Another Delay for the Red Flags Rule

In not-so-surprising news today, the FTC has delayed the enforcement date of the Red Flags Rule for the fifth time.  The new forbearance deadline is December 31, 2010 - however, if Congress passes legislation on this issue with an effective date before December 31, 2010, the FTC will begin enforcing this rule on that earlier effective date.  This delay follows on the heels of a lawsuit filed last Friday by the American Medical Association and other challenging the Rule's definition of "creditor" to the extent that it includes medical professionals.   

PPACA - The Starting Point for Reform

I recently led a class on the new health care reform law, the Patient Protection and Affordable Care Act (PPACA), and have attched the powerpoint presentation from that class.  I hope this provides a good start on understanding the scope of the this legislation.  A good overall detailed summary of the statute, which incorporates the Reconciliation changes into the PPACA provisions, is here.  The whole law, including the Reconciliation Act changes, is here.

PPACA is the start of a decades long process of remaking the health care system in the United States.The law calls for many new state or federal agencies, commissions, and other institutions, as well as scores of new federal rules and regulations, and will most likely require changes to other existing federal and state laws if it is to be fully implemented.  Congress has already begun talking about amending some of the provisions in PPACA due to "unintended consequences."

Cost estimates for the reformation are continually changing as well, and it now appears the purported $1 Trillion cap on cost will be significantly surpassed. 

For a timeline on when the various changes become effective, the Kaiser Family Foundation's is a good reference.

IRS Begins Issuing Regulations Under PPACA

The Internal Revenue Service has begun issuing regulations implementing the Patient Protection and Affordable Care Act (PPACA), the federal health reform law.  You can expect to see new regulations under the law coming out monthly for the remainder of the year.  At a recent speech to the American Health Lawyers Association, a spokesperson for CMS said that HHS is presently drafting 18 sets of new regulations that have to be in effect duri ng 2010, compared to its normal output of 2 - 3 sets.

The IRS's first rules relate to extending dependent coverage under a parent's health insurance to include children up to age 26.

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New OIG Advisory Opinion on pre-authorization services

The OIG just issued Advisory Opinion No. 10-04 which approved a program by a group of imaging centers to provide pre-authorization services for patients and referring physicians at no charge.  This is a surprising turn from the path of prior Advisory Opinions on free services provided to physicians, where the OIG expressed major concerns about any service being funished by a provider that relieved a referring physician of a task the doctor would otherwise have done.

The rationale of the OIG in deciding to approve the arrangement had four components:

1.  The service was available for all patients and referring physicians and was not tied to the volume or value of any physician's referrals, and since insurance plans do not have any uniformity in the requirements for who is to obtain the pre-authorization, it is only by chance if the physician is relieved of a duty.

2.  No payments will be made to the physicians by the imaging centers, and there are no other rewards to physicians as incentives for referrals.  The imaging centers only pass on to the payors the medical necessity information provided by the referring physician, and there is no assurance that the procedure will be authorized.

3.  The process would be transparent, in that the persons seeking pre-authorization would identify themselves as representatives of  the imaging centers, would make all their records concerning the requests to available to the physicians, and would have little ability to influence a referral because it would have already been made.

4.  Economically, it is the imaging centers who are at risk if pre-authorization is not done properly, as it is their charges that will be denied.  They therefore have a significant interest in making sure that the pre-authorization is received prior to their procedures being performed.

It is the 4th justification that seems to be the strongest here, since the risk is indeed all on the imaging center.  It is just somewhat unusual to see the OIG directly recognize the economic reality of the situation in addressing a fraud and abuse concern.

While this Opinion, like all such Advisory Opinions, is limited to the specific case at hand, it provides guidance to other providers as to when it may be permissible to provide an "extra" to enhance your services.  Whether it can translate into services beyond this type of administrative prerequisite for reimbursement is not clear.