. PQRS: Proposed Changes 2014 & beyond 2014 incentive: measures required to report would increase from 3 to 9 individual measures Criteria to avoid the 2016 penalty: would be required to meet the 2014 incentive criteria Would add a “qualified clinical data registry,” and GPRO “certified survey vendor” reporting options Would retire certain measures, adds certain measures and measures groups No Administrative Claims option available 2014 & beyond!

24. Where Quality & Cost Meet Payment….. The Value-Based Payment Modifier

25. 2015 Value-Based Payment Modifier Groups with 100 + EPs Satisfactory PQRS Reporters Meet the criteria for satisfactory PQRS group reporting to avoid the 2015 penalty: web-interface, registries, or administrative claims Non-Satisfactory PQRS Reporters Groups that do not meet PQRS criteria in 2013 for avoiding the 2015 penalty using GPRO -1% Modifier for 2015 In addition to the -1.5% PQRS penalty for 2015 0% Modifier for 2015 (No Payment Adjustment) Elect Quality-Tiering Groups could (1) earn an upward payment adjustment for high performance OR (2) risk a downward adjustment for poor performance No Election 0% Modifier for 2015 (No Payment Adjustment) 2015 Modifier will Adjust Either Upward or Downward -1% would be the maximum downward adjustment for 2015

26. 2015 Value-Based Payment Modifier • The VBPM will impact all Part B physicians in 2017 • 2015: Impacts groups with 100+ Eligible Professionals (EPs) • EPs include: physicians, nurse practitioners, therapists, physician assistants, clinical nurse specialists and more • Based on PECOS query completed by CMS on Oct. 15, 2013 • To avoid 2015 penalty, group must participate in 2013 PQRS GPRO • GPRO: Requires self-nomination by Oct. 15, 2013 via PV-PQRS (includes choosing reporting method) • GPRO reporting mechanisms available to groups w/ 100+ EPs= • GPRO registry • GPRO web-interface, or • Administrative claims

27. Value-Based Payment Modifier: Calculating the VBPM score • What is the VBPM score composed of? • Quality measures • PQRS GPRO measures • Outcome measures • 3 composite measures on: acute and chronic prevention quality indicators; all-cause readmission • Cost measures • Total per capita cost (includes Part A and Part B spending), and per capita cost for 4 chronic conditions (COPD, coronary artery disease, diabetes, heart failure) • Risk adjusted (HCC model) • Standardized to eliminate the impact of geographic variation • View Quality & Resource Use Reports (QRUR) to preview how group would fare under the VBPM policies- groups w/ 25+ EPs

28. VBPM: Proposed changes 2014 & beyond Proposed Changes: • 2016 VBPM based on 2014 performance • VBPM would impact groups with 10 or more EPs • Quality-tiering would be required- groups of 10-99 EPs not subject to penalties under QT • Would add an additional cost measure to the cost composite: Medicare Spending Per Beneficiary • Would create a specialty adjustment when calculating benchmarks for cost measurement • No Administrative Claims reporting option available 2014 & beyond!

29. Meaningful Use: Stage 1 • Stage 1 core and menu set MU measures = 15 core measures, choose 5 of 10 menu set measures • 6 CQMs (choose 3 core/alternate core + 3 menu set) • Some changes to Stage 1 measures and exclusions made in Stage 2final rule: CMS tip sheets

30. Meaningful Use: Stage 2 • Stage 2 final rule released Sept. 2012, along with factsheet • Stage 2 = 2014 • 17 core measures / 3 out of 6 menu measures required • Key changes: • Report CQM data electronically, starting in 2014 • Patient engagement measures • Batch reporting in 2014 • MGMA /CMS stage 2 webinar, MU resource center • MGMA letter to HHS: instate a moratorium on MU penalties, more time to meet stage 2 criteria

31. Meaningful Use Penalties Avoiding MU Penalties • Providers who are eligible to earn an incentive must participate successfully beginning in 2013 (or 2014 in some cases) to avoid the -1% penalty in 2015 • 5 hardship exemptions: • Infrastructure- i.e. lack of broadband • New EPs – limited 2 yr exempt. for newly practicing EPs • Unforeseen circumstances- i.e. natural disaster • Lack of face-to-face or telemedicine interactions and follow-up visits with patients • EPs who practice at multiple locations (must demonstrate you lack control over availability of the CEHRT for >50% of patient encounters) • Those with a primary specialty of anesthesiology, radiology or pathology will not be subject to penalties and do not have to apply for a hardship exemption

32. Compliance

33. Omnibus Privacy & Security Final Rule Compliance required Sept. 23, 2013 for most provisions! • Breach Notification “harm standard” replaced – practices required to presume a reportable breach unless a risk assessment is conducted and proves a low risk to PHI ACTION: Develop comprehensive breach avoidance & notification policies & procedures, Conduct a thorough security risk assessment • At mgma.com/hipaa - review the NIST checklist • Business Associates (incl. subcontractors) now considered “covered entities” - must abide by all privacy & security requirements & face fines if they don’t ACTION: Revise your BA agreements & Notice of Privacy Practices • NEW! MGMA member benefit: sample BA agreement • NEW! MGMA member benefit: sample NPP • Post revised NPPs (prominent place and on website), give to all new patients

34. Member Benefit: Notice of Privacy Practices MGMA Sample Notice of Privacy Practices

35. Steps Practices Will Need to Take Compliance required Sept. 23, 2013 for most provisions! • If practice stores PHI electronically, patient has a right to ask for it electronically ACTION: Explore options for providing your patients an electronic copy of the PHI • Self-pay patients can require that PHI must not be disclosed to plan ACTION: Incorporate a “segmenting” approach to self-pay patient PHI, train staff • Ensure that this PHI isn’t given to the plans during an audit • MGMA HIPAA Omnibus Rule webinar • MGMA HIPAA Resource Center

36. ICD-10 • CMS finalized additional compliance delay: • MGMA advocacy resulted in CMS delay of implementation to Oct. 1, 2014 • Recent letter to HHS Secretary urging CMS to do end-to-end testing • To date the government has failed to meet MGMA criteria: • demonstrate how the benefits outweigh significant costs • pilot test the new code set • consider alternative approaches • MGMA ICD-10 resources

37. ICD-10 implementation readiness level MGMA research indicates industry ICD-10 readiness lagging

38. MGMA Government Affairs at AC Government Affairs presentations in San Diego • Monday, Oct. 7 • 9:45am-10:45am: Medicare ACO Panel – Experiences From the Real World, Room 6F • 2pm-3pm: Implementing ICD-10 and the New Administrative Simplifications Standards: A Step-By-Step Guide for Medical Groups , Room 6F • 2pm-3pm: Compliance Update, Room 10 • 4pm-5pm: Washington Update, Room 6F • Tuesday, Oct. 8 • 9:45am-10:45am: Washington Update, Room 6F • 3:30pm-4:30pm: Get Ready for the New HIPAA Privacy and Security Changes: An Action Plan for Medical Groups, Room 6F

39. Questions?

40. Appendix

41. MGMA Fee Schedule Analysis Tool New MGMA fee schedule analysis tool allows you to compare the new fee schedule to the old fee schedule Upload CPT codes for the providers in your practice, and the tool will calculate the changes in work and total RVU values using the new and current fee schedules. Questions? Contact surveys@mgma.com

42. VBP Modifier: Calculating the VBP score How will the score be calculated? Clinical Care Patient Experience Population Health Quality Composite Patient Safety Value Modifier Score Care Coordination Efficiency Total overall costs for all patients Cost Composite Total costs for patients w/ 4 chronic conditions

43. VBP Modifier: Quality Tiering Value Modifier Amounts for the Quality Tiering Approach

44. Physician Value (PV)- PQRS System PV-PQRS will be used to: • Elect or change PQRS group reporting (GPRO) • Elect the administrative claims reporting option • Access Quality and Resource Use Reports (group TINs w/ 25+ EPs) The PV-PQRS registration system will be open July 15, 2013 to October 15, 2013 and an Individuals Authorized Access to the CMS Computer Services (IACS) account is required to access the new PV-PQRS system Providers should first update their IACS accounts to allow registration in the PV-PQRS system MGMA member benefit webinar available on-demand, walks participants through the process of accessing and navigating the new PV-PQRS system

45. Medicare Enrollment • Ordering/referring deadline postponed – could come back in 2013 • MGMA member benefit: ordering/referring factsheet • Phase 3 of Medicare revalidation begins in October • Impacts groups with 200+ reassignment and those who have not yet revalidated • Coming soon: new surrogate user program • Will allow practices to formally delegate to staff to make updates for PECOS, NPPES, Meaningful Use registration/attestation • MGMA comments on proposed changes to Medicare enrollment and incentive reward program • CMS rescinds enrollment over payment transmittal in response to MGMA advocacy

46. Overpayments Proposed Rule The proposed rule clarifies details concerning a provider’s obligation to report and return overpayments pursuant to ACA • However, even without a final regulation, providers are subject to the statutory requirements now • The proposed rule specifies that: • Overpayments must be reported if they are identified within 10 years of being received • A provider will have “identified” an overpayment if s/he has actual knowledge of its existence or acts in reckless disregard or deliberate ignorance of its existence • A provider has 60 days to report and return an overpayment if, after reasonable inquiry, the provider determines an overpayment exists • MGMA analysis of 60 Day Overpayment Rule

47. Sequestration cuts • Sequester cuts effective 4/1, scheduled to take place over next 9 years • Medicare cuts begin with services provided on or after 4/1 • Cut is capped at 2% for payments made for services provided by physicians, hospitals, MA payments and Part D drug plans • The 2% cut will be applied to the payment (beneficiary copayments and deductibles will not change) • Contractors released FAQs on their websites