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IN THE UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF TENNESSEE


ANDREW AVERETT, M.D.; ROBERT
)
BARKER, M.D.; RICKEY CARSON, M.D.; )
CLAREY DOWLING, M.D.; ARNOLD
)
HOPLAND, M.D.; RENEE JONES, M.D.; )
HAILU KABTIMER, M.D.; ABHAY
)
KEMKAR, M.D.; JONATHAN KERLEY, )
M.O.; JACK KING, JR. , M.D.; CHARLES )
LEONARD, M.D.; SCOTT MAY, M.D.;
)
JOSEPH RUPARD, M.D.; DANIEL
)
SCOTT, III, M.D.; HAK SEO, M.D.; NAZIA )
SHEHZAD, M.D.; WILLIAM TERRELL, )
M.D.; CLINTON WEBB, M.D.; JERALD
)
WHITE, M.D.; THERESA WOODARD,
)
M.D.; and MONICA WRIGHT, M.D.,
)
)
Plaintiffs,
)
)
v.
)
Case No. _________
)
UNITED STATES DEPARTMENT OF
)
HEALTH AND HUMAN SERVICES;
)
BRIAN DEESE, Secretary of the United
)
States Department of Health and Human
)
Services; CENTERS FOR MEDICARE AND )
MEDICAID SERVICES; and ANDY
)
SLAVITT, Administrator of the Centers for )
Medicare and Medicaid Services,
)
)
Defendants.
)
______________________________________________________________________________
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
______________________________________________________________________________
Plaintiffs Andrew Averett, Robert Barker, Rickey Carson, Clarey Dowling, Arnold
Hopland, Renee Jones, Hailu Kabtimer, Abhay Kemkar, Jonathan Kerley, Jack King, Jr., Charles
Leonard, Scott May, Joseph Rupard, Daniel Scott, III, Hak Seo, Nazia Shehzad, William Terrell,
Clinton Webb, Jerald White, Theresa Woodard, and Monica Wright (collectively Physicians)
state as follows:

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INTRODUCTION
1.

The Physicians are primary care providers practicing medicine in Tennessee.

They predominantly serve rural communities and disadvantaged populations, including


Medicaid participants.

The majority of the Physicians practice in counties designated as

Health Professional Shortage Areas (HPSA) for primary care by the Health Resources
Services Administration. Thus, they provide vital services to vulnerable populations with
limited access to medical care.
2.

The United States Congress enacted a statute, codified at 42 U.S.C.

1396a(a)(13)(C) (Medicaid Enhanced Payment Statute), specifically designed to increase


Medicaid payments to physicians who provided certain services in 2013 and 2014.

The

Medicaid Enhanced Payment Statute clearly and unambiguously provides that these increased
Medicaid payments were to be made to any physician with a primary specialty designation of
family medicine, general internal medicine, or pediatric medicine. Id.
3.

The Physicians satisfy the criteria described in the Medicaid Enhanced Payment

Statute and are precisely the individuals Congress intended to benefit when enacting the
Medicaid Enhanced Payment Statute.
4.

Centers for Medicare and Medicaid Services (CMS), however, added a

requirement through the regulatory rulemaking process that arbitrarily cuts off these increased
Medicaid payments for any non-board-certified physician if fewer than sixty percent of the
Medicaid codes he or she has billed fall within certain specified billing code categories. 42
C.F.R. 447.400.

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5.

CMS

1396a(a)(13)(C).

did

not

adopt

this

sixty-percent-threshold

requirement

from

Rather, CMS took that requirement from a completely different and

inapplicable statute regarding Medicare payments 42 U.S.C. 1395l(x).


6.

CMSs rule is contrary to Congresss intent and the statutory scheme.

7.

While Congress imposed a sixty-percent-threshold requirement for Medicare

payments made under 1395l(x), it decided to omit such a requirement for Medicaid payments
made under 1396a(a)(13)(C).
8.

During the notice and comment period, numerous commenters (including several

state agencies) pointed out that CMSs proposed rule was contrary to the Medicaid Enhanced
Payment Statute. Commenters also raised serious concerns that CMSs use of billed codes, as
opposed to allowed charges as used in the Medicare statute from which the threshold
requirement was lifted, would cause absurd consequences by arbitrarily and capriciously
discriminating against certain physicians particularly those in rural and other underserved
areas.

CMS did not consider, respond to, or factor in these legitimate concerns when

promulgating the final rule, codified at 42 C.F.R. 447.400 (Final Rule).


9.

The Final Rule arbitrarily excludes non-board-certified physicians from receiving

increased Medicaid payments under the Medicaid Enhanced Payment Statute if they do not
have a Medicaid billing code history consisting of at least sixty percent of certain designated
codes. This Final Rule is contrary to statutory law, and is arbitrary and capricious. Indeed, the
Final Rule excludes those physicians whom Congress intended to benefit when enacting the
statute.
10.

The Physicians, none of whom are board-certified, received payments under

1396a(a)(13)(C) for Medicaid services provided in 2013 and 2014. Many of the Physicians

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invested the enhanced reimbursement into their practices by purchasing equipment, expanding
clinic hours or hiring additional staff to enable them to offer more primary care services to
underprivileged patients.
11.

In mid-2015, the Bureau of TennCare (TennCare) determined that it must

recoup payments made to the Physicians, based on the sixty-percent-threshold requirement in


the Final Rule. In some if not all instances, TennCare determined that the Physicians did not
satisfy the sixty-percent threshold requirement because certain nonprofessional ancillary
services, such as lab tests performed in conjunction with an office visit, were billed under the
Physicians individual Medicare numbers.

Even though sixty percent of the professional

physician services performed by these Physicians fell within the requisite primary care codes,
sixty percent of the total Medicaid codes billed by these Physicians did not fall within the
requisite primary care codes due to the inclusion of the ancillary codes in the denominator of the
sixty-percent-threshold determination.
12.

The Physicians have contested the recoupment in a consolidated TennCare

Provider Appeal currently pending before the Commissioner of the Tennessee Department of
Finance and Administration. Because the hands of TennCare and the Tennessee Department of
Finance and Administration are effectively tied by the Final Rule and they lack authority to
invalidate CMS regulations, the Physicians are pursuing the present federal litigation to
invalidate the unlawful Final Rule. The Physicians intend to request a stay of the TennCare
Provider Appeal, and any potential recoupment efforts by TennCare based upon the sixtypercent-threshold requirement in the Final Rule, until full resolution of this litigation.
13.

This Court should hold unlawful and set aside, 5 U.S.C. 706(2), the Final Rules

sixty-percent-threshold requirement because it is contrary to 42 U.S.C. 1396a(a)(13)(C).

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Further, that requirement and the methodology used to calculate the threshold should be set
aside as arbitrary and capricious, especially given that CMS did not consider and respond
meaningfully to serious and legitimate concerns raised by multiple parties during the notice and
comment period.
THE PARTIES
14.

The Physicians are primary care providers practicing throughout Tennessee, and

each has a primary specialty designation of family medicine, general internal medicine, or
pediatric medicine, within the meaning of the Medicaid Enhanced Payment Statute. 42 U.S.C.
1396a(a)(13)(C). Several of the Physicians have been practicing medicine for thirty years or
more and began practicing long before specialty board certification became prevalent in the
medical field. For example, the American Board of Family Medicine issued its first board
certification in 1970, around the time when several of the Physicians began practicing medicine.
Board certification was not required for licensure nor a criteria for hospital privileges at that
time.
15.

Dr. Andrew Averett is a primary care practitioner specializing in general

medicine, therefore he meets the eligibility criteria established in the Medicaid Enhancement
Statute. He practices in Hohenwald, Tennessee, which is a HPSA for primary care. He has been
practicing medicine since 1989. Michael Parker is a Physician Assistant supervised by Dr.
Averett and TennCare seeks recoupment of reimbursement for services provided by Dr. Averett
and Mr. Parker.
16.

Dr. Robert Barker is a primary care practitioner specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Jackson, Tennessee, portions of which are a HPSA for primary care. He has been

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practicing medicine since 1962. Japeth Durham is a Nurse Practitioner supervised by Dr. Barker
and TennCare seeks recoupment of reimbursement for services provided by Dr. Barker and Mr.
Durham.
17.

Dr. Ricky Carson is a primary care practitioner specializing in family medicine

and pediatrics, therefore he meets the eligibility criteria established in the Medicaid
Enhancement Statute. He practices in Memphis, Tennessee, which is a HPSA for primary care.
He has been practicing medicine since 1974. The enhanced Medicaid payments in 2013 and
2014 enabled his practice to open an outreach clinic for bilingual uninsured patients, expand
hours to weekends and upgrade other services at his clinic, which serves a patient population
comprised of more than 90 percent Medicaid beneficiaries or uninsured patients.
18.

Dr. Clarey Dowling is a primary care practitioner specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Brownsville, Tennessee, which is a HPSA for primary care and is located in
Haywood County, one of the poorest counties in the state. He has been practicing medicine
since 1979. His patient population consists of 60 percent Medicaid recipients. He also provides
medical care for nursing home patients, the indigent, hospital and emergency room patients and
spends a significant amount of time volunteering in the community.

The increased

reimbursement he received pursuant to the Medicaid Enhanced Payment Statute enabled him to
hire a bilingual nurse to assist with communications to Spanish-speaking patients, giving them an
alternative to seeking treatment at a hospital.

In addition, Dr. Dowling hired an internal

medicine specialist who provided expertise in preventative medicine and diabetes treatment and
prevention and established clinics and informational sessions for the Medicaid population.

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Unfortunately, he was compelled to terminate her employment due to proposed recoupment of


reimbursement paid under the Medicaid Enhancement Payment Statute.
19.

Dr. Arnold Hopland is a primary care practitioner specializing in general

medicine, therefore he meets the eligibility criteria established in the Medicaid Enhancement
Statute. He practices in Elizabethton, Tennessee. He has been practicing medicine since 1979.
20.

Dr. Renee Jones is a primary care practitioner specializing in pediatrics, therefore

she meets the eligibility criteria established in the Medicaid Enhancement Statute. During 2013
and 2014, she practiced in Memphis, Tennessee, which is in a HPSA for primary care. She has
been practicing medicine since 1997.
21.

Dr. Hailu Kabtimer is a primary care practitioner specializing in internal

medicine, therefore he meets the eligibility criteria established in the Medicaid Enhancement
Statute. He practices in Hendersonville, Tennessee. He has been practicing medicine since
1986.
22.

Dr. Abhay Kemkar is a primary care practitioner specializing in internal

medicine, therefore he meets the eligibility criteria established in the Medicaid Enhancement
Statute. He practices in Sparta, Tennessee, which is a HPSA for primary care. He has been
practicing medicine since 1992.
23.

Dr. Jonathan Kerley is a primary care practitioner specializing in internal

medicine, therefore he meets the eligibility criteria established in the Medicaid Enhancement
Statute. He practices in Chattanooga, Tennessee. He has been practicing osteopathic medicine
since 1999. More than half of his patients are Medicaid recipients and he used the increased
reimbursement received under the Medicaid Enhanced Payment Statute to open additional
locations and hire new staff to better serve this patient population. Dr. Kerley also serves as the

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medical director for various police department, EMS and sheriff department teams in
Collegedale and Sequatchie, Tennessee. His passion for medical missions led him to co-found
International Christian Medical Outreach, through which he has coordinated and provided free
medical care in multiple countries throughout Central and South America.
24.

Dr. Jack King, Jr. is a primary care provider specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Knoxville, Tennessee, portions of which are a HPSA for primary care. He has been
practicing medicine since 1971. He was board certified by the American Academy of Family
Physicians beginning in 1978 and was continuously recertified through 2009. At that time, Dr.
King anticipated retirement from practice and chose not to renew certification. He remained
current with continuing medical education requirements and treated Medicaid beneficiaries as a
significant portion of his patient population until his retirement from private practice in 2014.
Dr. Kings decades of experience in primary care were critical to successful outcomes for his
Medicaid patients and quality of care did not diminish after 2009 when his board certification
ceased.
25.

Dr. Charles Leonard is a primary care provider specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Talbott, Tennessee. He has been practicing medicine since 1978. Dr. Leonard
serves as the chairman of the insurance committee of the Tennessee Medical Association
(TMA) and travels to Nashville to support bills before the legislature that the TMA
membership believes can benefit patients and doctors. Although once board certified in family
medicine, he decided against re-certification due to the high cost. In keeping with the intent of

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the Medicaid Enhanced Payment Statute, he increased the number of TennCare patients he saw
during 2013 and 2014.
26.

Dr. Scott May is a primary care practitioner specializing in general medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Elizabethton, Tennessee. He has been practicing medicine since 1983.
27.

Dr. Joseph Rupard is a primary care practitioner specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Shelbyville, Tennessee, which is a HPSA for primary care. He has been practicing
medicine since 1990. Dr. Rupard used the enhanced Medicaid payments to open a clinic in
Lewisburg, Tennessee, a HPSA for primary care, to treat an additional 11,000 patients annually.
28.

Dr. Daniel Scott, III is a primary care practitioner specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Millington, Tennessee, portions of which are a HPSA for primary care. He has been
practicing medicine since 1985.
29.

Dr. Hak Seo is a primary care practitioner specializing in internal medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Dayton, Tennessee, which is a HPSA for primary care. He has been practicing
medicine since 2008.
30.

Dr. Nazia Shezhad is a primary care practitioner specializing in family medicine,

therefore she meets the eligibility criteria established in the Medicaid Enhancement Statute. She
practices in Johnson City, Tennessee. She has been practicing medicine since 2001.
31.

Dr. William Terrell is a primary care practitioner specializing in pediatrics,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He

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practices in of Memphis, Tennessee, which is a HPSA for primary care. He has been practicing
medicine since 1972. A portion of the monies his office received pursuant to the Medicaid
Enhanced Payment Statute enabled purchase of updated medical equipment, including two
pediatric vision testing systems to identify optical or neural abnormalities related to vision that a
pediatrician might not otherwise detect.
32.

Dr. Clinton Webb is a primary care practitioner specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in Johnson City, Tennessee. He has been practicing medicine since 1970.
33.

Dr. Jerald White is a primary care practitioner specializing in family medicine,

therefore he meets the eligibility criteria established in the Medicaid Enhancement Statute. He
practices in the towns of Brownsville, Alamo and Jackson, Tennessee, all of which are HPSAs
for primary care and are in counties with some of the states highest percentages of indigent
citizens and Medicaid recipients. Accordingly, Dr. Whites patient population is comprised of at
least 60 percent Medicaid recipients. He has been practicing medicine since 1972. Dr. White
invested the money from the enhanced Medicaid payments to hire additional staff and purchase
equipment to continue to provide comprehensive care with emphasis on education and
prevention. In July 2014, the local hospital in Brownsville was closed, which further limited the
communitys access to healthcare services, especially emergency care, and increased demand on
primary care practitioners for ancillary services needed to adequately treat patients in compliance
with the appropriate standard of care.
34.

Dr. Theresa Woodard is a primary care practitioner specializing in internal

medicine, therefore she meets the eligibility criteria established in the Medicaid Enhancement
Statute. In 2013-2014, she practiced in Brownsville, Tennessee, which is a HPSA for primary

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care. She has been practicing medicine since 2002. She was recruited to work in Brownsville
due to her specialty skills and expertise in preventative medicine and diabetes. To that end, she
established diabetes clinics and other preventative medicine initiatives in the community.
Unfortunately, Dr. Woodards employment was terminated due to the proposed recoupment of
funds paid pursuant to the Medicaid Enhanced Payment Statute. The loss of her skills and
service is a great detriment to the community.
35.

Dr. Monica Wright is a primary care practitioner specializing in pediatrics,

therefore she meets the eligibility criteria established in the Medicaid Enhancement Statute. She
practices in Cordova, Tennessee. She has been practicing medicine since 1996.
36.

Defendant Brian Deese is the Secretary of the United States Department of Health

and Human Services (HHS). Defendant Andy Slavitt is the Administrator of CMS. These
individual Defendants are the federal officers responsible for administering HHS and CMS and
oversee the Departments that issued the Final Rule. They are sued in their official capacities.
37.

Defendant HHS, which has its principal office at 200 Independence Avenue,

S.W., Washington, D.C. 20201, is a federal agency responsible for promulgation of the Final
Rule.
38.

Defendant CMS, which has its principal office at 7500 Security Boulevard,

Baltimore, Maryland 21244-1850, is a federal agency responsible for promulgation of the Final
Rule. CMS is a federal agency within HHS.
JURISDICTION & VENUE
39.

The Physicians bring this action under the Administrative Procedures Act

(APA), 5 U.S.C. 551, et seq.

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40.

This Court has jurisdiction under 28 U.S.C. 1331 because all causes of action

arise under the laws of the United States.


41.

The Physicians have standing to bring this action because they have been and will

be directly impacted and harmed by the unlawful provisions of the Final Rule.
42.

The Final Rule is a final agency action that is ripe for review.

43.

This Court has the authority to grant the requested relief under, inter alia, the

APA and the Declaratory Judgment Act.


44.

Venue in this Court is proper under 28 U.S.C. 1391(e)(1)(B) because a

substantial part of the events or omissions giving rise to the claims occurred in the Middle
District of Tennessee.
45.

This Complaint is timely under 28 U.S.C. 2401(a)


STATUTORY AND REGULATORY BACKGROUND

46.

CMSs Final Rule is invalid both because it is contrary to the laws of Congress

and because it is arbitrary and capricious.


47.

For the reasons explained below, this Court should uphold the intent of Congress

when enacting the Medicaid Enhanced Payment Statute by declaring the Final Rule unlawful.
I.

Congress Enacted a Statute Requiring Increased Medicaid Payments to


Physicians with Certain Primary Specialty Designations.
48.

On March 30, 2010, President Barack Obama signed the Health Care and

Education Reconciliation Act of 2010 (the Act) into law.


49.

The Act was passed by means of the reconciliation process in order to amend the

Patient Protection and Affordable Care Act (the ACA), which had been signed into law the
week before.

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50.

Section 1202 of the Act provided that physicians serving the Medicaid population

would receive increased Medicaid payments for certain primary care services for the years 2013
and 2014.
51.

As codified in 42 U.S.C. 1396a, the Medicaid Enhanced Payment Statute

provides:
[P]ayment for primary care services (as defined in subsection (jj)) furnished in
2013 and 2014 by a physician with a primary specialty designation of family
medicine, general internal medicine, or pediatric medicine at a rate not less than
100 percent of the payment rate that applies to such services and physician under
part B of subchapter XVIII of this chapter (or, if greater, the payment rate that
would be applicable under such part if the conversion factor under section 1395w4(d) of this title for the year involved were the conversion factor under such
section for 2009)[.]
42 U.S.C. 1396a(a)(13)(C). Thus, enhanced payments were required under the statute for
primary care services performed by physicians with primary specialties designated under the
statute. See id.
52.

The Medicaid Enhanced Payment Statute defines primary care services as (1)

evaluation and management services that are procedure codes (for services covered under
[Medicare]) for services in the category designated Evaluation and Management in the
Healthcare Common Procedure Coding System (established by the Secretary under section
1395w-4(c)(5)1 of this title as of December 31, 2009, and as subsequently modified); and (2)
services related to immunization administration for vaccines and toxoids for which CPT codes
90465, 90466, 90467, 90468, 90471, 90472, 90473, or 90474 (as subsequently modified) apply
under such System.

[S]ection 1395w-4(c)(5) refers to the portion of the Medicare law that explains how payment
for physician services will work.

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53.

The purpose of the Medicaid Enhanced Payment Statute was to benefit physicians

that provide primary care services to the Medicaid population by increasing payments rates for
2013 and 2014. In the Congressional Report, Congress stated that the enhancements were
necessary because:
These low Medicaid payment rates do not provide adequate incentives for physicians to
participate in Medicaid, limiting access to physicians services by Medicaid beneficiaries.
In addition, low Medicaid payment rates discourage young physicians and other health
professionals from entering careers in primary care, undermining efforts to address the
shortage of primary care practitioners in many areas of the country.
H.R. REP. No. 111-299, pt. 1, at 617 (2009).
54.

Access to primary care is critical for ensuring continuity of care, improving

overall health and reducing health care costs.


II.

CMSs Final Rule is Contrary to the Statute.


55.

On November 6, 2012, CMS adopted the Final Rule codified at 42 C.F.R.

447.400(a)(2) that restricted increased payments authorized under the Medicaid Enhanced
Payment Statute to only those physicians who were either board-certified in certain specialties or
who satisfied a sixty-percent-threshold requirement even though Congress omitted such
requirements from the statute.
56.

The Final Rule states, among other things:

(a) States pay for services furnished by a physician as defined in 440.50 of this
chapter, or under the personal supervision of a physician who self-attests to a
specialty designation of family medicine, general internal medicine or pediatric
medicine or a subspecialty recognized by the American Board of Medical
Specialties (ABMS), the American Board of Physician Specialties (ABPS) or the
American Osteopathic Association (AOA). Such physician then attests that
he/she:
(1) Is Board certified with such a specialty or subspecialty and/or
(2) Has furnished evaluation and management services and vaccine
administration services under codes described in paragraph (b) of this

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section that equal at least 60 percent of the Medicaid codes he or she has
billed during the most recently completed CY or, for newly eligible
physicians, the prior month.
(b) At the end of CY 2013 and 2014 the Medicaid agency must review a
statistically valid sample of physicians who received higher payments to verify
that they meet the requirements of paragraph (a)(1) or (2) of this section.
42 C.F.R. 447.400(a)(2) (emphasis added).
57.

The sixty-percent-threshold requirement embodied in the Final Rule is directly

contrary to the plain language of Medicaid Enhanced Payment Statute, 1396a(a)(13)(C), which
imposed no such limitations on eligibility for the increased Medicaid payments. The Final Rule
restricts the increased payments to only a sub-population of primary care physicians, while
excluding others who would have otherwise been eligible under the statute. Specifically, the
proposed regulation improperly prohibits increased Medicaid payments to non-board-certified
physicians who billed less than 60 percent of certain Medicaid billing codes in the prior year,
regardless of whether those physicians practice the specialties designated by the Medical
Enhancement Statute. 42 C.F.R. 447.400(a)(2).
58.

CMS attempted to justify this improper sixty-percent-threshold requirement by

citing to another unrelated statute, without recognizing that Congress intentionally omitted the
sixty-percent-threshold requirement from the Medicaid Enhanced Payment Statute.

Indeed,

CMS admitted that it imported the sixty-percent-threshold requirement from a Medicare statute
and sought to apply it to the Medical Enhancement Statute, where Congress imposed no such
requirement. CMS wrote:
We developed this [60 percent threshold] proposal for the use of a supporting
history of codes billed to qualify physicians for increased payment after reviewing
the statutory requirements for the Medicare Incentive Payments for Primary
Care Services payments authorized by section 5501(a) of the Affordable Care
Act, which amended section 1833 of the Act. That provision specifically requires
that primary care services account for at least 60 percent of the allowed charges

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billed by a practitioner for services to be eligible for increased payment. We


propose that the same standard be applied to the Medicaid payments under section
1902(a)(13)(C) of the Act although we propose that verification would be based
on the number of codes billed for the specified primary care services, rather than
charges.
CMS-2370-P, p. 17.
59.

Comparison of the plain statutory language of the Medicaid Enhanced Payment

Statute and Medicare Incentive Payments for Primary Care Services (MIPPCS) makes clear
that Congress did not intend for the sixty-percent-threshold requirement to apply to payments
under the Medicaid Enhanced Payment Statute.
60.

First, while Congress was certainly aware of the sixty-percent-threshold

requirement in MIPPCS, which was passed the week before the Medicaid Enhanced Payment
Statute, it intentionally omitted that language from the Medicaid Enhanced Payment Statute.
61.

Second, MIPPCS applies only to primary care practitioner[s] as defined by that

statute. In contrast, the Medicaid Enhanced Payment Statute applies to any physician with a
primary specialty designation of family medicine, general internal medicine, or pediatric
medicine, which may or may not meet the specific definition of primary care practitioner
contained in the MIPPCS. Indeed, the phrase primary care practitioner is not used anywhere
in the Medicaid Enhanced Payment Statute. Accordingly, CMSs attempt to apply MIPPCSs
definition of primary care practitioner to the Medicaid Enhanced Payment Statute is contrary
to that statute.
62.

Third, MIPPCS explicitly imposes two independent criteria to be a qualifying

practitioner, but Congress decided to impose only one of those criteria to payments under the
Medicaid Enhanced Payment Statute. MIPPCSs criteria are: (1) a physician . . . has a primary
specialty designation of certain listed specialties and (2) at least 60 percent of the physicians

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allowed charges are primary care services. 1395l(x)(2)(A). The word and joining these
criteria signifies Congresss intent to create two independent eligibility standards in the MIPPCS.
Given that these are separate criteria, a sixty-percent-threshold requirement (or any percentage
threshold requirement) cannot be implied from the phrase physician with a primary specialty
designation in the Medicaid Enhanced Payment Statute. Otherwise, the language at
1395l(x)(2)(A)(ii) would be rendered completely meaningless, and courts should not interpret
statutes in a way that would render statutory language meaningless. See Williams v. Taylor, 529
U.S. 362, 364 (2000) (explaining that it is a cardinal principle of statutory construction that
courts must give effect, if possible, to every clause and word of a statute).
63.

For all these reasons, the sixty-percent threshold requirement embodied in the

Final Rule is contrary to the statute and, therefore, invalid.


III.

CMS Arbitrarily and Capriciously Ignored Comments Protesting the SixtyPercent-Threshold Requirement.
64.

During the notice and comment period for the Final Rule, CMS received multiple

comments opposing the proposed sixty-percent-threshold requirement, and those commenters


correctly pointed out that imposing a threshold on non-board-certified physicians would be
contrary to the statute and would result in inequitable results contrary to statutory intent.
65.

The Department of Public Welfare for the Commonwealth of Pennsylvania wrote

in its comment on the proposed rule:


[T]he proposed 60% requirement that CMS has drawn from Medicares
incentive bonus payment for physician primary care services . . . was not evident
in the ACA language and not anticipated by state staff. If the intent of the ACA
was to infuse the Medicare incentive bonus payment criteria into the enhanced
Medicaid payment criteria, then that should have been clear in the law.
The Department requests that CMS reconsider this proposed requirement because
it creates inequality between a Board certified and non-Board certified physician
in that a physician who is Board certified will automatically be eligible for the

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increased payment although he/she may only be providing 10 percent of his/her


services in a primary care capacity. However the non-Board certified provider
may be providing 50 percent but not qualify for the increased payment. This is
not consistent with the intent of the statutory language in the ACA.
(Ex. A, 6/11/2012 V. Gordon Letter (emphasis added).)
66.

The Department of Health and Hospitals for the State of Louisiana wrote:

[T]he CFR language does not align with the current statutory definition of
primary care providers under section s. 1905(t) of the SSA, which specifies
general practitioner, family medicine physician, internal medicine physician,
obstetrician/gynecologist, or pediatrician. As a result, non-certified physicians
who do not meet the 60 percent threshold and are currently considered or
registered as primary care providers will not be eligible for the increase in
payment.
....
[T]he State is concerned that the standards will result in inequitable
determinations and result in providers who have traditional[ly] been recognized
and served as primary care providers being ineligible for the payment.
....
Due to technical issues, the 60 percent threshold will undoubtedly result in the
unintended consequences of omitting physicians who have traditionally served as
an individuals primary care provider. For example, the draft rule would pay the
increased rate to a certified subspecialist, regardless of volume, yet exclude a noncertified physician whose billing history demonstrate that 59% were within the
designated service codes. While the State believes that services rendered by a
subspecialist are valuable, the example demonstrates one potential inequitable
result of the rule.
In the preamble to the proposed rule, CMS noted the 60 percent service
requirement is designed to align Medicaid with the statutory requirements for the
Medicare Incentive Payments for Primary Care Services authorized by section
5501(a) of the Affordable Care Act, which amended section 1833 of the Act,
which specifically requires that primary care services account for at least 60
percent of the allowed charges billed by a practitioner for services to be eligible
for increased payment. However, the State respectfully submits that the
application of the 60 percent service requirement is misapplied in the regulation.
Specifically, the Medicare provision under 1833 is identified as an incentive
and provides for 10 percent increase in payment. It is common for incentives to
be based on performance targets or other criteria such as minimum service
utilization. The characterization as an incentive is distinctly different from

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establishing a minimum payment as specified in the newly created section of


447.405.
As such, to require 60 percent does not appear to align with the statutory intent
that E&M services rendered are paid at least at the Medicare rate. Furthermore,
had Congress sought to align the two payment provisions, it could have
included the language in section 1833 in the corresponding provision in
Medicaid law given that the language was readily available.
(Ex. B, 6/11/2012 J. Kennedy Letter (emphasis added).)
67.

The National Association of Medicaid Directors wrote:

CMS noted the 60 percent service requirement is designed to align Medicaid with
the statutory requirements for the Medicare Incentive Payments for Primary Care
Services authorized by section 5501(a) of the ACA, which amended Section 1833
of the SSA that specifically requires that primary care services account for at least
60 percent of the allowed charges billed by a practitioner for services to be
eligible for increased payment. Medicaid Directors do not agree that it is
appropriate to designate a threshold. We believe that if Congress had sought to
align the two payment provisions, it would have included the language in
Section 1833 in the corresponding provision in Medicaid law.
(Ex. C, 6/11/2012 A. Allison Letter (emphasis added).)2
68.

The Department of Health Services for the State of Wisconsin wrote:

In the Preamble to the proposed rule, CMS noted the 60% service requirement is
designed to align Medicaid with the statutory requirements for the Medicare
Incentive Payments for Primary Care Services (authorized by section 5501(a) of
PPACA), found in Section 1833 of the SSA, specifically requiring primary care
services account for at least 60% of the allowed charges billed by a practitioner
for services account for at least 60% of the allowed charges billed by a
practitioner for services to be eligible for increased payment. This requirement is
not included [in] the corresponding Medicaid provisions of the law. Furthermore,
the Medicare provision under SSA Section 1833 is labeled an incentive and
provides for a 10% increase in payment. There is no such performance target
associated with the Medicaid increase; Congress established a minimum payment
as specified in the newly created section of 447.405. As such, the 60% threshold
does not appear to align with the provision. These inconsistencies are
problematic, and likely require Congressional action to resolve.
(Ex. D, 6/11/2012 D. Smith Letter (emphasis added).)

The letter from the National Association of Medicaid Directors was co-signed by Darin J. Gordon, TennCare
Director, in his capacity as Vice President of the National Association of Medicaid Directors.

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69.

Despite these valid concerns raised about the sixty-percent-threshold requirement

during the notice and comment period, CMS essentially ignored these concerns when adopting
the Final Rule.
70.

With respect to the multiple concerns that the sixty-percent-threshold requirement

is contrary to the plain language of the Medicaid Enhanced Payment Statute and Congresss
intent when enacting it, CMS merely provided the inadequate and conclusory statement that we
often use Medicare program standards in developing policy for the Medicaid program, and we
believe that it is appropriate to apply the 60 percent threshold applicable to the Medicare primary
care incentive payment to the Medicaid payment as well. RIN 0938-AQ63, 77 FR 66670-01.
71.

CMSs unsupported, conclusory dismissal fails to meaningfully address the

legitimate concerns raised by the commentators that CMS lacked statutory authority to impose
the sixty-percent-threshold requirement. CMSs lack of any substantive explanation as to how
its actions were supported by the statute supports findings that the sixty-percent-threshold
requirement in the Final Rule is both contrary to the statute and arbitrary and capricious.
IV.

The Final Rules Reliance on Billed Codes is Arbitrary and Capricious.


72.

When enacting the Final Rule, CMS completely failed to consider that the use of

billed codes with respect to the sixty-percent-threshold requirement arbitrarily and capriciously
harms the very providers that the statute was enacted to benefit.
73.

The Final Rule capriciously discriminates among physicians providing identical

primary care services to similarly-situated patients based exclusively on differences in


administrative billing.
74.

By relying on billed codes, payment under the Final Rule depends not on the

percentage of the total services furnished by that physician, but as a percentage of all services

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billed under the physicians provider number, regardless of whether those services were
furnished by that physician.
75.

The Final Rule does not account for the fact that many physicians practicing

primary care particularly in rural clinics typically bill under the physicians provider number
for a reasonably large volume of ancillary services (i.e., urine testing, blood work, X-rays)
furnished by other professionals under the physicians supervision. This common practice skews
the ratio used to calculate the sixty-percent-threshold in a way that creates an inaccurate
classification of these physician practices in the context of the Final Rule and inappropriately
excludes them from receiving the enhanced Medicaid payments.
76.

Furthermore, group practices with more than one physician typically bill for

ancillary services under the group provider number (because the group typically bears the
expense of, and obtains any necessary certifications for, the technical component of such
ancillary services), whereas solo practitioners must bill all ancillary services under their own
provider number. This means that a physicians status as a group practice physician or a solo
practitioner could determine whether a particular physician satisfies the sixty-percent-threshold
requirement, even though the professional services performed by the physician would be the
same in either case. The Final Rule, therefore, arbitrarily discriminates between physicians who
practice in groups and sole practitioners.
77.

Consequently, a significant number of physicians, including many solo

practitioners and rural physicians who provide vital primary care services to traditionally
underserved and vulnerable populations with few options for medical care, are arbitrarily
excluded from the increased payments entitled to them by Congress.

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78.

This discriminatory Final Rule is not a reasonable interpretation of Congresss

intent to enhance payments to physicians with primary care designations.


79.

Although CMS gleaned the sixty-percent-threshold requirement in the Final Rule

from MIPPCS, measurement of the sixty-percent-threshold under MIPPCS is based on allowed


charges, whereas measurement of the sixty-percent-threshold under the Final Rule is based on
codes billed. This discrepancy provides further evidence of the inaccuracy and arbitrariness of
including all codes billed, even non-professional ancillary services, in the denominator of the
sixty-percent-threshold determination.
80.

Moreover, CMSs own sub-regulatory guidance indicates that the sixty-percent-

threshold was intended to be based on the total professional services performed or supervised by
the physician, not on the total codes billed under that physicians number. For example, in the
preamble commentary to the Final Rule, CMS notes that [m]any commenters expressed concern
with the requirement that services be billed under the physicians billing number. 77 Fed. Reg.
66677. CMS also recognized that, [i]n the case of a group practice, the claim would most likely
be billed under the practice number and not the physicians number. Therefore, CMS decided
to [remove] the requirement that services be billed under the physicians billing number. Id.
CMSs comments indicate that its focus was on services performed, not on which billing number
happened to be used. Thus, CMSs use of the phrase 60 percent of the Medicaid codes he or
she has billed should be read to refer to the universe of professional services performed by or
under the supervision of the physician, not on the universe of codes that happen to be captured
by a particular billing number. Yet, CMS applied its Final Rule contrary to its own subregulatory guidance in this matter.

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81.

As

another

example,

Q&A

document

from

CMSs

website

(https://www.medicaid.gov/affordablecareact/provisions/downloads/qs-and-as-on-1202-iii-1-3013.pdf) contains the following:


Q:

Community clinics in my state (clinics other than FQHCs and RHCs) are
reimbursed at the same rate as a physician. They do not receive a bundled or
encounter rate. Are they eligible for the higher payment? Would they have to
attest that 60 percent of the services provided in the clinic are within the
qualifying E&M codes? Are they required to pass through any increased
payments in the form of higher wages for the health care professionals they
employ?

A:

Higher payment made under the requirements of the regulation is for physicians
reimbursed pursuant to a physician fee schedule. A physician working in a clinic
and reimbursed through a physician fee schedule could qualify for higher
payment if he or she is appropriately Board certified or if 60 percent of the
services that he or she provides is for the specified primary care services. Since
the clinic itself is not eligible, this percentage of services threshold cannot be
based on the aggregate of all services provided by all practitioners within the
facility, only on services [sic] the individual physicians.

(emphasis added). The above website content demonstrates that the 60 percent threshold should
be based on the universe of professional services performed, not on the universe of codes that
happen to be billed under a particular provider number. The use of a particular provider number
to bill certain codes depends on practice setting, state rules and payer requirements. Thus, it
does not accurately represent a physicians practice characteristics for purposes of determining
if the physician can accurately claim a specialty designation of family medicine, general
internal medicine, or pediatric medicine. See 77 Fed. Reg. at 66673.
82.

Unsurprisingly, calculating sixty percent of allowed charges leads to different

results than calculating sixty percent of codes billed. As multiple commentators pointed out
during the notice and comment period, altering the borrowed MIPPCS provision to measure the
sixty-percent-threshold based on billed codes instead of allowed charges was arbitrary and
capricious and undermined Congresss purpose for enacting the statute.

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83.

In other words, CMS not only lifted an improper requirement from another statute

and applied it where Congress did not intend, CMS also inexplicably manipulated that
inapplicable requirement in a way that produces absurd results contrary to the intent of the
Medicaid Enhanced Payment Statute.
84.

For example, consider a common scenario in which a female Medicaid

beneficiary visited her primary care provider for an annual check-up. If the physician ordered a
pregnancy test and a simple blood test to check for anemia both processed by clinic staff but
billed under the physicians provider number then 66 percent of codes billed for that visit
would not constitute billing codes designated under the Final Rule. As a result of including nonprofessional ancillary services in the denominator of the sixty-percent-threshold calculation, the
physician in this example would be ineligible increased payment under the Final Rule, despite
the undisputable facts that the physician fits squarely within the parameters of the Medicaid
Enhanced Payment Statute and provided primary care services to a Medicaid beneficiary, which
Congress intended to incentivize with the Medicaid Enhanced Payment Statute. This result is
clearly contrary to the Medicaid Enhanced Payment Statute.
85.

Further, for purposes of the sixty-percent-threshold requirement in the Final Rule,

a $5.00 strep test would be treated with equal weight as a complex office visit in which a
physician spent an hour treating a patient.
86.

These nonprofessional ancillary services, such as diagnostic testing and simple

imaging often administered by nurses or technicians, are completely irrelevant to whether the
physician predominately practices primary care. However, a literal interpretation of the sixtypercent-threshold requirement in the Final Rule makes the volume of ancillary services billed

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under a physicians provider number a determining consideration as to whether a physician can


receive increased payments.
87.

CMSs use of billed codes to determine whether providers satisfy the sixty-

percent-threshold requirement was arbitrary and capricious not a reasonable interpretation of


Congressional intent.
88.

During the public comment period, multiple commenters pointed out these

arbitrary and capricious flaws in with CMSs proposed rule, but CMS ignored these concerns
without explanation.
89.

For example, the American College of Physicians wrote:

[t]he College recommends that the 60% criteria should be based on allowed
charges rather than percent of billing codesthis would be consistent with the
definition used under the Medicare Primary Care Bonus provision of the ACA
and would be less likely to in appropriately exclude those physicians who truly
provide primary care services, but are also required to provide a broad range of
other services due to the limited availability of other clinicians in the area e.g. in
rural and similar underserved areas.
(Ex. E, 6/11/2012 R. Gluckman Letter.)
90.

The American College of Chest Physicians wrote:

[W]e recommend that the use of allowed charges be used rather than percentage
of billing codes. This would prevent the exclusion of those physicians that must
provide other services in areas where clinician availability is limited. We
understand that this method would be consistent with the definition used under the
Medicare Primary Care Bonus provision of the Patient Protection and Affordable
Care Act of 2010.
(Ex. F, S. Raoof Letter.)
91.

CMS completely ignored those comments raising concerns about using billed

codes as the operative metric, instead of allowed charges, to calculate the sixty-percent-threshold
and provided no explanation when enacting the Final Rule. CMSs lack of response to these
comments further supports a finding that it acted arbitrarily and capriciously.

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V.

TennCare Seeks to Recoup Money From the Physicians as a Direct Result of the
Unlawful, Arbitrary and Capricious Sixty-Percent-Threshold Rule.
92.

As mandated by the Final Rule, TennCare reviewed the billed codes of Tennessee

physicians who received increased payments under the Medicaid Enhanced Payment Statute to
determine whether they satisfied the criteria established in the Final Rule.
93.

During 2013 and 2014, the Physicians were not board-certified with a specialty or

subspecialty listed in subsection (a) of the Final Rule. The Physicians are experienced primary
care practitioners, some with thirty or more years of experience, and some began practice when
specialty board certification was not common or required for licensure or hospital privileges.
Furthermore, some of the Physicians were deterred from obtaining or continuing board
certification by the high cost of certification and recertification.
94.

After reviewing billing codes for services provided to Medicaid beneficiaries in

2013 and 2014, TennCare determined that the Physicians did not satisfy the sixty-percentthreshold requirement in the Final Rule.
95.

Despite the fact that many if not all of the Physicians satisfied the sixty-percent-

threshold requirement in the MIPPCS, based on allowed charges, and qualified for increased
Medicare payments under that statute, TennCare found that they did not satisfy the sixty-percentthreshold requirement of the Final Rule, based on billed codes (including billed codes for nonprofessional ancillary services).
96.

In its effort to carry out the Final Rule, TennCare endeavors to recoup from the

Physicians the increased payments made under the Medicaid Enhanced Payment Statute.
Proposed recoupments from the Physicians total $2,368,147.15. The prospect of repaying this
money is daunting for many of the Physicians, some of which may be forced to close clinics if

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the recoupment is carried out. This unfortunate and unintended consequence illustrates the
arbitrary and capricious nature of the Final Rule.
97.

On behalf of Tennessee providers, the Tennessee Medical Association (TMA)

wrote a series of letters to CMS objecting to the absurd and unfortunate outcome of the arbitrary
and capricious Final Rule. (Ex. G, 12/21/2015 TMA Letter.)
98.

In its response to the TMA, CMS conceded that the statute did not require

criteria for eligibility for enhanced Medicaid primary care payments and that the criteria had
been imposed solely as the result of CMSs regulation. (Ex. H, 1/19/2016 J. Glaze Letter.)
99.

According to CMS, the Final Rule mandates that TennCare recoup the increased

Medicaid payments from the Physicians if they did not meet the sixty-percent-threshold
requirement, based on billed codes, in the Final Rule. (Ex. H, 1/19/2016 J. Glaze Letter.)
100.

CMS misinformed the TMA that during the notice and comment period, CMS

received only one comment on the threshold and its application and that commenter suggested
that there be no threshold at all. (Ex. H, 1/19/2016 J. Glaze Letter.) As demonstrated above,
that statement is false.
101.

In fact, multiple commentators objected to the proposed methodology used to

calculate the sixty-percent-threshold requirement. (E.g., Ex. E, 6/11/2012 R. Gluckman Letter;


Ex. F, S. Raoof Letter.) While CMS completely failed to address those comments during in its
final rulemaking procedures, the concerns were indeed raised.
102.

Further, as demonstrated above, multiple commenters not just one as CMS

claimed objected to CMSs improper imposition of a threshold requirement not supported by


the statute. (E.g., Ex. A, 6/11/2012 V. Gordon Letter; Ex. B, 6/11/2012 J. Kennedy Letter; Ex.
C, 6/11/2012 A. Allison Letter; Ex. D, 6/11/2012 D. Smith Letter.)

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103.

The fact that CMS was apparently unaware that these comments even existed

demonstrates that CMS could not possibly have appropriately considered or adequately
addressed those comments during the final rulemaking process, which further supports a finding
that the Final Rule was arbitrary and capricious. See 5 U.S.C. 553(c) (requiring that the agency
must consider the relevant matter presented during the notice and comment period when
adopting the final rule).
VI.

The Physicians Will Seek to Stay Their State Administrative Appeal of


TennCares Recoupment Pending This Litigation.
104.

The Physicians contested TennCares recoupment efforts in a consolidated

TennCare Provider Appeal currently pending before the Commissioner of the Tennessee
Department of Finance and Administration.
105.

TennCares audit and recoupment efforts against the Physicians are based

specifically on the sixty-percent-threshold requirement in the Final Rule.


106.

Unlike this Court, neither TennCare nor the Tennessee Department of Finance

and Administration have jurisdiction or authority to overrule CMSs Final Rule or declare it
invalid.
107.

If the Court invalidates the sixty-percent-threshold requirement in the Final Rule

as contrary to the statute or arbitrary and capricious, then TennCares audit and recoupment
efforts against the Physicians would likewise be invalidated.
108.

The Physicians advised TennCare and the Tennessee Department of Finance and

Administration that they would be challenging the validity of the Final Rule in federal court.
109.

The Physicians also advised TennCare and Tennessee Department of Finance and

Administration that, following the filing of this lawsuit, the Physicians plan to request a stay of
the TennCare Provider Appeal, and any potential recoupment efforts against the Physicians by

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TennCare based upon the sixty-percent-threshold requirement in the Final Rule, pending the
outcome of this lawsuit
COUNT I
VIOLATION OF THE APA BECAUSE THE FINAL RULE IS
CONTRARY TO STATUTE, ARBITRARY AND CAPRICIOUS
110.

The Physicians reallege and incorporate by reference paragraphs 1 through 109 as

if fully set forth below.


111.

The Final Rule is subject to judicial review under the APA because it is a final

agency action within the meaning of 5 U.S.C. 704.


112.

Under 5 U.S.C. 706(2), a reviewing court shall . . . hold unlawful and set aside

agency action that is arbitrary, capricious, an abuse of discretion, or otherwise not in


accordance with law (id. 706(2)(A)); is contrary to constitutional right, power, privilege, or
immunity (id. 706(2)(B)); or is in excess of statutory jurisdiction, authority, or limitations, or
short of statutory right (id. 706(2)(C)).
113.

The Final Rule is not in accordance with law and in excess of statutory

jurisdiction, authority, or limitations, or short of statutory right because as explained above


it conflicts with the statute codified at 42 U.S.C. 1396a(a)(13)(C).
114.

Defendants also did not adequately consider the alternatives to the sixty-percent-

threshold requirement in the Final Rule or provide reasons for rejecting alternatives articulated in
comments.
115.

Specifically, CMS failed to meaningfully consider or respond to comments that

the sixty-percent-threshold requirement would produce arbitrary results, would harm the very
providers that the statute was enacted to benefit, and was not authorized by statute. (See, e.g.,
Ex. A, 6/11/2012 V. Gordon Letter; Ex. B, 6/11/2012 J. Kennedy Letter; Ex. C, 6/11/2012 A.

29
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Allison Letter; Ex. D, 6/11/2012 D. Smith Letter; Ex. E, 6/11/2012 R. Gluckman Letter; Ex. F,
S. Raoof Letter.) As such, CMS did not meaningfully consider the relevant matter presented,
5 U.S.C. 553(c), and the Final Rule was not based upon consideration of the relevant factors.
116.

Defendants did not adequately consider proposed alternatives to the billed charges

methodology for calculating the sixty-percent-threshold in the Final Rule or provide reasons for
rejecting alternatives, such as basing the calculation on allowed charges as in the MIPPCS,
articulated in comments.
117.

CMSs Final Rule was adopted without observance of procedure required by

law, 5 U.S.C. 706(D).

It constitutes agency action that is arbitrary or capricious and,

therefore, should be held unlawful and set aside pursuant to the APA.
118.

The Physicians are entitled to a declaration that those aspects of the Final Rule

requiring providers to satisfy the sixty-percent-threshold requirement in order to receive


increased payments under the Medicaid Enhanced Payment Statute are not in accordance with
law, and/or are arbitrary and capricious, and an order declaring that payments made under the
Medicaid Enhanced Payment Statute should not be recouped based on upon failure to satisfy the
sixty-percent-threshold requirement in the Final Rule.
119.

The Physicians are entitled to a declaration that those aspects of the Final Rule

requiring providers to satisfy the sixty-percent-threshold requirement in order to receive


increased payments under the Medicaid Enhanced Payment Statute are arbitrary and capricious,
and an order declaring that payments made under the Medicaid Enhanced Payment Statute
should not be recouped based on upon failure to satisfy the sixty-percent-threshold requirement.

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COUNT II
DECLARATORY JUDGEMENT
120.

The Physicians reallege and incorporate by reference paragraphs 1 through 119 as

if fully set forth below.


121.

The Final Rule is subject to judicial review because it is a final agency action

within the meaning of 5 U.S.C. 704.


122.

Under the Declaratory Judgment Act, 28 U.S.C. 2201, in a case of actual

controversy within its jurisdiction, any court of the United States . . . may declare the rights
and other legal relations of any party seeking such declaration.
123.

The Physicians bring an actual controversy within the jurisdiction of this Court

because they have been, and will be, injured as a direct result of Defendants action in
promulgating the Final Rule.

As a direct result of the Final Rule, the Physicians could

collectively be forced to pay back $2,368,147.15 as a direct result of a regulation that is


unlawful, arbitrary, capricious, and contrary to the statute.
124.

The Court should protect the Physicians rights not to be subjected to agency

action that is contrary to law, in excess of statutory authority, arbitrary, or capricious. The Final
Rule represents agency action that violates those rights because it conflicts with the language of
a federal statute and constitutes arbitrary and capricious agency action, among other reasons, for
lack of adequate reasoning and response to comments.
125.

Accordingly, the Physicians are entitled to a declaratory judgment that those

aspects of the Final Rule requiring providers to meet the sixty-percent-threshold requirement as
set forth in that rule in order to receive increased payments under the Medicaid Enhanced
Payment Statute violate the APA, were promulgated ultra vires and contrary to law, and
constitute arbitrary and capricious agency action.

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PRAYER FOR RELIEF


In view of the foregoing, the Physicians respectfully pray that this Court:
1.

Declare that the Final Rule is unlawful insofar as it requires the Physicians to

meet the sixty-percent-threshold requirement as set forth in that rule in order to receive increased
payments under the Medicaid Enhanced Payment Statute;
2.

Declare that the Physicians are not required to refund reimbursement payments

received pursuant to the Medicaid Enhanced Payment Statute by reason of the invalid sixtypercent-threshold requirement in the Final Rule;
3.

Issue an order granting injunctive relief in favor of the Physicians and against

Defendants preventing enforcement of the sixty-percent-threshold requirement in the Final Rule;


4.

Award the Physicians their costs and expenses, including reasonable attorneys

fees; and
5.

Award such further additional relief as is just and proper.

DATED this 31st day of October, 2016.


Respectfully submitted,
/s/ David A. King
David A. King (BPR# 11559)
Brittain W. Sexton (BPR# 27525)
Alison K. Grippo (BPR# 29601)
BASS, BERRY & SIMS PLC
150 Third Avenue South, Suite 2800
Nashville, TN 37201
(615) 742-6200
(615) 742-2842 (facsimile)
Attorneys for Plaintiffs

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EXHIBIT A

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Case 3:16-cv-02815 Document 1-1 Filed 10/31/16 Page 3 of 6 PageID #: 35

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EXHIBIT B

Case 3:16-cv-02815 Document 1-2 Filed 10/31/16 Page 1 of 10 PageID #: 39

Bobby Jindal

Bruce D. Greenstein

GOVERNOR

SECRETARY

State of Louisiana
Department of Health and Hospitals
June 11, 2012
Marilyn Tavenner
Acting Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016
RE: Medicaid Program; Payments for Services Furnished by Certain Primary Care
Physicians and Charges for Vaccine Administration Under the Vaccines for
Children [CMS-2370-P]
Dear Ms. Tavenner:
Thank you for the opportunity to comment on the proposed rule entitled "Payments for
Services Furnished by Certain Primary Care Physicians and Changes for Vaccine
Administration under the Vaccines for Children Program dated May 11, 2012. The
Department's major concerns center on the administrative burden associated with
implementing the new minimum payment levels based on the requirements of the
proposed rule given the statutory implementation deadline of January 1, 2013.
The proposed rule implements new requirements regarding payment by State Medicaid
agencies of at least the Medicare rate in effect in CYs 2013 and 2014 for primary care
services furnished by a physician with a specialty designation of family medicine, general
internal medicine, or pediatric medicine. The minimum rates will result in an increase
and will apply to both fee-for-service and managed care. The proposed rule also
establishes uniform payment provisions regarding eligible primary care services and
specifies how increases should be calculated in order for states to claim the 100%
enhanced match. Finally, the proposed rule also updates the vaccine rates for the
Vaccines for Children Program.
The provisions are effective for services rendered starting in January 1, 2013, which is
less than seven months away. Given that the comment period is closing on June 11th and
CMS will need to issue a final rule, the State is particularly concerned regarding the
limited time it will have to implement the final regulatory provisions and comply with the
statutory requirements. Therefore, the State respectfully requests that provisions of the
proposed rule be modified to reduce the administrative burden on the State and provide
alternative options for implementation, which we believe will also meet the statutory
requirements.
Bienville Building 628 North 4th Street (70802) P.O. Box 90230 Baton Rouge, Louisiana 70821-0629
Phone #: 225/342-3032 Fax #: 225/342-9508 www.MakingMedicaidBetter.com
An Equal Opportunity Employer

Case 3:16-cv-02815 Document 1-2 Filed 10/31/16 Page 2 of 10 PageID #: 40

Tavenner, Marilyn
June 11, 2012
Page 2

Subpart G - Payments for Primary Care Services Furnished by Physicians


Newly created section 447.400, Primary care services furnished by physicians
Section 1902(a)(13)(C)) of the Social Security Act specifies that physicians with a
primary specialty designation of family medicine, general internal medicine, or pediatric
medicine are primary care providers. Those that render evaluation and management codes
and services related to immunization administration for vaccines and toxoids for
specified codes would be eligible for reimbursement at specified rates.
To implement the statutory provisions, the proposed rule creates new Subpart G under 42
CFR 447 - Payment for Services. In order to be eligible for the increased payment, the
provider must be a physician defined in 42 CFR 440.50, or under the personal
supervision of a physician with specialty designation in family practice, general internal
medicine and pediatrics or a subspecialty recognized by the American Board of Medical
Specialties and verified by the Medicaid agency as meeting one of the following
requirements;

Be board certified in the specialty or subspecialty; or

Have furnished evaluation and management (E&M) and vaccine


administration services that equal at least 60 percent of the Medicaid codes billed
during the most recently completed CY year. (Eligible E&M codes include
99201-99499; eligible vaccine administration codes include 90460, 90461, 90471,
90472, 90474, or successor codes.)

For physicians who do not have 12 months of paid Medicaid claims history,
data on codes billed must be reviewed from the date of enrollment through the
end of the enrollment CY.
Comments:
The law and proposed regulation specify that family practitioners, general internal
medicine physicians and pediatricians are eligible for the increased fees. It should be
noted that the CFR language does not align with the current statutory definition of
primary care providers under section s. 1905(t) of the SSA, which specifies general
practitioner, family medicine physician, internal medicine physician,
obstetrician/gynecologist, or pediatrician. As a result, non-certified physicians who do
not meet the 60 percent threshold and are currently considered or registered as primary
care providers will not be eligible for the increase in payment.
In the proposed rule there are two ways a provider can be eligible for the newly
established minimum rate. First is to be board certified in one of the American Board of
Medical Specialties (ABMS) specialty or sub-specialty fields. Second is to demonstrate
through billing history that 60 percent of billed Medicaid codes were for E&M and
vaccine administration. The preamble states that in developing the requirements for
verification of self-attestation it was done to promote uniformity since there are no
existing federal standards regarding Medicaid requirements concerning designations of
specialty. However, the State is concerned that the standards will result in inequitable

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determinations and result in providers who have traditional been recognized and served
as primary care providers being ineligible for the payment.
While the regulation requires certification by ABMS, it should be noted that the law only
specifies designated not certified. Specifically, the provision in federal law regarding
applicability of payment provisions in Medicare and Medicaid both use the term "primary
specialty designation." However the proposed rule would result in a different
interpretation and implementation process. Specifically, Medicare eligibility for the
incentive payment appears to be based on a self-designation of specialty by the Medicare
physician, whereas the proposed rule for Medicaid imposes substantial additional
requirements.
To determine certification as a designated physician specialist, the State is required to
obtain an attestation and establish a validation process before making increased payment.
The State does not currently do this and, based on the rule, would need to do this for all
physicians for which it has not validated a certification as a designated specialist or
subspecialist. These verification requirements pose a substantial administrative burden
for the State as we do not maintain up-to-date certification records as part of the provider
registration process. Furthermore, the State would need to establish a process to have
provider records tied to some other State database that does track certification.
For those physicians that are not certified, the Medicaid agency would have to review the
providers billing history for all of CY 2012 and verify that 60 percent of codes billed
were for specific service, this would also require a substantial amount of work to make
this determination and will result in technical issues that might render inequitable
determinations. Specific technical concerns include the requirement to use billed claims
and claims from the most recent calendar year. Specifically billed claims will likely
include duplicate claims thus skewing results, but more importantly are not a reflection of
services rendered and paid. With respect to the calendar year, it would not permit for
claims run out.
Furthermore, the State is extremely concerned about how it would identify claims in
managed care programs or when a provider bills under different numbers. The State
recently transitioned to managed care; thus, claims in the most recent calendar year for
2012 are now processed by multiple entities.
Due to technical issues, the 60 percent threshold will undoubtedly result in the
unintended consequence of omitting physicians who have traditionally served as an
individual's primary care provider. For example, the draft rule would pay the increased
rate to a certified subspecialist, regardless of volume, yet exclude a non-certified
physician whose billing history demonstrated that 59% were within the designated
service codes. While the State believes that services rendered by a subspecialist are
valuable, the example demonstrates one potential inequitable result of the rule.

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In the preamble to the proposed rule, CMS noted the 60 percent service requirement is
designed to align Medicaid with the statutory requirements for the Medicare Incentive
Payments for Primary Care Services authorized by section 5501(a) of the Affordable
Care Act, which amended section 1833 of the Act, which specifically requires that
primary care services account for at least 60 percent of the allowed charges billed by a
practitioner for services to be eligible for increased payment. However, the State
respectfully submits that the application of the 60 percent service requirement is
misapplied in the regulation. Specifically, the Medicare provision under 1833 is
identified as an incentive and provides for 10 percent increase in payment. It is
common for "incentives" to be based on performance targets or other criteria such as
minimum service utilization. The characterization as an incentive is distinctly different
from establishing a minimum payment as specified in the newly created section of
447.405.
As such, to require 60 percent does not appear to align with the statutory intent that E&M
services rendered are paid at least at the Medicare rate. Furthermore, had Congress
sought to align the two payment provisions, it could have included the language in
section 1833 in the corresponding provision in Medicaid law given that the language was
readily available. The State respectfully submits that a minimum service standard not be
included in the regulation.
As noted above, the State is most concerned about the administrative burden and that the
technical requirements of the regulation will result in the exclusion of physicians that
have long served as primary care providers. As a result the State respectfully requests
that alternative methods to determine that a physician meets one of the specialties
designated in law be considered. Specifically, the State asks that the regulation be
amended to provide the following:

State ability to accept self-designation of specialty, similar to Medicare


enrollment, in accordance with federal and State laws; (or allow States to rely on
the Medicare designation, with CMS transmitting those files to the States).
Ability to identify eligible physicians in the respective specialties based on
information in provider registration and credentialing files for primary care case
management programs as well managed care programs;
Removal of the 60 percent service requirement

Such options would permit the State to comply with statutory requirements without
putting the State or physicians at undue risk of recoupment due to unnecessary
administrative requirements. The State believes that these changes will better align with
Medicare provisions where appropriate and will greatly reduce the State's administrative
burden while also complying with the federal law. Otherwise, the State believes that the
administrative burden will result in excluding some physicians that should have qualified.

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Section 447.405, Amount of required minimum payments


The proposed rule creates section 447.405, which provides for minimum payment levels
for E&M codes and vaccine administration as outlined below.
For the E&M service codes the minimum payment is the lesser of:

The Medicare Part B fee schedule rate applicable to the site and geographic
location of the service or, if there is no applicable rate, the rate specified in a fee
schedule established and announced by CMS, or
The provider's actual billed charge for the service.

For the vaccine administration codes the State must pay the lesser of:

The Regional Maximum Administration Fee; or


The Medicare fee schedule rate in CY 2013 or 2014 (or, if higher, the rate using
the 2009 conversion factor and the CY 2013 and 2014 RVUs) for code 90460

Comments:
Minimum Payment - The proposed regulation indicates that the State must pay for
physician services described in 447.400 based on the lesser of specified rates. The State
is concerned that as drafted the regulation could be interpreted to require the State to
cover all identified CPT codes, including services not previously covered in 2009. The
State requests clarification and corresponding modification to the provision to ensure that
it could not be construed in that manner since coverage determination goes beyond the
intended minimum payment requirement. Furthermore, such a requirement could have a
corresponding fiscal obligation for the State not previously anticipated or contemplated.
Medicare Rate Updates - The preamble to the regulation notes that while the Medicare
rates may be updated throughout a calendar year, the State has the ability to either adopt
annual rates or use a methodology to update rates to reflect changes made by Medicare
during the year. The State appreciates the option to determine which mechanism is most
appropriate and requests the regulation be updated to clearly reflect the requirement. The
State respectfully requests that this be clarified in the regulation.
Geographic location and site of service - The proposed rule specifies use of the Medicare
Part B rate that is applicable to the site of service and geographic location of the service.
States that use a statewide fee schedule regardless of geography and/or site would be
required to obtain information regarding both and edit systems accordingly. It is unclear
if this includes HPSA and other provider-specific adjustments. To update systems to this
level of detail will be difficult for States in the limited time available. Therefore, the
State requests that it be provided additional flexibility in how it would implement rates
that are specific to a site of service or geographic location.

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Newly created section 447.410, State Plan requirements


The regulation requires that the State must amend its State Plan to reflect the increase in
fee schedule payments in CYs 2013 and 2014 unless, for each of the billing codes eligible
for payment, the state currently reimburses the higher of the CY 2013 and CY 2014
Medicare rates for the rate derived using the CY 2009 conversion factor and CY 2013
and 2014 Medicare RVUS.
Comments:
Since the preamble notes that the State has the ability to determine whether rates will be
updated and potential other criteria to implement the provisions, the State recommends
that the section be revised to reflect this option and avoid any perceived conflict with
other provisions.
Newly created section 447.415 Availability of Federal financial participation (FFP)
The proposed regulation specifies that 100 percent FMAP would be available for the
amount by which the established Medicare Part B payment exceeds the Medicaid
payment that would have been made under the approved State plan in effect on July 1,
2009. These provisions apply to fee-for-service payments, and there are distinct
requirements regarding managed care payments. To the extent that the State reduced
rates after July 1, 2009, then the increase to the 2009 rate would be eligible for the
regular FMAP.
For purposes of determining the payment rate under the State Plan in effect on July 1,
2009, the State must consider all supplemental and increased payments made for the
individually billed codes, including any incentive payments and other supplemental
payments in effect at that time. For vaccine administration, the State must impute the
payment that would have been made under the approved Medicaid State plan in effect on
July 1, 2009, by calculating the average payment for specified codes weighted by
volume.
Comments:
As noted, the Medicaid rate must consider supplemental and increased payments,
including incentive payments, as of July 1, 2009. The State respectfully requests that
supplemental and increased payments not be included in determining the rate as of July 1,
2009.
As noted in the preamble of the regulation, the Medicare rate will not include primary
care incentive payments made pursuant to section 5501 of the Affordable Care Act,
which amended section 1833 of the Act. It was noted that this was done since section
5501(a) provides for incentive payments for a subset of the codes covered by this
regulation. Furthermore, it was noted that the payments are not made as increases in fee
schedule amounts and are not reflected in the MPFS. Similar logic should apply to
supplemental payments to the determination of the Medicaid rate since these payments

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are periodic, may also apply only to a subset of codes, and may not tie to specific codes.
Otherwise it will be difficult to determine the appropriate basis for the payment
differential.
With respect to incentive payments, the State is concerned that if the incentive payment is
included in determining the rate as of July 1, 2009, then the State would need to commit
additional funding to continue an incentive payment or discontinue the incentive
payment. Furthermore since incentives are often specific, this would result in a
different "base" for each provider and thus be unworkable.
Immunization Administration - In determining the rate as of July 1, 2009, the State will
need to impute the CY 2009 rate for code 90460 based on the average payment amount
for the deleted codes weighted by service for each of the four CY 2009 rates for vaccine
administration multiplied by their respective percentages of service volume and then
added to determine one payment amount. This is required as four CPT codes for
immunization administration in 2009 were deleted and replaced with 90460 and 90461
(which is to be reimbursed at 0).
Applicability to Managed Care Plans
Amendments to section 438.6 and creation of 438.804
As noted, the increase in rate also applies to services by eligible providers participating
with managed care plans. Specifically, the proposed regulation 42 CFR 438.6(c)(3)(v)
and 438.6(5)(vi) require managed care contracts to comply with new minimum payment
levels, make those payments to physicians (whether directly or through a capitation
rates), and provide documentation to the State regarding the amount payments increased.
The regulation also creates 42 CFR 438.804, which specifies that 100 percent FFP is
available for the portion of the expenditures for capitation payments made under those
contracts that comply with contractual requirements under 438.6(c)(50(vi) only if the
following requirements are met:
(1) The State makes a reasonable estimate of the increased amounts paid for specified
primary care services provided by eligible primary care physicians resulting from
contractual requirements under 438.6(c)(5)(vi), based on information received
from the managed care provider for services furnished as of July 1, 2009.
(2) The State develops a methodology for identifying the differential in payment
between the provider payments that would have been made by the managed care
provider on July 1, 2009, and the amount needed to comply with the contractual
requirement under 438.6(c)(5)(vi).
(3) The State submits the methodology in paragraph (a)(2) of this section to CMS for
approval before the beginning of CY 2013.

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Comments:
Plan-Specific Data - The conditions for 100 percent FFP will be difficult for the State to
meet. Specifically, the regulation requires that the rate be based on information received
from the managed care provider for services furnished as of July 1, 2009. Since
Louisiana recently implemented managed care, the State does not have information from
managed care plans as of July 1, 2009. The regulation should clarify that the rate will be
based on the fee-for-service or base utilization data used for rate setting.
For those States that had managed care programs, the requirements may be problematic
for those that did not collect encounter data or collected encounter data but did not
include all data fields. The preamble appears to indicate that the rate paid was included
in the encounter data. While a State may have collected this information, it may not have
been thoroughly validated for this purpose. For example, a data field for payment could
include charge information or have been blank or not otherwise used. Since States had
no way of knowing this would be a condition of FFP, they cannot retroactively change
requirements.
Finally, the new special provision may result in a conflict with 438.6(c)(3)(i) which
requires that actuarially sound rates be based on utilization and cost data that are derived
from the Medicaid population. The 2009 cost data included in the rate may not reflect the
amount paid to the provider, since managed care contracts are risk arrangements. As a
result, States should be given the option to use reasonable methods for determining the
differential. For example, States should be able to use a methodology similar to the
enhanced claiming for family planning service expenditures that are a component of the
capitation rate. Many States have experience with this methodology and could modify it
to capture the expenditures related to the portion of the capitation payment attributable to
the minimum payment and identify the amount on the CMS-64 based on the number of
individuals enrolled.
The preamble notes that the increase in payment must correspond to the volume and
increase in payment specified in the rule. It is unclear if the volume requirement is
referring to the 60 percent threshold established in the regulation. As noted above, this
information is difficult to determine, and some States may not have access to this
information. With respect to rate development, it is unclear how the volume requirement
would be addressed. Since 2009, States have had a tremendous increase in enrollment
and utilization of services, and implementation and expansion of managed care programs
may not be captured in 2009 data. The State requests clarification regarding the
statements in the preamble regarding this issue.
Finally, the regulations require that the methodology must be submitted to CMS prior to
2013. Since the State must comply with other rate-setting requirements in 436.6 and
managed care contracts are to be approved by CMS, it is unclear if the methodology is to
be submitted separately from the rate certification or if it must be submitted with the rate

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certification. If the latter, it is unclear why the proposed regulation appears to require
separate submissions.
However, given the uncertainty when a final rule will be issued and the likely need to
conduct additional rate-setting analysis to comply with the data, it would be extremely
challenging for the State to submit a methodology for CMS approval prior to then.
Missing the deadline would jeopardize the availability of the enhanced FMAP even
though the State is required by law to pay the Medicare rate. The State requests that
CMS issue more detailed guidance regarding permissible methodologies and remove the
deadline for submission.
Other Comments:
It should be noted that the proposed regulation does not specifically detail the distribution
of payments. The law does not specify if increased payments must be paid as part of the
adjudication of the claims or if supplemental payments would be permissible. The State
requests that this be clarified and that States be provided with the option to provide for
increased payment through supplemental payments. For example, States could choose to
pay eligible providers similar to the process used for the Medicare PCIP payments, which are
calculated by the Medicare contractors and made quarterly on behalf of the eligible primary
care practitioner for the primary care services furnished by the practitioner in that quarter.
This would reduce the administrative burden associated with system changes that would
be required as part of claims processing while providing sufficient documentation to
support payments for purposes of accurately claiming the enhanced FMAP.
We appreciate the opportunity to submit comments on this very important matter and
look forward to working with you on this and other issues in the future.
Sincerely,
J. Ruth Kennedy
Medicaid Deputy Director

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EXHIBIT C

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June 11, 2012

Marilyn Tavenner
Acting Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016
RE: Medicaid Program; Payments for Services Furnished by Certain Primary Care
Physicians and Charges for Vaccine Administration Under the Vaccines for
Children Program [CMS-2370-P]

Dear Ms. Tavenner:


On behalf of the nations Medicaid directors, the National Association of Medicaid
Directors (NAMD) submits comments on the proposed regulation, Medicaid Program;
Payments for Services Furnished by Certain Primary Care Physicians and Charges for
Vaccine Administration Under the Vaccines for Children Program. We appreciate the
opportunity to provide recommendations that we believe will help clarify and ease the
implementation of the required increases in Medicaid primary care services rendered
during calendar years 2013 and 2014.
The concept of increasing state Medicaid program primary care reimbursement rates to at
least the Medicare level will, along with other factors, assist in state efforts to successfully
increase access to primary care services. Unfortunately, as the rules are proposed,
implementation will be administratively burdensome, complex, costly, and may
jeopardize timely implementation and place at risk the intended outcome.
Medicaid Directors respectfully urge CMS to revise the proposed rule to incorporate our
recommendations to simplify implementation processes, improve transparency of the
applicability of the rate increase to providers, and minimize the administrative burden to
states for implementing the requirements as proposed. Medicaid Directors also urge our
federal partners to work with states to clarify and resolve the outstanding issues identified
herein and ensure consistency with congressional intent. It is imperative that CMS allow
states as much flexibility as possible in implementation of the time-limited enhanced
payment.

444 North
Capitol Street, Suite 309
Washington,
20001 10/31/16
Phone: 202.403.8620
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Our comments center on two overarching themes:


1) States must develop and implement the policies and procedures to comply with the
provisions implementing the new statutory requirements. However, Medicaid
Directors believe the proposed rule is overly complex from an operational perspective.
This threatens to impede states ability to implement the enhanced payment for
providers by the January 1, 2013 implementation date and, in some states, could make
implementation entirely unworkable.
2) The application of the higher reimbursement rate is at the same time overly narrow
and too expansive. Medicaid Directors believe that CMS should amend its framework,
and, to the greatest extent possible, grant states the flexibility to target the higher
payment to providers designated as the primary care provider.

Payments to Physicians for Primary Care Services: Statutory and Regulatory


Framework
The Preamble states that it is critical that a sufficient number of primary care physicians
participate in the Medicaid program. The Preamble goes on to state that the primary care
increase will encourage primary care physicians to participate in Medicaid by increasing
payment rates. While Medicaid Directors agree that physician participation in the program
is critical, we also believe that reimbursement rates are one of a number of significant
factors impacting physician participation in the Medicaid program. Other issues driving
the level of participating physicians include the overall supply of physicians within a
particular geographic region or state, and medical students decisions to specialize in a
particular field, among other factors that are not unique to Medicaid.
Further, Medicaid Directors believe it is essential to look not only at the supply of primary
care physicians, but also the demand for these services. Specifically, states seek to become
more rational purchasers of care and to help educate Medicaid clients to ensure
appropriate utilization of services from the most appropriate provider. States have and will
continue to undertake innovative approaches to ensure there is sufficient provider supply,
for example by utilizing physician extenders, implementing and expanding telehealth and
telemedicine programs, and encouraging preventive measures and services.
States have focused efforts on ensuring that primary care providers are caring for
Medicaid members, including through care coordination and integration initiatives like
health homes that are supported by CMS. Similarly, CMS should reconsider its
framework and ensure the higher reimbursement is targeted to the providers truly
delivering primary care services. We have strong concerns that, as proposed, this rule is
poised to create disincentives for delivery of primary care services by the most appropriate
provider as well as for accessing primary care services in the most appropriate setting.
Revision of this regulation is critical in order to ensure implementation does not inhibit
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states efforts to facilitate use of the right providers and related initiatives to drive delivery
of appropriate services in the most appropriate setting.

Implementation Timeframes and Operational Issues


As proposed, the rule establishes unnecessarily complex requirements and process for
identifying eligible providers. In addition, the simultaneous complexity and vagueness of
the process for implementation in managed care programs creates additional
implementation challenges for states. In many states, it takes at least several months to
implement the types of policy changes that CMS has proposed. Therefore, the complexity
of the proposed rule will make it difficult if not impossible for many states to meet the
January 1, 2013, implementation date. Further, we believe several states may not be
ineligible for the increased FMAP because of changes in their reimbursement rates since
July 1, 2009.
Therefore, we urge CMS to grant all states greater flexibility to implement these payment
provisions in a manner that is fiscally sound and best addresses the needs of Medicaid
members. For example, we request that CMS work with states to allow for
implementation in phases if needed and to allow states to make retrospective adjustments.

Payments to Physicians for Primary Care Services


Section 1902(a)(13)(C)) of the Social Security Act specifies that physicians with a
primary specialty designation of family medicine, general internal medicine, or pediatric
medicine are primary care providers. Those that render evaluation and management codes
and services related to immunization administration for vaccines and toxoids for specified
codes also would be eligible for reimbursement.
As proposed, in order to be eligible for the increased payment the following requirements
must be met. The provider must:
Be a physician, or under the personal supervision of a physician, with a specialist
designation of family practice, general internal medicine and pediatric medicine or
a subspecialists related to one of these primary care specialists and recognized by
the American Board of Medical Specialties; and
Be board certified in the specialty or subspecialty; or
Have furnished evaluation and management (E&M) and vaccines services that
equal at least 60 percent of the Medicaid codes billed during the most recently
completed calendar year.

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There are a number of operational challenges and significant new administrative burdens
associated with the proposed method for designating an eligible provider. For example,
we note that few states currently maintain up-to-date certification records. Nor are all
states provider records tied to some other state database that tracks up-to-date board
certification information. Further, reviewing provider files for the 60 percent service
requirement adds an additional administrative task not currently required of the states.
Additionally, states will need to implement a process to reimburse newly enrolled noncertified providers at a higher rate which will require additional, new administrative tasks
and processes to assure the integrity of state Medicaid programs.
Implementation of this provision will require most states to invest significant time
researching and reviewing provider records and claims. This could significantly slow
Therefore, NAMD respectfully requests that CMS adopt the following recommendations
related to provider designation:
1) Provide states the flexibility to apply the provider rate increase leveraging states
existing enrollment and claims processing capacity.
2) The process for reimbursement of new physicians also is problematic and results
in system costs and administrative complications. We recommend that states
continue to rely on the providers reported specialty and existing system capacity.
3) CMS should adopt an alternative approach in which the non-board certified
physician would qualify if she/he completed an approved residency in one of the
three designated primary care physician fields.
4) Since taxonomy is used as an indicator for specialty and subspecialty and is selfreported, NAMD recommends that states be given the flexibility to use taxonomy
for confirmation of specialty and that no additional verification process be
imposed on states. The imposition of the proposed requirement results in
significant changes to systems and provider enrollment processes, is
administratively burdensome and costly to implement, and could adversely impact
operational timelines.
5) Board certification is not confirmed at a national level in the assignment of
taxonomy and National Provider Identification (NPI). Therefore, states should not
be required to confirm this at the state level. Instead, states should be permitted to
rely on CMS assignments of NPI taxonomy.
Specified Specialists and Subspecialists. As proposed, the rule would allow subspecialists
related to the primary care specialists designated in the statute to qualify for the higher

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payment if they are recognized by the American Board of Medical Specialties (ABMS).
We believe that this proposal would add 44 additional specialty designations to the list of
physicians who are eligible to receive the increased payment rate. Included among eligible
providers are physicians who practice sports medicine and sleep medicine. However,
OB/GYNS and psychiatrists, both of which bill evaluation and management (E&M) codes
that are equated with the provision of primary care, are not included in ABMS listing.
This proposal could incentivize inappropriate behavior by certain providers. Further, the
breadth of this proposal threatens states ability to meet the statutory requirements of
1902(a)(30)(A), which require assurances that payments under the state plan are
consistent with economy, efficiency and quality of care. In other words, this broad
proposal would require higher payments to specialists without a rational correlation to the
subspecialists that do or that might as a result of the temporary higher payment deliver
primary care services to Medicaid members. The proposal also does not provide
reasonable assurances that extension to a broad array of subspecialists will expand access
to primary care services.
In addition, we believe the proposal significantly expands the number of eligible
physicians beyond a reasonable interpretation of the statute. In turn, as proposed, the
extension to a wide range of subspecialists will have considerable budgetary impacts for
most states, including those that adjusted their reimbursement rates downward since 2009.
Further, the broader provider categories (internal medicine, family practice, and
pediatrics) should continue to apply as states currently have different enrollment and
claims processing capacity and may not be able to identify all provider subspecialties and
reimburse a different rate by subspecialty.
As noted earlier, states seek to support the delivery of primary care by the most
appropriate provider in the most appropriate setting. Further, states, rather than federal
agencies, are in the best position to make this assessment for their Medicaid members. For
these reasons, we strongly urge CMS to rescind this provision and consider other
proposals contained herein for creating a more flexible framework for states to identify
eligible primary care physicians.
60 percent threshold. In the Preamble to the proposed rule, CMS noted the 60 percent
service requirement is designed to align Medicaid with the statutory requirements for the
Medicare Incentive Payments for Primary Care Services authorized by section 5501(a) of
the ACA, which amended Section 1833 of the SSA that specifically requires that primary
care services account for at least 60 percent of the allowed charges billed by a practitioner
for services to be eligible for increased payment. Medicaid Directors do not agree that it is
appropriate to designate a threshold. We believe that if Congress had sought to align the
two payment provisions, it would have included the language in Section 1833 in the
corresponding provision in Medicaid law.

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Furthermore it is worth noting that the Medicare provision under 1833 is labeled an
incentive and provides for a 10 percent increase in payment. NAMD notes that there is
no performance target associated with the Medicaid increase; Congress established a
minimum payment as specified in the newly created section of 447.405. As such, to
require 60 percent does not appear to align with the provision.
Finally, the requirement for states to review billing histories of each provider would result
in tremendous, unanticipated administrative burdens, especially with respect to newly
enrolled providers without a Medicaid billing history.
Again, to alleviate the administrative burden and align with existing regulatory language,
NAMD recommends that states be allowed to accept physician self-designation of
specialty as permitted by Medicare or rely on current systems such as enrollment as a
primary care provider (PCP) in the state's Medicaid program. This would help reduce
administrative burden and ensure that physicians that have historically provided
evaluation and management services are eligible for the increased rate.

Specified Physicians
The proposed rule states that primary care services would be paid at the higher Medicare
rate if properly billed under the provider number of an eligible physician, regardless of
whether the service is furnished by the physician directly or under the physicians
personal supervision. This approach could recognize the important role that non-physician
providers working under the supervision of physicians have in delivery of primary care
services.
However, in proposing to do so, CMS should consider that many states have billing and
oversight policies and procedures designed to elicit desirable policy goals or analyses, but
which also will make it administratively difficult for non-physician providers to receive
the higher Medicare rate. For example, some states require certain non-physician
providers to obtain their own billing number. This can allow Medicaid programs to
conduct more detailed analysis and monitoring of physician supply and the provision of
primary care services to Medicaid clients. Given the temporary nature of the increase,
states may determine that changes to Medicaid systems and states policies to
accommodate the pass-through of the reimbursement increase may not be cost effective.
Further, such changes could obscure who is delivering primary care services, which in
turn could disrupt state planning on a range of issues.
Obstetrician/Gynecologist. Obstetrician/gynecologists is not identified as a board
certification category for recognition as eligible providers. Yet they are an integral part of

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health care delivery in Medicaid, often serving as the designated primary care physician of
record. NAMD requests that CMS reconsider this category of providers for inclusion in
this program on terms similar to other physician types.
Crossover claims. The rule proposes that the increase in primary care payment will also be
provided for Medicare/Medicaid cross over claims for dually eligible members. This
poses significant administrative challenges in state Medicaid fee-for-service and managed
care programs. States are responsible for any wrap-around payments that CMS will not
cover with respect to these individuals.
However, in many states providers frequently do not bill the state or Medicaid managed
care plan if they know the reimbursement initially received from Medicare exceeds the
Medicaid fee schedule. For providers not in a states fee-for-service program or managed
care system, a state will not know whether or not the claim truly represents a service
delivered by a provider functioning as a primary care physician, nor will a state
necessarily have access to detailed information regarding board certification or eligibility.
States need either encounter data for these beneficiaries or significant flexibility in
determining increased payments to managed care plans related to dually eligible
beneficiaries particularly for sub-capitated arrangements. One possible solution we
recommend that CMS consider is for the federal agency to provide a file to states that
identifies physicians eligible for the payment increase on cross over claims. Alternately,
CMS could administer claims for this dually eligible population entirely by paying 100
percent through Medicare for the services and providers that qualify

Minimum Payment
The proposed rule provides for minimum payment levels for E&M codes and vaccine
administration.
Medicare Physician Fee Schedule (MPFS). The Preamble to the regulation notes that
while the Medicare rates may be updated throughout a calendar year, states have the
ability to either adopt annual rates or use a methodology to update rates to reflect changes
made by Medicare during the year. We also note that CMS typically releases the physician
relative value units (RVU) file late in the calendar year likely too late for states to
incorporate the Medicare payment rates on January 1, 2013. Many states would then most
likely initiate the process using the prior year's rates, re-configure pricing to make a midyear correction and adjust prior claims. This is a complicated multi-step process and states
are also concerned that there will not be enough time once the final rule is published to
finalize a methodology, develop rates, update contracts, and obtain CMS approvals prior
to January 1, 2013.
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States will need the flexibility to implement changes retrospectively given these timing
challenges. Medicaid Directors support the proposal to allow states to adopt either annual
rates or a model that best suits a states current practice. For example, one potential model
should allow states to develop an average Medicare rate, as opposed to applying facility
differentials and geographical conversions in the rate setting and claims adjudication
process. States would update the rate as changes to the Medicare rate impact the average.
This flexibility will allow states to align the implementation with other scheduled
activities and should be included as part of the State Plan Amendment (SPA) submission.
Geographic location and site of service. The proposed rule specifies use of the Medicare
Part B rate that is applicable to the site of service and geographic location of the service.
States that use a statewide fee schedule regardless of geography and/or site would be
required to obtain information regarding both and edit systems accordingly.
However, Medicaid reimbursement systems generally do not apply facility differentials
and geographical conversions in the rates and claims adjudication process. Imposition of
this requirement will result in the need to make significant changes to the MMIS. This
will result in increased cost to the states and federal government for a change that will be
in place for a limited amount of time and may impact implementation timelines. Therefore
NAMD requests that CMS allow each state to apply the rate increase based on existing
claims processing capacity and available data rather than limiting it to the rate that is
applicable to the site of service and geographic location of the service. As previously
discussed, we also recommend that CMS consider allowing states to develop an average
Medicare rate, as opposed to applying facility differentials and geographical conversions
in the rate setting and claims adjudication process.

Eligibility for 100 percent Federal Financial Participation


The proposed regulation specifies that 100 percent FMAP would be available for the
amount by which the established Medicare Part B payment exceeds the Medicaid payment
that would have been made under the approved State Plan in effect on July 1, 2009.
These provisions apply to fee-for-services payments and managed care.
The proposed rule specifies a range of procedure codes that are identified as primary care
services. Section 447.410 requires that a state amend its plan to reflect the increase in fee
schedule payments for each of the eligible billing codes. Many states have identified
evaluation and management (E&M) codes within the range of specified codes that are not
currently covered within the state Medicaid plan. NAMD requests that CMS clarify that
the federal agency is not requiring that all codes be covered. Instead, we seek

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confirmation that CMS is maintaining the authority for states to continue to reimburse
providers at the higher level only for services eligible under the state Medicaid program.
In addition, states request that CMS clarify the applicable Medicare rate for particular
services that a state Medicaid program did not cover in 2009 but does cover in 2013 and
2014. That is, would the applicable rate be the greater of the Medicare rate in 2009, 2013,
or 2014?
Supplemental payments. For purposes of determining the payment rate under the State
Plan in effect on July 1, 2009, the rule proposes to require states to consider all
supplemental and increased payments made for the individually billed codes, including
any incentive payments and other supplemental payments in effect at that time. CMS also
is proposing that states be required to use the Medicare Physician Fee Schedule (MPFS)
as published. However, in determining the Medicare rate, the Preamble of the regulation
noted that the Medicare primary care incentive payments made pursuant to section 5501
of the ACA, which amended section 1833 of the SSA, would not be included. Section
5501(a) provides for incentive payments for a subset of the codes covered by this
regulation. The payments are not made as increases in fee schedule amounts and are not
reflected in the MPFS.
Therefore, Medicaid Directors recommend that CMS apply similar logic to supplemental
payments to the determination of the Medicaid rate since these payments are periodic,
may only apply to a subset of codes, and may not include all providers. Otherwise it may
be difficult for states to determine the appropriate basis for the payment differential.
Regarding Medicaid performance based payments and programs, states request that CMS
apply similar logic as that it proposed for Medicare. That is, CMS should exclude pay for
performance or similar types of supplemental payments in the determination of the
applicable 2009 Medicaid reimbursement rate for the primary care service for the eligible
physician. It would be significantly burdensome to both the providers and the State to
determine what portion of the supplemental payment is just for those providers and
services covered under this proposed rule.
Submission of claims. Eligible providers that render primary care services during CYs
2013 and 2014 will receive at least the applicable Medicare reimbursement rate. However,
billing by such providers may not be processed for many months thereafter. We ask CMS
to clarify that providers have no less than 12 months from date of SPA approval to file
claims for payment. We also ask CMS to confirm that state Medicaid agencies will be
allowed to claim the 100 percent federal participation until they have been reimbursed in
total for whatever they have paid to eligible providers per the statutory requirements for
the temporary higher rate during CYs 2013 and 2014.

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In addition, we urge CMS to provide states flexibility in meeting these timelines as it


relates to the increase given the short timeframes for developing verification plans,
managed care methodologies, and state plans that CMS must subsequently approve and
the systems changes required for implementation.

Applicability to Managed Care Plans


As noted, the rate increase applies to services by eligible providers participating with
managed care plans. Specifically, the proposed regulation 42 CFR 438.6(c)(3)(v) and
438.6(5)(vi) require managed care contracts to comply with new minimum payment
levels, make those payments to physicians (whether directly or through a capitation rate),
and provide documentation to the state regarding the payment increases.
The regulation also creates 42 CFR 438.804, which specifies that 100 percent federal
financial participation (FFP) is available for the portion of the expenditures for capitation
payments made under those contracts that comply with contractual requirements under
438.6(c)(50)(vi) only if the following requirements are met:
(1) The State makes a reasonable estimate of the increased amounts paid for specified
primary care services provided by eligible primary care physicians resulting from
contractual requirements under 438.6(c)(5)(vi), based on information received
from the managed care provider for services furnished as of July 1, 2009.
(2) The State develops a methodology for identifying the differential in payment
between the provider payments that would have been made by the managed care
provider on July 1, 2009, and the amount needed to comply with the contractual
requirement under 438.6(c)(5)(vi).
(3) The State submits the methodology in paragraph (a)(2) of this section to CMS for
approval before the beginning of CY 2013.
Determination of eligible physician.As previously noted, the rule provides payment
increases for a number of subspecialists in addition to primary care physicians. In most
state managed care programs, a Medicaid members primary care provider is clearly
identified and designated as such within the managed care system. Therefore, we
recommend that states operating managed care systems be given flexibility to apply the
increase in payment specifically to providers serving as the primary care physician within
states managed care systems.
As noted above, the proposed rule also extends the payment increase to services provided
by nurse practitioners and physician assistants when properly billed through an eligible
physician. We recommend that states operating managed care systems be granted
flexibility to apply the increases in payment specifically to those nurse practitioners and

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physician assistants who are functioning as primary care providers within the states
managed care systems.
Increased payment methodologies. NAMD requests that CMS simplify the requirements
for states to receive 100 percent FFP as the proposed requirements are overly complex and
will likely be difficult for many states to meet. Specifically, the regulation requires that
the rate be based on information received from the managed care provider for services
furnished as of July 1, 2009. We recommend that CMS add language that could states in
determining the rate differential. Specifically, we request that CMS insert or data used by
the state in developing payment rates following from the managed care provider at 42
CFR 438.804(a)(1). NAMD also recommends that for states that implemented managed
care after 2009, the regulation should clarify that it will be based on the FFS or base
utilization data.
For those states operating managed care programs in 2009, the requirements may be
problematic for several other reasons. The Preamble appears to indicate that the rate paid
was included in the encounter data. While a state may have collected this information, it
may not have been thoroughly validated for this purpose. Since states had no way of
knowing this would be a condition of FFP, it will impose a significant burden, or could be
impossible, for most states to obtain this historical data. For example, a data field for
payment could include charge information or it could have been blank or not otherwise
used. Assuming the data is available and retrievable, a state may have to amend its
contracts with health plan entities to impose additional reporting requirements.
The proposed rule also requires states to include managed care organization reports for
justification of increased capitations. The imposition of additional reporting requirements,
if reports result in variation of capitation rates throughout the year, will be complicated
and difficult to implement. We also note that the new special provision appears to conflict
with 438.6(c)(3)(i) which requires that actuarially sound rates be based on utilization and
cost data that are derived from the Medicaid population. The 2009 cost data included in
the rate may not reflect the amount paid to the provider, since contracts are risk
arrangements. We also note that this rule will be difficult to implement for physicians
being paid a salary by the health plan entity because information may be confidential.
Given these challenges, NAMD recommends that states be given as much flexibility as
possible in choosing the methods for determining the differential. That is, CMS should
allow states to submit a methodology for claiming the enhanced FMAP associated with
the increased capitation. Some of the possible methods states could use include the
following:
An actuarial sound cost accounting analysis where the enhanced FMAP for primary
care payments is calculated based upon a historical cost accounting analysis of
existing health plan data of the specific provider codes. This methodology is similar to

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the enhanced claiming for family planning service expenditures that are a component
of the capitation rate. Many states have experience with this methodology and could
modify it to capture the expenditures related to the portion of the capitation payment
attributable to the minimum payment.
A below the line adjustment on a per member month basis indicating the enhanced
funding amount for each contracting Medicaid health plan. Based upon the
calculation, each plan would appropriately identify the amount of enhanced funding
that will be passed onto eligible providers. This would be outside the risk structure of
the contract.

Volume of payment. The Preamble notes that the increase in payment must correspond to
the volume and increase in payment specified in the rule. It is presumed that the volume
requirement is the 60 percent threshold established in the regulations. As noted above,
this information is difficult to determine, and some states may not have access to this
information.
With respect to rate development, NAMD believes it is unclear how the volume
requirement would be addressed. Since 2009, states have had a tremendous increase in
enrollment and utilization of services and implementation and expansion of managed care
programs may not be captured in 2009 data. More importantly, the volume requirement
does not appear to align with the statutory intent that E&M service rendered are paid at
least the Medicare rate.
Submission of methodology. The regulation requires that the methodology must be
submitted to CMS prior to CY 2013. However, given the uncertainty of when a final rule
will be issued and the likely need to conduct additional rate-setting analysis to comply
with the data, it is unlikely that any state could submit a methodology for CMS approval
prior to then. Furthermore, since the state must comply with other rate-setting
requirements in 436.6, it is unclear if the methodology is to be submitted separately from
the rate certification or if it must be submitted with the rate certification. If the latter, it is
unclear why the proposed regulation appears to require separate submissions.
Further, neither the Preamble nor the proposed rule provides any standards by which CMS
will evaluate and approve or deny the methodologies. This creates further uncertainty
regarding the submission process and timeframes. NAMD recommends that CMS seek
additional state input into this process as the 30-day comment period provided for this rule
was insufficient to provide comprehensive comments on this important aspect of the rule.
Other affected managed care components. NAMD requests that, to the extent the final
rule increases the administrative burden on health plans, full federal funding should be
made available for those administrative expenses. We also request that full federal funding

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be made available for other rate components impacted by this increase, such as the Federal
Health Insurer Fee, premium-related taxes, and underwriting gain.

State Plan Amendments


The rule requires states to amend their State Plan to reflect the increase in fee schedule
payments for CYs 2013 and 2014 unless the state currently reimburses at least as much as
the higher Medicare rate for the applicable period. We note that this requirement deviates
from CMS usual process for the submission of a SPA, which is within the quarter in
which the change is implemented, and we request that CMS consider allowing states more
flexibility in the timeframe.
State Plan Requirements. States require additional information regarding the contents of
the SPA, including any specific information states must provide with respect to assuring
verification and identifying applicable rates, specifying any mid-year updates, and
assuring notification and whether states must identify the actual CPT codes. Given the
very short timeline to submit the SPA and implement the significant changes to state
systems, NAMD respectfully requests that CMS work with states to clarify outstanding
issues and provide these details in a timely manner. In addition, we recommend that CMS
develop a SPA template that states may use. A SPA template could help facilitate timely
and efficient implementation.
States also request that CMS allow the Medicaid agency to include an automatic sunset
period in the SPA to reduce administrative burden for the state and federal partners at the
conclusion of the period for the temporary reimbursement increase. This option will
reduce the administrative burden for states and the federal agency at the conclusion of the
statutory requirement for higher reimbursement.
Payment Distributions. It should be noted that the proposed regulation does not
specifically detail the distribution of payments. NAMD requests that CMS clarify that
states have the flexibility to make the increased payments either as part of the adjudication
of the claims or as supplemental payments.
The law requires that states and managed care plans must comply with 1902(a)(37)
regarding timeliness of claims payments. In order for the supplemental claims payment to
also comply with the timely claims payment requirements, NAMD requests that for states
that choose to provide supplemental payments, such states be granted the authority to
approximate payment or provide such payments more frequently than quarterly.

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Immunization Administration
For vaccine administration, the state must impute the payment that would have been made
under the approved Medicaid State Plan in effect on July 1, 2009 by calculating the
average payment for specified codes weighted by volume.
In determining the rate as of July 1, 2009, states will need to impute the CY 2009 rate for
code 90460 based the average payment amount for the deleted codes weighted by service
each of the four CY 2009 rates for vaccine administration multiplied by their respective
percentages of service volume and then added to determine one payment amount. This is
required as four CPT codes for immunization administration in 2009 were deleted and
replaced with 90460 and 90461 (which is to be reimbursed at 0).
We recommend that CMS allow states to develop and propose a methodology for
determining the 2009 vaccine administration rate and permit states to implement the rate
change in accordance with states current payment policies related to the administration of
vaccines.
Administration fee impact. In its discussion of the Vaccines for Children (VFC) program
maximum administration fee, CMS notes that the amount paid to providers for
administering vaccines to Medicaid-eligible children through state Medicaid programs
will not increase unless a state elects to increase its rate by submitting a SPA. However,
the Statement of Regulatory Impact indicates that providers who provide immunizations
under the Medicaid program must be reimbursed at the lesser of the 2013 or 2014
Medicare rate, or the Regional Maximum VFC Administration Fee in 2013 and 2014. We
request that CMS clarify the requirements related to reimbursement of Medicaid providers
providing immunizations through the VFC program.

Regulatory Impact
Several states reviewed the proposed revisions and compared these to similar initiatives,
such as 5010 implementation, to assess the relative administrative and financial burden on
states. Based on assessments from a number of states, NAMD believes the regulatory
impact statements significantly underestimate the time and resources for states to
undertake the significant coding and related systems work, conduct the necessary analyses
and develop policies, implement the regulation as part of regular operations, and maintain
compliance with the regulation, as currently proposed. Therefore, we strongly urge our
federal partners to engage states in further conversation to more accurately assess the
impact and ways to minimize the multiple challenges.

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On behalf of the nations Medicaid Directors, we thank you for the opportunity to
comment on this proposed rule. We look forward to continuing to work with CMS on
these issues throughout this rulemaking process and beyond. If you have any questions
regarding our comments or require additional information, please do not hesitate to
contact Andrea Maresca, NAMDs Director of Federal Policy and Strategy at
andrea.maresca@namd-us.org.
Sincerely,

Andy Allison
Director, Division of Medicaid Services
State of Arkansas, Department of Human
Services
President, NAMD

Darin J. Gordon
TennCare Director
State of Tennessee, Department of Finance
and Administration
Vice President, NAMD

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EXHIBIT D

Case 3:16-cv-02815 Document 1-4 Filed 10/31/16 Page 1 of 6 PageID #: 65

State of Wisconsin

Department of Health Services


Scott Walker, Governor
Dennis G. Smith, Secretary

June 11, 2012


Honorable Marilyn Tavenner
Acting Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016
Attention: CMS 2370-P
P.O. Box 8016
Baltimore, Maryland 21244-8016

RE:

Proposed CMS Regulation CMS-2370-P Payments for Certain Services Furnished


by Certain Primary Care Physicians & Charges for Vaccine
Administration under the Vaccines for Children Program

Dear Administrator Tavenner:


Thank you for the opportunity to comment on the proposed regulation, CMS-2380-P regarding
Medicaid payments for certain services and charges. CMS has issued its proposed rule to
implement new Social Security Act (SSA) provisions, enacted by the Patient Protection and
Affordable Care Act (PPACA), relating to the payment rates for certain primary care physicians,
eligible primary care services and selected vaccines provided under the Vaccines for Children
Program. The Rule is to be effective January 1, 2013 through December 31, 2014.
In general, we view the underlying statute and subsequent rule as a step backward in the
movement to authentic service deliver reform. At a time when states and the federal government
are seeking new ways to incentivize the entire health care delivery system to move away from
volume-based reimbursement, this rule seems contradictory to the many statements by federal
officials. Bearing in mind that the law will be in effect for just two years, please consider the
following impacts and consequences:

It would force Wisconsin to relinquish savings in Medicaid efficiencies that have already
been put into place.
It would force Wisconsin to re-open managed care contracts that are already in effect.
Given the contractual relationships between the state and its partners and the managed
care entities and their provider partners, the provision would in affect re-negotiate terms
that are already settled.
Within the concept of risk-based contracts, there is no compelling reason to make
adjustments that can only be done after the fact. The final data necessary to make
accurate payments for CY 2013 will not be available until 2015.

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Honorable Marilyn Tavenner


June 11, 2012
Page 2

The definition of primary care goes beyond the current definition in order to spread
federal dollars across more specialists. At the same time, it does not allow the enhanced
federal match rate to be used for care extenders such as pharmacists. CMS is
interfering with market reforms that have great potential to expand access and lower
costs.
States and the federal government are moving to adopt bundled payments. Wisconsin
already employs bundled payments for vaccines. This would force the state to unbundle,
a result that is quite inconsistent with statements of federal officials that support bundled
payments.
CMS has under-estimated the systems changes that would have to made, with no
additional federal funding.
In an arbitrary and capricious manner, CMS has boot-strapped major changes to the
Vaccines For Children (VFC) program onto an unrelated regulation. At a minimum, the
VFC provisions should be separated.

Section 1902(a)(13)(C) of the SSA defines primary care providers as physicians with a
primary specialty designation of family medicine, general internal medicine, or pediatric
medicine. Those who render evaluation and management (E & M) codes and services related to
immunization administration for vaccines and toxoids for specified codes would be eligible for
reimbursement.
In order to be eligible for the increased payment as proposed in 42 CFR 447, a provider must:
Be a physician as defined in 42 CFR 440.50, or under the personal supervision of a
physician with specialist designation in family practice, general internal medicine and
pediatrics or a subspecialty recognized by the American Board of Medical
Specialties;
Be board certified in the specialty or subspecialty; or
Have furnished at least 60% of all Medicaid codes as evaluation and management
(E&M) and vaccines services during CY12.
Additionally, a process for recouping or claims reprocessing will be needed to reimburse newly
enrolled non-certified providers at a higher rate.
There are a number of operational challenges and significant new administrative burdens
associated with the proposed method for designating an eligible provider. Up-to-date
certification records and provider records may not be readily available for review. Further,
reviewing provider files for the 60 percent service requirement adds an additional administrative
task not currently required of the states. Technical issues, such as identifying claims in managed
care programs or provider billing under different numbers, will pose significant administrative
challenges and strain DHS resources.

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Honorable Marilyn Tavenner


June 11, 2012
Page 3

In the Preamble to the proposed rule, CMS noted the 60% service requirement is designed to
align Medicaid with the statutory requirements for the Medicare Incentive Payments for Primary
Care Services (authorized by section 5501(a) of PPACA), found in Section 1833 of the SSA,
specifically requiring primary care services account for at least 60% of the allowed charges
billed by a practitioner for services to be eligible for increased payment. This requirement is not
included the corresponding Medicaid provisions of the law. Furthermore, the Medicare
provision under SSA Section 1833 is labeled an incentive and provides for a 10% increase in
payment. There is no such performance target associated with the Medicaid increase; Congress
established a minimum payment as specified in the newly created section of 447.405. As such,
the 60% threshold does not appear to align with the provision. These inconsistencies are
problematic, and likely require Congressional action to resolve.
The proposed rule states that primary care services would be paid at the higher Medicare rate if
properly billed under the provider number of an eligible physician, regardless of whether the
service is furnished by the physician directly or under the physicians personal supervision.
The proposed regulation specifies that 100% FMAP would be available for the amount by which
the established Medicare Part B payment exceeds the Medicaid payment that would have been
made under an approved State Plan in effect on July 1, 2009. These provisions apply to fee-forservices payments, managed care, PIHPs and PAHPs. They do not apply to FQHCs or RHCs,
since Medicaid reimburses such providers at cost. At a minimum, this requirement would be
administratively problematic. Furthermore, it will likely cost the state money because of recent
changes to rates. Under the CMS construction, rates will have to be increased to those in place
in July 2009. The State would be responsible for making up the difference without the enhanced
federal match.
For purposes of determining the payment rate under a State Plan in effect on July 1, 2009, the
rule would require states to consider all supplemental and increased payments made for the
individually billed codes, including any incentive payments and other supplemental payments in
effect at that time.
CMS also is proposing that states be required to use the Medicare Physician Fee Schedule
(MPFS) as published. However, in determining the Medicare rate, the Preamble of the regulation
noted that the Medicare primary care incentive payments made pursuant to section 5501 of
PPACA, which amended section 1833 of the SSA, would not be included. Section 5501(a)
provides for incentive payments for a subset of the codes covered by this regulation. The
payments are not made as increases in fee schedule amounts and are not reflected in the MPFS.
Eligible providers that render primary care services during CYs 2013 and 2014 will receive at
least the applicable Medicare reimbursement rate. However, billing by such providers may not
be processed for many months thereafter. State flexibility in making reimbursements will be
essential if full compliance with the proposed regulation is to be achieved.

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Honorable Marilyn Tavenner


June 11, 2012
Page 4

The proposed regulation 42 CFR 438.6(c)(3)(v) and 438.6(5)(vi) requires managed care
contracts to comply with new minimum payment levels, make those payments to physicians
(whether directly or through capitation rates), and provide documentation to the state of the
amount payments increased. CMS proposes reviewing all MCO contracts, in order to ensure
compliance. This is hardly a realistic proposal, particularly since states are to provide the
methodology for computing reimbursement rates and consequential amended MCO contracts to
CMS for approval before December 31, 2012.
The regulation also creates 42 CFR 438.804, which specifies that 100% FFP is available for the
portion of the expenditures for capitation payments made under those MCO contracts that
comply with contractual requirements under 438.6(c)(50(vi) only if all of the following
requirements are met:

The State makes a reasonable estimate of the increased amounts paid for specified
primary care services provided by eligible primary care physicians resulting from
contractual requirements under 438.6(c)(5)(vi), based on information received from
the managed care provider for services furnished as of July 1, 2009.
The State develops a methodology for identifying the differential in payment between
the provider payments that would have been made by the managed care provider on
July 1, 2009, and the amount needed to comply with the contractual requirement
under 438.6(c)(5)(vi).
The State submits the methodology in paragraph (a)(2) of this section to CMS for
approval by December 31, 2012.

The proposed rule requires states to include MCO reports for justification of increased
capitations. The imposition of additional reporting requirements, if reports result in variation of
capitation rates throughout the year, will be complicated and administratively burdensome to
implement. Further, the new special provision appears to be in conflict with 438.6(c)(3)(i) which
requires that actuarially sound rates be based on utilization and cost data that are derived from
the Medicaid population. The 2009 cost data included in the rate may not reflect the amount paid
to the provider, since contracts are risk arrangements.
Finally, the proposed regulation does not define how to claim the 100% FMAP in a capitated
environment. If it is done through the rates, and utilization varies, there will be HMO winners
and losers based on how the capitation rates are set. If HMO impacts are not adequately
addressed or the PMPM amount is fixed, it may lead HMOs to adjust utilization to match the cap
rate. Any post reconciliation by HMO would be administratively burdensome.
The Preamble notes that the increase in payment must correspond to the volume and increase in
payment specified in the rule. Presumably, the volume requirement is the 60% threshold
established in the regulations. Clarification of this provision is necessary. For example, the
formulas denominator to be used by the state must be identified the physicians Medicaid FFS
rate, the Medicaid HMO rate, or the states entire book of Medicaid business.
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Honorable Marilyn Tavenner


June 11, 2012
Page 5
The regulation requires that the methodology must be submitted to CMS on or before December
31, 2012. However, given the uncertainty as to when a final rule will be issued and the probable
need to conduct additional rate-setting analysis to comply with the data, it is unlikely that any
State could submit a methodology for CMS approval in accordance with the proposed regulation.
The rule requires states to amend their State Plans to reflect the increase in fee schedule
payments for CY 2013 and 2014 unless the state currently reimburses at least as much as the
higher Medicare rate for the applicable period. States require additional information regarding
the contents of the State Plan Amendment (SPA), including any specific information, which
must be provided to assure verification and identify applicable rates, specifying any mid-year
updates, and whether states must identify actual CPT codes.
The proposed regulation does not specifically detail the distribution of payments. The states
ought to have the flexibility to make the increased payments as part of the adjudication of the
claims or as supplemental payments.
The proposed regulation requires that states and managed care plans must comply with
1902(a)(37) regarding timeliness of claims payments. In order for the supplemental claims
payment to also comply with these requirements, states should be granted the authority to
approximate payment or provide such payments more frequently than quarterly.
Changes proposed for payment under Vaccines for Children Program (VFC)
Under the auspices of the Omnibus Budget Reconciliation Act of 1993 , the regulation would
codify requirements of the VFC Program (Section 1928 (c) (2) (C) (ii)) to require Wisconsin to
establish a new State Plan Amendment.
Under the proposed regulation, Wisconsin would be allowed to charge a regional maximum
administrative fee (having been set by HHS) of $20.83 (currently $15.02) for vaccine
administration under VFC. There is no analysis by CMS that would justify this significant
increase.
In sum, this entire section of PPACA is misguided and should never have been enacted. The
enhanced federal funding will last only two years, which will pressure states to maintain the
higher payment level with more state dollars. The federal should refrain from interfering in the
Wisconsin marketplace and resist future efforts to drive a wedge between the state government
and its provider partners.
Sincerely,

Dennis G. Smith
Secretary
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EXHIBIT E

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June 11, 2012


Marilyn Tavenner, Acting Administrator and Chief Operating Officer
Centers for Medicare & Medicaid Services
Department of Health & Human Services
P.O. Box 8013
Baltimore, MD 212448013
Re: Medicaid Program: Payments for Services Furnished by Certain Primary Care
Physicians and Charges for Vaccine Administration Under the Vaccine for
Childrens Program (CMS-2370P)
Dear Administrator Tavenner,
The American College of Physicians (ACP) appreciates this opportunity to comment on
the above referenced Proposed Rule. ACP is the largest medical specialty society and
second largest physician membership organization in the United States, representing
132,000 internal medicine physicians who specialize in primary and comprehensive care
of adolescents and adults and medical students who are considering a career in internal
medicine.
The American College of Physicians has advocated for health insurance coverage for all
for over the past two decades. The expansion of Medicaid coverage beginning in 2014 to
individuals with earnings up to 133% of the federal poverty level through the Affordable
Care Act of 2010 is a positive step towards this goal. It is estimated that approximately
16 million additional Americans will be covered under this federal program 1most
being childless adults. This proposed rule recognizes that ready access to primary care
services is a core goal of the Medicaid program, and attempts to ensure through increased
payments that a sufficient number of primary care physicians and related specialists
/subspecialists participate in the program to meet the needs of this expanded population.
More specifically this proposed rule would implement Medicaid payment for primary
care services furnished by primary care and related physicians in calendar years 2013 and
2014 at rates not less than the Medicare rates in effect in those years. The federal
government would be responsible for the total cost of these added payments during this
time period.
1

Congressional Budget Office. Updated Estimates for the Insurance Coverage Provisions of the Affordable
Care Act MARCH 2012. Accessed at
http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf

Case 3:16-cv-02815 Document 1-5 Filed 10/31/16 Page 2 of 5 PageID #: 72

The College is very supportive of the overall goal of this proposed rule and generally
supports the specific regulations the rule defines. Below are a list of comments and
recommendation for your consideration:

Definition of Physician Eligibility --- The College commends CMS for the broad
definition used in defining those physicians eligible for these increased payments.
The definition includes primary care specialists (family medicine, internal medicine
and pediatrics) and the subspecialists related to these primary care specialty areas
through their respective certifying boards. It also qualifies those physicians that
provide at least 60 % of codes billed from the set of defined primary care codes. The
broad definition recognizes that the delivery of primary care services is not restricted
to traditional primary care specialists, but is often provided by primary care
subspecialists and other physicians.
The importance of this broad definition of eligible primary care physicians cannot be
over-emphasized. Research reflects that obtaining subspecialty care for both adults
and children in Medicaid is problematic 2 3 and is directly related to the reluctance of
many primary care specialists to participate within the program 4 --- it is a barrier to
the provision of quality care. These subspecialists, through consultation and comanagement, are also an important part of the team of clinicians required to treat
many common conditions within the Medicaid population (e.g. asthma, diabetes,
heart problems). In addition, for those patients with severe and complex conditions,
these subspecialists often provide the first-contact, comprehensive care required by
this very vulnerable population.
While ACP supports the alternative eligibility determination method based on the
proportion of defined primary care services delivered by the physician, the College
recommends that the 60 % criteria should be based on allowed charges rather than
percent of billing codesthis would be consistent with the definition used under the
Medicare Primary Care Bonus provision of the ACA and would be less likely to
inappropriately exclude those physicians who truly provide primary care services, but
are also required to provide a broad range of other services due to the limited
availability of other clinicians in the area e.g. in rural and similar underserved areas.

Care Provided by a Non-Physician --- The College also commends CMS for
making the increased payment available for those designated primary care services
provided by a non-physician practitioner (e.g. Nurse Practitioner ) if properly billed
through a qualified, supervising physician. This will serve as further incentive for
physician participation in the Medicaid program.

Government Accountability Organization. MEDICAID AND CHIP Most Physicians Serve Covered
Children but Have Difficulty Referring Them for Specialty Care. June 2011. Accessed at
http://www.gao.gov/products/GAO-11-624
3
Kaiser Family Foundation. Health Reform Roundtables: Charting A Course Forward. May 2011.
Accessed at http://www.kff.org/healthreform/upload/8187.pdf
4
ibid

Case 3:16-cv-02815 Document 1-5 Filed 10/31/16 Page 3 of 5 PageID #: 73

Primary Care Codes Eligible for Enhanced Payment --- The rules states that
Healthcare Common Procedure Coding System (HCPCS) E&M codes 99201 through
99499 and vaccine administration codes 90460, 90461, 90471,90472, 90473 and
90474 or their successors would be eligible for higher payment codes. The rule
further specifies that Medicaid will also pay at the enhanced rate for codes in that
range not currently paid for under Medicare and indicates four such service areas that
are:
New Patient/Initial Comprehensive Preventive Medicine--codes 99381
through 99387;
Established Patient/Periodic Comprehensive Preventive Medicinecodes
99391 through 99397;
Counseling Risk Factor Reduction and Behavior Change Intervention
codes 99401 through 99404, 99408, 99409, 99411, 99412, 99420 and
99429;
E&M/Non Face-to-Face physician Service--codes 99441 through 99444.
The College would like to point out that in addition to the four code sets above, there
are additional E/M codes in the defined eligible range that Medicare does not
currently pay for and should be eligible for the higher Medicaid payment. The
College believes that these additional codes are all important for the delivery of
effective care and their payment would increase the likelihood of physician
participation in the program. These are:

Consultation Services (99241-99245 and 99251-99255)


Anticoagulant Management (99363 and 99364)
Medical Team Conference (99366-99368)
Care Plan Oversight (99339-99340 and 99374-99380)
Counseling Services (99401-99420)

The College would also like to point out that in the past several years Medicare has
been paying for a number of preventive, counseling and screening services through
g codes rather than the related E/M service codes. Many of these codes derive from
recommendations from the U.S. Preventive Services Task Force. The College
recommends that these services be included as eligible under the provisions of this
rule. A list and description of these services is available at
http://www.cms.gov/Medicare/Prevention/PrevntionGenInfo/ .

Continued Barriers to Physician Participation within the Medicaid Program--The limitation of enhanced payment for only two years will serve as a barrier for
participation by many of our memberseven at these enhanced rates. In addition,
survey research indicates that there are substantial administrative hassles connected
with physician participation within the programthese include onerous billing

Case 3:16-cv-02815 Document 1-5 Filed 10/31/16 Page 4 of 5 PageID #: 74

requirements, unnecessary paper work and delayed reimbursement. 5 6 In order to


address these issues, ACP recommends that:
o CMS work with the states to facilitate timely data collection to determine the
effects on the quality and efficiency of care being received under Medicaid
with the implementation of these enhanced fees. The more evidence that can
be obtained that this provision provides increased physician participation,
improved care to beneficiaries and lower cost to the states, the more likely the
states will cover this enhanced payment following the termination of this
provision. We believe physicians would be more willing to participate if
efforts were being made to increase the likelihood of these enhanced
payments following 2014.
o CMS work with the states to reduce the administrative hassles on physicians
who choose to participate in the Medicaid program.
The College appreciates this opportunity to comment on and provide recommendations
regarding this proposed rule. Please direct any questions you may have regarding this
letter to Neil Kirschner on our staff at nkirschner@acponline.org or 202 261-4535.
Respectfully

Robert Gluckman, MD, FACP


Chair, Medical Practice and Quality Committee

Cunningham PJ. May JH. Medicaid Patients Increasingly Concentrated Among Physicians. Tracking
Report No. 16. Center for Studying Health System Change Aug. 2006.
http://www.hschange.com/CONTENT/866/#ib10
6

Cunningham PJ. OMalley AS. Do reimbursement delays discourage Medicaid participation by


physicians. Health Affairs 28(1), 2009 w17-28 accessed at
http://content.healthaffairs.org/content/28/1/w17.full.pdf

Case 3:16-cv-02815 Document 1-5 Filed 10/31/16 Page 5 of 5 PageID #: 75

EXHIBIT F

Case 3:16-cv-02815 Document 1-6 Filed 10/31/16 Page 1 of 4 PageID #: 76

To promote the prevention,


diagnosis, and treatment of chest
diseases through education,
communication, and research.
BOARD OF REGENTS
Suhail Raoof, MBBS, FCCP
President
Darcy D. Marciniuk, MD, FCCP
President-Elect
David D. Gutterman, MD, FCCP
Immediate Past President
Edward J. Diamond, MD, FCCP
Treasurer
Michael H. Baumann, MD, FCCP
President-Designate
Stephanie M. Levine, MD, FCCP
The CHEST Foundation,
President and Trustee
Executive Vice President and CEO
Paul A. Markowski, CAE
Secretary
Regents-at-Large
Henri G. Colt, MD, FCCP
Clayton T. Cowl, MD, FCCP
LeRoy M. Graham, MD, FCCP
Richard M. Hamrick III, MD, FCCP
Susan M. Harding, MD, FCCP
Angeline A. Lazarus, MBBS, FCCP
Scott Manaker, MD, FCCP
Curtis Sessler, MD, FCCP
Barbara A. Phillips, MD, FCCP
Paul H. Sammut, MD, FCCP
Chair, Council of Governors
and Membership Chair
Francis J. Podbielski, MD, FCCP
Vice-Chair, Council of Governors
Jay I. Peters, MD, FCCP
Chair, Council of NetWorks
Burton Lesnick, MD, FCCP
Vice-Chair, Council of NetWorks
Panagiotis K. Behrakis, MD, FCCP
Chair, Council of International
Regents and Governors
Paraschiva A. Postolache, MD, FCCP
Vice-Chair, Council of International
Regents and Governors
CHEST
Editor in Chief
Richard S. Irwin, MD, Master FCCP

Marilyn Tavenner, Acting Administrator


Centers for Medicare & Medicaid Services,
Department of Health and Human Services,
Attn: CMS-2370-P
P.O. Box 8013,
Baltimore, MD 21244-8013
Re: Comments regarding CMS Proposed Rule [CMS2370P] entitled Medicaid
Program; Payments for Services Furnished by Certain Primary
Care Physicians and Charges for Vaccine Administration Under the
Vaccines for Children Program
Dear Ms. Tavenner:
The American College of Chest Physicians (ACCP) appreciates this opportunity to
comment on the CMS Proposed Rule (Proposed Rule) regarding Medicaid payments
for certain primary care physicians.
The ACCP membership is comprised of over 18,000 physicians and allied health
professionals in the care of diseases of the chest in specialties of pulmonology,
cardiology, thoracic and cardiovascular surgery, critical care medicine, sleep medicine,
pediatrics and anesthesiology. The majority of our physician members are
subspecialists under the internal medicine general certificate category, as delineated by
the American Board of Medical Specialties (ABMS). As internal medicine
subspecialists, our physicians often provide primary care services described by the
E&M and vaccine administration codes contemplated in the Proposed Rule. Our
members provide histories, physicals and testing for evaluations and diagnoses of
pulmonary diseases such as COPD and asthma, which are prevalent in the Medicaid
population. Our physicians also provide primary care associated with interstitial lung
disease and lung cancer, among other complex conditions. In addition, our ACCP
pediatric pulmonologists may provide primary care services for children.
The ACCP supports the overall goal of CMS Proposed Rule. Accessibility of primary
care services is a core goal of the Medicaid program and recent efforts to expand
Medicaid eligibility. The ACCP applauds CMS efforts to provide Medicaid payment for
primary care services furnished by primary care and related physicians, in calendar
years 2013 and 2014, on par with Medicare rates in effect for those years.
Physician Eligibility
The ACCP approves of the broad definition of eligible physicians under the Proposed
Rule. The contemplated eligible physicians include primary care specialists (family
medicine, internal medicine and pediatrics) and the subspecialists related to these
primary care specialty areas. The broad definition acknowledges the reality that primary
care services are often provided by primary care subspecialists and other physicians.
As indicated by the American College of Physicians in their related comment letter to
CMS, obtaining subspecialty care for both adults and children in Medicaid is
1 2
problematic
and is directly related to the reluctance of many primary care specialists

Government Accountability Organization. MEDICAID AND CHIP Most Physicians Serve


Covered Children but Have Difficulty Referring Them for Specialty Care. June 2011. Accessed
at http://www.gao.gov/products/GAO-11-624

CHEST 2012
October 20-25
Atlanta, Georgia

Case 3:16-cv-02815

3300 Dundee Road t Northbrook, Illinois 60062-2348 t USA


(847) 498-1400 voice t (847) 498-5460 fax t accp@chestnet.org e-mail
www.chestnet.org
Document 1-6 Filed 10/31/16
Page 2 of 4 PageID #:

77

To promote the prevention,


diagnosis, and treatment of chest
diseases through education,
communication, and research.
BOARD OF REGENTS
Suhail Raoof, MBBS, FCCP
President
Darcy D. Marciniuk, MD, FCCP
President-Elect
David D. Gutterman, MD, FCCP
Immediate Past President
Edward J. Diamond, MD, FCCP
Treasurer
Michael H. Baumann, MD, FCCP
President-Designate
Stephanie M. Levine, MD, FCCP
The CHEST Foundation,
President and Trustee
Executive Vice President and CEO
Paul A. Markowski, CAE
Secretary
Regents-at-Large
Henri G. Colt, MD, FCCP
Clayton T. Cowl, MD, FCCP
LeRoy M. Graham, MD, FCCP
Richard M. Hamrick III, MD, FCCP
Susan M. Harding, MD, FCCP
Angeline A. Lazarus, MBBS, FCCP
Scott Manaker, MD, FCCP
Curtis Sessler, MD, FCCP
Barbara A. Phillips, MD, FCCP
Paul H. Sammut, MD, FCCP
Chair, Council of Governors
and Membership Chair
Francis J. Podbielski, MD, FCCP
Vice-Chair, Council of Governors
Jay I. Peters, MD, FCCP
Chair, Council of NetWorks

to participate within the program . Thus, an increase in Medicaid payments for the
specific primary care services would certainly facilitate accessibility for the expanded
beneficiary population, as more providers would be willing to join the Medicaid
program. Moreover, subspecialists serve on the team of clinicians that treat many
common conditions within the Medicaid population (e.g. asthma, diabetes, heart
problems). In this manner, they often serve as the first contact with the health care
system for patients with severe and complex conditions.
The Proposed Rule also proposes eligibility determination based on the billing of at
least 60 % of codes from the set of defined primary care codes. The ACCP supports
this method for determination of eligibility; however, we recommend that the use of
allowed charges be used rather than percentage of billing codes. This would prevent
the exclusion of those physicians that must provide other services in areas where
clinician availability is limited. We understand that this method would be consistent with
the definition used under the Medicare Primary Care Bonus provision of the Patient
Protection and Affordable Care Act of 2010.
Primary Care Codes Eligible for Enhanced Payment
In the Proposed Rule, Healthcare Common Procedure Coding System (HCPCS) E&M
codes 99201 through 99499 and vaccine administration codes 90460, 90461,
90471,90472, 90473 and 90474 or their successors would be eligible for higher
payment codes. The rule also specifies that for codes in that range not currently paid
for under Medicare, Medicaid will pay at the enhanced rate. The Rule indicates four of
these service areas:
New Patient/Initial Comprehensive Preventive Medicine--codes 99381
through 99387;
Established Patient/Periodic Comprehensive Preventive Medicine
codes 99391 through 99397;
Counseling Risk Factor Reduction and Behavior Change
Interventioncodes 99401 through 99404, 99408, 99409, 99411,
99412, 99420 and 99429;
E&M/Non Face-to-Face physician Service--codes 99441 through
99444.
ACCP feels that other E/M codes in the defined eligible range are important for the
delivery of effective care. Their payment would increase the likelihood of physician
participation in the program. These are:

Burton Lesnick, MD, FCCP


Vice-Chair, Council of NetWorks
Panagiotis K. Behrakis, MD, FCCP
Chair, Council of International
Regents and Governors
Paraschiva A. Postolache, MD, FCCP
Vice-Chair, Council of International
Regents and Governors
CHEST
Editor in Chief
Richard S. Irwin, MD, Master FCCP

Consultation Services (99241-99245 and 99251-99255)


Anticoagulant Management (99363 and 99364)
Medical Team Conference (99366-99368)
Care Plan Oversight (99339-99340 and 99374-99380)
Counseling Services (99401-99420)

Additionally, the ACCP recommends that preventive, counseling and screening


services paid through Medicare g codes be eligible for increased payment under the
Proposed Rule. The U.S. Preventive Services Task Force has recommended many of
2

Kaiser Family Foundation.!!Health Reform Roundtables: Charting A Course Forward. May


2011. Accessed at http://www.kff.org/healthreform/upload/8187.pdf!
3
ibid

CHEST 2012
October 20-25
Atlanta, Georgia

Case 3:16-cv-02815

3300 Dundee Road t Northbrook, Illinois 60062-2348 t USA


(847) 498-1400 voice t (847) 498-5460 fax t accp@chestnet.org e-mail
www.chestnet.org
Document 1-6 Filed 10/31/16
Page 3 of 4 PageID #:

78

To promote the prevention,


diagnosis, and treatment of chest
diseases through education,
communication, and research.
BOARD OF REGENTS
Suhail Raoof, MBBS, FCCP
President
Darcy D. Marciniuk, MD, FCCP
President-Elect
David D. Gutterman, MD, FCCP
Immediate Past President
Edward J. Diamond, MD, FCCP
Treasurer
Michael H. Baumann, MD, FCCP
President-Designate
Stephanie M. Levine, MD, FCCP
The CHEST Foundation,
President and Trustee
Executive Vice President and CEO
Paul A. Markowski, CAE
Secretary

these codes. A list and description of these services is available at


http://www.cms.gov/Medicare/Prevention/PrevntionGenInfo/.
Limitation of Enhanced Payment to the 2013 and 2014 Calendar Years
The ACCP urges CMS and states to maintain increased primary care payments
beyond 2014. Given the administrative hassles and delayed reimbursement for
physicians participating in the Medicaid program, a long-term increase would
encourage more participation by much needed physicians.
The American College of Chest Physicians thanks you for the opportunity to comment
on the Proposed Rule implementing payment parity for certain Medicaid primary care
services. Please feel free to contact us at smahajan@chestnet.org or (847) 498-8348
should you require any clarifications of our comments.

Sincerely,

Regents-at-Large
Henri G. Colt, MD, FCCP
Clayton T. Cowl, MD, FCCP
LeRoy M. Graham, MD, FCCP
Richard M. Hamrick III, MD, FCCP
Susan M. Harding, MD, FCCP
Angeline A. Lazarus, MBBS, FCCP
Scott Manaker, MD, FCCP
Curtis Sessler, MD, FCCP
Barbara A. Phillips, MD, FCCP

Suhail Raoof, MBBS, FCCP


ACCP President

Paul H. Sammut, MD, FCCP


Chair, Council of Governors
and Membership Chair
Francis J. Podbielski, MD, FCCP
Vice-Chair, Council of Governors
Jay I. Peters, MD, FCCP
Chair, Council of NetWorks
Burton Lesnick, MD, FCCP
Vice-Chair, Council of NetWorks
Panagiotis K. Behrakis, MD, FCCP
Chair, Council of International
Regents and Governors
Paraschiva A. Postolache, MD, FCCP
Vice-Chair, Council of International
Regents and Governors
CHEST
Editor in Chief
Richard S. Irwin, MD, Master FCCP
CHEST 2012
October 20-25
Atlanta, Georgia

Case 3:16-cv-02815

3300 Dundee Road t Northbrook, Illinois 60062-2348 t USA


(847) 498-1400 voice t (847) 498-5460 fax t accp@chestnet.org e-mail
www.chestnet.org
Document 1-6 Filed 10/31/16
Page 4 of 4 PageID #:

79

EXHIBIT G

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EXHIBIT H

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