New Labor Law changes how we pay Overtime; New FLSA Updates

I understand that many doctors have numerous items to concerns themselves with and that often Human Resource compliance is the last thing on their mind.

However, with this new law signed by Obama, you will need to pay attention as it DRASTICALLY changes the landscape of wages paid in America and is going to affect the mass majority of employees and employers.

As most are aware, there are employees titled EXEMPT and NON EXEMPT.

NON EXEMPT employees are paid an hourly wage.  If they work over 40 hours per week, you must pay them overtime.

EXEMPT Employees are paid Salary.  You are not required to pay them overtime payments and they may work well over 40 hours without earning any extra wage.  

There have always been tests to determine if you qualify for Exempt status , in addition to the testing criteria to qualify for salary status, an employee also had to be paid a minimum of $455 per week or $11.38/hour.

THIS IS WHERE THE MAJOR CHANGE IS!!!

EFFECTIVE DECEMBER 1, 2016, IN ORDER TO QUALIFY FOR EXEMPT STATUS - BE PAID A SALARY WITH NO OVERTIME - YOU AS THE EMPLOYER MUST PAY THEM AT LEAST $913 PER WEEK OR $22.83/HOUR. 

This means - that unless your Office Manager or Director or any other salary employee (hopefully not your front desk) - is making at least $913 per week OR $47,476 Annually from you - YOU NEED TO START PAYING OVERTIME. 

I will outline a related portion of the criteria to qualify for exempt status below. 

Please contact me with any questions.

Executive Exemption

To qualify for the executive employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $913 per week;
• The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
• The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
• The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight. 

Administrative Exemptions

To qualify for the administrative employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week;
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption

To qualify for the learned professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week;
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the creative professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week;
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

DEPARTMENT OF LABOR FACTSHEET, SHOULD BE UPDATED AFTER DECEMBER 1ST: https://www.dol.gov/whd/overtime/fs17a_overview.htm 

A NOTE ON THE FINAL RULE:  https://www.dol.gov/WHD/overtime/final2016/ 

On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations, which will automatically extend overtime pay protections to over 4 million workers within the first year of implementation. This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work.

In 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA's minimum wage and overtime standards. Consistent with the President's goal of ensuring workers are paid a fair day's pay for a hard day's work, the memorandum instructed the Department to look for ways to modernize and simplify the regulations while ensuring that the FLSA's intended overtime protections are fully implemented.

The Department published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on July 6, 2015 (80 FR 38515) and invited interested parties to submit written comments on the proposed rule at www.regulations.gov by September 4, 2015. The Department received over 270,000 comments in response to the NPRM from a variety of interested stakeholders. The feedback the Department received helped shape the Final Rule.

Key Provisions of the Final Rule

The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:

1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
2. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.

ADP PAYROLL COMPANY ALSO HAS A NICE EXPLANATION OF THE NEW RULE HERE: http://sbshrs.adpinfo.com/flsa 

Billing for Influenza: New CPT Code 90674

Billing for Influenza: New CPT Code 90674 

The American Medical Association issued a new Current Procedural Terminology (CPT) code for influenza vaccine Flucelvax, CPT 90674, effective August 1, 2016 for Medicare claims. However, Medicare claims processing systems will not be able to accept the new code until January 1, 2017. Until this time, you may hold claims containing CPT 90674. Alternatively, Medicare Administrative Contractors (MACs) may direct use of a Not Other Classified (NOC) code to allow billing for the vaccine for dates of service on or after August 1, 2016, and before January 1, 2017. Check with your MAC for this information and other interim billing instructions. Finally, if you bill institutional claims, note that code CPT 90674 will be implemented on February 20, 2017.

E & M Billing Guidelines

Evaluation and Management: Billing the Correct Level of Service

In a 2012 study report, the Office of the Inspector General (OIG) noted that a number of physicians increased their billing of higher level, more complex and expensive Evaluation and Management (E/M) codes. Many providers submit claims coded at a higher or lower level than the medical record documentation supports. Use the following resources to bill correctly for E/M services:

• OIG Report: Coding Trends of Medicare E/M Services
• Medicare Claims Processing Manual: Chapter 12, Section 30.6
• E/M Services Guide
• 1995 Documentation Guidelines for E/M Services
• 1997 Documentation Guidelines for E/M Services
• Frequently Asked Question on Use of 1995 and 1997 Guidelines

Medicare to remove Social Security Numbers

Social Security Number Removal Initiative

What do you need to do to get ready?

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires CMS to remove Social Security Numbers (SSNs) from all Medicare cards by April 2019. A new randomly generated Medicare Beneficiary Identifier (MBI) will replace the SSN-based Health Insurance Claim Number on new Medicare cards for transactions like billing, eligibility status, and claim status. Prepare for this change by visiting the new overview and provider webpages, which include:

• Transition period
• Characteristics of the MBI
• How to obtain the MBI

Ohio Legalizes Medical Marijuana

Medical Marijuana is moving fast into legalized status.  State by state, the government is approving its usage as a medically appropriate alternative.  However, it is far from complete.  Once signed into law, it can take months or years before the legislation surrounding the act is passed and doctors can start offering to patients.

Read more here:

http://www.cleveland.com/open/index.ssf/2016/06/ohio_legalized_medical_marijua.html

Injection Kits or Convenience Kits

Please be advised that there has been a lot of talk about convenience kits or injections kits as a reimbursable product for the medical groups.

The J codes created for these kits are a combination of the medication plus supplies.  However, since the medication itself already has a procedure code and policy dictates that supplies are an inherent part of the injection reimbursement, these new kits are skirting a grey area of compliance and not being coded correctly.

Correct coding bundles the kit with the injection and it is not appropriate to bill separately.

Many companies have been going around selling doctors on entering into these agreements with legal back doors of becoming 'investors' on the pharmacy side to receive income from releasing these kits under the pharmacy benefit.

While these ventures will surely produce income now... it is inevitable that it will not last very long.

Please see released statement from Highmark.  The insurance companies are becoming wise on these "kits" and will no longer be paying for them.  

Please speak with me individually for details.

See released update here:  https://www.highmarkblueshield.com/health/pdfs/pubs/sb-prescription-drug-cvg-convenience-kit-products-081516.pdf 

MEDICARE CHIROPRACTIC CLAIMS

CMS continues to deny many chiropractic claims because they do not meet Medicare’s requirements. During the 2015 reporting period, the Medicare Fee-For-Service (FFS) improper payment rate for chiropractic services was 51.7 percent, representing approximately $300 million in improper payments and accounting for 0.7 percent of the overall Medicare FFS improper payment rate. 

The most common reason for the improper payments is insufficient documentation to support the billed services. This type of error occurs when the medical records do not contain enough information for the reviewer to make a decision about medical necessity for the item or service furnished. Avoid denied claims and overpayment recovery by understanding Medicare's requirements, especially around documentation requirements and medical necessity.

HERE IS AN EDUCATIONAL VIDEO RELEASED BY MEDICARE CMS RELATED TO CHIROPRACTIC DOCUMENTATION NEEDS.

Please review and watch with your staff.

https://www.youtube.com/watch?v=tMiw1X9KvDA

HERE ARE LINKS TO MEDICARE MLN POLICY ON DOCUMENTING CHIROPRACTIC SERVICES

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1101.pdf

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1601.pdf

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1602.pdf

Medical Marijuana

On April 17, 2016, Gov. Tom Wolf signed into law SB 3, Pennsylvania’s compassionate medical cannabis legislation. The Senate had first approved the bill on May 12, 2015, and it was subsequently revised and approved by the House on March 14-16, 2016. The Senate made technical changes to the bill and sent it back to the House on April 12, and it received final approval in the House on April 13, 2016. The law went into effect on May 17, 2016, and the Department of Health will then have six months to issue temporary regulations.

MEDICARE UPDATE JUNE 6, 2016

Medicare released an update to coding definitions effective June 6, 2016.

While the majority of these updates are related to surgical procedures, they also have defined how to apply diagnosis to specific regions of the body. 

A complete copy of the update can be found here: https://www.cms.gov/Medicare/Coding/ICD10/2017-ICD-10-PCS-and-GEMs.html

Please take note of the following details most related to your office(s):

Tendons, ligaments, bursae and fascia near a joint

B4.5

Procedures performed on tendons, ligaments, bursae and fascia supporting a joint are coded to the body part in the respective body system that is the focus of the procedure. Procedures performed on joint structures themselves are coded to the body part in the joint body systems.

Examples: Repair of the anterior cruciate ligament of the knee is coded to the knee bursa and ligament body part in the bursae and ligaments body system.

Knee arthroscopy with shaving of articular cartilage is coded to the knee joint body part in the Lower Joints body system.

Skin, subcutaneous tissue and fascia overlying a joint

B4.6

If a procedure is performed on the skin, subcutaneous tissue or fascia overlying a joint, the procedure is coded to the following body part:

 Shoulder is coded to Upper Arm

 Elbow is coded to Lower Arm

 Wrist is coded to Lower Arm

 Hip is coded to Upper Leg

 Knee is coded to Lower Leg

 Ankle is coded to Foot

Fingers and toes

B4.7

If a body system does not contain a separate body part value for fingers, procedures performed on the fingers are coded to the body part value for the hand. If a body system does not contain a separate body part value for toes, procedures performed on the toes are coded to the body part value for the foot.

Example: Excision of finger muscle is coded to one of the hand muscle body part values in the Muscles body system.

AllergyPro is here!

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