I. Introduction.
Section 3022 of the Affordable Care Act of 2010 (“ACA”) amended Section 1899 of the Social Security Act (42 U.S.C. § 1395, et. seq., the “Act”) to establish a Shared Savings Program.  The purpose of the Shared Savings Program is to promote accountability for the Medicare patient population, coordinate the delivery of items and services under Parts A and B of Medicare, and encourage investment in infrastructure and redesign care processes for high quality and efficient service delivery.  Congress, through the ACA, directed the Center for Medicare and Medicaid Services (“CMS”) to establish guidelines and methodologies for the establishment of accountable care organizations (“ACOs”). 

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In General:

In Part I of this analysis of the proposed regulations concerning Accountable Care Organizations (“ACOs”), we covered some of the general requirements for qualifying as an ACO and the reasons behind CMS’ emphasis on this program.  In Part II, we looked at the implicit and explicit CMS requirement that the ACO make significant and continuing up-front investments in EHR systems for data capture as well reporting on some 65 quality measures to CMS as well as to manage care coordination and other patient data. 

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In General:
In the first part of this analysis of the proposed regulations concerning Accountable Care Organizations (“ACOs”), we covered some of the general requirements for qualifying as an ACO and the reasons behind CMS’ emphasis on this program.  Let’s continue on with some of the general themes found in the ACO proposed regulations and finish this part discussing some questions an ACO provider/supplier should ask of anyone trying to organize an ACO. 

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Introduction:
The health care reform bill (the “Affordable Care Act” or “ACA”) passed in March of 2010 contained a section mandating the creation of a shared savings program for Medicare expenditures. Section 3022 of the ACA charges the Secretary of Health and Human Services with establishing a shared savings program that promotes accountability for patient populations.

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The Center for Medicare and Medicaid Services (“CMS”) released the 2011 Medicare Physician Fee Schedule on June 25, 2010 (the “2011 Statement”).  Among other things, the 2011 Statement addresses Section 6003 of the Patient Protection and Affordable Care Act of 2010 (“PPACA”).  Section 6003 creates a new disclosure requirement for physicians or group practices that refer patients for certain imaging services offered by their clinic.  Prior to the enactment of PPACA, these same physicians only had to satisfy the in-office ancillary services exception as interpreted at 42 C.F.R. 411.355(b) for the referral of their patients for certain radiological procedures.  Section 6003 of PPACA provides that with respect to referrals by physicians for MRI, CT, and PET services, as well as such other radiology or imaging services included in the DHS category that the Secretary determines appropriate.  The referring physician must inform a patient in writing at the time of the referral that the patient may obtain the service from a person, other than the referring physician or someone in the physician’s group practice, and provide the patient with a list of suppliers who furnish the same service in the area in which the patient resides.  CMS states in the 2011 Statement that while they are considering whether to expand this disclosure requirement to other radiology and imaging services beyond MRI, CT, and PET, they are not inclined to do so at this time.

CMS addresses the Section 6003 notice requirement in the 2011 Statement.  It now proposes to amend 42 C.F.R. 355(b) to add a new subsection (7) that will require, among other things, the following – (i) the notice to patients now required under Section 6003 of PPACA must be written in a manner sufficient to be reasonably understood by all patients; (ii) nothing in the disclosure notice or list of suppliers indicates or implies that the patient must receive imaging from a supplier on the list if the patient elects not to receive the service from the referring physician; (iii) only suppliers must be included on the list and not acute care hospitals; (iv) the list of suppliers should be limited to those suppliers within a 25 mile radius of the physician’s office location, not the patient’s residence as many of us feared – recognizing that this would be an administrative burden on the physician’s office; and (v) the list should include the 10 closest suppliers within the 25 mile radius, unless there are fewer than 10 suppliers within the 25 mile radius in which case the list should include all suppliers within the 25 mile radius of the physician’s office.  The list to be provided to the patient must include the name, address, and telephone number of the suppliers as well as the distance from the physician’s office.  Finally, the physician should document receipt of the notice with patient’s signature with the signed copy being maintained as an element of the patient’s medical record.  The effective date for all of this would be January 1, 2011.

Since this is a notice of a proposed rule-making, it is difficult to predict the final result.  However, the 2011 Statement gives physicians, their lenders, and their landlords valuable insight into CMS’ thinking and the direction they intend to take the Section 6003 notice requirement.

For additional information or should you have questions, contact John Alan Lewis by email jalewis@mwlaw.com or telephone (479) 464-5656.

Last week President Obama signed the Patient Protection and Affordable Health Care Act (H.R. 3590).  Among other things, Section 6003 of H.R. 3590 amends the “in-office ancillary services” exception to the Stark Law (42 U.S.C. § 1395nn).  The in-office ancillary services exception, an exception from Stark’s general prohibition against a physician referring a patient to an entity in which he or she (or a member of his or her immediate family) has a financial interest, has been with us for years.  Subject to certain constraints, the exception permits certain ancillary services personally furnished by the referring physician or other physicians in the referring physician’s group practice to be billed to the Medicare or Medicaid programs. 

HR3590 amends 42 U.S.C. § 1395nn(b)(2) adding a requirement that the referring physician inform the patient that he or she may obtain the services for which the individual is being referred from another supplier other than the referring physician or his or her group.  Right now, the amendment only applies to certain radiological procedures as noted below.  However, H.R. 3590 gives the Secretary of HHS the right to expand the patient information requirement to cover other designated health services.  If the physician’s practice does not offer these services, there is no requirement to provide this information.  But if the referring physician’s practice does offer the services, then information requirement must be satisfied.  The term supplier, when referring to alternative providers, unless the context otherwise requires, means a physician or other practitioner, a facility, or other entity that furnishes items or services under the Social Security Act (42 U.S.C. § 1395x.) 

So how might this apply to a physician’s office?  If a physician is referring a patient out for certain radiological procedures (see below) and the referring physician’s office or group offers these services, the physician must provide the patient with a written list of all other suppliers who furnish such services in the area “.in which such individual resides.”  Note that the list must cover suppliers where the patient resides and not those in the referring physician’s trade area.  Each physician’s office that falls under the purview of H.R. 3590 will need to spend time preparing a compendium of those other providers offering services in the area where the patient resides.  This will not be easy.

Right now the new requirements apply only to “magnetic resonance imaging, computed tomography, and positron emission tomography”.  §§ 1395(b)(2), (h)(6)(D).  As noted, H.R. 3590 gives the Secretary of HHS authority to expand the list of designated health services covered by the disclosure requirement.  We think this is likely to happen.  Also, the new requirement applies whether the referring physician has an ownership interest in the entity or has a compensation arrangement with the entity supplying the referred services.

For further questions, feel free to contact Alan Lewis (1-479-464-5656 or jalewis@mwlaw.com), Heather Bell (1-479-464-5654 or hbell@mwlaw.com), or Cory Childs (1-501-688-8885 or cchilds@mwlaw.com).

“There are three steps in the revelation of any truth: first, it is ridiculed; in the second, resisted; in the third, it is considered self-evident.”  Schopenhauer

It seems self-evident that new payment methods which encourage the adoption of telemedicine and telehealth by health care providers into their practices will emerge.  This will certainly be true in the area of electronic communications via the internet.  In January of 2004 AMA created a reimbursement code for online patient consultations.  Besides the incentives given, those providers under the HITECH Act who satisfy the “meaningful use” requirements concerning electronic health records and health information technology, private insurers such as Aetna, Cigna, WellPoint and now United Health are adopting policies in some states to reimburse physicians for e-mail communications with their patients.  It now appears fairly certain that the health reform legislation, whatever its final form takes, will continue to encourage providers to adopt telehealth and electronic health records into their practices.  While physicians are encouraged to recognize the “self-evident” and take steps to incorporate electronic communication into their practices, the first thing each physician should do is adopt a comprehensive policy that includes best practices for provider-patient email.  The adoption of this policy is the first step before beginning ANY patient communication using electronic means.  Among other things, the HIPAA Security Rule[1] must be followed regardless of what you may have heard from vendors or other third parties.

Before communicating with patients via email, a health care provider should pay particular attention to the HIPAA Security Rule’s Technical Standards[2].  The violation of HIPAA Security Rule can lead to civil as well as criminal sanctions.  The civil penalties may include a fine of $100 per violation up to $25,000 per year[3].  The criminal penalties provide for the assessment of monetary fines ($50,000 to $250,000 in fines) and incarceration (up to ten years in prison)[4].  The technical standards policy for their practice needs to address/incorporate the following:

• Encryption:  Email communications from a provider to a patient should be encrypted utilizing updated encryption security technology.  (The attached is from the Security Rule’s technical standards.)
• Informed Consent:  The provider needs a written informed consent from each patient with whom the provider intends to communicate by email.  We have developed a proto-type form for this purpose. Whether you choose to adopt our form or others, the informed consent form must authorize the provider to communicate with the patient by email and should inform the patient of the following:
• While reasonable efforts will be made by the provider to maintain the confidentiality of email communications, the provider cannot guarantee that these communications will not be intercepted, misdirected, or undelivered;
• Email communications from the patient to the provider should be limited to those that pertain to the patient’s care and treatment;
• The patient should be made to understand that email to the provider in emergency situations are not appropriate.  In such a situation, the patient should contact emergency medical services;
• The provider should identify in advance to the patient the email address the provider will use to communicate with the patient and the patient should only respond to email communications from the provider that come from that email address; and
• Should the patient not adhere to the requirements of the informed consent form, the provider can terminate email communications with the patient.
• Retention:  All email communications between a provider and his/her patients should be transferred to the patient’s medical record (electronic or otherwise) within a reasonable period of time and produced in response to an appropriate authorization for release of the patient’s medical record.  It is critical that a subsequent treating provider be able to review a patient’s medical record and understand the current state of the patient’s overall health.  The email communications between the previous treating provider and the patient are a necessary component of that understanding.
• Auto-Reply Message:  A provider should set-up an auto-reply message on their email system stating that (1) patient email communications will be responded to in a specified time period (i.e. next business day); and (2) if you are a patient experiencing an emergency situation to immediately contact emergency medical services.
• Confidentiality Notice:  All email from a provider to a patient should include a standard confidentiality notice informing the recipient of the email that the email message is confidential and is intended only for the individual to whom it is addressed.  The notice should also state that if the individual has received the email in error to immediately notify the provider and to delete the message from any hard drive, disk, or other means of electronic storage.
• Email Use Restrictions:  The following restrictions should be observed by any provider who communicates with a patient via email:
• email should only contain the minimum necessary amount of protected health information;
• email should be written in clear and complete sentences without acronyms or abbreviations;
• any email to a patient that is misdirected must be documented on the patient’s accounting of disclosures;
• unless an individual is designated as the patient’s personal representative, a provider should only email the patient; and
• if a provider believes that a patient will by reason of the subject matter, not understand an email communication or if it appears to the provider that the patient did not understand a previous email communication, the provider should no longer communicate with the patient via email regarding such subject matter, but rather should attempt to contact the patient via telephone.

A provider’s patient email policy must include other members of the provider’s staff as well such as mid-level providers and nurses.  It is my belief that no other members of the provider’s staff should have access to this system or be permitted to use it for any reason other than periodically updating or maintaining the system’s technical standards and capabilities.

In subsequent postings I will discuss breach notification rules and then begin digging into the meaningful use requirements recently established by the HIT Policy Committee.

[2] 42 C.F.R § 164.312 (see attached as Exhibit A).

[3] 45 C.F R. § 160.404

[4] 42 U.S.C. § 1320d-6

A significant part of my practice deals with regulatory and business issues facing physicians and physician groups.  One reason to start this journal is to periodically put down my thoughts regarding the national health care reform debate and how it affects physicians, both personally and from a regulatory perspective.  This purpose takes on added meaning in light of the looming health care reform bill.  Another reason to do this is to keep myself intellectually and professionally honest regarding new developments in this area of the law.  What better way to force myself to think about these issues in a systematic way than to put them down for others to read?  This strikes me as one more way to fulfill my obligations to clients and colleagues.

While my professional responsibilities are limited to a geographically small part of the United States and only one piece of a huge industry, I believe my perspective might be useful to some.  There are several reasons for this belief.  First, I am in contact with a large number of physicians and practice group administrators, both primary care and sub-specialists.  Over time we will continue to see a tension develop between these two groups as the reimbursement incentives change and primary care physicians become more of a gatekeeper for the system.  This tension will be worth writing about and explaining to others.  Second, our office location (Rogers, Arkansas) is within a couple of miles of what I think is the epicenter of health care reform – the home office of Wal-Mart stores.  Wal-Mart has done more in the last three years to change how we think about health care and health care delivery systems than anyone.  Those who do not believe Wal-Mart will continue to be a significant force in the continuing health care debate are dreaming or do not need to read any further.  Next, the physician shortages we face and the coming surge of mid-level providers is a daily issue that confronts our clients.  This issue is not going away and I predict it will be resolved in a way physicians find objectionable.

Here is my plan.  Over the coming weeks, we will look at some of the more immediate questions and challenges that physicians face.  The next posting will deal with some of the concerns regarding communications between physicians and patients over the internet and the rules physicians must adhere to.  This will be followed by a discussion regarding the breach notification rules and then a look at the “meaningful use” requirement under the HITECH Act and what that might mean to a physician in this part of the country.  Finally, the notion of how EHRs, PHRs, and HIEs are coming together and how this may work for primary care physicians as well as sub-specialists.  All of this while posing questions or commentary on the new health care bill once President Obama signs it into law.