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ICD-10 Delayed for At Least One Year

A vote by the Senate on March 31, 2014, will delay the implementation of the ICD-10 medical diagnosis and procedure codes for at least one year, according to Modern Healthcare.  The delay is included in the Protecting Access to Medicare Act of 2014, which the House of Representatives approved by a voice vote on March 27, 2014.

The legislation, approved by the Senate 64-35, also prevents steep cuts to Medicare physician payments from going to effect for one year, according to Modern Healthcare.  The delay in ICD-10 means the coding system will not be in effect until at least Oct. 1, 2015. In February 2014, Centers for Medicare and Medicaid Services Administration Marilyn Tavenner said there would be no more delays in the implementation of ICD-10.

According to Modern Healthcare, trade groups including the American Health Information Management Association and the American Hospital Association oppose the delay.  Other groups, including the American Medical Association, expressed concerns about meeting the Oct. 1, 2014, deadline set by the CMS and the costs of implementing ICD-10.

Overall, the ICD-10 issue was not a focus during the March Senate debate about the bill. Many senators spoke about their disappointment with the short term solution for the Medicare physician payments.  Senate Majority Leader Harry Reid (D-Nev.) said the legislation was “not ideal” but that he lacked the votes for a permanent solution. 

Without the Medicare delay, physician payments would have been cut by 24 percent. The bill also partially delays enforcement of a “controversial” inpatient rule for hospitals, known as the two midnight rule, for six months. 

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Will the CFPB Regulate Medical Debt?

As the Consumer Financial Protection Bureau develops rules for the debt collection industry, questions about inclusion of medical debt in the process remain unanswered. The CFPB has excluded medical debts from much of its work to date. There also remains some question whether medical debt falls within the bureau’s scope under the Dodd-Frank Act.  

ACA International recently submitted comments in response to the bureau’s Advance Notice of Proposed Rulemaking about debt collection. Specifically, the bureau should recognize that the debt collection market is extremely varied in the types of debt being collected and the nature and size of the nation’s debt collectors encompasses a broad scope.   

Excluding mortgages and auto loans, debt issued by financial institutions no longer represents the largest focus of debt collection activity in the United States, either by dollar amount or by number of consumers it reaches, according to the bureau. This has been surpassed by medical debt. During a House committee hearing, primarily about small business regulation, in August 2013 CFPB Director Richard Cordray also discussed medical debt and the “larger market participant” rule. The rule allows the bureau to have supervisory authority over debt collection companies with more than $10 million in annual receipts from consumer debt collection activities.

During the hearing Cordray said, in response to a question about medical debt on credit reports, “That is something we have been grappling with at the bureau, not only as medical debt affects credit reporting bureaus but also as it affects debt collection, which obviously intersect with credit bureaus. We are in the process of working through issues of medical debt as it relates to what will soon be our supervisory coverage of debt collectors.”

More recently, in February 2014, the American Hospital Association submitted a letter to the CFPB requesting consideration of the significant differences between medical debt and consumer debt when setting policies.  The AHA notes that, unlike other service providers, hospitals:

• Collect, in most cases, only a very small portion of the initial bill at the time of service.

• Provide, by law, certain medical services without regard to a patient’s ability to pay.

• Seek the majority of their reimbursement through a complex, post-visit billing process and working with numerous potential payers.

Despite various efforts to collect payments, hospitals are left uncompensated for a considerable amount of their services, according to the letter. An AHA survey of 5,000 community hospitals found that their uncompensated care totaled $45.9 billion, or 6.1 percent of expenses.  

“Concepts that may be relatively simple in the context of consumer debt can be much more complicated in the context of medical debt owed to hospitals,” AHA Senior Vice President and General Counsel Melinda Reid Hatton said in the letter. “For instance, the concept of when a mortgage payment, a credit card payment or a bill from a service provider to a consumer is ‘due’ or ‘past due’ may typically be straightforward and governed by a credit agreement. However, when a particular medical account becomes past due will depend on the post-visit billing process that must occur to determine how much the patient ultimately owes.” 

Therefore, AHA noted that strict definitions of terms and concepts such as “due,” “past due” or “delinquency” may not apply in the same manner for medical debt as for other forms of debt. AHA asked the CFPB to avoid defining delinquency based on specific number of days past-due and recognize that hospitals do not typically extend credit to patients or provide consumer financial products or services.

The association also asked the CFPB to recognize consumer protections in the Internal Revenue Services’ requirements for nonprofit hospital debt collection practices. Reid Hatton explained that hospitals may not use “extraordinary collection actions,” before determining if a patient is eligible for financial assistance. AHA believes this financial assistance process may address the CFPB’s concerns about insufficient validation and premature reporting to a credit agency.

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Study: Massachusetts Health Care Reform Led to Declines in Bankruptcy, Debt and Collection Balances


Examining the Massachusetts health care model, which served as the basis for the Affordable Care Act, researchers concluded that reform reduced the amount of past-due debt and decreased third-party collection balances.  Research from the Federal Reserve and University of Notre Dame shows health care reform in Massachusetts, which served as a model for the nation’s Affordable Care Act, has improved individuals’ credit scores while reducing past-due debt and personal bankruptcies.


“The effects of reform on credit score, personal bankruptcy and delinquency are most pronounced for those whose credit scores were lower before the reform, but those with higher credit scores (and therefore, better access to credit) experienced a larger relative decline in total debt,” according to the researchers, Bhashkar Mazumder from the Fed and Sarah Miller from Notre Dame.


There was a significant reduction in delinquencies of more than $5,000, according to the research.  The research also shows health care reform in Massachusetts may have reduced third party collections. On average, Massachusetts residents averaged $60 in third-party collections, while residents of other New England states averaged about $83.


“Our analysis shows that health care legislation has implications that reach beyond health care providers and the uninsured and extend into credit markets, benefitting not only uninsured households who gained coverage, but also creditors who served those households,” the study states. “These results show that the health care reform legislation has a strong effect not just on health and the use of health services, but across many measures of household well-being.”  



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Health Care Funding: Proposed HHS Budget Aims to Strengthen Medicare and Medicaid

The Department of Health and Human Services announced its proposed budget in March 2014 with a mandatory contribution of $369 billion toward deficit reduction over the next decade. “By incentivizing high quality and efficient care… and by continuing to reduce health care cost growth… this budget also strengthens Medicare and Medicaid with $415 million in net savings over the next decade,” Secretary Kathleen Sebelius said during a March 4, 2014, press conference to announce the budget. “

It will reduce average annual growth in Medicare over the next decade from 6.3 percent to 5.3 percent,” she said. According to HHS, the proposed 2015 budget provides $77.1 billion in base discretionary resources to help make coverage affordable, drive down long-term health care costs and improve care for millions of Americans, as well as to train new health care providers, address public health priorities, assist vulnerable populations and support medical research.

One of the key funding pieces in the budget is supporting the Affordable Care Act’s health insurance coverage improvements that are already providing coverage for millions of Americans through the operation of health insurance marketplaces and the delivery of subsidies to make coverage affordable.

To help ensure the prudent use of federal funds, the budget includes $25 million over two years to monitor and prevent fraud, waste and abuse in the health insurance marketplace. “This budget invests to empower Americans to live healthier lives and to obtain financial security for their families, through the Affordable Care Act,” Sebelius said.

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