CMS’S NEW IPPS RULE

CMS issued a proposed rule for next year reducing readmission payments and payments for hospital acquired conditions, but do not provide any change or relief to the ‘two-midnight’ rule.  Generally, the rule increases payments for inpatient stays at acute care hospitals by 1.3% in FY 2015, and .8% for long term care hospitals.  The readmission reduction rate changes from 2% to 3% for FY 2015, and a 1% reduction in Medicare inpatient payments that rank in the top 25% for preventable conditions.

There has been much speculation that CMS would revise the two-midnight rule, but it appears that this rule is with us to stay.

ENCRYPTION AS A CURE

Case law and HIPAA settlements with HHS continue to show the importance of encryption, particularly in laptops and other mobile storage devices.  Although encryption is not required by HIPAA/HITECH, the absence of encryption will cause HHS to take a harsher look at any PHI breach.  In short, should you choose not to encrypt devices containing PHI, you will be required to provide a justification of your rationale and adopt other safeguards that achieve equal levels of protection.

In essence, HHS’s message is encrypt or face the consequences.

ARE YOU A FEDERAL CONTRACTOR?

Many entities may be surprised to find themselves, at some time, being a federal contractor.  Obviously, if you apply to be a federal contractor it should come as no surprise, but in other cases, providing healthcare benefits or receiving healthcare payments may make you a federal contractor.  A recent flurry of executive orders and regulations has created new, and somewhat conflicting requirements on federal contractors.  These include a prohibition against firing employees for discussing their compensation with your other employees.  This common business rule now may be a violation of this new executive order.  Other matters include compensation reports, increasing the minimum hourly pay to $10.10 and requirements of filing a VETS-100-A Report regarding hiring of veterans.

INDIANA’S NEW PHARMACIST RULES

The Indiana Medical Licensing Board issued guidance involving a new rule to establish standards and requirements for physician prescription of controlled substances, particularly regarding pain management.  The rule applies if a patient has been prescribed during three consecutive months, either 60 or more opiate containing pills a month, or any morphine equivalent dose of 15mg or more per day.  While the rule may provide exceptions for residents of licensed health facilities, hospice patients or certain other programs, the rule requires that the patient sign a treatment agreement, and requires the physician to annually utilize INSPECT, Indiana’s prescription monitoring program.  The treating physician must state whether the INSPECT report is consistent with the physician’s knowledge of the patient’s use of those drugs.  The physician must perform an annual drug test, and again, if the results indicate any inconsistency with the use patterns and the prescription drug, the physician must discuss with the patient the risks and make certain reports.

To date, the rule has not been determined to create any additional pharmacist requirements, but this may change since the board has included a list of red flags for pharmacist.  Pharmacists should note that it is likely that that rule will change in the near future.

LEGACY PLAN RULE

When ACA was being debated prior to its passage, a number of officials made statements that under ACA “if you like your health plan, you can keep it”.  This turned out to be largely untrue for a number of reasons even though ACA, on its face, did not prohibit existing plans.

HHS has issued regulations to allow individual state departments of insurance to extend the grandfathering of existing healthcare plans for another two years.  Three of the largest carriers in Indiana have agreed to continue certain policies not currently compliant with ACA, but these are all small group plans.  The rule also appears to allow underwriting of these grandfathered plans either under ACA’s adjusted community rating, or on the prior non-ACA underwriting basis.  We await the Indiana health insurance markets response to this HHS guidance.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.