Basic Health Program

government_400Part of the Affordable Care Act and Patient Protection plan provides states with a new coverage option called the “Basic Health Program”. This program is for the purpose of providing a health insurance program for citizens or lawfully present non citizens, who won’t qualify for Medicaid, the Children’s Health Insurance Program (CHIP) or other minimum essential coverage and also have an income between 133 percent and 200 percent the federal poverty level (FPL).

The Basic Health Program (BHP) was to be up and running by January 1st, 2014. CMS has issued a proposed rule for establishing the standards for BHP. Through this process, administration and the HHS have determined that it will not meet the January 1st, 2014 deadline and hope to have the program up and running by January 1st, 2015.

The purpose of BHP is to provide states with an option to establish health benefit programs for low-income individuals who would otherwise be eligible to purchase health insurance coverage through the Health Insurance Marketplace. The proposed rule establishes the framework for eligibility and enrollment, benefits, delivery of health care services, transfer of funds to participating states, administration and federal oversight.

The BHP benefits will include the ten essential benefits specified in the Affordable Care Act. Individuals eligible for the BHP will not be required to pay premium costs that will exceed what an eligible individual would be required to pay when receiving benefits through a Qualified Health Plan (QHP) through the Market Place. States that offer BHPs will qualify for federal funding equal to 95 percent of the amount of the premium tax credits and cost sharing reductions that would be provided to a eligible individual enrolled in a QHP through the Marketplace.

The rule proposes:

(1)        The procedures for certification of a state-submitted Basic Health Program blueprint, and standards for state administration of the Basic Health Program consistent with that blueprint;

(2)        Eligibility and enrollment requirements for standard health plan coverage offered                          through the Basic Health Program;

(3)        The benefits covered by such standard health plans as well as requirements of the              plans;

(4)        Federal funding of certified state Basic Health Programs;

(5)        The purposes for which states can use such federal funding;

(6)        The parameters for enrollee financial participation; and

(7)        Federal oversight of Basic Health Program funds.

The Rule establishes that eligibility determinations must be performed by government agencies. It uses the same criteria using most standards to those of the Internal Revenue Service when determining advance premium tax credits and cost sharing reductions. The rule also proposes the minimum benefit standard and makes provisions for additional benefits. It also establishes cost-sharing standards consistent with the Marketplace including the prohibition of cost sharing for preventive health services.


Government Shutdown on Medicare

government_400The governments fiscal year begins from October 1st and runs through September 30th meaning the 2014 fiscal year begins on Tuesday, October 1st, 2013. Typically during that time,  Congress is required to pass and the President sign appropriations bills that will release funds needed for the federal government to operate.

As of today, none of the 12 appropriations bills that will fund the government for the 2014 fiscal year, have been signed into law. What this means as of now, and at midnight tonight, that the government has no funds available to pay salaries of federal employees, grants, and other utilities for government operations. Congress is debating approving what is called the “Continuing Resolution” or CR. It is a legislation that will extend the 2013 fiscal year for a length of time agreed upon by Congress and the President to continue operations. Currently the length of time for a CR is unspecified. It can be one day or a CR can be extended up to a full year.

There is a possibility that Congress and the President will not reach a resolution on the adoption of the Continuing Resolution by midnight. If Congress and the President fail to reach a resolution, the result will be that all “non essential” federal employees will be told not to show up for work tomorrow, October 1, 2013.

Questions were raised that If a government shutdown occurs, will this also effect Medicare processing claims for payment for anything sent after October 1? The answer to that question is – “No”. The funds appropriated for Medicare benefits are not subject to the appropriations process because it is an entitlement program instead of a discretionary program, and processing of Medicare claims is considered “essential”. The Center for Medicare and Medicaid Services (CMS) announced that there should be no disruption of Medicare claims processing and all CMS activities will continue regardless of a delay in the appropriations process.





Prolonged Services

1314902_medical_doctorAll evaluation and management (E-M) service codes have a time value in conjunction with expanded problem focused history and medical complexity decision making. But occasionally providers will spend longer periods of time with patients but that extra time doesn’t justify coding to a higher level E-M code. To code a higher level E-M, not only does the time of a face-to-face encounter have to increase, but the complexity of medical decision making, problem focused history and counseling of care level must also increase.

The CPT manual shows two categories of codes that can be used as add-on codes to E-M codes when face-to-face time with a patient goes beyond the normal specified time values for each E-M code. The categories are outpatient/office for your typical clinic setting and inpatient/observation for hospital/Skilled Nursing Facility (SNF) patients.

99354 – 99355 – Outpatient/office

99356 – 99357 – Inpatient/Facility

Encounter Time –

Understanding what the CPT manual specifies as encounter time will help with knowing how to use and assign the prolonged visit codes. In an office/clinic setting, the encounter time is defined as face-to-face spent with the patient by the provider or practitioner. This time includes time spent on history review, obtaining records, performing the exam and counseling the patient. Activities performed before and after the face-to-face time are not included as part of the face-to-face time.

For example, a patient seen in a office/outpatient setting, a provider spends 15 minutes reviewing medical records and history, the spends 30 minutes face-to-face time with the patient, then spends another 20 minutes coordinating care with staff or other providers. The encounter time here is the 30 minutes that was spent face-to-face with the patient. The additional 35 minutes is not counted towards the actual encounter time.

When services are provided in an inpatient/facility setting, encounter time is defined as the time the physician/practitioner is present on the patients facility unit and at the patients bedside rendering services for that patient. This time also includes, medical record review, examining patient, encounter documentation, orders, communication with other professionals and patients family.

The additional time that must be spent with a patient in order to use the prolonged visit add on codes is 30 minutes. If a professional spends 25 additional minutes with the patient, then they cannot use the add on codes. The minimum time spent to qualify for the add on codes is 30 minutes and extends to 60 minutes. If the encounter time surpasses 75 minutes, a second add on code can be used. The encounter time for the prolonged visit codes is the same for both the outpatient/office setting and inpatient/facility setting.


Setting                               First Hour                    Add’l 30 minutes

Office/outpatient …………. 99354 ……………………. 99355

Inpatient/facility …………… 99356 ……………………. 99357

The encounter time does not have to be continuous. Blocks of time can be added together to account for the total encounter time. For example, a physician or practitioner spends time with a patient, goes to see another patient, then returns to the first patient, those separate times with the first patient can be added together for the total encounter time. However this time does not include staff time. Time is only counted by the physician/practitioners face-to-face time with the patient.

The prolonged visit add on codes are to be used in addition to the traditional E-M codes. The E-M codes are still the primary codes used for exams. So an example of the prolonged visit codes in conjunction with the E-M codes would work like this,

A provider sees an established patient in an office setting and determines the exam uses low medical decision making complexity and a problem focused history which supports a E-M code of 99213. A encounter lasts a total of 55 minutes and is not dominated by counseling or coordination of care. The CPT manual specifies encounter time of 15 minutes for a 99213, so the encounter has gone 40 minutes longer than the specified 15 minutes for the 99213. So the physician can add on the prolonged visit code of 99354 to be billed with the 99213. The same example can be used with the inpatient/facility setting using the corresponding E-M facility codes.

The prolonged service codes can be used in conjunction with all the typical E-M codes. The times will just need to be adjusted to qualify for the add on. So for a 99214, the CPT manual specifies 25 minutes for encounter time. So the total time will have to reach 55 minutes to use the add on codes.

Documentation –

Patients medical records must indicate the duration of the prolonged service. It must also show that the physician/practitioner personally provided the time specified in the code definition. The medical record should also show the total encounter time of the visit. Total time can represent the total face-to-face time in minutes, or the start and stop time of the visit. It should also be notated as to why the encounter was prolonged.

Prolonged services can provide providers with additional reimbursement for lengthy encounters but should be documented appropriately to show total time and reasoning for the prolonged service so as to withstand audit or review.



Expanding Payment Channels

DollarsAs the industry grows and changes at a rapid pace, more and more provider offices are becoming increasingly  concerned at the increase in patient responsibility. Employers are continually looking for ways to save money on increasing healthcare costs. In order to save and still offer employees healthcare coverage, many employers are moving to higher deductible plans leaving patients to pay more out of pocket. As patient responsibly continues to rise, patients are having more influence in the payment process to providers. By expanding payment channels, providers will be able to collect more payments effectively.

83 percent of providers surveyed said it took longer than 30 days to collect payments from patients after insurance carriers paid claims.

Patient Interaction – A key factor in facilitating payments is to make attempts to collect payments at any interaction point with patients. When scheduling appointments, calling for prescription refills, diagnosis followups, lab results etc., notify patients they have outstanding payments due and begin the process of collecting.

Technology – 72 percent of patients prefer to pay bills online. It is estimated in 2016 consumers will spend $300 billion online. The ability to take payments online is another key factor in increasing payment collection from patients. Website and online access give patients a 24/7 ability to go online and make payments without the need for staff interaction.

Cultural – Training staff to prepare and enable them to collect payments more frequently is another factor in increasing revenue. implementing tools and policies such as prompt pay discounts, staff incentive programs, minimum payment requirements, and scripts to assist them when interacting with patients are other effective ways to collect revenue.

Expanding payment channels will assist with better management in revenue cycle and lowering the aging of accounts.

Utah Medicaid Expansion

state-flag-utahUnder the Affordable Care Act, Americans must have health insurance by 2014 or they will be faced with a penalty. The Affordable Care Act, gives each state the option of expanding it’s Medicaid eligibility programs in an effort to offer coverage for more low-income residents.

Utah Gov. Gary Herbert said he will not make a decision to expand Utah’s Medicaid eligibility in an effort to cover more of the states uninsured, until next year. The Governor said he intends to make the decision in conjunction with the legislature and they don’t convene until January 2014.

The Health and Human Services (HHS) department has set no hard deadline for states to make a decision on the Medicaid expansion, but the state risks losing millions in funding if the decision isn’t made by fall. Utah is one of the few states left to decide on the Medicaid expansion. Gov. Herbert said he is still collecting information about the “actual true cost” the expansion will require.

If Utah were to expand it’s Medicaid program, 123,000 of Utah’s 400,000 low-income uninsured residents would  be eligible for coverage. This would expand Medicaid to those residents earning up to 138 percent of the poverty level which is about $32,400 for a family of four, or $15,856 a year for an individual.

For states that opt for the full expansion, the federal government will cover 100% of those costs through 2017. After 2017, states will be required to pay a share of the cost of the expansion, but the law caps those expenses at 10 percent of the overall costs.

Most Utah lawmakers appose the Medicaid expansion, but some medical providers and advocates for the poor favor the expansion.


SGR Repeal & Replace


Parties on Capital Hill continue to make progress by enacting a bi-partisan legislation to repeal and replace the current Sustainable Growth Rate (SGR) formula that is used to update annually, Medicare Physician Fee Schedule payments.

Even though it is earlier in the year but still a very important step, on July 31, the House Energy and Commerce Committee, by a vote of 51 – 0, approved legislation (H.R. 2810) repealing and replacing the SGR formula effective January 1, 2014.

Here is what the legislation is supposed to do:

1. Repeal the current SGR formula, effective for services provided on or after January 1, 2014;

2. Sets a 0.5% increase in the Conversion Factor (CF) for each year for the next 5 years (2014 – 2018).

3. The CF would continue to be permanently updated with 0.5% increases starting in 2019.

4. Also starting 2019, fee schedule payments would also be adjusted by “quality adjusters”

5. “Eligible professionals” would have the option to move from traditional fee-for-service payments using the fee schedule and the conversion factor, to an alternative payment model.

6. CMS will work with physician organizations and other stakeholders to develop the alternative payment models (APMs) beginning 2014.

7. APMs can be approved any time after 2014;

8. A list of approved APMs can be listed on the Federal Register by the Secretary beginning 2015.

9. The legislation anticipates multiple alternative payment models will be developed (presumably specialty specific)

10. Eligible Professional Organizations (peer cohorts) shall develop clinical quality measures applicable to that cohort;

11. The Secretary shall establish a quality adjustment scale based upon the clinical quality measures.  Scores will range from 0 – 100;

12. The quality adjustment score shall have three outcomes: 1% increase, 0% increase or -1% adjustment based upon the providers score on the quality adjustment scale;

13. Each year’s score will only affect payments for that year;

14. New providers payments will be frozen (i.e. score of 0) for one year after entering the program (i.e. no increase or decrease)

15. If a provider opting for the Alternative Payment Model fails to report quality measures, the provider”s payments would be based upon 95% of the fee schedule amount;

16. CMS is directed to coordinate the new initiative with both the PQRS program and the EHR incentive program;

17. If an APM results in higher payments than would have otherwise occurred or if the APM results in lower quality than the Secretary deems appropriate, the Secretary is authorized to immediately terminate the APM;

18. Directs the Secretary of HHS to publish an annual report on how well these new payment models are working.  Reports are also to be produced by GAO and MedPAC.

Unfortunately, the legislation gave no indication as to how it will be “paid for”. The Congressional Budget Office (CBO) said that repealing the SGR formula would “cost” the Medicare Trust Fund approximately $139 Billion over 10 years. The House Leadership also said that whatever formula is put into place, will be “paid for”. Thus meaning there will be offsets.

The House Ways and Means Committee shares jurisdiction over Medicare Part B issues with the Energy and Commerce Committee (E&C). They will now build on the E&C Committees work trying to report out a plan for repealing and replacing the SGR. They will however not be able to make any action until Congress returns to session in September.

Changes to H.R 2810 are not likely at this time, but that could change in the up coming months.

The Ways and Means Committee has sole jurisdiction over all other Medicare programs (Part A, C & D) and handles raising revenue and legislation. That is where we will see how Congress plans to pay for fixing the SGR.

A bi-partisan group of Senators announced they are working on their own version of an SGR repeal and replace bill. The are planning to announce their proposal when Congress returns from recess in September. There are indications that they will have some of the same concepts as H.R. 2810 but could have significant differences in terms of details.

Should the House and Senate pass the SGR repeal and replace legislation these bills will have to be reconciled. President Obama has indicated he supports repealing and replacing the SGR and if the House and Senate reach a solution , the President will sign that legislation into law.

HBMA Testifies on ICD-10

Shaking handsDue to the large role the Healthcare Billing and Management Association (HBMA) plays in revenue cycle management, the HBMA was invited to participate in discussions with the National Committee on Vital and Health Statistics (NCVHS) subcommittee standards on the process of transitioning from ICD-9 to ICD-10 on October 1, 2014.

Holly Louie, CHBME, Chair of HBMA’s ICD-10/5010 Committee presented HBMA’s views on what they considered “lessons learned” from the 5010 conversion that took place in January 2011, and how those lessons could apply to the upcoming ICD-10 conversion.

Louie was one of many experts invited to address the NCVHS. In her address she said, “HBMA believes that we MUST learn from the mistakes that were made in transitioning from 4010 to 5010, and undertake the transition from ICD-9 CM to ICD-10 CM in a way that demonstrates we learned those lessons.” She shared the HBMA’s concerns with the committee and of how those “lessons learned” from 4010 to 5010 should “materially inform the implementation of ICD-10”. She further explained to the committee, “the economic stability of America’s healthcare reimbursement system will be at risk and could be severely compromised, affecting provider financial viability and patients’ access to care.”

The Centers for Medicare and Medicaid Services (CMS) have already delayed the implementation date of ICD-10 to October 1 2014. With this delay Louie said, “it is imperative that the time gained by the delay be used wisely in order to ensure that the transition is successful. If we fail to learn the lessons we will merely be delaying the likelihood for payment disruptions and patient access to care problems from 2013 to 2014.”

HBMA strongly recommends the following:

1. While CMS has adopted a definition of “ready” and developed the tools and checklists to assist every provider, organization, payor and vendor to validate they are ready on October 1, 2014, a subsequent announcement by CMS that they will not perform any external testing is extremely problematic for the industry. End-to-end testing by all payors, to meet the definition of “ready” must occur to ensure a smooth ICD-10 CM implementation. Failure to engage in meaningful end-to-end testing is a recipe for disaster.

2 CMS must establish period benchmarks that cannot be ignored to assess the “readiness” status for all facts of the healthcare industry.

3. There must be clear pronouncement that there is no vendor, EHR, coding assist tool, map, crosswalk or other product that will solve the problem of excellent medical record documentation and accurate coding. Physicians and staff must be fully prepared with adequate training to operate compliantly and not rely on false proclamations of marketed solutions.

4. Payor policies will be critical to the appropriate adjudication of claims. Currently, there is a wide variance among payors in stated policies. It is imperative that policies are published by October 1, 2013 in order to allow adequate time for education and training, data analysis and other preparations for ICD-10 CM.

5. Any payor that is currently only accepting claims by 4010 format must be fully 5010 compliant by January 1, 2014 in order to be ICD-10CM ready.

HBMA’s expert remarks were made on behalf of the membership with the goal of making this transition as smooth as possible for the entire medical community.


SOURCE: Healthcare Billing and Management Association


Senate Bill 20

government_400In the 2013 General Session, an amendment was passed to the Medical Assistance Act. The amendment, Senate Bill 20 (SB20), specifies action that needs to be taken by providers when sharing identifying information to verify eligibility with the states Medicaid and Children’s Health Insurance Programs.

SB20 states that effective July 1, 2013, health care providers who participate in the state Medicaid or Children’s Health Insurance Program are to include in the providers Notice of Privacy Practices (NPP), that the health care provider has, or may submit, the patients personal identifiable information to the state’s Medicaid and Children’s Health Insurance Program eligibility database.

The amendment also requires the state Medicaid and Children’s Health Insurance Program, to verify the providers NPP, complies with federal and state law before giving the provider access to the state’s eligibility database.

For more information, click here for a link to SB20.


government_400The SGR problem that has been an issue for over a decade, remains a high priority for senate leaders. The original SGR formula was developed during the Clinton administration and has had serious flaws. Since, a fix to the SGR problem as continued to be elusive.

A fix to the SGR is not imminent due to many factors but the House and Senate feel that a permanent fix appears achievable in 2013. Congressional Committees that have jurisdiction over Medicare Physician Payment reforms have held Hearings and gotten feedback on possible permanent solutions. Both Democratic and Republican leaders remain committed to finding a permanent solution whereas in past years, the commitment level was much much less.

Proposals have been circulated amongst various physician offices, as well as some other healthcare organizations for the purpose of feedback and reaction to proposed fixes. The Healthcare Billing and Management Association (HBMA) will meet with the Senate Finance Committee and other White House staffs to assist in finding permanent fix to the SGR problem.

If Congress fails to find a permanent solution prior to the end of 2013, the current estimate of a 24% reduction in provider payments will be necessary to comply with SGR law.

The following are concepts from discussions for the SGR fix:

  1. Repeal SGR and replace it with statutory increases (possibly 1 – 2% per year) for a period of time (3 – 5 years). Thus eliminating the 24% cut come January 1, 2014.
  2. Implement Specialty Specific Quality Measures as part of the payment formula.
  3. Payments would be a combination of “base rate” plus a variable rate that would be tied to quality/performance.
  4. A score on quality would be based upon a comparison of peers AND compared to the individual providers prior year scores AND provider participation in specialty specific clinical improvement initiatives.
  5. Providers of the same specialty would “self-identify” with a peer cohort and provide information on:
  • Identifies the peer group the provider wants to be compared to; and
  • Provides information on quality measures applicable peer group that the provider is assigned

The Health & Human Services (HHS) Secretary will be responsible for the development and methodology for assessing the performance of providers with respect to the measures and for methods of collecting data for the assessments. The Secretary is directed to develop the processes in a way that will minimize the administrative burden to ensure reliable results.

The HBMA and other healthcare organizations, continually encourge Congress to find a permanent solution to the SGR problem before January 2014.


HIPAA Final Rule


The Office for Civil Rights (OCR) published the final rule for changes to the Health Information Portability and Accountability Act (HIPPA) of 1996 in accordance with the Health Information Technology Economic Clinical Health Act (HITECH). It is a very extensive and in this blog we will just touch on a few of the amendments that will affect health care providers.


Business Associates –

Providers are required to establish business associate agreements with any contractors that transmit, receive, or maintais protected health information (PHI) on behalf of the provider or covered entity under HIPAA. One of the changes in the final rule is that it makes the business associates liable for violations to the HIPAA provisions. The final rule also clarified that providers don’t need to establish agreements with the contractors of a business associate. The business associate, with whom the provider has an agreement, is responsible to ensure its contractors have the appropriate agreements and protections in place for privacy and security.

Non-Compliance Penalties Increased –

Under the HITECH act, there are tiered penalty amounts for HIPAA violations. The minimum fines are range from $100 and $50,000 per violation. The amounts will cap at $1.5 million for all violations during the same calendar year. The four tiers are as follows, listing from the lowest violation to the highest. 1. Did not know – meaning by exercising reasonable diligence, associates and providers wouldn’t have known of the violation. 2. Reasonable cause – violations due to reasonable cause and not willful neglect. 3. Willful neglect (timely corrected) – violation due to willful neglect and was corrected within 30 days of when business associate or provider knew or should have known. 4. Willful neglect (not timely corrected) – violation due to willful neglect and was not corrected within 30 days of when business associate or provider knew or should have known. Below is also a chart of the tiered violations and penalties.

Violation Category                  Penalty Per Violation        Violations Identical In Calendar Year

Did not know                              Between $100 & $50,000             $1.5 Million

Reasonable Cause                    Between $1,000 & $50,000          $1.5 Million

Willful Neglect (corrected)          Between $10,000 & $50,000        $1.5 Million

Willful Neglect (not corrected)    $50,000                                        $1.5 Million


Notice of Privacy Practices –

Provders need to be aware of the requirements for their Notice of Privacy Practices (NPP) that will need revision and how they should be provided to patients. One of the key revisions to NPP should be a statement informing patients they have the right to be notified of a breach of unsecured PHI. Providers are not required to re-issue hard copies of NPP to patients, but providers need to post the revised NPP in a clear location and have new copies of the NPP available at patient request. Providers are allowed to post a summary of the revised NPP as long as a full version of the NPP is available (reception desk, table, etc.) for patients to acquire without adding additional burden. It is not appropriate for a patient to have to ask for copies of a full NPP.

Use and Disclosure Restrictions –

The final rule also includes restrictions on providers in regards to use and disclosure of PHI. Previous HIPAA regulations did not require providers to comply with a patient’s request on restrictions when disclosing information. There is now an exception that providers are required to agree to under certain curcumstances. The provider must agree if:

  • the disclosure is for payment or health care operations
  • disclosure is not required by law
  • PHI relates only to a health care item of service for which the provider has been paid in full (cash pay)

Medicare beneficiaries also have the right to refuse a provider to submit a billing to Medicare. In these cases, a provider is not required to submit a claim to Medicare for the covered service. What can be collected from the Medicare patient is still limited, as it always is.

It is recommended that in a situation where a patient restricts the provider from submitting claims for payment, that the provider request payment in full from the patient prior to providing services.

Breach notification –

A lot of the focus on the final rule was the requirement to notify patients if their PHI had been breached following an assessment that the breach would cause harm to the patient. The final rule also changed the definition of “breach” to clarify that an impermissible use or disclosure of PHI is presumed to be a breach unless the provider or business associate indicates a low probability that PHI has been compromised, thus replacing the “harm standard” with “low probability”. Providers are encouraged to assess compliance plans and include risk assessment to be undertaken by providers, covered entities, and business associates prior to detirmining whether a breach requires notification to the patient or other entities (HHS, media, etc.).


Other information and sources regarding the final rule can be accessed at



Providers are encouraged to seek legal counsel regarding compliance with applicable laws and HIPAA.