Single Payor Health Care System
June 14, 2019
Posted by Frank Ciesla
This is a continuation of our attempt to analyze the various single payor health care proposals that are being made during this election cycle. A possible model, irrespective of how it is characterized or described, is the single payor model used by the Veterans Administration (hereinafter “VA”). That is a possible model because it uses a federal budget-driven approach. If the government is going to provide health care, it is going to have to have a statutory, as well as budgetary, structure under which that health care will be provided.
It is not clear from any of the discussions of a single payor system so far, whether or not the actual provider of the health care will be a government employee or will be a government contractor. If the government is the sole payor either by regulation or by contract, it will be making arrangements with various providers (whether they are hospitals, ambulatory care centers, nursing homes, physicians or other health care providers) for the provision of care to those covered by the government program.
If it is a budgetary-driven program, then the structure and incentives need to be examined and may significantly impact the actual delivery of the care. For instance, if the program provides $X, then the incentives for those administering the program will be to be able to deliver as much care as possible, to as many people as possible, within the budgetary constraints. That creates significant alternatives to those administering the program. It may be that there are tradeoffs between the quality and the quantity of care that the program is able to provide under the budgetary constraints. The more care that a provider can provide at a particular cost level, the more likely it will be that an increased number of patients can receive that care. So a tradeoff may result between trying to avoid providing the most expensive care (which may limit the amount of care that can be provided), versus providing a less expensive alternative that would provide an opportunity to provide a greater amount of care to a greater number of people.
It also is not clear what the level of costs may be and whether or not certain administrative elements and their associated costs can be eliminated for various health care providers. Will they be provided a lump sum to take care of a population, which could eliminate billing and the costs associated with billing and collections, or will there be some other alternative which would require them to bill for the services?
There is also the possibility that the care will be provided by government employees at government institutions, as is done, to a large extent, by the VA today. Currently, many of the physician caregivers at the government institutions are not employees of the government, but are contractors and paid accordingly.
If one were to look at the VA, one could see issues regarding the number of patients who are waiting for care and, of course, the widely reported “scandals” involving the long waiting lists for care at various VA locations. If there is no copay and no payment for the care on the part of the patient, then what will the mechanism be under which a person will decide that they need care? What will be the mechanism to allocate resources to determine who actually will receive the care versus who will not receive the care? That is an issue that is currently facing the VA and certainly might be an issue facing any system of government-provided health care.
There is also the question of who determines which providers can provide care to an individual patient. Supporters of the Affordable Care Act made the statement that “if you like your doctor, you can keep your doctor.” In some instances, this turned out to be incorrect. The question for any government-run program, will be how will the government allocate patient access to various providers.
So far, these questions have neither been asked nor addressed. They are critical to any analysis of a single payor health care system.
What is a Medicare Advantage?
June 10, 2019
Posted by Anjali Baxi
According to the Henry K. Kaiser Foundation, 33% of all Medicare beneficiaries are enrolled in a Medicare Advantage Plan. https://www.kff.org/tag/medicare-advantage/. A previous blog post [http://njhealthcareblog.com/2019/03/13/health-care-issues-2020-election/] authored by Frank Ciesla provides a summary of the different Medicare plans. This blog post will give you a sense of Medicare Advantage.
Medicare Part C Coverage is called “Medicare Advantage” or “MA”. The MA is an alternative to traditional Medicare. It is a private health plan, such as an HMO or PPO, which includes all Medicare-covered Part A and Part B benefits, except hospice services. MA Plans also may provide supplemental benefits, such as vision and dental care, podiatry, chiropractic services and gym memberships. The Medicare Advantage Plan receive payments from the federal government to provide all Medicare covered benefits to enrollees. For each person who chooses to enroll in a Part C Plan, Medicare pays the plan a set amount every month without regard to the actual number and nature of services used by the member (“capitation”). The organizations contracted to offer Medicare Advantage benefits must meet Medicare conditions of participation requirements and are required to report data to CMS on a variety of measures.
Before enrolling into a MA plan, the beneficiary must enroll in Medicare Parts A and B. Each MA plan can charge different out-of-pocket costs and can have different rules for how a recipient gets services, such as whether a recipient must have a referral to see a specialist or if the recipient has to go to doctors, facilities, or suppliers that belong to the plan for nonemergency or non-urgent care. Plans are required to use any additional payments to provide “supplemental benefits” to enrollees in the form of lower premiums, lower cost sharing, or benefits and services not covered by traditional Medicare. Supplemental benefits are interpreted by CMS as being items or services (1) not covered by traditional Medicare, (2) that are primarily health related, and (3) for which the MA plan must incur a direct medical cost.
In April 2018, CMS issued a Call Letter (2019 Final Call Letter) which discusses a reinterpretation of the statute to expand the scope of the primarily health related supplemental benefits standard. Under the new interpretation, CMS would allow supplemental benefits if they are used to diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization. Supplemental benefits must be medically appropriate and recommended by a licensed provider as part of a care plan if not directly provided by one.
Starting in 2019, Medicare Advantage plans have the option to build in some supplemental benefits that fall into the realm of home and community-based long-term care. Some of the new long-term care options include adult day-care services, in-home assistance with custodial care or activities of daily living, respite care benefits for caregiver home safety modifications like bathroom grab bars, wheelchair ramps, and stair rails, non-emergency transportation services so that members can get to their doctor’s appointments and in-home meal delivery. Before we get excited for Uber/Lyft or DoorDash we will need to wait and see whether these are covered services under MA plans that are offered in New Jersey.
2019 Call Letter: https://www.cms.gov/MEDICARE/HEALTH PLANS/MEDICAREADVTGSPECRATESTATS/DOWNLOADS/ANNOUNCEMENT2019.PDF.
2020 MA Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/2020-medicare-advantage-and-part-d-rate-announcement-and-final-call-letter-fact-sheet
April, 2019 Regulatory Developments
April 25, 2019
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register in April, 2019:
- On April 1, 2019, 51 N.J.R. 452(a), the Department of Human Services, Division Of Medical Assistance and Health Services proposed amendments to N.J.A.C. 10:74, Managed Health Care Services for Medicaid and NJ FamilyCare Beneficiaries. The proposed readoption regulates the enrollment of Medicaid and NJ FamilyCare beneficiaries into managed care as a health care delivery system and the provision of services by a managed care organization (MCO) to these beneficiaries. Notably, there are new proposed definitions of “Comprehensive Waiver” and “MLTSS”.
- On April 1, 2019, 51 N.J.R. 473(a), the Department of Law and Public Safety, Division of Consumer Affairs, State Board of Optometrists adopted amendments to N.J.A.C. 13:38-7.3, requiring optometrists to complete, at a minimum, one credit for educational programs or topics that concern the prescription of hydrocodone, or the prescription of opioid drugs in general, including responsible prescribing practices, the alternatives to the use of opioids for the management and treatment of pain, and the risks and signs of opioid abuse, addiction, and diversion.
- On April 1, 2019, at 51 N.J.R. 481(a), the Department of Banking and Insurance, Division of Insurance, Office of the Commissioner published a notice regarding the minimum deposit requirements for Health Maintenance Organizations (HMOs) and 3.3% increase in the medical component of the CPI for all urban consumers in the New York-Northern New Jersey-Long Island region and the Philadelphia-Wilmington-Atlantic City region as reported by the United States Department of Labor, Bureau of Labor Statistics Existing HMOs shall make adjustment for their minimum net worth no later than July 1, 2019. The required deposit shall be made no later than July 1, 2019, pursuant to N.J.A.C. 11:24-11.4(e) to include the specific CPI adjustment.
- On April 1, 2019, at 51 N.J.R. 481(b), the Department of Banking and Insurance, Division of Insurance, Office of the Commissioner published a notice regarding the minimum net worth requirements for Health Maintenance Organizations (HMOs) and 3.3% increase in the medical component of the CPI for all urban consumers in the New York-Northern New Jersey-Long Island region and the Philadelphia-Wilmington-Atlantic City region as reported by the United States Department of Labor, Bureau of Labor Statistics Existing HMOs shall make adjustment for their minimum net worth no later than July 1, 2019. The required deposit shall be made no later than July 1, 2019, pursuant to N.J.A.C. 11:24-11.4(e) to include the specific CPI adjustment.
- On April 15, 2019, at 51 N.J.R. 501(b), the Department of Banking and Insurance, Division of Insurance, Office of the Commissioner adopted amended rules regarding permissible network deductibles and network coinsurances in contracts issued by HMOs that provide out-of-network benefits for emergency and urgent care. See rule at N.J.A.C 11:22.
- On April 15, 2019, at 51 N.J.R. 509(a), the Department of Health, Office of the Commissioner published a notice of cancellation of a certificate of need call for new specialized long-term care beds for severe behavior management. The call for CN applications was scheduled for January 2, 2019.The Department has determined there is not a need for new specialized long-term care beds for severe behavior management at this time. On January 2, 2018, the Department had issued a certificate of need call for additional specialized long-term care beds for severe behavior management at 50 N.J.R. 260(b). In response to this call, the Department received applications from several applicants, which are currently under review by the Department. The next scheduled call for new specialized long-term care beds for severe behavior management will be January 2, 2020. The Department will continue to monitor the utilization and availability of specialized long-term care beds for severe behavior management and, should the need arise, issue a future call for these services prior to January 2, 2020.
March 2019 Regulatory Developments
April 3, 2019
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register in March 2019:
- On March 4, 2019, at 51 N.J.R. 363(b), the Higher Education Student Assistance Authority adopted rules regarding partial tuition reimbursement for medical students that pursue a residency in psychiatry and agree to practice full-time as a psychiatrist in an underserved area in New Jersey and/or in a State psychiatric hospital for a period of one to four years in return for the tuition reimbursement provided under the reimbursement program. The participant may not be simultaneously participating in either the Primary Care Practitioner Loan Redemption Program, or in the Federally administered National Health Service Corps Loan Repayment Program. The rule citation is N.J.A.C. 9A:10-3.
- On March 18, 2019, at 51 N.J.R. 409(a), the Department of Community Affairs, Office of the Commissioner, readopted the rules related to the DCA regarding government records. The rules were readopted without amendment. The rule citation is N.J.A.C. 5:3.
Health Care Issues: 2020 Election
March 13, 2019
Posted by Frank Ciesla
Health care was one of the most important issues, if not the most important issue, in the 2018 election campaign. It already looks like it will be a major issue, and possibly the biggest issue, in the 2020 elections. Candidates have already announced their intentions for exploring a run for President. We intend to have a series of blogs as different concerns arise during the campaign. This is significant to health care providers as well as to the public, since it may have a major impact on both the payment for and delivery of health care going forward.
Our starting point will be the Medicare program which is now over 50 years old and has been evolving. The Medicare program is a good example of what questions should be asked about coverage and cost. For instance, what health care does that program cover? If one were to look at Part A and Part B, it does not cover many aspects of health care including vision, hearing, dental, drugs and long-term care. It also requires significant copayments and deductibles from those covered by the Medicare program. The program as now structured for most Americans is not available until they are 65 years old.
It is also necessary to look at the financing of that program. There are many aspects to the financing. Even though most Americans are not receiving any benefits from that program until they are 65, most people are paying into that program (together with their employer) for their entire employment life, including periods of employment which may occur after they are a beneficiary of the Medicare program. The financing of that program has changed over the years so that it now covers all W-2 earnings or its equivalent. For non-W-2 earnings, the program has a provision in which, at a certain level, the individual is required to pay additional premiums. Further, for Medicare Part B coverage, an individual either pays a premium directly after they enroll, or if they are also on Social Security, an amount is deducted monthly to cover participation in Part B program. That amount is adjusted based upon the individual’s level of income the prior year. The program still has a significant deductible and copayment requirements. Many of the participants cover these requirements by purchasing supplemental insurance. For those who are eligible, those copayments and deductibles may be paid by the Medicaid program. Based on the most recent Trustees’ report, the program is projected to be in serious financial distress in the near future.
As the program evolved, CMS developed Medicare Part C which is a managed care insurance product for Medicare patients. Part C (depending on where you are and the product available) may have no copayment or deductibles and may cover additional services such as vision, dental, and hearing. Part C may not cover long-term care.
More recently, Part D was added to the Medicare program, which is also a product which covers prescription drugs.
In any of the health care financing and coverage programs proposed, one has to look at them to see what was covered, who is covered, when they are covered, what the copayments are, what the deductibles are, and how the program is going to be paid for.
An additional issue is the payment to the health care provider. The program is now experiencing the refusal of some providers to accept Medicare, because of its “low” reimbursement rates. How providers will be paid is a major issue.
Under the Affordable Care Act (a/k/a “ACA” or “Obamacare”), there are different levels of coverage from a bronze, silver, gold and platinum level. Candidates proposing new health care financing and coverage programs will need to establish whether or not such a distinction in the level of care will be included or addressed by any new health care proposal.
February 19, 2019 Regulatory Developments
February 26, 2019
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on February 19, 2019:
- On February 19, 2019, at 51 N.J.R. 215(b), the Department of Banking and Insurance published a rule readoption with amendments requiring to dental plan organizations (DPOs) and dental service corporations (DSCs) to comply with the essential health benefit requirements under the ACA.
- On February 19, 2019, at 51 N.J.R. 217(a), the Department of Law and Public Safety, Division of Consumer Affairs, Board of Massage and Bodywork Therapy, adopted an amendment to N.J.A.C. 13:37A-2.1, relating to the application requirements for a massage/bodywork therapists. Among the changes is the requirement for successful completion of 500 hours of course study, an associate degree in massage therapy or other qualifying coursework, and proof of successfully passing a written examination given by FSMTB, NCBTMB, or NCCAOM.
- On February 19, 2019, at 51 N.J.R. 218(a), the Department of Law and Public Safety, Division of Consumer Affairs adopted an amendment to N.J.A.C. 13:45H-1.1, which would require manufacturers, distributors, and dispensers of controlled dangerous substances (CDS) and animal control/human societies to pay CDS annual fees for registration and renewal applications.
- On February 19, 2019, at 51 N.J.R. 219(a), the Department of Law and Public Safety, Division of Consumer Affairs published a notice of readoption of N.J.A.C. 13:45A. The readopted rule extended the expiration date of the chapter seven years from the date of filing. (January 16, 2026). These rules address several items such as the delivery of household furniture and furnishings; prepaid calling cards; the sale of cats and dogs; home improvement and home elevation contractor registration; the sale of food represented as kosher; motorized wheelchair dispute resolution; prescription drug retail prices; and compassionate use of medical marijuana.
February 4, 2019 Regulatory Developments
February 20, 2019
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on February 4, 2019:
- On February 4, 2019, at 51 N.J.R. 177(b), the Department of Health, Certificate of Need and Healthcare Facility Licensure Program published a notice of its decision to grant the petition and initiate rulemaking in response to a petition for rulemaking from Laura I. Thevenot, Chief Executive Officer, American Society for Radiation Oncology (ASTRO), Arlington, Virginia. The petitioner requested that the Department make certain amendments to the Manual of Standards for Licensing Ambulatory Care Facilities at N.J.A.C. 8:43A-30.7, Radiation oncology services quality improvement methods, and the Hospital Licensing Standards at N.J.A.C. 8:43G-28.19, Radiation therapy continuous quality improvement methods. The Department will initiate rulemaking within 90 days of the publication of the notice.
- On February 4, 2019, at 51 N.J.R. 178(a), the Commissioner of Health issued a call for certificate of need (CN) applications (on a full review basis) to establish intermediate and intensive neonatal bassinets in accordance with the provisions of N.J.A.C. 8:33, 8:33C, and 8:43G and N.J.S.A. 26:2H-1 et seq. for the following counties: Atlantic, Bergen, Burlington, Camden, Cumberland, Mercer, Middlesex, Monmouth, Morris, and Passaic Counties.
The CN call excludes changes in perinatal designation and changes in consortium membership. Those hospitals that currently operate temporary intermediate or intensive neonatal bassinets shall apply to formally approve temporary bassinets. The application due date is June 3, 2019. The DOH anticipates completeness review decision to be issued on September 6, 2019. The State Health Planning Board is scheduled to review applications and submit recommendations to the Health Commissioner on
December 5, 2019.
Retiring Physician? Some Things To Consider Before Hanging Up Your Stethoscope
January 14, 2019
Posted by Beth Christian
If you are a physician approaching retirement, you may be thinking about the activities which await you once you cease your practice activities for good. You may be dreaming of lying on a beach with a cool drink, traveling the world, or doing good by providing services as part of a medical mission or medical response team. While many individuals in the workforce can retire after providing their employer with a few weeks’ notice, as a physician you’ll need to give yourself more time to make that transition. Careful planning for your retirement exit will ensure smooth sailing as you move toward a post-retirement life. Here are some things to consider:
- If you are part of a multi-physician practice, you’ll need to determine how much notice you will give to your professional colleagues and will need to work through reassignment of clinical, governance and other responsibilities. If you are a solo practitioner, you will need to determine how you will notify the individual employees of your practice and how items such as unused vacation or sick time and employee benefits (if any) will be handled.
- If you have an employment agreement with your practice, are an employee of a health care system, or are employed by a captive professional practice, you will need to review the notice requirements under your employment contract.
- Since you will be providing professional services through the date of your retirement, you will need to determine how to bill for these services following your departure from practice, particularly if you have historically done your billing in-house.
- There are legal requirements for patient notification regarding the manner in which patients can obtain copies of their medical records, as well as a newspaper notice requirement of the cessation of practice.
- As a licensee of the New Jersey Board of Medical Examiners, you will need to determine what type of license to maintain post-retirement. It is possible to obtain either a retired active, reduced fee license or a retired inactive, no fee license. Each of these has separate requirements and limitations that should be reviewed.
- You should carefully review any third party payor and vendor agreements, as well as space and equipment leases for your practice, as well as for contract termination and notice provisions. You should review your current professional memberships and subscriptions (including cable and streaming service subscriptions). All of these subscriptions have a monthly cost. If you practice with colleagues, they may feel that the associated costs are no longer necessary. If you are closing a solo practice, you may not want to pay for these costs once you are no longer actively working.
- You should schedule a call or meeting with your insurance broker to review the various options that may be available with regard to professional liability insurance and any other types of insurance that you maintain.
- If you do not plan on obtaining another direct patient care position, you should notify the NPPES that you will no longer be utilizing your NPI number once you are satisfied that you have received all claims payments.
- You will need to notify the New Jersey Controlled Dangerous Substance Unit and the federal Drug Enforcement Administration. These agencies will provide you with instructions regarding the destruction of prescription pads and other matters involving your CDS and DEA registration.
- If you will not be engaging in any practice activities, you should notify the hospitals and other health care facilities where you have Medical Staff privileges that you will be retiring.
- If you are employed by a captive P.C., you will need to follow up and confirm that the P.C. has a new physician shareholder to assure that you are no longer responsible for the medical decisions of the captive P.C.
- If your practice entity is not going to continue as an ongoing concern with other practitioners, you should take steps to dissolve your practice entity once you are satisfied that your practice activities have been wrapped up and all claims payments have been received. In addition, you will also need to have your accountant prepare and file a final tax return before your practice entity is dissolved.
The number of steps that a physician needs to take before retiring can appear somewhat daunting. Enlisting the help of an attorney, an accountant, and other professionals who have helped physicians through the process should allow you to sleep more peacefully at night and ensure that you will take all the steps needed to launch a successful retirement.
January 7, 2019 Regulatory Developments
January 8, 2019
Posted by Anjali Baxi
Here are the most recent health care related regulatory developments as published in the New Jersey Register on January 7, 2019:
- On January 7, 2019, at 51 N.J.R. 17(a), the Department of Human Services, Division Of Medical Assistance And Health Services, issued a proposed rule amending N.J.A.C. 10:66, Independent Clinic Services, addressing the payment methodology for covered services provided in an ambulatory surgical center (ASC). The proposed amendments memorialize the New Jersey Medicaid/NJ FamilyCare program’s compliance with Federal rules regarding ASC reimbursement at 42 CFR Part 416, Subpart F: “Coverage, Scope of ASC Services, and Prospective Payment System for ASC Services Furnished on or After January 1, 2008.”
- On January 7, 2019, at 51 N.J.R. 28(a), the Department of Community Affairs, Division of Law and Public Safety, Board of Medical Examiners proposed rules to require licensed athletic trainers to complete one credit of continuing education in topics concerning prescription opioid drugs every biennial renewal period. These topics would have to include the risks and signs of opioid abuse, addiction, and diversion. The proposal would amend N.J.A.C. 13:35-10.21.
- On January 7, 2019, at 51 N.J.R. 83(a), the Department of Health, Public Health Services Branch, Division of Family Services, Maternal and Child Health Service, Child and Adolescent Health Program, readopted N.J.A.C. 8:51A with amendments to address lead screening in children under the age of 6. The only Federal regulation governing lead screening applies to children enrolled in Medicaid, which requires children to be screened at 12 and 14 months, or between 36 and 72 months in the case of a child who has not been previously screened. The readopted rules are as protective as Federal recommendations regarding childhood lead screening. Accordingly, N.J.A.C. 8:51A would continue to govern lead screening for non-Medicaid enrolled children in New Jersey. The goal is to have all children undergo lead screening.
Pharmaceuticals
December 19, 2018
Posted by Frank Ciesla
As you can see from the following link (https://www.washingtontimes.com/news/2018/dec/18/elizabeth-warren-us-govt-ought-make-generic-drugs/), Elizabeth Warren is proposing that the government now go into the manufacture of pharmaceuticals. I have proposed in two prior blogs (http://njhealthcareblog.com/2018/05/17/pharmaceutical-pricing/; and http://njhealthcareblog.com/2018/11/08/pharmaceutical-pricing-update-to-may-17-2018-blog/) that we take a much more direct and simpler approach…that is that we legislatively impose the Most Favored Nation’s treatment on the drug industry. This makes a lot more sense than creating another government bureaucracy. The government’s track record in the medical field, as shown by their inability to provide care to veterans under the Veterans Administration is not at all encouraging and there is no reason to believe that their endeavor in the pharmaceutical field will be any better.
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