Life Science Compliance Update

October 21, 2016

Post ICD-10 Changes to the ACA and its Implications


The coming year will bring along change for practices. The ending of the ICD-10 grace period will bring rising problems for practices if they are not prepared. Apart from nearly 2700 new codes that are coming out, there are also significant changes in old codes as well.

With the introduction of ICD-10 it was decided that there would be a year’s time where all unspecified codes would still be accepted and not sent into denials mostly because many practices were unprepared. With this changing, the denials rates of practices will be rising to a huge extent. To combat this, practices need to have a medical billing software which is well equipped with the recent changes and the updates.

It is predicted by many experts that the denial rates will be moderately higher for practices come October 1st, however, they will be significantly higher for practices that do not have medical billing software, and are not prepared. Of course, the full wrath of the changes will be felt differently, depending upon which family of codes a particular practice gets often. Hence it is important to see the relevant changes concerning your practice, and then deciding what is needed.

The problem is that a relatively small practice will need such software much more, because it is harder for a smaller practice to hire an entire billing department, and hence in some cases (learn more) the doctor himself/herself ends up doing the coding, which basically results in a couple of extra hours every day. Instead, this time can be utilized in taking care of more patients which can result in not only a higher profit for the practice but better care for the patient. This way it all comes down to specialization, the doctor should be doing what the doctor knows best, which is to practice, and the coder should do what the coder knows best, which is to code. Now when the doctor takes the time to start doing other tasks ultimately it is a waste of resources.

The changes and the new codes that are being introduced are very important, and one should be fully prepared not just for the updates of the ICD-10, but for other factors that will be affecting the medical industry in the long run. One of these things is the upcoming election, which will have major implications on healthcare. The healthcare industry was revolutionized with the “Affordable Healthcare Act,” (ACA) ever since it became part of the constitution. Similarly, with the front runners of the both the major parties decided it would be interesting to see what potential effects they will have on the healthcare industry in the foreseeable future.

Hillary Clinton has exclaimed that she would not be for repealing the affordable health care act and actively “defend” it and even build on its success, whereas Donald Trump wants to completely repeal the act, and instead bring in “something great.” Now basically what does this mean for the healthcare industry, will the upcoming elections bring about a paradigm shift, and change the way things are done entirely?

    Now changes to the ACA look likely whether Clinton or Trump take the white house; however, this could be harder to do especially since the Supreme Court upheld it in 2012 and it is firmly a law of the land. It is estimated by the Obama administration that it would add around $137 billion to the federal budget to repeal the ACA.

Below we will be discussing the federal health care plans of both major party candidates, although neither candidate has outlined a detailed comprehensive plan as far as health care is concerned, they have suggested certain policies which provide a generic outline on which we can make an analysis.

Recently at the DNC Hillary Clinton talked about how she wants to defend and further add changes to the ACA to make sure that affordable health care is provided to as many Americans as possible. She also talked about how she would protect Roe v. Wade which was a landmark decision as far as abortion is concerned. As far as Clinton is concerned it should be protected and the decision of abortion should clearly lie with the mother.

Mike Pence who is Donald Trump’s running mate, actually talked about putting Roe v. Wade to the ash heap of history where it belongs. The republicans are pro-life, and would repeal the aforementioned case which would mean a huge tassel in congress.

Now here is the direct impact that the industry will have as far as practicing doctors are concerned. A Hillary Clinton presidency brings more of the same thing in a bigger package, more regulations such as HIPPA and HITECH in the industry, which means that practicing doctors will be treating more patients, relatively be getting paid the same amount that they are being paid currently with adjustments to inflation of course.

A Donald Trump Presidency would bring with it free market conditions, that could considerably increase the pay of doctors, and bring with it fewer regulations in the long term. This could lead to fewer people have access to good healthcare who cannot afford it; such is the law of the market. 

However whichever candidate gets selected, it is important to keep track of what is important, and for a practice, the most important factor should be how to keep afloat and turn in profit while helping the most amounts of people. To do this the practice needs to update about the changes that are coming, especially with the ICD-10 grace period ending.

Author Bio: Aiden Spencer is a health IT researcher and writer at CureMD who focuses on various engaging and informative topics related to the health IT industry. He loves to research and write about topics such as Affordable Care Act, electronic health records, Medical Practice management and patient health data. You can get in touch with him on Twitter: @AidenSpencer15

July 15, 2016

Independent Payment Advisory Board (IPAB) What is Happening Now

The Independent Payment Advisory Board (IPAB) is one of the "cost control mechanisms" that can be found within the Affordable Care Act (ACA) and is designed to bring per-capita Medicare spending back in line with statutory benchmarks, if those benchmarks are exceeded. While an IPAB trigger was avoided this year, the IPAB continues to be a reality threatening healthcare stakeholders.

The IPAB is close to the current Medicare Payment Advisory Commission (MedPAC), but there are some stark differences. For one, recommendations made by the IPAB have the force of law unless Congress acts to amend them in ways that also achieve the required savings. Such an automatic implementation has stakeholders on edge: the IPAB is unaccountable to anyone or any entity (including Congress) and could therefore possibly exercise outside authority with significant implications for various industries, including pharmaceutical manufacturers.


Interestingly, since the ACA's enactment in 2010, the current Administration has taken no steps to formalize, or even appoint, the IPAB. The ACA calls for the IPAB to be made up of fifteen members, each appointed by the President for six-year terms, and confirmed by the Senate. The President also selects a Chair, while the Vice Chair is chosen among the members. IPAB members are supposed to be nationally recognized experts in healthcare finance, economics, actuarial science, and health facility management, as well as physicians and other providers from various professional and geographic backgrounds. The Secretary of the Department of Health and Human Services (HHS), the Administrator of the Centers for Medicare and Medicaid Services (CMS), and the Administrator of the Health Resources and Services Administration (HRSA) serve as non-voting members of the board.


Each year, CMS' Office of the Actuary is to issue an annual IPAB determination in which it will compare projected five-year average Medicare per-capital spending growth to the statutory benchmark noted in the ACA. The five-year period considers two years prior, the current year, and two subsequent years. Each determination since 2013 has confirmed actual growth to be below the benchmark level.

The Actuary recently stated that the IPAB has not been triggered for the 2016 determination year. From this year onward, the Medicare savings target for IPAB recommendations to meet (if IPAB is targeted) is the lesser of: 1.5% or the percentage of excess Medicare spending.


If – and when – IPAB is triggered, several statutory deadlines come into play. By September 1, the IPAB is to send the draft proposal to two organizations: to MedPAC for consultation and to HHS for comment. By the following January 15, the proposal is to be sent to Congress and the President, along with an explanation, a legislative proposal, and actuarial cost-saving certification. If IPAB was triggered but does not produce its proposal, HHS has until January 25 to send the proposal to Congress. By April 1, Congressional Committees will have considered the proposal and reported on legislative language suggestions. Congress may amend the proposal if the same savings target is met, or may also vote to block the proposal. On August 15, HHS begins automatically implementing the proposal, with FY proposals taking effect on October 1 and CY proposals, Medicare Advantage proposals, and Part D proposals taking effect January 1.


The ACA seems as though it wants the IPAB to address certain areas, while leaving other areas untouched. For example, prior to 2020, hospitals and hospices that are subject to productivity adjustments under the ACA are excluded. Further, IPAB proposals are not to include raising beneficiary premiums, rationing care, changing Medicare eligibility criteria, or increasing cost sharing.

The IPAB is also limited by statute to only make recommendations on the Medicare program and dual-eligible listed beneficiaries. The IPAB should also give priority to recommendations that extend Medicare solvency, improve healthcare delivery, improve access to evidence-based-services in rural areas, and consider the impacts on provider payments.

Potential Proposals

As with any other uncertainty, stakeholders are trying to bring some certainty to the game by speculating on the areas that are most likely to be touched with it comes to IPAB-driven cuts. Some ideas include: giving HHS the authority to negotiate drug prices in Medicare Part D, implementing a Part B formulary, adopting MedPAC's Part D recommendations on reducing Part D reinsurance and eliminating antidepressant and immunosuppressant drugs' protected class status, and increasing the coding intensity adjustment received by Medicare Advantage plans.

Potential Timelines

In its June 2016 report, the Medicare Trustees projected that the IPAB will be triggered in the 2017 determination year and again in 2022, 2024, and 2025. A 2017 determination year trigger would result in a 2019 implementation year for proposals, barring congressional intervention.


While the trigger has once again been averted, IPAB determinations are an annual process and according to the Medicare Trustees report, it is likely that the threshold will be exceeded next year. It is likely that next spring, stakeholders will once again focus on the IPAB as the CMS actuarial determination and Trustee report approach.

May 14, 2015

Update on the Medical Device Tax Repeal Efforts

Medical Device

The Medical Device Tax, instituted as part of the Affordable Care Act, is a tax of 2.3 percent on the sale price of medical device products. There has been considerable pushback against the tax—with members of Congress from both sides of the aisle arguing that it stifles innovation and costs jobs. While there has been a lot of talk about a repeal, the issue has seemed to stall until recently.  

In late April, the United States Senate Committee on Finance held a hearing entitled “A Fresh Look at the Impact of the Medical Device Tax on Jobs, Innovation and Patients.” In the lead-up to the hearing, Finance Committee Chairman Orrin Hatch (R-UT) stated that the Committee plans to mark up a bill to repeal the tax “soon,” notes Cooley Health Beat.  

The hearing itself is quite interesting. Senator Patrick J. Toomey (R-PA) started things off by holding up various medical devices—including a mechanical heart pump, a spinal implant, and a vagal nerve stimulator for epilepsy—all of which vastly improve patients’ lives but which took millions of dollars in losses to bring to market before ever showing a profit. The device tax only magnifies these losses. Toomey noted that at least one manufacturer, in order to offset the costs of the medical device tax, would be building its next factory outside the U.S. Further, the tax has cost jobs, as a number of speakers testified

Toomey also raised an important point when discussing how the tax works in practice:

My view is that the tax, the Medical Device Tax, is not only onerous on its scale, but it’s bad in its design. It is a tax on sales, not a tax on profits. And so these companies that I alluded to that spent large sums of money making these product and bringing them to market, they were losing money years, even when they started to have sales. The initial sales those years were not enough to be profitable. To impose a tax on those sales prior to there even being a profit, it just adds to the debt load that these companies have to carry. And there is only so much debt that can be financed. This is one of the concerns that I have. The design of this tax is very very unfortunate.

In the House: Protect Medical Innovation Act "prior to Memorial Day recess"

Even more recently, a group of 18 Democrats in the U.S. House of Representatives urged House leaders to pass H.R. 160, the "Protect Medical Innovation Act," that would repeal the device tax. The bill is sponsored by Rep. Erik Paulsen (R-Minn.) and Rep. Ron Kind (D-Wis). 

In a May 1 letter written by Rep. Scott Peters (D-Calif.) and co-signed by 17 other Democrats, the lawmakers said that the medical device tax is blocking new medical technology breakthroughs and ultimately harming patients. Furthermore, the tax is harming the employment outlook of a vibrant sector. “The medical technology industry directly employs over 400,000 Americans,” states the letter. “The industry is primarily comprised of small and medium-sized businesses and American companies representing 38% of the global market.” Importantly, “[o]f the 6,500 medical device manufacturers in the United States, 80% employ fewer than 50 employees," notes Peters. 

The letter was addressed to House Speaker John Boehner (R-Ohio), Minority Leader Nancy Pelosi (D-Calif.), Ways and Means Committee Chairman Paul Ryan (R-Wis.), and Committee Ranking Member Sander Levin (D-Mich.).He urged the House leaders to pass H.R. 160 by the Memorial Day recess. 

The sticking point in getting a medical device repeal has been the lack of a budget offset. Last year, the Joint Committee on Taxation estimated that the tax would raise about $28 billion over the next decade. H.R. 160 doesn’t include a way to offset that expected source of revenue. The White House has indicated that the President would veto a measure that doesn't account for the budget.


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