The OIG published a notice today announcing that it is extending the public comment period on its July 11, 2014 notice soliciting recommendations for revising OIG's non-binding criteria for implementing its permissive exclusion authority under Section 1128(b)(7) of the Social Security Act. The OIG notes that due to a technical problem, the public may have been unable to submit comments during the original comment period. The new comment deadline is December 29, 2014.
The Reed Smith Health Industry Washington Watch blog has been updated to report on recent health policy developments, including the following:
- Regulatory Developments. The OIG and CMS have extended fraud and abuse waivers in connection with the Medicare Shared Savings Program. CMS also published a rule on the ACA Basic Health Program, and CMS is expected to publish several major final 2015 Medicare payment rules in the coming days. Recent CMS notices have addressed clinical diagnostic lab tests and Medicare deductible and coinsurance amounts for 2015. The HHS Office for Human Research Protections issued guidance on disclosing risks in standards of care research, and the Office of the National Coordinator for Health Information Technology is inviting applications for a “Market R&D Pilot Challenge. Reed Smith has released a client alert on the “OIG Proposed Rule to Amend the Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing Regulations.”
- Other HHS Developments. CMS has posted preliminary determinations for new 2015 clinical laboratory fee schedule codes. CMS also has announced new innovation initiatives, including the Transforming Clinical Practice Initiative and the Accountable Care Organization Investment Model. CMS has released Medicare Advantage/Part D drug plan quality data, and it is requesting suggestions for future physician quality measures. CMS also has issued updates regarding the Sunshine Act “Open Payments” system and its Medicare appeals administrative agreement opportunity. CDC has released several guidance documents on management of Ebola patients. The OIG has issued a report on Medicare beneficiary copayment costs for outpatient services provided at critical access hospitals.
- Health Industry Events. CMS is hosting calls on inpatient rehabilitation facility quality reporting and transitioning to ICD-10. The HHS Office of Medicare Hearings and Appeals is holding a second Medicare Appellant Forum. Congressional panels are reviewing the government response to the Ebola outbreak.
- @ReedSmithHealth is on Twitter. For the latest health policy news, follow us at @ReedSmithHealth.
CMS is expected to publish several major final Medicare payment rules for 2015 in the coming days. The agency has already submitted to the White House Office of Management and Budget (OMB) for regulatory clearance the final 2015 rules updating Medicare payments for outpatient hospitals, ambulatory surgical centers, home health agencies, and end-stage renal disease facilities, along with reimbursement policy updates impacting suppliers of durable medical equipment, prosthetics, orthotics, and supplies. The final Medicare physician fee schedule rule is not yet at OMB, but it should be following shortly. While the text of the regulations are not yet available, we expect that the rules will be put on display at the Federal Register in the near future. We will be providing summaries of the final rules in future updates.
On October 27, 2014, CMS published a notice announcing that it is establishing an Advisory Panel on Clinical Diagnostic Laboratory Tests, as authorized by the Protecting Access to Medicare Act of 2014 (PAMA). The Panel will provide recommendations to CMS on the following issues:
- Calculation of weighted median for laboratory services using private payor rates.
- Phase-in of reductions from private payor rate implementation.
- Application of market rates.
- Evaluation and designation of tests as advanced diagnostic laboratory tests.
- Whether to use crosswalking or gapfilling to determine payment for a specific new test.
- The factors used in determining coverage or payment processes for new clinical diagnostic laboratory tests.
CMS is requesting nominations for individuals to serve on the panel, which will consist of up to 15 individuals with expertise in issues related to clinical diagnostic laboratory tests, which may include representatives of clinical laboratories, molecular pathologists, clinical laboratory researchers, and experts in clinical laboratory science or the economics of clinical laboratory services. The deadline for submitting nominations is on November 26, 2014.
On October 23, 2014, CMS published the proposed methodology for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS proposes to use the same methodology in 2016 as was established in the final 2015 payment notice, with updated values. Comments will be accepted through November 24, 2014.
CMS has released the Medicare Part A inpatient hospital deductible and hospital and extended care services coinsurance amounts for 2015. Specifically, the 2015 Part A deductible for hospital inpatient admissions for the first 60 days of care will be $1,260, followed by $315 per day for days 61-90 and $630 per day for stays beyond the 90th day in a benefit period. The daily skilled nursing facility coinsurance for days 21 through 100 in a benefit period will be $157.50 in 2015. CMS also published the 2015 Medicare Part A premium amounts for the uninsured aged and disabled individuals who have exhausted other entitlement. Finally, CMS has announced that Medicare Part B premiums and deductibles will be unchanged in 2015, for the second consecutive year. Specifically, the 2015 premium varies by income from $104.90 to $335.70 per month, and the Part B deductible is $147.00 for all Part B beneficiaries.
On October 24, 2014, the HHS Office for Human Research Protections published a notice announcing that it is seeking comments on draft guidance for the research community entitled “Guidance on Disclosing Reasonably Foreseeable Risks in Research Evaluating Standards of Care.” The guidance addresses risks to subjects that are presented by research evaluating risks associated with standards of care, and which of these risks are reasonably foreseeable and should be disclosed to prospective research subjects as part of their informed consent. Comments on the guidance will be accepted until December 23, 2014.
The Office of the National Coordinator for Health Information Technology (ONC) is launching the “Market R&D Pilot Challenge,” which will bring together health care organizations and innovative companies to test new health information technology products through pilot funding awards and facilitated matchmaking. Pilot proposals could be awarded in three domains: clinical environments (e.g., hospitals, ambulatory care, surgical centers); public health and community environments (e.g., public health departments, community health workers, mobile medical trucks, school- and jail-based clinics); and consumer health (e.g., self-insured employers, pharmacies, laboratories). Among other things, the program is intended to encourage early collaboration between entrepreneurs, medical and public health personnel, patients, and the research community in efforts to link health IT innovation to care delivery innovation. Up to 6 winning proposals will each receive a $50,000 award.
CMS has announced its newest innovative delivery reform program, called the “Transforming Clinical Practice Initiative,” which will provide up to $840 million over four years to help clinicians share, adapt, and develop quality improvement strategies. CMS intends to make awards for the following two types of systems:
- Practice Transformation Networks are peer-based learning networks designed to help clinicians develop core competencies specific to practice transformation. CMS is seeking applicants that have pre-existing relationships with multiple clinician practices that include data sharing capabilities (e.g., health systems; regional extension centers; quality improvement organizations; large group practices; regional/state-based health collaboratives; and hospital systems).
- Support and Alignment Networks will promote workforce development through organizations that use tools such as continuing medical education, maintenance of certification, and core competency development to help ensure sustainability of these efforts. Applicants could include medical professional associations, specialty societies, and organizations that generate evidence-based clinical practice guidelines, support efforts to reduce unnecessary testing and procedures, and effectively incorporate safety and patient/family engagement.
Applicants are encouraged to submit a letter of intent by November 20, 2014, and applications are due by January 6, 2015. CMS anticipates announcing awards in spring/summer 2015.
CMS has announced a new Accountable Care Organization “Investment Model” that was developed in response to concerns that some providers lack adequate access to the capital needed to invest in infrastructure necessary to successfully implement population care management. CMS will provide as much as $114 million in upfront investments to up to 75 ACOs across the country to help these ACOs make infrastructure investments and develop new ways to improve care for Medicare beneficiaries.
CMS is inviting quality measure suggestions for potential use in the Physician Quality Reporting System (PQRS) and other physician quality programs. Measure suggestions will be accepted on an ongoing basis, with measures submitted prior to June 15, 2015 eligible to be considered for inclusion in the PQRS as early as 2017.
CMS has posted the 2015 Medicare Star Ratings for Medicare Advantage (MA) and Medicare Part D prescription drug plans (PDPs). According to a CMS fact sheet, there are increases in the number of Medicare beneficiaries in high-performing MA plans and PDPs for 2015, while CMS notes “dramatic improvement” among plans that had received the low performing icon in 2014. CMS also is interested in receiving information from the public regarding potential data differences in MA and Part D quality measurements for dual-eligible versus non-dual-eligible enrollees. Information is due November 3, 2014. Finally, CMS has released the MA and PDP annual audit and enforcement report for 2013. According to the report, CMS imposed 43 CMPs totaling almost $8.4 million on 39 different organizations and 5 cases of immediate suspension of enrollment and marketing activities for issues identified in 2012 and 2013. Most violations cited in enforcement actions related to inappropriate delays or denials of access to health services and medications for enrollees.
As previously reported, CMS is offering an "administrative agreement" providing partial payment to hospitals that drop their appeals related to certain short-stay hospital claims in an effort to reduce the backlog in Medicare appeals. CMS has posted updated “frequently asked questions” on its proposed settlement process. The deadline for applying for the settlement is October 31, 2014, but providers may request an extension if they are not able to meet this deadline.
The OIG has issued a report on Medicare beneficiary copayment costs for outpatient services provided at critical access hospitals (CAH). Beneficiaries who receive services at CAHs pay Medicare coinsurance amounts based on CAH charges, in contrast to patients at acute care hospitals who are responsible for coinsurance amounts based on outpatient prospective payment system (OPPS) rates. According to the OIG report, “Medicare Beneficiaries Paid Nearly Half of the Costs for Outpatient Services at Critical Access Hospitals,” CAH charges are typically higher than the reasonable costs associated with CAH services or the OPPS rates that acute-care hospitals receive. The OIG estimates that Medicare beneficiaries paid nearly half the costs for outpatient services at CAHs in 2012 (approximately $1.5 billion of the estimated $3.2 billion cost for CAH outpatient services). The OIG recommends that CMS seek legislative authority to modify how coinsurance is calculated for outpatient services received at CAHs to reduce the percentage of costs paid by Medicare beneficiaries in coinsurance. For instance, CMS could consider (1) computing coinsurance so that it is based on interim payment rates rather than charges, and (2) processing claims for outpatient services at CAHs as if they were paid under OPPS for the purpose of calculating an OPPS equivalent coinsurance.
On November 6, 2014, the Senate Appropriations Committee is holding a hearing on the U.S. government response to the Ebola outbreak. This follows an October 24 House Oversight Committee hearing on coordination of a multi-agency response to the Ebola crisis, along with an October 16 House Energy and Commerce Committee hearing on the U.S. public health response to the Ebola outbreak.
CMS is hosting a conference call for inpatient rehabilitation facility (IRF) providers regarding the IRF Quality Reporting Program on October 29, 2014. Specifically, CMS will discuss data collection and submission information for outcome measures related to hospital-onset methicillin-resistant Staphylococcus aureus (MRSA) bacteremia and Clostridium difficile infection (CDI), which IRF providers are required to report to CMS beginning January 1, 2015.
The Centers for Disease Control and Prevention (CDC) has issued a number of guidance documents for the health care industry on management of patients with known or suspected Ebola virus. To date, the CDC has offered recommendations regarding, among many other topics: the use of personal protective equipment by health care workers in hospitals; infection prevention and control; performing acute hemodialysis in patients with Ebola virus; transfers by emergency medical services; laboratory specimen handling; and Ebola-associated waste management. Reed Smith has formed a cross-practice Global Ebola Task Force to address legal issues emerging from the spread of the viral disease in West Africa and around the world.
CMS has released a beta version of its Open Payments search tool, which is intended to facilitate public review of payments and transfers of value made by drug and device manufacturers and group purchasing organization (GPOs) to physicians and teaching hospitals, as well as physician ownership information. The tool allows the public to search identified data for physicians, teaching hospitals, or companies. CMS is also reminding applicable manufacturers and GPOs of an October 31, 2014 deadline for making corrections to any 2013 Open Payments disputed records for publication on or before December 31, 2014 (although data corrections can be performed at any time). Disputes that remain unresolved as of October 31, 2014 will display as disputed in the Open Payments database.
HHS Office of Medicare Hearings and Appeals (OMHA) Hosting Second Medicare Appellant Forum (Oct. 29)
On October 29, 2014, the OMHA is hosting its second OMHA Medicare Appellant Forum. The meeting will update OMHA appellants on the status of OMHA operations and discuss OMHA and CMS initiatives designed to mitigate the Medicare appeals backlog at the OMHA-level of the administrative appeals process. The deadline for in-person registration is October 28, and registration for remote/webinar attendance ends October 24.
Reed Smith Client Alert: Analysis of HHS OIG Proposed Rule to Amend the Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing Regulations
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has published a major proposed rule that would amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty rules to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the AKS. Reed Smith has prepared a Client Alert analyzing the proposed rule, highlighting areas where the OIG is seeking public comment. Overall, the OIG appears to recognize that new health care delivery mechanisms demand a more flexible approach to fraud and abuse enforcement than has been the case in the past, as discussed in our analysis.
The Client Alert is available here.
On October 23, 2014, CMS is hosting a call on 2013 Quality and Resource Use Reports (QRURs) for physician group practices and physician solo practitioners. The 2013 QRURs contain quality and cost performance data that will be used in determining the applicable Value-Based Payment Modifier for 2015.
The Advisory Panel on Hospital Outpatient Payment will be holding its first semi-annual meeting for 2015 on March 9-10, 2015. The purpose of the Panel is to advise CMS on (1) the clinical integrity of the Ambulatory Payment Classification groups and their associated weights, and (2) hospital outpatient therapeutic services supervision issues. Registration will be open January 19 through February 20, 2015. CMS will accept comments and presentations for the agenda until February 6, 2015.
OIG and CMS Extend Fraud/Abuse Waivers for Medicare Shared Savings Program/ACOs; Invite Feedback on Waiver Policy
Today the OIG and CMS published a joint notice continuing the effectiveness of fraud and abuse law waivers granted in 2011 in connection with the Medicare Shared Savings Program, which is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form accountable care organizations (ACOs).
By way of background, in a November 2, 2011 joint OIG-CMS interim final rule with comment period, the agencies established waivers of the application of the federal physician self-referral law, the federal anti-kickback statute, and certain civil monetary penalties law provisions to specified arrangements involving ACOs participating in the Shared Savings Program (the Waiver IFC). In 2011 Reed Smith prepared an in-depth analysis of the Medicare Shared Savings Program, including an analysis of the Waiver IFC. Because of a general 3-year deadline for publishing Medicare final rules after the publication of a proposed or interim final rule, the agencies are extending the timeline for publication of a final rule concerning Shared Savings Program waivers to avoid “creating legal uncertainty for ACOs participating in the Shared Savings Program and potentially disrupting ongoing business plans or operations of some ACOs.” The notice also states that CMS is developing a proposed rule to make certain modifications to the Shared Savings Program regulations; in order to ensure that the final waiver regulations align with the Shared Savings Program rules, the agencies believe “the prudent course of action at this time is to extend the effectiveness of the Waiver IFC.” Thus the Waiver IFC will remain in effect through November 2, 2015, unless a final waiver rule becomes effective on an earlier date.
In the notice, the agencies also suggest that they would benefit from additional stakeholder input to inform their understanding of:
- how and to what extent ACOs are using the waivers;
- whether the existing waivers serve the needs of ACOs and the Medicare program;
- whether the waivers adequately protect the Medicare program and beneficiaries from the types of harms associated with referral payments or payments to reduce or limit services; and
- whether there are new or changed considerations that should inform the development of additional notice and comment rulemaking.
No deadline is specified for providing feedback on these considerations.
CMS has posted its preliminary payment determinations for new 2015 clinical laboratory fee schedule codes. The document lists CMS’s recommendation regarding the basis of payment for codes -- either crosswalk or gap-fill. Note that CMS is recommending to delay pricing various individual drug testing screening codes given “the potential for overpayment when billing for each individual drug test rather than a single code that pays the same regardless of the number of drugs that are being tested for.” Additional information about the comment and reconsideration process is available on the CMS website.
The Reed Smith Health Industry Washington Watch blog has been updated to report on recent health policy developments, including the following:
- Regulatory Developments. The OIG has published a major proposed rule to amend the safe harbors to the Anti-Kickback Statute and the Civil Monetary Penalty rule. CMS regulations and notices have addressed home health conditions of participation, amount in controversy thresholds for Medicare appeals, and corrections to the final FY 2015 Medicare IPPS/LTCH rule. The ONC has issued a final rule on electronic health record certification criteria, and the DEA published a final rule on secure disposal of controlled substances.
- Other HHS Developments. CMS has announced changes to the Nursing Home Five Star Quality Rating System; launched the “Open Payments” public database; requested input on delivery innovations in Medicare Part D, Medicare Advantage, and other programs; released new Medicare Recovery Auditors statistics; and posted updated Medicare Part B drug pricing files. HHS has released guidance on the HIPAA Privacy Rule and same-sex marriage. Draft FDA guidance documents address laboratory developed test regulatory oversight and medical device cybersecurity).
- OIG & GAO Developments. The OIG has issued a Special Advisory Bulletin on Pharmaceutical Manufacturer Copayment Coupons, along with a report on this topic. Other recent OIG reports have focused on state standards for access to care in Medicaid managed care, CMS enforcement of rural health clinic location criteria, and Part B drug dispensing and supplying fees. The OIG also has highlighted state Medicaid policies that inflate federal costs. The GAO has called for improvements to Healthcare.gov information security and privacy controls.
- Legislative Developments. President Obama has signed into law the Improving Medicare Post-Acute Care Transformation Act; Reed Smith has prepared a client alert summarizing the new law. President Obama also signed bills addressing muscular dystrophy research, emergency medical care for children, and autism research and intervention.
- Health Industry Events. CMS is hosting calls on hospital appeals settlements and transitioning to ICD-10. HHS is holding a workshop on “Integrating Plans for Long-Term Services and Supports and Health Care Delivery through Health Information Technology.” MedPAC is meeting to discuss various Medicare policy issues.
- @ReedSmithHealth is on Twitter. For the latest health policy news, follow us at @ReedSmithHealth.
On October 9, 2014, CMS is publishing a proposed rule that would extensively revise the conditions of participation (CoPs) that home health agencies (HHAs) must meet to participate in the Medicare and Medicaid programs. The rule is intended to provide HHAs with enhanced flexibility while focusing provider efforts on the services delivered to the patient, the quality of care furnished by the HHA, and quality assessment and performance improvement efforts. According to CMS, the proposed CoPs “reflect a fundamental change in our regulatory approach -- a change that to a large extent establishes a shared commitment between CMS and HHA providers to achieve improvements in the quality of care furnished to HHA patients.” CMS expects its patient-centered, outcome-oriented approach to enhance the working relationship between state survey agencies and HHAs, and provide a basis for improved performance that will help ensure that quality care is provided to all patients.
More specifically, CMS proposes to establish the following four CoPs (in addition to retaining current requirements related to comprehensive assessment of patients):
- “Patient rights” would emphasize the HHA's responsibility to respect and promote the rights of each home health patient.
- “Care planning, coordination of services, and quality of care” would incorporate the interdisciplinary team approach to provide home health services focusing on the care planning, coordination of services, and quality of care processes.
- “Quality assessment and performance improvement” (QAPI) would require each HHA to conduct ongoing quality assessment, incorporate data-driven goals, and maintain an evidence-based performance improvement program of its own design to affect continuing improvement in the quality of patient care.
- “Infection prevention and control” would require HHAs to follow accepted standards of practice to prevent and control the transmission of infectious diseases and to educate staff, patients, and family members or other caregivers on these accepted standards.
CMS proposes to remove many process details from the current CoPs where they do not achieve the goal of ensuring desired outcomes. CMS is not proposing to incorporate by reference any specific clinical practice guidelines or professional standards of practice; HHAs would be responsible for identifying their own performance problems through their QAPI programs, addressing them, and continuously striving to improve the quality of care, patient outcomes and satisfaction, and efficiency/economy. The proposed CoPs also are designed to enable surveyors to look at outcomes of care and “how effectively the provider was pursuing a continuous quality improvement agenda.” CMS will accept comments for 60 days after publication (December 8, 2014).
CMS has announced that it will make a series of improvements to the Nursing Home Five Star Quality Rating System, including additional quality measures, new data verification processes, and a revised quality scoring methodology. Among other things:
- CMS will add a new quality measure on antipsychotic medication use starting January 2015, and include claims-based data on re-hospitalization and community discharge rates in the future.
- CMS and states will implement focused survey inspections for a sample of nursing homes to verify staffing and quality measure information, effective January 2015.
- CMS will implement a quarterly electronic reporting system that is auditable back to payrolls to verify staffing information and allow for the calculation of staffing-related quality measures.
- CMS will strengthen requirements to ensure that states maintain a user-friendly website and complete timely, accurate nursing home inspections for inclusion in the rating system.
- CMS will revise the methodology used to calculate each facility’s quality measure rating in 2015.
On October 6, 2014, President Obama signed into law H.R. 4994, the Improving Medicare Post-Acute Care Transformation Act of 2014 (the “IMPACT Act”). The IMPACT Act’s provisions will affect a broad range of post-acute care (PAC) providers: home health agencies (HHAs), skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long-term acute care hospitals (LTCHs). Various facets of daily operations of these PAC providers will change as a result of the Act and ensuing regulations: what information PAC providers must collect and report, the information the public will receive about PAC providers, and the method of determining future Medicare payments to PAC providers, among others. The IMPACT Act also increases survey frequency for Medicare-certified hospice programs. A Reed Smith client alert summarizing the Impact Act is available here.
Separately, President Obama also signed into law a number of other health policy bills approved by Congress, including the following:
- H.R. 594, Paul D. Wellstone Muscular Dystrophy Community Assistance, Research and Education Amendments of 2014, which revises and expands research, surveillance, and education activities relating to muscular dystrophy at the National Institutes of Health and the Centers for Disease Control and Prevention, and expands the federal agencies comprising the Muscular Dystrophy Coordinating Committee;
- S. 2154, Emergency Medical Services for Children Reauthorization Act of 2014, which reauthorizes appropriations through fiscal year 2019 for a program to provide high‑quality emergency medical care to children; and
- H.R. 4631, Autism Collaboration, Accountability, Research, Education, and Support (CARES) Act of 2014, which reauthorizes Combating Autism Act funding for autism research, screening, intervention, and education activities, as well as an HHS coordinating committee.
Despite a series of technical problems and data disparities leading up to the launch, CMS met its schedule to release the first round of “Open Payments” data on September 30, 2014. Note that initial use of the database of financial payments made by drug and device manufacturers and group purchasing organization to physicians and teaching hospitals has been hampered by large file sizes, multiple databases, and confusing instructions. CMS has stated that it plans to launch a more user-friendly search tool later this month.
The first wave of data details 4.4 million payments valued at nearly $3.5 billion attributable to 546,000 individual physicians and almost 1,360 teaching hospitals during the last five months of 2013 (future annual updates will include 12 months of data). Because CMS identified payment records that appeared to have inconsistent physician information (e.g. a National Provider Identifier for one doctor and a license number for another) that could not be matched, CMS has temporarily “suppressed” the personally-identifiable information for those records. In fact, CMS estimates that about 40% of the records published initially are de-identified, and additional disputed data was not published, which could skew initial attempts to draw conclusions about payment patterns. CMS cautions that financial ties between manufacturers and providers “do not necessarily signal wrongdoing” or conflicts of interest, given that some relationships may lead to the development of beneficial new technologies and therapies. CMS encourages patients to discuss these financial relationships with their health care providers.
In a recent report, the OIG concluded that Medicare would have saved millions of dollars in 2011 if Medicare Part B prescription drug dispensing and supplying fees had been aligned with the rates paid by Medicare Part D plans or state Medicaid programs. Specifically, if Part B dispensing and supplying fees had been the same as average Part D rates in 2011, Part B would have saved $110.9 million, while use of average state Medicaid rates would have saved $106.3 million. The OIG recommended that CMS issue regulations to decrease Part B dispensing and supplying fees to rates similar to those of other payers, such as Part D and Medicaid. CMS did not concur with the OIG’s recommendation, and requested that the OIG study actual costs associated with dispensing these Part B drugs. For additionl information, see the full report, “Medicare Part B Prescription Drug Dispensing and Supplying Fee Payment Rates Are Considerably Higher than the Rates Paid by Other Government Programs."