Baker Donelson | Washington, D.C. Update

April saw the debate in Congress heat up as Justice Neil Gorsuch was confirmed for a seat on the Supreme Court, House Republicans suspended, restarted and then ultimately succeeded in their effort to repeal and replace the Affordable Care Act, and – after a few hiccups – an agreement was reached to keep the federal government open through the end of September.

With the exception of the two week-long recesses for Memorial Day and the Fourth of July, Congress will remain in session continuously through the end of July, meaning significant legislation in a variety of issue areas will be considered in the coming months, including health care, 2018 appropriations and tax reform. In this month’s version of the Washington, D.C. Update, we discuss:

·         House Makes Good on Promise to Repeal and Replace Affordable Care Act

·         Agreement Reached over FY17 Appropriations Package

·         FY18 Budget Negotiations Begin in the House and Senate

·         Trump Administration Proposes Significant Tax Overhaul

·         Senate Confirmations Continue Their Slow March Forward

·         Trump Administration Agrees Not to Immediately Withdraw from NAFTA
Please feel free to reach out to me for additional information on these topics or other issues of importance.

Sheila Burke
Chair, Government Relations and Public Policy
Baker Donelson



House Makes Good on Promise to Repeal and Replace Affordable Care Act

On May 4, 2017, the House of Representatives succeeded in passing legislation to repeal and replace the Affordable Care Act (ACA). The American Health Care Act (AHCA) now moves to the Senate where its passage is far from assured and will likely result in significant changes to the House-passed legislation.

The AHCA, which narrowly passed 217 to 213 with all House Democrats and 20 House Republicans in opposition, closely reflects the version that was pulled from consideration only minutes before a vote on March 24. The bill, if it becomes law, would overhaul the American health care system, dramatically altering the nation’s individual health insurance marketplace, ending the Medicaid expansion and converting the program to a block grant or per capita cap system, repealing practically all taxes incorporated in the ACA, ending federal funding for Planned Parenthood, and giving states significantly more say in how and to what level health insurance is regulated in their states.

Looking forward, the AHCA now moves to the Senate, where Senate Republicans must decide how to advance a bill that most analysts agree cannot pass the Senate in its current form. Majority Leader Mitch McConnell (R-KY) has already said he will wait until the Congressional Budget Office releases its updated analysis of the bill’s impact (expected in the next two weeks) before deciding on next steps. A number of moderate and more conservative Senate Republicans have expressed concerns with provisions of the legislation, including age-adjusted tax credits, funding cuts to the Medicaid program, the defunding of Planned Parenthood and the waiving of protections for individuals with pre-existing conditions. Furthermore, key Senate Republican leaders have indicated that the process will not be rushed. Senator Orrin Hatch (R-UT), Chair of the Senate Finance Committee, said Senators should “manage expectations” and “remain focused on the art of the doable.” Meanwhile, Senator Lamar Alexander (R-TN), Chair of the Senate Health, Education, Labor and Pensions Committee, said “we will take the time to get it right.”

A working group made up of Senators McConnell, Hatch, Alexander, Mike Enzi (R-WY), John Thune (R-SD), Mike Lee (R-UT), Ted Cruz (R-TX), Tom Cotton (R-AR), Cory Gardner (R-CO), John Barrasso (R-WY), John Cornyn (R-TX), Robert Portman (R-OH) and Pat Toomey (R-PA) has been tasked with developing a proposal.

For more information on the passage of the AHCA, please see our alert, “House Makes Good on Promise to Repeal and Replace Affordable Care Act.”

Takeaway: With passage of the AHCA, House Republicans made good on their more than seven-year effort to repeal and replace the ACA. The bill, which passed by the narrowest of margins, now moves to the Senate where it will face an uphill climb and will likely incorporate significant changes if it is to be successful – which is far from sure thing. Expect the ongoing debate over the future of the ACA to continue into the summer, if not the fall or beyond.



Agreement Reached on FY17 Appropriations Package

Over the past few weeks, it looked increasingly possible that Congress might fail to meet an April 28 deadline for adopting a fiscal year 2017 (FY17) appropriations package, potentially leading to a shutdown of the federal government. In March, negotiations seemed to be on track, but in early April, President Trump insisted that the package include additional funding for the military and, controversially, funding to begin the design and construction of a wall on the U.S.-Mexico border. There was also briefly a time when the President seemed to imply that he would suspend federal payments for the ACA’s Cost Sharing Reductions (CSR), leading Democrats to insist on funding for CSRs be included in the appropriations measure.

However, after a one-week extension, Democrats and Republicans agreed on an omnibus appropriations package to keep the federal government running through the end of the fiscal year. The mammoth legislation contained the 11 unfinished FY17 appropriations bills, providing spending for nearly every corner of the federal government. In the House, the legislation passed 308 to 118 with 103 Republicans and 15 Democrats bucking their leadership to vote against the measure. In the Senate, it passed 79 to 18 with 18 Republicans voting against the measure. Democrats are claiming victory, saying they eliminated more than 160 Republican “poison pill riders” (including all funding for a border wall), and Republicans are hailing the $15 billion increase in supplemental defense spending and $1.5 billion for non-wall border security efforts. The bill also contains $295.9 million to help shore up Puerto Rico’s Medicaid fund and $1 billion for a health care and pension benefits fund for retired coal miners, boosts spending at the National Institutes of Health by $2 billion, and cuts the Environmental Protection Agency by just one percent (roughly $80 million).

Takeaway: Republicans, eager to avoid a government shutdown, were pleased with increased supplemental funding for the military and generally agreed to push major disputes (such as funding for Planned Parenthood) off until this summer and the fall’s negotiations over the FY18 budget. In what was expected to be the first tough appropriations negotiation of the Trump Administration, Democrats were largely successful in protecting domestic spending and rejecting funding for President Trump’s border wall.



FY18 Budget Negotiations Begin in the House and Senate

While the FY17 appropriations package dominated the headlines, the debate surrounding the FY18 budget has begun in the House and Senate Budget Committees. House Budget Chair Diane Black (R-TN) said the House Budget Committee is working toward having a markup the week of May 15 and going to the floor the following week, just ahead of the week-long Memorial Day recess. The budget resolution sets forth Congress’ policy preference as well as spending and revenue targets for the coming fiscal year. It will also likely serve as a vehicle for moving forward with tax reform under the budget reconciliation procedures. Chairwoman Black committed to balancing the budget in ten years, much like past Republican budgets have done, transforming Medicare into a premium support model, and said that the package may include some sort of Medicaid reform. In the Senate, Budget Committee Chair Michael Enzi’s (R-WY) staff have been working on a budget resolution, but few discussions have taken place among Republican members of the Committee. The White House said it would release the President’s full FY18 budget proposal on May 22.

Takeaway: With the FY17 appropriations package largely mirroring past Obama-era packages, Republicans and the Trump Administration are gearing up to have a much more significant reshaping of the federal government with the FY18 budget and appropriations cycle. If the ACA repeal effort currently in the Senate is not ultimately successful, expect to see Republican calls for significant changes to health care as part of the coming budget and appropriations fight, including converting Medicare into a premium support program and transforming Medicaid to a block grant or per capita cap.



Trump Administration Proposes Significant Tax Overhaul

On April 26, Treasury Secretary Steven Mnuchin and Gary Cohn, director of the National Economic Council, presented the Trump Administration’s tax reform proposal to the media. The proposal consisted of a one-page outline that hewed closely to President Trump’s tax proposal offered during the campaign. The outline calls for lower taxes across the board for both individuals and businesses. On the individual side, President Trump’s proposal seeks to eliminate most itemized deductions except for the mortgage interest deduction, charitable donation deduction and retirement savings deduction. It would also reduce the current seven income brackets to three – 10, 25 and 35 percent – although officials did not offer income ranges for each bracket. It also eliminates the estate tax and the alternative minimum tax, doubles the standard deduction and calls for some sort of a dependent care benefit.

Under the proposal, business taxes would be cut from 35 percent to 15 percent across the board and the new rate would apply to both corporate income as well as pass-through income. The proposal also includes a transition from a global tax system to a territorial tax system and creates an as-of-yet-unspecified, one-time opportunity to repatriate existing profits held overseas. Notably, the proposal does not include the Border Adjustment Tax supported by Speaker Paul Ryan (R-WI).

Congressional Republicans and Democrats greeted the proposal as expected, with Republicans hailing the proposal as “critical guideposts” and Ranking Democrat of the Senate Finance Committee Senator Ron Wyden (D-OR) calling the proposal “an unprincipled tax plan that will result in cuts for the one percent.” Expect the proposal – which will likely serve as a starting point for debate – to be modified significantly in the coming months. Congressional Republicans are reportedly considering moving forward with the tax reform package under the Reconciliation rules, limiting debate and blunting the threat of a Democratic filibuster in the Senate. If Congressional Republicans elect to follow this path, the so-called “reconciliation instructions” from the Budget Committees to the Senate Finance and House Ways and Means Committees will significantly determine the outline of the debate. However, moving forward under these procedures means any tax reform bill, which as proposed during the presidential campaign was estimated to add about $7 trillion to the deficit, would have to be deficit neutral over ten years. So far, the Administration has not yet identified sufficient pay-fors or spending cuts to fully offset the proposal.

Takeaway: With release of the White House’s tax reform plan, the debate now shifts to Congress, where Republicans in the House and Senate will debate the proposal most likely as part of the FY18 budget process, providing additional substance to the outline presented by the Trump Administration. With its numerous stakeholders and trillions of dollars at stake, tax reform is an incredibly difficult and complex undertaking. Expect the negotiation process to be drawn out and contentious.



Senate Confirmations Continue Their Slow March Forward

Confirmations for key Trump Administration positions continue apace as 21 of the 22 cabinet-level nominees have now been confirmed by the Senate. This is in addition to the April 7 confirmation of Justice Neil Gorsuch to serve as Associate Justice of the Supreme Court. The only outstanding cabinet-level nomination is that of Robert Lighthizer to serve as U.S. Trade Representative. Mr. Lighthizer was reported favorably out of the Senate Finance Committee on April 25, but his nomination has not yet been taken up by the full Senate.

President Trump continues to be behind his predecessors in terms of the rate of both confirmations and nominations. Of the 556 key positions identified by the Partnership for Public Service as requiring Senate confirmation, 27 have been confirmed, 41 have been formally nominated, 23 have been announced but not formally nominated, and 465 have no nominee. 100 days into his presidency, President Obama had 69 appointees confirmed and 118 appointees nominated but not yet confirmed. By day 100, President Bush had 35 positions confirmed and 50 others nominated but not yet confirmed.

Takeaway: The Trump Administration has been comparatively slow selecting nominees for the more than 1,200 Senate confirmable positions. Likewise, the Republican-controlled Senate has taken longer than previous administrations to confirm appointees, averaging 30 days versus President Obama’s average of 24 days and President George W. Bush’s average of 8 days.


Trump Administration Agrees Not to Immediately Withdraw from NAFTA

In a series of tweets on April 27, President Trump said “I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate NAFTA rather than terminate. I agreed subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA. Relationships are good – deal very possible!” The posts represented an abrupt about-face from the day before when presidential advisors put out word that the President was likely to sign an executive order in the coming days to begin the six month clock to withdraw from the North American Free Trade Agreement (NAFTA). Reportedly, President Trump changed course after phone calls with Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau. Initial news reports of a potential U.S. withdrawal caused a tumble in the value of the Mexican Peso, but later sent both it and the Canadian Dollar upwards after news of the renegotiation broke.

Takeaway: In response to President Trump’s continued threats to withdraw from NAFTA, the Governments of Mexico and Canada both agreed to begin renegotiation of the landmark trade agreement. Expect the on-again off-again renegotiation of NAFTA to continue for the foreseeable future.

Vendor Relations – Your Best Friends Really Can Hurt You

By Craig Nazzaro

Your team is only as strong as its weakest link. This platitude may be overused and cliché, but within the data privacy and cybersecurity space, the expression is more of a warning and must be taken seriously as essential advice. Vendors and third-party service providers create a unique challenge to organizations that are looking to streamline the services offered to their customers while implementing controls and safeguards to protect their customer’s data.

There should be a balancing act taking place within each vendor contract, where your organization should be aiming to find the sweet spot of vendor access to your organization’s and your customer’s data, which allows a vendor to provide the requested service without risking your customer’s privacy. Too often an organization will permit a vendor untethered access to their internal systems and/or customer data while also placing insufficient controls on the vendor’s activity. This is a recipe for disaster.

The Tenth Annual Verizon Data Breach Investigations Report addresses this risk by stating, “We recommend all businesses, small and large, ask the right questions to any third-party management vendors about their security practices.” The Report underscores the importance of this advice by pointing out the frequency of hacking through vendor access: “Following the same trend as last year, 95% of breaches featuring the use of stolen credentials leveraged vendor remote access to hack into their customer’s point of sale environments.”

So what are the best practices that can be implemented in order to limit your risk?

Prior to Onboarding

When evaluating vendors and third-parties, you should have a robust due diligence process where your vendors’ data security policies, procedures and controls are thoroughly reviewed. All vendor standards should meet or exceed standards implemented by your organization. In the event of a breach through a vendor, you want to be able to show that your organization was not negligent when it came to onboarding the vendor and did not unknowingly allow for a weak spot in the organization’s data protection plan. This is especially true if, within your industry, you are promoting your organization’s data protection ability.

When negotiating each vendor contract be sure that you provide for data security reporting standards, which will include a timely notification of any breach, attempted breach or other data security incident. Include non-disclosure clauses covering any of your organization’s and/or your customer’s private information. Your agreements should also provide for the right to require changes to standards as external and internal environments change, as this space is evolving on an almost daily basis. It is a mistake to have contacts that call for or define a static security standard that cannot evolve with the best practices implemented within your industry. Finally, your contacts should provide that your organization, or an auditor which you choose, has access to your vendors’ systems.

After these controls are in place, it is also important to have a thorough understanding of what your vendor is doing with the information you permit the vendor to access. For example, as behavioral advertising continues to grow, many marketing departments engage vendors to assist and are unaware of what the vendors are doing with aggregated data that is collected by the vendors at the organization’s request. This is vital information that you should be aware of and possibly disclosing to your customers, depending on your industry and privacy policies.

Oversight Once Engaged

Proper vendor oversight does not end after onboarding is complete. You will need to provide for continued oversight that ensures your vendors are honoring their commitments and living up to the standards and processes laid out in your vendor agreements. Your organization should have controls in place to monitor if data privacy and cybersecurity risks are being appropriately identified, measured, mitigated, monitored and reported to your organization on a consistent basis. These controls should be deployed on a routine basis as frequently as possible.

Vendor data privacy and cybersecurity risks are often only thought of when looking at issues surrounding the Internet of Things (IoT) issues, where certain equipment and vendor-provided devices are creating network and/or data access points and/or FinTech issues, where lenders are entering into vendor agreements to provide services that traditionally were unavailable to borrowers. However, it is important to note that all vendors your organization is employing must be subject to the aforementioned best practices.

As was heavily reported, the hackers in the Target breach of 2013 gained access through Target’s HVAC vendors, as these vendors had remote access to Target’s network to perform maintenance issues. This is a perfect example that it’s not just the vendor’s intended use that poses risk; it’s the access that can be gained through the vendor whether said access was intentionally or mistakenly granted. For this reason, you should always be asking what access will the vendor need and is this the most limited access needed to accomplish the tasks at hand? It may be costly to carve out and limit each vendor’s access, but that cost will be eclipsed by the costs associated with a breach that could have been avoided.

The best practices outlined above are a good start to limit your exposure to hacking through vendor access. These tips will also mitigate your litigation exposure if a breach were to occur through your vendor, by providing an argument that your organization was diligent in attempts to safeguard all customer data. In addition, depending on what industry you are in, there are multiple regulatory risks and privacy issues that need to be addressed and guarded against when allowing vendors access to your internal data.

If you have any questions or concerns about your organizations data privacy and cybersecurity protocols or industry specific questions, please reach out to Craig Nazzaro, Sam Felker, Eric Setterlund or any member of Baker Donelson’s Data Protection, Privacy and Cybersecurity Team and we will be happy to assist.

Craig Nazzaro

What You Need to Do Now: Responding to the Major Cybersecurity Attack Against Organizations

By Alisa Chestler, CIPP/US

Regardless of whether you have experienced any disruptions to date, you cannot ignore the major global cybersecurity attack that continues to plague organizations. A particularly destructive piece of malicious software, the WannaCry ransomware infection has hit more than 100 countries and brought thousands of organization to a grinding halt.

As we continue to assist clients with their current and ongoing issues, Baker Donelson offers some key thoughts and action plans for management, business teams and IT security personnel. First and foremost, as this attack was based upon a known vulnerability, please make sure that your IT team has installed the MS17-010 patch to the Microsoft Windows operating system. For more detailed information, we recommend your IT security personnel keep track of the recent information through the U.S. Computer Emergency Readiness Team (US-CERT), which is a division of the United States Department of Homeland Security. [Multiple Ransomware Infections Reported]


·         Communicate. Prepare and send an alert for employees and staff regarding their roles in preventing such attacks on your networks. For example, remind them to be on the lookout for phishing scams and to report them to the Help Desk immediately if they are making it through your spam filters. Further, remind employees that very few emails contain an “emergency.” Even if an email appears to be from a known source, everyone should be thoughtful when opening email attachments. Please also make sure employees know how to get to the Help Desk 24 hours a day, seven days a week, as system incidents are not limited to a 9-5 workday.

·         Review Your Incident Response Plan. Ensure communication lines among management, counsel and key IT personnel (IT Information Security Team) are open and ready to implement your incident response plan. Pull out the response plan and make sure it specifically anticipates a ransomware attack of this nature. If your plan does not, or if you do not have a written incident response plan, please contact your Baker Donelson counsel for assistance. Documented Incident Response Plans are an expected compliance obligation for all organizations regardless of the size, industry or kind of information maintained by the systems.

·         Know Your Patching Compliance. Patch Management programs are the lifeblood of any IT security structure. Thousands of organizations were immune to this strain of ransomware because they were up-to-date with their patches. Management should ask (if they don’t already know) whether critical patches are up to date. If they are not, initiate a plan to get your programs as current as possible.

·         Use This as an Opportunity. Management, legal and IT security can no longer keep “kicking the can” when it comes to information security. Whether the systems include information on trade secrets or personal information of individuals (including employees), or the systems just keep the machinery up and running, computer systems and programs are the lifeblood of organization. Knowing your compliance and contractual obligations before an event is critical. This is also a good opportunity to revisit some prior decisions. For example, many organizations continue to delay implementing multi-factor authentication. Organizations continue to resist multi-factor authentication for a variety of reasons, including employee morale. However, this tool is widely becoming one of the most important information security protocols.
If your organization has become infected with this (or any other) ransomware and a system is already encrypted, then swift action must be taken. Baker Donelson has an incident response team that can help you systematically address the most pressing issues quickly and efficiently.

Baker Donelson’s Data Protection, Privacy and Cybersecurity Team was recently recognized as a member of the “Honor Roll of Cybersecurity Law Firms” in the United States as determined by The BTI Consulting Group. Recognition as a member of the Honor Roll reflects corporate counsel’s view of the Baker Donelson team as strong cybersecurity performers. To link to the Baker Donelson series on ransomware, please click here.

If you have any questions regarding the topics in this alert, please contact Alisa Chestler, CIPP/US, or any member of the Firm’s Data Protection, Privacy and Cybersecurity Group.

About the Author

Alisa ChestlerCIPP/US


HBMA Washington Report – April Issue

Washington Report – April, 2017

(Covers activity between 4/1/17 and 4/30/17)

Bill Finerfrock, Matt Reiter, Nathan Baugh, Krupa Zachariah, Carolyn Bounds

Washington Report – April Issue

  • House Republicans Pass AHCA
  • CMS Issues ACA Exchange Market Stabilization Final Rule
  • Congress Reaches Deal on $1.1 Trillion Spending Bill
  • HBMA Testifies Before NCVHS on Health Plan IDs
  • MIPS Participation Letters Being Sent
  • Trump Administration Continues to Fill Key HHS Positions
  • Trump Lifts Federal Hiring Freeze But Orders Agencies to Reorganize
  • New CMS Mailbox for Beneficiary Notices Initiative Questions
  • Anthem Loses Appeal – Merger Attempt with Cigna Suffers Major Setback
  • CMS Creates New Administrative Simplification Fact Sheet and Infographic
  • Senate Finance Committee Reintroduces Chronic Care Bill
  • CMS Transmittals

HHS Finalizes Rule Aimed at Stabilizing ACA Individual Marketplace

HHS Finalizes Rule Aimed at Stabilizing ACA Individual Marketplace

By Sheila Burke and Tiffani Williams

On Thursday, April 13, the Department of Health and Human Services finalized a long-awaited regulation intended to stabilize the Affordable Care Act (ACA) individual health insurance marketplace. The final rule tracks closely to the proposed rule by shortening the open enrollment period, tightening eligibility for special enrollment periods, modifying the actuarial values (AVs) used to determine levels of coverage, deferring to states to certify network adequacy, and reducing the threshold requirement for essential community provider (ECP) network participation.

Significant changes to existing regulations include:

  • Guaranteed Availability of Coverage: Allows issuers to require individuals to pay any outstanding premium debt from the prior 12 months of service prior to enrolling in a plan without violating guaranteed availability guidelines.
  • Open Enrollment Period: Shortens the open enrollment period for 2018 from three months to six weeks. Open enrollment will now extend from November 1, 2017 to December 15, 2017, rather than until January 31, 2018.
  • Special Enrollment Periods: Requires pre-enrollment verification of all applicable individual market special enrollment periods for all states served by the platform. Previously, consumers had the option to self-attest to their eligibility for special enrollment.
  • Levels of Coverage: Increases the “de minimis variation” used in the actuarial variations to determine the level of coverage of a plan from +2/-2 to +2/-4 for all non-grandfathered individual and small group plans. For expanded bronze plans, the de minimis variation will be expanded from +5/-2 to +5/-4. Allows states to impose stricter AV requirements so long as they are consistent with federal law.
  • Network Adequacy: Defers to states to certify whether a plan sold under a federally-facilitated exchange meets network adequacy requirements. For states that do not have the authority or means to conduct such network adequacy reviews, Centers for Medicare and Medicaid Services will now rely on an issuer’s accreditation from an HHS-recognized accrediting entity.
  • Essential Community Providers: Allows issuers to continue to write-in ECPs to meet the threshold requirement for certification and reduces the threshold from 30 percent to 20 percent of available ECPs in a plan’s service area.

It is important to note that while insurers have viewed the final regulation as an important step toward stabilizing the individual marketplace, there remain challenges to the marketplace outside the scope of this regulation. In particular, insurers have made clear that the continuation of cost-sharing reduction subsidies for individuals between 100 and 250 percent of the federal poverty level is critical to ensuring both affordable coverage and their continued participation in the marketplace.

Please see our February 16 alert “HHS Makes Its First Move to Stabilize the Individual Health Insurance Market” which provides additional analysis of the changes finalized yesterday.

If you have any questions regarding the finalized regulation or are in need of assistance, please contact Sheila Burke, Chair of Baker Donelson’s Government Relations and Public Policy Group or Tiffani Williams, Senior Vice President and Public Policy Advisor with The Daschle Group, a Public Policy Advisory of Baker Donelson.


About the Authors

Sheila Burke
Washington, D.C.

Tiffani Williams
Washington, D.C.

HBMA Washington Report – March Issue

Washington Report – March, 2017

(Covers activity between 3/1/17 and 3/31/17)

Bill Finerfrock, Matt Reiter, Nathan Baugh, Krupa Zachariah, Carolyn Bounds

Washington Report – March Issue

  • House Republicans Cancel Vote on American Health Care Act
  • House Republicans Pass Two Health Reform Bills
  • CMS Delays Bundled Payment Model Demonstration
  • CMS to Release MIPS Exemption Notifications Soon
  • Trump Administration Releases Final ACA Enrollment Figures
  • GAO Evaluates HHS Efforts to Encourage Patient Use of Electronic Health Data
  • Trump Administration Fills Several Key HHS Positions
  • MedPAC Releases Report to Congress – Stay the Course on Physician Payments
  • HHS Needs More Time and Resources to Address Appeals Backlog
  • President Trump Releases Preliminary Budget Request to Congress
  • HHS Creates New Patient Empowerment Website
  • CMS Program Transmittals

Dear Doctor, Tell Me What You Really Think


Every two years one of the most interesting perspectives on medicine in America is published by the Physicians Foundation.…/Biennial_Physician_Survey_2016.pdf

In the 2016 survey, 17,236 physicians responded to a wide variety of questions about their practice, the state of the healthcare industry, and perspectives on specific topics, including ICD-10.  Although ICD-10 was still relatively new in 2016, the responses raise a red flag.  Not that ICD-10 is a problem in and of itself, but that it is one more issue physicians have identified as problematic in the big picture.  For some issues, the same or similar findings have now been published for six years, with some minor fluctuations, but appear to have fallen on deaf ears.  These very same issues have been raised by numerous other industry stakeholders.  These issues are the ones that scream administrative simplification is an oxymoron, that many EHRs are a barrier to quality care and the physician patient relationship, that far too much time is spent on red tape and non-clinical work, that the administrative burdens are overwhelming, that morale is low for many, and that both the patients and physicians have been lost in quest for “quality”.

While each of the issues could be addressed individually, I believe we need to start with the big picture.  ICD-10 is just one small piece of the quality picture.  There are the mandates enacted through the Affordable Care Act (ACA), the Medicare Access and CHIPS Reauthorization Act (MACRA), the Merit Based Incentive Payment System (MIPS), the electronic health records (EHR) incentive program, etc.  When you add all of the other regulatory and clinical practice requirements physicians must meet, it is quite easy to see how quickly one can be completely overwhelmed.  Unfortunately, each of these regulations seems to increase exponentially in complexity and difficulty.  The rush to implementation has taken precedence over getting it right.

One thing EHRs were supposed to do was to greatly improve clinical documentation accuracy and thoroughness.  As a result, diagnostic coding would be more specific, more accurate and better communicate patient care and outcomes.  This would not only result in higher quality care but also in better data for analysis and more appropriate reimbursement.  However, the physician survey results found only 29% of physicians believe EHRs improved quality of care, 25% believe it increased efficiency, and a disheartening 11% believe patient interaction was improved.  60% of responding physicians reported EHR has detracted from patient interaction.

Specific to ICD-10, the survey results also reflect a failure to meet the well intentioned goals.  Only 6% of physicians see improved efficiency, 6% saw any increased revenue and even more disappointing, only 5% believe patient care has improved.  Although 52% of responses said they saw no impact from ICD-10 implementation, 42.5% said it detracted from their efficiency.

It seems plausible that quality has gotten lost in regulatory requirements that impose additional time and non-clinical work burdens.  Based on the survey, 21% of a physician’s time is spent on non-clinical work such as pre-authorizations necessary to meet payor reimbursement demands.  Aggregated, that lost clinical time is estimated to be equal to 168,000 physicians!  It also seems plausible that when physicians consistently report they are over extended, the time they do have is prioritized on their patient interactions and care, not becoming experts in all the regulatory demands and “quality” expectations.  If EHRs are not efficient, clinical documentation improvement will fall victim to those inefficiencies.  If clinical documentation improvement does not occur, the ICD-10 goals will also not meet the expected results.

Quality care, in the opinion of many physicians, has a much better chance of being realized when how, what, when and why are not based on regulatory and idiosyncratic payor requirements.  Will every physician agree with the findings?  Of course not.  But there is a strong message from more than 17,000 physicians that we should heed.

“The happiness of too many days is often destroyed by trying to accomplish too much in one day.  We would do well to follow a common rule for our daily lives – DO LESS, AND DO IT BETTER.”  Dale E. Turner


Holly Louie, RN, CHBME, is the compliance officer for Practice Management Inc. and the 2016 HBMA president.


HBMA Washington Report – February Issue

Washington Report – February, 2017

(Covers activity between 2/1/17 and 2/28/17)

Bill Finerfrock, Matt Reiter, Nathan Baugh, Krupa Zachariah, Carolyn Bounds

Washington Report – February Issue

  • ACA Replacement Starts to Take Shape
  • Price Gets Confirmed, Verma One Step Away
  • HHS OIG Hotline Number Used in Fraud Scam
  • National Health Expenditures Data Shows Accelerating Growth in Healthcare Spending
  • Federal Courts Block Mega Insurance Mergers
  • Trump Administration Easing Up on Insurers for 2018 Health Exchanges
  • CMS Extends 2016 PQRS Reporting Deadline for Reporting via EHR
  • Major Changes to Medicaid are on the Horizon
  • CMS Awards MACRA Technical Assistance Grants to Help Small and Rural Practices
  • Filing a HIPAA Transaction Complaint
  • CMS Transmittals

HBMA Washington Report – January Issue

Washington Report – January, 2017
(Covers activity between 1/1/17 and 1/31/17)
Bill Finerfrock, Matt Reiter, Nathan Baugh, Krupa Zachariah, Carolyn Bounds

Washington Report – January Issue

  • State of the Affordable Care Act
  • Senate Committees Hold Confirmation Hearings for HHS Secretary Nominee
  • President Trump Takes Swift Action on Many Issues with Executive Orders
  • PQRS and Meaningful Use Updates
  • HHS Allows Disclosure of PHI in Public Health Emergencies
  • Aetna- Humana Merger Blocked by Federal Judge
  • OIG Review of MACs Shows Improvement but Also Persistence of Security Gaps
  • Federal Judge Indefinitely Delays Patient Steering Rule
  • 2016 CAQH Index Shows Continued but Slow Adoption of Electronic Transactions
  • President Trump Nominates Neil Gorsuch for the US Supreme Court
  • CMS Transmittals

HBMA Washington Report – December Issue

Washington Report – December, 2016

(Covers activity between 12/1/16 and 11/31/16)

Bill Finerfrock, Matt Reiter, Nathan Baugh, Asad Karamally, Carolyn Bounds

Washington Report – December Issue

  • Quality Payment Program Begins (A Friendly Reminder)
  • Republicans to Make ACA Changes an Immediate Priority
  • CMS Will Not Finalize Medicare Part B Drug Reimbursement Proposal
  • HHS Updates Civil Monetary Penalties and Anti-Kickback Safe Harbors
  • GAO: Small and Rural Practices Face Challenges in Value-based Payment Models
  • National Healthcare Spending Increased by 5.8 Percent in 2015
  • CMS to Require Disclosure of Third Party Premium Payments by Dialysis Facilities
  • Reminding Providers to Revalidate
  • CMS Finalizes 2018 Health Insurance Exchange Rule
  • CMS Finalizes Bundled Payment Model for Hip and Femur Fractures
  • Program Transmittals