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Healthcare Reform Compliance - Provisions Impacting Physicians

> Healthcare Reform Timeline - Changes Affecting Physicians

Funding to Expand Physician and Nursing Capacity

The Act provides for increased student loans for nurses, and establishes a special pediatric specialty loan repayment program. The Act also provides for grants for nurse-managed health clinics that meet certain requirements, with $50,000,000 available for this program for each of FYs 2011 through 2014.

Incentive Payments for Primary Care

The Secretary will make grants to hospitals and schools of medicine to operate appropriate training programs to increase the number of primary care physicians. There are authorized to be appropriated $125,000,000 for FY 2010 for such programs, and for each of FY 2011 through 2014. There is even a provision to promote geriatric education and training with grants in the amount of $10,800,000 for FY 2011 through 2014. There is also a specific focus on nurse education, practice, and retention.

There are grants available under the Primary Care Extension Program to any community worker who provides assistance to primary care practices by implementing quality improvement or system redesign to provide high quality effective and efficient primary care. There is $120,000,000 available for this grant for each of FY 2011 and 2012, and additional funds for FY 2013 through 2014.

Federally Qualified Health Centers and Home Health Care

The Act provides for a Medicare federally-qualified health center ("FQHC") improvement initiative whereby the Secretary is charged with implementing a prospective payment system for FQHC providers. Such FQHC prospective payment system shall begin for cost reporting periods beginning on or after October 1, 2014.

Payment adjustments for home health care are included in an effort to reduce payment costs for home health care.

Medical Homes

Under the Act, the Secretary will create a program to provide grants to establish community-based interdisciplinary, interprofessional teams ("health teams") to support primary care practices. Patient-centered medical homes are defined as a mode of care that includes personal physicians, whole person orientation, coordinated and integrated care, use of evidence-informed medicine, health information technology, and continuous quality improvements, expanded access to care, and payment that recognizes added value from additional components of patient-centered care. Under this model, primary care physicians are required to provide a plan of care to the health team, provide access to health team of patient health records, and meet regularly with the health team to ensure integration of care.

Medication Management

Beginning no later than May 1, 2010, the Secretary shall establish a program to provide grants to entities that implement medication management ("MTM") services provided by licensed pharmacists that take an interprofessional approach to the treatment of chronic diseases for targeted individuals.

Physician Payments (amounts for 2010 and beyond)

Physicians in family medicine, internal medicine, geriatrics, and pediatrics whose Medicare charges for office, nursing facility, and home visits comprise at least 60% of their total Medicare charges will be eligible for a 10% bonus payment for these services from FY 2011 through 2016. General surgeons who operate in a health professional shortage area will also be eligible for a 10% bonus payment for their services from FY 2011 through 2016. Medicare will also increase payment for psychotherapy services by 5% in FY 2010. In FY 2010 and 2011, Medicare will adjust the geographic payment adjustment ("GPCI") to allow physician practice expenses in rural and low-cost areas to increase.

In addition, the Medicare quality reporting incentive payments will be extended to physicians. Incentive payments of 1% in FY 2011 and 0.5% from FY 2012 to 2014 will continue for voluntary participation by physicians in the Physician Quality Reporting Initiative ("PQRI"). Beginning in FY 2015, physician payments will be reduced if they do not successfully participate in the PQRI program. In 2015, the penalty will be 1.5%, and in subsequent years 2%.

Residency Programs

Beginning July 1, 2011, a percentage of residency positions that have been unfilled for the prior three cost reports will be redistributed to training primary care physicians, giving special preference to programs located in states with a low resident to population ratio and States with the highest ratio of population living in health professional shortage areas. Any residency slots from closed hospitals, including hospitals that were closed two years before enactment, will also be redistributed.

Medicaid payments to family medicine physicians, general internists, and pediatricians for evaluation management services and immunizations are raised to at least Medicare rates in FY 2013 and 2014.

Overall, there will be an increase in Medicaid payments for fee-for-service and managed care for primary services provided by primary care physicians (family medicine, general internal medicine, or pediatric medicine) to 100% of the Medicare payment rates for FY 2013 and 2014. States will receive 100% federal financing for the increased payment rates effective January 1, 2013.

New Tort Reform Models

Beginning in FY 2011, the Act authorizes the Secretary to award demonstration grants over a five-year period to states that implement and evaluate alternative medical liability reform initiatives, such as health courts and early offer programs. There will be additional medical liability protection under the federal Tort Claims Act for officers, board members, employees, and contractors of free clinics.

Sunshine Programs for Payments to Physicians for Drug and Pharmaceutical Companies

The physician payments sunshine provisions in the Act require drug and medical device manufacturers to publicly report gifts and payments made to physicians and teaching hospitals. Physician ownership interests must also be disclosed and the particular drug, device, biologic, or medical supply must be named where applicable. Under the sunshine provisions, pay or gifts less than $10 need not be disclosed publicly unless the aggregate annual value exceeds $100. The Secretary will make this payment and ownership information available on a publicly-accessible website. CMPs will be assessed for noncompliance.

Value Based Payment Modifier

The Act requires the Secretary to set up a value-based payment modifier that provides for different payments to physicians under the Medicare Fee Schedule based upon quality of care furnished as compared with cost during a specified performance period. The Secretary shall begin implementing the payment modifier through the rule-making process during 2013 for the Medicare Fee Schedule; and, during 2015, the Secretary shall apply the payment modifier for items and services furnished. As of 2017, the payment modifier must be applied to all physicians.

Mandated Strategy on Quality and Safety

The Act mandates a wide-ranging national plan addressing, among other things, strategies to align public and private payers on quality and patient safety efforts.

Independence at Home

The Act provides for the "Independence at Home Demonstration Program" to test a payment incentive and service delivery model that uses physicians and nurse practitioners directed by home-based primary care teams. This program must begin by January 1, 2012.

Nonpayment for Readmission

Hospitals paid under the Medicare pay for performance system will be subject to reductions in Medicare payments beginning October 1, 2012, if they are unable to prevent certain Medicare patients from being readmitted. CMS is charged with reducing payments in 2012 to hospitals when patients with three specific "high volume" and "high cost" conditions (i.e., heart attack, heart failure and pneumonia) are readmitted for those conditions. Base payments for diagnosis-related groups could be reduced by as much as 1% in 2012, 2% in 2014 and 3% in 2015 and thereafter if hospitals are unable to prevent such readmissions.

For additional information on any of the issues referenced on this page, please contact C. Mitchell Goldman, David E. Loder or the Duane Morris attorney with whom you are regularly in contact.