American Association for Clinical Chemistry
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June 2012 Clinical Laboratory News: Regulatory Profiles

Regulatory Profiles

New ICD-10 Transition Deadline Announced

The Department of Health and Human Services (HHS) announced that the nation’s transition to the ICD-10 medical coding set will be delayed for a second time until October 1, 2014. The most recent deadline was October 1, 2013, a 2-year deferral from the original 2011 date. ICD-10 will introduce more than 100,000 new diagnostic and procedure codes, affecting everything from medical research to reimbursement.

Physician groups had turned up the pressure in recent months to delay implementation, criticizing HHS for requiring too much from providers in a short timeframe, such as the transition to electronic health records. In addition, some in the lab community had warned that payers were not prepared for ICD-10, and that labs could be stuck between physicians and payers, both of whom appeared equally ill-prepared for the transition to a new coding scheme.

More information about ICD-10 is available from the government’s ICD-10 website.

Medicare Long-Term Health at Risk

A report from the Medicare Trustees shows that the Hospital Insurance (HI) trust fund may run out of money in 2024. In 2011, the HI trust fund expenditures were lower than expected. However, HI expenditures have exceeded income annually since 2008 and are projected to continue doing so under current law in all future years.

The trust fund’s assets are projected to cover annual deficits through 2023, with asset depletion in 2024. At this point, if Congress were to take no further action, projected revenue would be adequate to cover 87% of estimated expenditures in 2024 and 67% of projected costs in 2050. In practice, Congress has never allowed a Medicare trust fund to exhaust its assets. Medicare has bought some time due to the Affordable Care Act, which cut some payments. Without this law, the trust fund would expire 8 years earlier, in 2016.

The full report is available from the Centers for Medicare and Medicaid Services website.

Proposed Payment Rule for Hospitals Pushes Quality Metrics

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would update Medicare payment policies and rates for inpatient stays. According to CMS, the proposed rule is a continuation of efforts to promote improvements in care designed to produce better patient outcomes while slowing healthcare cost growth.

The rule implements elements of the Affordable Care Act, including value-based purchasing programs and the hospital readmissions reduction program. It also lays groundwork for expanding Medicare’s quality reporting requirements. These programs will adjust hospital payments beginning in 2013 and annually thereafter based on how well they perform or improve their performance on a set of quality measures.

Beginning in 2015, the value-based purchasing program would include all Part A and Part B payments from 3 days prior to an inpatient hospital admission through 30 days post-discharge, with certain exclu-sions. The proposed measure would be risk-adjusted for the beneficiary’s age and severity of illness.

In addition, the Hospital Readmissions Reduction Program will reduce payments to certain hospitals that have excess readmissions for three selected conditions: heart attack, heart failure, and pneumonia. The proposed rule includes a methodology and the payment adjustment factors to account for excess readmissions for these three conditions.

Overall, CMS estimates that under the proposed rule, rates to general acute care hospitals will increase by 2.3% in 2013.

The 2.3% is a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes.

CMS will accept comments on the proposed rule until June 25. The proposed rule can be downloaded from the Federal Register online.

Report: More Oversight Needed of EHR Program

The Centers for Medicare and Medicaid Services (CMS) should improve its process for verifying that healthcare providers qualify for incentive payments through the meaningful use program of electronic healthcare records (EHR), according to a report by the Government Accountability Office (GAO).

Under the 2009 federal economic stimulus package, healthcare providers who demonstrate meaningful use of EHRs can qualify for incentive payments from CMS. After 2015, providers will face cuts to reimbursement if they fail to implement EHRs.

GAO found that CMS has implemented proper systems to verify whether providers have met eligibility requirements before any incentive payments are processed. However, GAO noted serious problems with how exceptions are handled. CMS allows providers to exempt themselves from reporting certain measures if they report that the measures are not relevant to their patients or practices. However, GAO found that among participants in the first year of the Medicare EHR program, the majority of providers chose to exempt themselves from reporting on at least one meaningful use measure. In addition, many providers reported at least one clinical quality measure based on less than seven patients. GAO recommended that CMS collect more detailed information about providers.

The full report is available from the GAO website.