Associate Agreements by xco29199

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									       David G. Schoolcraft
Ogden Murphy Wallace, PLLC
         dschoolcraft@omwlaw.com
   Part I – Federal Incentive Payments for Health IT
    ◦ Up to $36.5Billion in federal stimulus funding
    ◦ Unprecedented opportunity to advance “Health IT”
    ◦ Complex payment methodologies and some open issues
   Part II – Significant Changes to HIPAA
    ◦   Data Breach Notification Rules
    ◦   Business Associate Agreements
    ◦   Penalties & Enforcement
    ◦   Accounting of Disclosures
   Part III – Action Plan for 2009
   Eligible Hospitals
    ◦ Medicare
      PPS factors: discharges, “Medicare Share”
      CAH factors: costs w/o depreciation, “Medicare Share”
    ◦ Medicaid
      10% of hospital’s “patient volume” (to be defined)
      No difference in payment methodology for PPS and CAH
   Eligible Physicians (Medicare or Medicaid)
   HIE Planning and Development Grants
   EHR Adoption Loan Program
   Washington Grace Hospital = 25 beds, Critical Access Hospital
    ◦ 2 Employed Physicians – Medicare ($44,000)




                                             Estimates based on certain factual assumptions.
                                             Subject to revision under final HHS regulations.
   Washington Grace Hospital = 80 beds
    ◦ 4 Employed Physicians – Medicare ($44,000)




                                                   Estimates based on certain factual assumptions.
                                                   Subject to revision under final HHS regulations.
 Incentives for Adoption and
“Meaningful Use” of “Certified
      EHR Technology”
▶   Demonstrate to the “satisfaction of the Secretary”
    use of certified EHR in a meaningful manner
▶   Certified EHR technology must be connected to
    provide for the electronic exchange of health
    information to improve the quality of care
▶   Hospitals to submit information on clinical quality
    and other measures as selected by the Secretary
▶   More stringent measures over time
   “Certified EHR technology” is a qualified electronic
    health record meeting standards to be defined
   Office of the National Coordinator for Health
    Information Technology (“ONC”) to develop certification
    program
   Certification Commission for Healthcare Information
    Technology (“CCHIT”) may be involved along with the
    National Institute of Standards and Technology (“NIST”)
   December 31, 2009 deadline for initial standards,
    implementation specs and certification criteria
   Fiscal year 2011-2015 (Oct. 2010)
    ◦ Phased Transition Schedule After 2013
   HHS will determine how hospitals shall demonstrate
    meaningful use (attestation, survey, etc.)
   Amount
    ($2 MM + $200 (Discharges 1,150th - 23,000th)) * Medicare Share * Transition Factor
    ◦ Medicare Share = Medicare portion of inpatient days
      adjusted upward for charity care.
    ◦ Transition Factor - Reduction by 25% per year for 4 years
   Medicare incentives are paid on a transition
    schedule.
   After FY 2015, if a hospital is not a meaningful EHR
    user then penalties begin
    Meaningful FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
     EHR User
      FY 2011     100%     75%     50%     25%
      FY 2012             100%     75%     50%     25%
      FY 2013                     100%     75%     50%     25%
      FY 2014                              75%     50%     25%
      FY 2015                                      50%     25%
       After                                    33.33% 66.66%     100%
      FY 2015
   Washington Grace Hospital – 80 beds
    Total Discharges                        4,500
    Medicare Patients                       2,500
    Medicare Inpatient Days               11,000                    Medicare
    Total Inpatient Days                  17,000                     Share
    Total Hospital Charges          $ 190,000,000
                                                                      65%
    Total Charity Care                $ 2,000,000

                        Estimate of Medicare Incentive Payments*
                       2011         2012          2013        2014
                 $1,811,551      $1,358,663    $905,776         $452,888




                                          Total
                                       $4,075,990
                                                          *Estimate based upon existing statute in advance of HHS rule making   .
   If a meaningful EHR user by 2015, CAH may expense certain
    EHR costs in one year for cost reporting purposes (non-
    depreciated basis) and certain costs from prior periods
   Calculation uses Medicare Share amount + 20%
   Equation:
      101% * Reasonable Cost of EHR System * (Medicare Share + 20%)
   If CAH is not a meaningful user by 2015 or thereafter,
    percentage reimbursement will be reduced to 100.66% in
    2015, 100.33% in 2016 and 100% in 2017
   Washington Grace CAH – 25 beds
    Total Discharges                            170
    Medicare Patients                           110
    Medicare Inpatient Days                     260               Medicare Share
    Total Inpatient Days                        350              75% + 20% = 95%
                                                                  (20% increase for CAH)
    Total Hospital Charges              $ 8,500,000
    Total Charity Care                      $120,000
    Annual Cost of EHR System               $350,000

                            Estimate of Incentive Payments*
                       2011        2012           2013              2014
                  $337,060         $337,060       $337,060     $337,060
                 Assumes costs remain the
                 same over all four years


                                               Total
                                            $1,348,242
                                                             *Estimate based upon existing statute in advance of HHS rule making.
   CAH’s who have not implemented EHR’s by 2015
    may be subject to reductions
   10% of “Patient Volume” on Medical Assistance
    ◦ To be defined by Secretary of HHS
    ◦ Inpatient vs. outpatient volumes
   States allocate the money
   Year 1 – Demonstrate efforts to adopt, implement or
    upgrade EHR system
   Years 2-6 – Demonstrate “meaningful use”
   Washington Grace CAH – 25 beds
    Total Discharges                      170
    Medicaid Patients                      30
    Medicaid Patient Volume               17%           Medicaid
    Avg Rate of Growth                   6.73%           Share
    Medicaid Inpatient Days                35
                                                          10%
    Total Inpatient Days                  350
    Total Hospital Charges        $ 8,500,000
    Total Charity Care            $ 120,000

                               Incentive Payments
                       2011     2012         2013       2014
                  $183,004    $137,427       $91,742   $45,937



                                      Total
                                    $458,109
   Physician incentive payments are 75% of Medicare allowed
    charges
    ◦ Penalties – reduction in physician fee schedule
   10% increase in incentives if physician practices in a
    designated health professional shortage area
Meaningful FY 2011 FY 2012 FY 2013 FY 2014       FY 2015 FY 2016 FY 2017       Total
 EHR User
  FY 2011  $ 18,000 $ 12,000 $ 8,000 $ 4,000     $   2,000                 $   44,000
  FY 2012           $ 18,000 $ 12,000 $ 8,000    $   4,000 $ 2,000         $   44,000
  FY 2013                    $ 15,000 $ 12,000   $   8,000 $ 4,000         $   39,000
  FY 2014                             $ 12,000   $   8,000 $ 4,000         $   24,000
   After                                               1%       2%    3%
  FY 2015
   Hospitals may be able to collect incentive
    payments for certain employed physicians, but
    note that “hospital-based” physicians are excluded
                     Excluded Physicians

                 Pathologists

                 Anesthesiologists

                 Emergency Physicians
New Compliance Obligations
           and
 More Regulations to Come
   Requires that covered entities notify patients of
    any unauthorized acquisition, access, use, or
    disclosure of “unsecured” PHI
   Date of discovery – first day breach was known or
    should have been known
   Notice within 60 days of discovery
   If+500, then notice to media and HHS
   Recent HHS Guidance
   Reference to NIST Publication 800-100
   Internal review and risk analysis
   Data encryption technologies
   Currently – Business Associates not directly
    regulated by HIPAA
   Application of HIPAA Security Requirements
    ◦   Administrative Safeguards
    ◦   Physician Safeguards
    ◦   Technical Safeguards
    ◦   Documentation Requirements
   Requirement to notify Hospital if there is a breach
   Open question regarding mandatory revisions to
    Business Associate Agreements
   Expansion of criminal and civil penalties
   Tiered penalties tied to violator’s level of intent
   Periodic audits by HHS
   Victims may receive percentage of civil penalties
   State Attorney General may bring an action
    provided an action by HHS is not pending
   Eliminates existing exception limiting accounting for
    disclosures other than treatment, payment and health care
    operations
   Will require significant operational changes, but may be
    aided by improved IT systems
   Staggered effective dates:

                     EHR Acquired     Effective Date
                    Before 1/1/2009     1/1/2014
                     After 1/1/2009     1/1/2011
   Prepare estimate of health IT incentive funds
    available for your facility
   Analyze Medicare and Medicaid incentive
    payments for hospitals (PPS/CAH) and eligible
    physicians
   Monitor HHS, ONC, CCHIT, NIST for development
    of standards for “certified EHRs” and “meaningful
    use”
   Develop data breach prevention and response plan
   Assess data security in light of new federal standards
   Implement additional data security measures deemed
    necessary and appropriate following risk analysis
   Develop reporting and communications plan in
    conjunction with IT service providers:
    ◦ Internal reporting and incident review
    ◦ Required external communications (patients, media,
      government)
    ◦ Methods to address follow up inquiries from patients and/or
      media
   Careful review of information technology
    transactions– from due diligence during system
    selection through contracting
   Ensure that all information technology
    transactions are HITECH-Ready
    ◦ Vendor/service provider commitments regarding data
      security and accounting of disclosure requirements
    ◦ Updated Business Associate Agreement
    ◦ Functionality necessary to obtain or maintain “certified
      EHR” status and to facilitate “meaningful use”
   David G. Schoolcraft
dschoolcraft@omwlaw.com
      206.447.7211

								
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