Policy, Regulation Shaping Emergency Medicine Reimbursement

April 12, 2021 - More volatility is expected in emergency medicine reimbursement as new laws and programs come into effect, and federal budget cuts occur.

Rulemaking process will define the rules and legal framework of surprise medical billing

The No Surprise Act was passed in 2020 to establish a federal ban on surprise medical billing (SMB). Now, lawmakers are in the “rulemaking phase” of this legislative process that must be completed before the new law takes effect in 2022. 

“This is where the rubber meets the road,” explains Dr. Andrea Brault, President and CEO of Brault Practice Solutions. “The ban on surprise medical billing makes sense in theory, but there are a lot of variables and potential downstream effects that must be taken into consideration – especially as it relates to emergency medicine.”

Emergency medicine is a unique specialty, from a clinical, business model, and reimbursement perspective, explains Dr. Brault, and there are a few key areas of particular importance:

• Federal laws and provisions such as EMTALA and the Prudent Layperson Standard are still in effect today, and they work together to ensure the emergency care network.
• EMTALA requires that a medical screening exam be provided to each person that presents to an emergency department. If the medical screening exam (MSE) reveals an emergency medical condition, then the patient is provided stabilizing treatment. And, to ensure that all people have access to emergency care, this process must occur regardless of the patient’s ability to pay for these services.
• Subsequently, the Prudent Layperson Standard was passed into federal law to ensure that payers would cover the MSE and any necessary services to stabilize the patient’s emergency medical condition—regardless of the final diagnosis.
• However, recent payer behavior such as automatic pay lists and automatic down-coding threaten the emergency care network for everyone. These programs automatically adjust payments based on final diagnosis.  And, as a result, they jeopardize the balance of the emergency medicine business model.

“The landscape of emergency medicine reimbursement is a complicated dance,” continues Dr. Brault. “There are long-standing rules and steps already in place, so we have to be very careful when introducing new rules that could disrupt the flow and lead to unintended consequences.”

Dr. Brault explains that now is the time to get involved. The next deadline for rulemaking on SMB is July 2021, and it relates to the definition of a “qualified payment amount” and the methodology for calculating the “median contracted rate,” which arbitrators will ultimately use to determine final payment in cases of billing disputes between a payer and provider.

Now is the time to reach out to your advocates, such as

Emergency Department Practice Management Association

 (EDPMA), American College of Emergency Physicians (ACEP), and

American Academy of Emergency Medicine

 (AAEM) to ensure your voice is heard during this rulemaking process.

Medicare reimbursement cut looming as temporary relief measures expire

In the Budget Control Act of 2011, Congress established a budget neutrality rule that results in broad reductions to federal programs when government spending exceeds the budgeted amount. Because of this rule, Medicare reimbursement is adjusted downward on an annual basis to account for the increases in government spending.

“Sequestration always translates to a reduction in Medicare reimbursement,” explains Dr. Brault. “Initially, Congress placed the sequestration process on hold during the pandemic. But, those protections have now expired, and a -2 percent adjustment to Medicare reimbursement was put into effect on April 1, 2021.”  

Congress is actively working to ensure that the -2 percent adjustment does not return until the end of the public health emergency.

Dr. Brault explains that Sequestration is just the beginning. There is also a larger wave of Medicare reimbursement that is expected if Congress doesn’t further take action. For example:

• To offset the government spending on pandemic relief bills, an additional -4 percent adjustment is expected for Medicare reimbursement starting January 2022.
• A -3.75 percent adjustment to the 2020 Medicare conversion factor is also expected in 2022. There was a one-year fix in 2021 to keep this conversion factor unchanged. But those protections are set to expire in 2022.

“The next couple years will be challenging for the business of emergency medicine,” explains Dr. Brault. “New laws and shrinking reimbursement will continue to shape the future of this business model. And now is the time for physician groups to start planning before the change is thrust upon them.” 

Physician reimbursement will be volatile, but opportunities for extra income emerge   

Dr.  Brault explains that emergency medicine groups should be focused on optimizing their approach for quality data submissions to the Medicare Merit-Based Incentive Payment System (MIPS) program. This program adds an adjustment to annual Medicare payments for eligible providers, resulting in a bonus check, a penalty payment, or no payment adjustment.

Accountable care organization (ACO) members should also be focused on clinical quality measurement in 2021.

Starting in 2021, CMS requires that each member of the ACO track submit their own quality data—meaning that each member will also receive an individualized MIPS score rather than inheriting the ACO score.

Dr. Brault explains that the process for submitting quality data isn’t overly complicated. But it does require a strategic plan, possibly new technology, and a high level of research and analysis.

The MIPS program scores providers on a 100-point scale, and every year the score to get a bonus or penalty payment has been slowly adjusted. But, in 2022, the full MIPS program will roll out with much stricter thresholds on bonuses and penalty payments.

“The MIPS program is meant to function as a neutral pool of funds, which means that Provider A’s penalty payments are used to fund Provider B’s bonus check,” explains Dr. Brault. “So, as penalties get stricter, bonus payments will also become more lucrative.”

In 2021, any provider who scores 60 or fewer points will incur a penalty payment (compared to a 45-point threshold in 2020).  Positive payment adjustments could start at the same level (depending on how many providers actually receive penalties). And anyone who scores 85 or more will receive a high-performance bonus payment.   Payment adjustments will then range from -9 percent to +9 percent of total Medicare payments in this performance year.

Dr. Brault suggests that, “now is the time to figure out the technology, analysis, and compliance components of MIPS management. These programs are not going away. And, in fact, they can be quite lucrative with some strategic management.”

For more information on the full rollout of MIPS, visit: https://revcycleintelligence.com/news/preparing-providers-for-full-macra-implementation-in-2022

Potential tax relief through Employee Retention Credits (ERTC)

ERTC was created as part of the CARES Act to encourage businesses to continue paying their employees, by providing a credit to eligible employers for wages paid to eligible employees.  

“For some physician groups, the ERTC program can be a valuable source of funding,” explains Dr. Brault. “And it could also be an alternative for those who didn’t qualify for the Payroll Protection Program and other emergency loans.”

More information can be found at: https://www.irs.gov/coronavirus/employee-retention-credit

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Article Contributors:

Dr. Andrea Brault, President and CEO at Brault Practice Solutions

Jay Fisher, MPA, Partner at C3 Partners LLC

Brault is a revenue cycle and practice management organization that partners exclusively with hospitals and acute care physician groups. Their intelligent practice solutions include MIPS optimization, practice analytics, and provider documentation training. Learn more at www.Brault.us