Monthly Archives: April 2014


By: Pamela Tahim

1) Legally Required Amendments – 28 California Code of Regulations Section 1300.71(m) allows Qualified Health Plans (QHPs) to make material modifications to the underlying contracts so long as they provide 45 days advanced notice with the opportunity to terminate the underlying agreement if the physician does not agree. This is how QHPs are contracting with Physicians to be part of the Exchange, rather than by entering into new contracts.
a) Some Physicians are not aware that they are part of the Exchange and should confirm whether they received this Amendment by calling or emailing the QHPs. Physicians should also determine whether they agree to legally mandated amendments (i.e., to be part of Covered California and the applicable rate schedules.)
b) If a Physician does not agree to an amendment, the Physician should review the underlying contract with the QHPs to determine whether they have time to opt out of the amendment or the entire contract. If there is not time to opt out, Physicians should find out what other options they have.
2) Payment – QHPs will reimburse the Physician according to a fee schedule, typically attached to the Agreement. Language in Agreements: “In exchange for the provision of Covered Services to Members, QHP shall pay Provider the lesser of (i) the applicable reimbursement rates set forth in Exhibit B thereto, or (ii) Provider’s billed charges, in either case, less the Member’s applicable Copayment.”
a) Reimbursement rates may vary depending on the type of health plan the patient is enrolled in. Physicians are advised to get all fee schedules. Understand your patient population and the issues that will come from a different population from the Exchange, to make sure that the pricing is sufficient to cover costs. Physicians are recommended to check each Health Plan’s website on the first day of each calendar quarter for updated pricing.
b) Physicians are required to use their “best efforts” to accept electronic methods of payment and receive related explanation of benefits via electronic funds transfer. This means Physicians will need to take steps to make sure they can accept electronic methods of payment to prevent being in breach of the contract with the QHPs.
3) Physicians are Required to Collect Copayments, Deductibles and Coinsurance – Only Physicians are responsible for collecting copayments, deductibles, and co-insurance. This can create collections issues with grace periods under the ACA.
a) Physicians should be aware that depending upon the type of plan selected, a patient can have significant cost-sharing for copays and deductibles with an Exchange. This may result in greater incidence of bad debt and increased administrative costs due to increased collection efforts.
b) Physicians should require copays at the time of service.
c) Physicians should implement a policy to check the insurance eligibility of each patient prior to seeing them.
d) Physicians should implement a policy to require copayments and deductibles be paid prior to seeing a patient unless there is an emergency situation.
e) Physicians should consider hiring a billing/collection company to assist with the above.
4) Termination of Contracts – The contracts with the QHPs have two ways of terminating, either mutually without cause, or unilaterally if it is for cause. Generally, either party may terminate the contract without cause by providing fair written notice (typically 120 days prior). Generally the term of the contracts is for one year with automatic renewal annually.
If the termination is for cause, the QHP must give notice of deficiency to cure. There are provisions that allow for immediate termination, which Physicians should review and make sure they are aware of. Physicians can terminate the contract if a legally required amendment causes financial hardship. Physicians are advised to review termination clauses associated with exchange products carefully because for some contracts such as Blue Cross and Blue Shield, if they did not opt (in/out) prior to the deadline under the QHP, then they have to opt out of the entire PPO Plan.
5) Dispute Resolution Procedures – Contracts with the QHPs have specific dispute resolution procedures that require the Physician to first file a complaint with the QHP’s internal grievance department, meet and confer, and then use binding arbitration if not resolved by the prior methods. If the Physician does not follow this process, the QHPs can argue that the Physician failed to exhaust the administrative remedies and be barred from pursuing his/her claim.
6) Out of Network Referrals – Contracts with QHPs have very strict provisions regarding out of network referrals and it can be a breach of the contract with the QHP if it is not followed. Generally QHPs require Physicians to refer patients to participating providers unless written authorization has been granted in advance by the QHP, unless it is an emergency.
7) Nondiscrimination Clauses – Contracts with QHPs have nondiscrimination clauses so that Physicians cannot deny care to patients simply because they are enrolled in Covered California.
8) Compliance with state and federal laws – Physicians should be aware of their obligations to have an up to date Health Insurance Portability and Accountability Act (HIPAA) and Electronic Medical Records (EMR) compliant system or they will be in breach of the contract with the QHP.
9) Maintenance of Malpractice Insurance and Medical License – Physicians are obligated to maintain their medical license free from any restrictions or limitations and also to maintain medical malpractice insurance, or they will be in breach of the contract and could be terminated for cause without the ability to cure.
10) QHP’s Policies and Procedures – Physicians are generally required to comply with all QHP’s policies and procedures, so it is highly recommended that they obtain a copy of the QHP’s Provider Manuals and review them.


Regulatory Backdrop for Direct Primary Care: The Future of Concierge Medicine Under the Accountable Care Act.

How does the Accountable Care Act deal with cash practices?

Actually, quite well. Well, sort of.

The ACA authorizes HHS to permit qualified health plans (QHPs) to provide coverage through a qualified “direct primary care medical home” plan. The plan has to provide coverage that meets certain criteria (as developed by the Secretary of HHS) and that the QHP, meeting all other applicable requirements, ensures coordination of such services with the entity offering the QHP. Huh?
With respect to implementing guidance, this provision was addressed in 2012 in CMS Exchange/QHP final regulation, in which CMS codified the treatment of direct plans. The provision authorizes QHP issuers to provide coverage through a direct PCMH that meets the standards established by HHS, provided that the QHP meets all standards otherwise applicable. CMS in its final rule addressed comments raised during the proposed rule-making process relative to what those standards might look like, noting in the final rule that direct PCMHs need not be accredited in order to participate in QHP networks. However, CMS “encourage[d] QHP issuers to consider the accreditation, licensure, or performance of all network providers.”

CMS opted in the final rule not to set firm requirements or thresholds
that would necessitate that QHP issuers contract with a specified number or percentage of direct PCMHs. Thus, CMS in its final rule, does not direct that Exchanges create incentives for contracting with direct PCMHs; instead CMS “encourage[s] Exchanges to promote, and QHP issuers to explore innovative models of delivery along the care spectrum.” Thus, there does appear to be an opportunity for Exchanges and QHP issuers alike
to promote and include such models, but per the final guidance on this provision, there is no obligation to do so.

In California, Covered California does not explicitly recognize direct primary care.  There are attempts in the legislature to allow for these cash practices. However, it is generally agreed that practices that accept monthly payments for primary care — similar to the way insurance covers health care, but without the insurance—will pass muster in the state. Instead of filing claims through an insurer, participants — individuals and employers — pay a monthly membership fee directly to their health care providers.

The newer primary care models could come in many flavors:

• Hybrids that offer fee-for-service insurance or a flat monthly fee (not insurance);
• Access model, which charges members an annual or monthly fee for providing enhanced services and bills insurance companies; and
• Qliance’s brand of care, the direct practice model, which charges a flat fee for unrestricted access to primary care services and does not bill insurance.

Does the cash practice make sense?  Take a look at the practices on Yelp that have taken the leap.

By Matt Kinley, Esq.




ICD-10 Gets Moved to 2015 or…..

ICD-10 Humor


California Physicians Express Concerns 

Physicians are expressing deepening frustration with California’s version of the Accountable Care Act’s Health Insurance Market place, known in California as “Covered California,” or the Exchange.  Covered California has the reputation for being the best run health care exchange in the nation but even it is suffering from severe problems during this early going.  Physicians are frustrated with administrative issues, the collection of deductibles and co-pays, and the lack of clarity in qualified health plan’s provider contracts.  Most of all, they express contempt for Covered California’s  “narrow networks” and what it means for the physician’s practice and their patients.


What is a Narrow Network?

Bernard Wolfson at the Orange County Register describes the Narrow Network like this:

“Welcome to the “skinny” medical provider network.

The insurers say they are pressured to keep premiums in check but have been left with fewer tools to do it. Health plans that applied to sell their wares in Covered California, the state-run insurance exchange, competed largely on price.

But at the same time, they’re required to provide standardized benefits that not everybody needs or wants, including things like prenatal care, pediatric services and treatment for substance abuse. That tends to raise premiums.

One of the few effective ways to reconcile these countervailing demands, insurers say, is to eliminate higher-cost hospitals and doctors. As a result, consumers are getting thinner pickings, but at lower prices.”  (OC Register, November 13, 2013.)

Narrow networks are needed to keep premiums down.  The idea is to first find those doctors and hospitals agreeable to receiving lower reimbursement for healthcare services. Second,  load them up with patients.

2014 contracts from Covered California Qualified Health Plans are really not much different than provider contacts from prior years.  They still maintain the “fee for service” model that providers have grown use to.  Change is coming. Buried in the contracts with the qualified health plans are agreements to move over to value based payment in the future.  That is, providers will be expected to take the risk that payments from the health plans will cover the actual cost of treatment.

What’s Wrong With Narrow Networks?

Some of the issues physicians have been suffering from are listed below:

  1. Finding Specialist.  Many primary care physicians are unable to find specialist who are participating in Covered California’s qualified health plans.  Finding the specialist, even an orthopedic to set a broken arm, as proven to be impossible in some areas.
  1. Hospital Utilization.  Many hospitals have not agreed to the lower rates offered by qualified health plans under the Exchange. Often, a patient will find that their doctor is under one Covered California health plan, but their hospital is not.
  1. For Medicaid recipients it will be even harder. California is expected to enroll two million Obamacare Medi-Cal beneficiaries. Only about half of California doctors accept new Medi-Cal patients and the Medi-Cal doctor payment rates, already among the lowest in the nation, are going to be cut by 10 percent just as the Obamacare expansion begins. Medi-Cal waiting lines for specialist care are already critical.
  1. Health Plans are not accepting doctors.  Some specialists have been told that the health plans are no longer accepting physicians.
  1. Patients will not be able to go to their old doctor, and in some cases won’t find a doctor that will take them at all.

Policy Concerns.

The problem with fixing California’s narrow networks is that premiums for the health insurance will skyrocket. Federal regulations do require that health plans under the exchanges  have “reasonable” provider networks.  Health and Human Services is looking to stiffen these regulations in the near future.  California law has provider network requirements.  California’s Health and Safety Code  has certain requirements for provider networks, requiring a hospital to be located within 15 minutes of each and every enrollee and requires certain care to be completed within certain time frames. (Title 28, California Code of Regulations, Section 1300.51(c). California Health & Safety Code sections 1342, 1367 & 1367.03.)

While Covered California has tacitly accepted these narrow networks as a method of keeping premiums low, there is growing concern about how such networks will change healthcare in California.  David Jones, the California Insurance Commissioner held hearings in December on this issue.  Look for proposed regulations from the Department of Insurance later this year.

By Matt Kinley, Esq.  Mr. Kinley is a healthcare attorney in Long Beach, California. 

New Tools to Help Providers Conduct Security Risk Assessments

The Office of the National Coordinator for Health Information Technology (ONC), in collaboration with the HHS Office for Civil Rights (OCR), recently released a jointly developed tool designed to assist small and medium sized practices (one to ten healthcare providers) in conducting  security risk assessments (the “SRA Tool”). This tool can be found at

The HIPAA Security Rule mandates that covered entities and business associates assess the potential risks and vulnerabilities to the confidentiality, integrity and availability of the electronic PHI they hold and take appropriate measures to minimize those risks and vulnerabilities.  These steps are a crucial part of an entity’s Security Management Process and considered by HHS to “form the foundation upon which an entity’s necessary security activities are built.”

The Rule does not specifically outline the steps entities should take in conducting a risk analysis or dictate how often it should be done.  In previous guidance, HHS indicated that covered entities could use, but were not required to use, any of the National Institute of Standards and Technology (“NIST”) publications, such as SP 800-30 – “Risk Management for Information Technology Systems.”  Others have used the OCR Audit Program Protocol to guide them in conducting risk assessments or developed home grown tools.

Use of the SRA Tool is not required by the Security Rule or by OCR, nor does it guarantee compliance with HIPAA or state privacy and security laws.  The purpose of this specific tool is to “assist healthcare practices in performing and documenting a Security Risk Assessment.”  Although small to medium practices are the target audience, larger organizations or practices can benefit from viewing the tool and tailoring it to their specific needs. The tool does not include provisions to assess for compliance with the Privacy Rule.