New Regulatory Developments in Healthcare

American Flag with Health Care Reform Written over itThere have been a number of regulatory developments in healthcare recently that all stem from the Affordable Care Act (ACA). Many are confused by the Affordable Care Act and what it means for their facilities and their practices. There have been certain types of payments cut, legislation that affects how the healthcare industry does business, and even changes on how Healthcare is billed. It is very important to understand what the ACA means and how it affects your individual practice or facility.

The following are just some of the regulatory developments that have come about that affect the healthcare industry. By being educated and ensuring you have the proper guidance any time new legislation results in additional regulations, you can protect yourself against costly mistakes and better manage the time needed to implement new practices.

Recent Rules Affecting DSH Payments

On October 1, 2013, DSH cuts launched and this is something that affected hospitals. The Affordable Care Act mandated that disproportionate share hospital (DSH) payments would take cuts and even the states that had opted out of Medicaid expansion were affected.

According to the final rule, CMS will do the following:

  • Evaluate the extent to which DSH was included in the calculations for budget-neutrality for coverage expansion.
  • Implement greater reductions in states that do not send most DSH payments to hospitals that have high levels of uncompensated care.
  • Implement greater reductions in states with the lowest percentage of uninsured citizens during the most recent year that has available data.
  • Implement greater reductions in states that do not send most of their DSH payments to hospitals that have high Medicaid volumes.
  • Implement small reductions in the 16 states for which the DSH allotment in fiscal year 2000 was less than 3 percent of their state and federal Medicaid spending.

States that qualify as “low DSH states” will receive some protections if they are expanding Medicaid.

All in all, hospitals and the states say that they are confused by the methodology that CMS has used and CMS does recognize that the rule is not perfect. They have stated that they do not have sufficient information on the impacts that would result from the decisions by states to implement the new coverage group. For affected hospitals that may be looking for guidance, hospital consultants that educate and can give assistance where needed are great assets.

Expansion of HIPAA Requirements

HIPAA has expanded its requirements and it is very important to ensure that your practice meets the new provisions outlined in the law. The principal security and privacy provisions have been extended directly to business associates who may have access to health information when performing services for covered individuals.

How this works is this: HIPAA permits a physician to disclose the protected health information of a patient to a third-party service provider. Hospital consultants or even HIPAA consultants are good examples of individuals who may be exposed to patient information. The physician will receive written assurance from the service provider that the proper safeguards have been put into place to protect the information given to them.

With respect to HIPAA’s security provisions, there are new requirements for third-party providers to protect the confidentiality of health information that is transmitted electronically. Both parties have the obligation to police the compliance of the other. Patients can also request disclosures and physicians must comply and physicians cannot sell patient health information unless the patient gives valid authorization. The only exception is when the information is used for treatment of the individual or research.

GAO Study Findings on the Coordination of Medicare Audits

The Government Accountability Office has taken on the role of ensuring the integrity of the Medicare Program. This means that there will be audits. These audits will typically require the pulling of specific medical records. The Centers for Medicare and Medicaid Services make over $30 billion in incorrect payments. Now CMS has brought on a number of contractors to conduct postpayment claims reviews so that improper payments can be identified. However, questions have been raised about the effectiveness of these contractors and the administrative burden that it puts on healthcare providers.

Nonetheless, the program is not going to go away, as GAO has recommended that all of the postpayment review requirements be examined so that they become more consistent. This means that the healthcare audit is going to be alive and well. It is best for physicians to be prepared for this through healthcare audit consulting. This will help ensure that the office remains productive even when Medicare audits are being performed.


The Affordable Care Act has resulted in many changes and this will not be the end. MD Pro Solutions has the knowledge and experience to help you implement new processes, move through healthcare audits, and much more. Call us at (508) 946-1665, toll free at (800) 853-8110, or visit our contact page.