HEALTH INDUSTRY ONLINE - CMS Clarifies Reporting of Physician Quality Measures

In December 2006, Congress once again overrode the Sustainable Growth Rate ("SGR") methodology that adjusts the fee schedule for Part B physician services. ¹ President Bush signed the Tax Relief and Health Care Act of 2006 ("Act") to avert SGR-mandated cuts to payments to physicians in 2007. The Act also included provisions for payment of an incentive bonus, subject to a cap of one and one-half percent (1.5%) of total fees for physicians who report on CMS quality measures for the period of July to December 2007. CMS has posted 74 quality measures in the 2007 Physician Quality Reporting Initiative ("PQRI").² CMS will adopt and publish all of the reporting quality measures for 2007 prior to July 1, 2007.

The PQRI is another step in the development of the value-based purchasing program discussed in our April 18th publication of Health Industry Online.³ At this time, physician participation in the PQRI is voluntary. CMS calls it "a relatively low-risk opportunity for physicians to gain experience with quality reporting." The results of the quality data provided by physicians to CMS during 2007 will not be publicly reported.

Participation by physicians in the 2007 PQRI does not require prior registration. Physicians should identify those 2007 PQRI Quality Measures that relate to their practices and provide CMS with the quality data codes on claims for services provided between July 1 and December 31, 2007. For reporting purposes, CMS has prescribed the CPT Category II codes and G-codes identified in the specifications for the 2007 PQRI. Most of the quality measures are expressed in terms of a ratio that defines the percentage of a physician's patient population that receive a particular process of care or achieve a particular outcome. CMS has promulgated specific instructions that describe in detail how PQRI measures are to be reported.

Further, CMS is developing an education program to facilitate physician participation in the PQRI. CMS is designing this outreach program to assist physicians in correctly submitting their data, understanding how they will qualify for the bonus, and assessing feedback reports that assess a physicians success in meeting quality measures. The program has not yet been published on the CMS website, but should be available before July 1, 2007.

The PQRI measures include a broad range of quality initiatives. The measures include quality indicators that are appropriate for patients in a long-term care facility, or in a home-based setting. Care appropriately provided in these settings may be reported. Currently, CMS has adopted 74 quality measures, some of which will not be applicable to all physician practices. Moreover, some of the quality measures will require extensive recordkeeping to document clinical procedures and patient conditions over specified periods of time.

CMS will update the PQRI measures and will provide an opportunity for public comment on the 2008 Physician Fee Schedule Proposed Rule. Several requirements included in the Act require participation by consensus organizations in the rule making process by consensus organizations. This includes such organizations as the AQA Alliance and National Quality Forum. Physician specialty organizations are also provided an opportunity to participate in the process.

The PQRI represents the starting place for the future physician reimbursement model. While participation in the PQRI is voluntary at this point and the initial payment modest, the PQRI provides physicians with a way to ease into the new quality reimbursement methodology with a minimal risk and some financial upside. The delay by physicians in learning, if not embracing, this new payment methodology may be costly in the long run. It would be wise to thoughtfully consider that option.

CMS Proposes Disclosure Requirement for Physician Ownership of Hospitals

On April 13, CMS posted its annual proposed update to the hospital inpatient prospective payment system (IPPS) for fiscal year 2008. The proposed IPPS rule includes new obligations for mandatory disclosure of physician ownership in hospitals. These proposed disclosure requirements apply equally to the hospitals, which will be classified as "physician-owned hospitals," and to the physician owners.⁴

The proposed rule would require all hospitals, not just specialty hospitals, that have physician owners to notify patients of the fact that they are "physician-owned" and to provide a list of the physician owners upon request. CMS further proposes that all physician owners who are also members of the hospital's medical staff must disclose their ownership interest in writing to all patients they refer to the hospital.

The proposal defines "physician-owned hospital" as any Medicare participating hospital in which a physician or physicians have an ownership or investment interest. Such ownership or investment interest could occur through equity, debt, or other means and includes financial interests in an entity that owns or invests in the hospital, such as a parent holding company or health system in which the physician holds an ownership or investment interest.

New Resource for HIPAA Privacy Compliance and Enforcement

On April 20, the U.S. Department of Health & Human Services ("HHS") announced the launch of an enhanced website that will make it easier to get information about how HHS and its Office of Civil Rights ("OCR") enforces privacy rights and standards for individual health information.⁵ In launching the website, Winston Wilkinson, the Director of OCR, noted: "HHS has obtained significant change in the privacy practices of covered entities through its enforcement program. Corrective actions obtained by HHS from these entities have resulted in change that is systemic and affects all the individuals they serve."

The new website provides comprehensive information about the HIPAA Privacy Rule, which created federal rights and requirements to protect the privacy of personal health information. The website further provides additional information for consumers, healthcare providers, health plans, and others in the healthcare industry about HHS's compliance and enforcement efforts. This new information describes HHS activities in enforcing the HIPAA Privacy Rule, the results of those enforcement activities, statistics showing which types of complaints are received most frequently, and the types of entities most often required to take corrective action as a result of consumer complaints. Other information on the website covers consumers' rights with respect to their health information as well as guidance about how to submit complaints about possible violations of the law.