D.C Report: ONC Head Relates MU to Payment Model Reform, HHS Issues Interim Final Rule for Administrative Burdens in Electronic Transactions

ONC Head Relates MU to Payment Model Reform at Washington Summit
Farzad Mostashari, M.D., addressed a crowd gathered in Washington, D.C., Monday to discuss health IT’s role in payment and delivery model reform. At a joint meeting of the National Health IT and Delivery Systems Transformation Summit and the Second Annual National Accountable Care Organization Summit, Mostashari highlighted how HITECH and meaningful use are providing a foundation for new initiatives passed in last year’s Affordable Care Act (ACA). He said the historical piecemeal approach to payment model innovation and technology advancements were stifled because they were not done in ways that were mutually supportive. But due to the ACA, the healthcare system can “stop delivering healthcare the way you sell shoes.” He said that healthcare transformation will allow doctors to identify and connect with at-risk patients, not merely treat symptoms as they walked in the office. And that payment models would reward those proactive steps.

Mostashari also emphasized the importance of the National Quality Strategy, saying it sets very specific goals that are reflected in everything coming out from Centers for Medicare & Medicaid Services (CMS), Office of the National Coordinator for Health Information (ONC), and others at the federal level. “Before ACA, goal-setting was inconsistent and highly variable,” he said. “Now tribes at the federal level are coming together,” such as CMS, Health Resources and Services Administration (HRSA), ONC, Agency for Healthcare Research and Quality (AHRQ), and others. In a Q&A session following the speech, Mostashari said a “robust process of engaging” would be developed for providers who deal with clinical quality measures. “Specific things will come from ACA in regard to a process, to align and consolidate,” clinical quality measures he promised.

Finally, Mostashari indicated that while the NPRM for meaningful use Stage 2 (due out late this year or early 2012) won’t look exactly like the HIT Policy Committee’s recommendations (ppt.) for Stage 2, much of what CMS proposes will be familiar to those following the process. “We give a lot of deference to those recommendations,” Mostashari said.

HHS Issues Interim Final Rule to Address Administrative Burdens in Electronic Transactions
A news release issued Thursday by the Department of Health & Human Services claims that two new operating rules for electronic health care transactions will save $12 billion for providers over the next 10 years. Through provisions in Section 1104 of the Affordable Care Act, providers will more easily be able to determine (1) whether a patient is eligible for coverage and (2) review the status of a healthcare claim submitted to a health insurer. “Doctors and health insurance companies waste thousands of hours and billions of dollars filling out forms and processing paperwork,” HHS Secretary Kathleen Sebelius said in a statement. This interim final rule will reduce transaction costs in the form of fewer phone calls between physicians and health plans; lower postage and paperwork costs; result in fewer denied claims for physicians; and a greater ability to automate healthcare administrative processes, HHS said. Future rules meant to address administrative simplification will include:
• Standards and operating rules for electronic funds transfer and remittance advice;
• A standard unique identifier for health plans;
• A standard for claims attachments; and
• Requirements that health plans certify compliance with all HIPAA standards and operating rules.
Comments will be accepted for this interim rule through Sept. 6, 2011. CHIME’s Advocacy Program is examining the interim final rule to determine if comments are needed or if improvements can be made to the regulation.

Political Maneuvering in Washington Continues Over Debt Ceiling, Medicare
One side’s cut is another side’s savings in the debate over Medicare and the debt ceiling. Sens. Tom Coburn (R-OK) and Joseph Lieberman (I-CT) released a plan this week to “save more than $600 billion over 10 years,” according to the authors’ summary. To do this they plan to increase the eligibility age to 67 by 2025; introduce an annual deductible of $550 for Part A and Part B; and add an annual “out-of-pocket maximum” of $7,500 that goes up to $22,500 for Medicare recipients who make $160,000 - $213,000 ($320,000 for married couples) per year. The authors’ also claim they can extend the solvency of Medicare’s Hospital Insurance Trust Fund by allocating savings from their proposal to the trust fund, while also containing a three-year fix to Medicare physicians’ sustainable growth rate. Top Democrats denounced the proposal, calling it a $600 billion cut to Medicare that is simply “unacceptable” and “a bad idea.” Meanwhile some House Republicans gave it a cold reception because they’re more interested in leveraging the debt ceiling to push through Ryan’s proposal to privatize Medicare. Under the Lieberman-Coburn proposal, Medicare retains its fundamental structure.

First Federal Court Rules In Favor of Obama Administration on Health Reform
The U.S. Court of Appeals for the 6th Circuit in Cincinnati became the first appellate court to rule on the individual mandate under the ACA this week. The three-judge panel upheld the right of Congress to require health insurance in a 2-to-1 vote, providing Democratic supporters a cause for celebration and Republican detractors to dismiss the ruling’s importance. According to the opinion (pdf.) filed Wednesday, judges found the minimum coverage provision “a valid exercise of legislative power by Congress under the Commerce Clause.” This is the first of four expected rulings in coming months; two federal appellate courts—one in Virginia and one in Georgia—are expected to issue decisions in a matter of weeks. And the U.S. Court of Appeals for the District of Columbia Circuit will hear oral arguments in September.

As ACA moves through the appeals process to the Supreme Court, CHIME will continue to monitor the high profile items, as well as those that don’t always grab headlines, but have far more impact on healthcare delivery than insurance mandates. Examples include new operating rules for electronic health care transactions mentioned above.