September 2013

CMS is hosting a call on September 26, 2013 to discuss the physician order, and physician certification, inpatient hospital admission, and medical review criteria that were adopted in the final FY 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) rule. In short, under this new policy, if the ordering practitioner expects a beneficiary’s

The Reed Smith Health Industry Washington Watch blog (https://www.healthindustrywashingtonwatch.com) has been updated to report on recent health policy developments, including the following:

– Regulatory Developments. CMS has finalized financial integrity and oversight standards for Affordable Insurance Exchanges and state Medicaid disproportionate share hospital allotments under the Affordable Care Act (ACA). CMS also has released technical corrections to the CY 2014 proposed rule updating the Medicare Hospital Outpatient Prospective Payment System (OPPS) and ambulatory surgical center payments. For details, see https://www.healthindustrywashingtonwatch.com/articles/regulatory-developments/hhs-developments/other-cms-developments/. HHS has published notices seeking comments on its latest draft Departmental Strategic Plan, a draft National Action Plan for Adverse Drug Event Prevention, and options for streamlining HHS regulations (https://www.healthindustrywashingtonwatch.com/articles/regulatory-developments/hhs-developments/). The Internal Revenue Service (IRS) has finalized ACA individual “shared responsibility” payment requirements (https://www.healthindustrywashingtonwatch.com/articles/regulatory-developments/).

– Other CMS Developments. CMS has delayed enforcement of an ACA provision requiring a face-to-face encounter as a condition of Medicare payment for durable medical equipment (DME) items. The agency also issued guidance on admission order and certification requirements for inpatient admissions, released updated Medicare drug payment files, and requested input on the Advanced Diagnostic Imaging (ADI) program. See https://www.healthindustrywashingtonwatch.com/articles/other-cms-developments-1/.

– OIG & GAO Reports. The OIG has issued reports on potential Medicare Part B drug rebates, Medicaid drug pricing changes, critical access hospital qualifications; Medicare diabetes test strip payments, Medicaid DME reimbursement, and Medicare program integrity efforts (see https://www.healthindustrywashingtonwatch.com/articles/regulatory-developments/hhs-developments/oig-developments/). GAO reports have addressed self-referral of anatomic pathology and IMRT services (https://www.healthindustrywashingtonwatch.com/articles/other-gao-developments/).

– Legislative Developments. The House has approved a bill to require verification of ACA individual subsidy eligibility, and Congressional panels have addressed a variety of health policy issues. Several hearings this week will focus on ACA implementation. See https://www.healthindustrywashingtonwatch.com/articles/legislative-developments/.

– Health Industry Events. CMS is hosting a call on the 2015 Value-Based Payment Modifier (see https://www.healthindustrywashingtonwatch.com/articles/events/).
For details on these and other health industry developments, please visit https://www.healthindustrywashingtonwatch.com/.
Continue Reading New Postings on the Reed Smith Health Industry Washington Watch Blog

As previously reported, the final FY 2014 Medicare inpatient prospective payment system (IPPS) rule established new criteria for determining the appropriateness of inpatient admissions. In brief, under this policy, CMS generally will presume that surgical procedures, diagnostic tests, and other treatments are appropriate for Medicare Part A inpatient hospital payment when the physician admits

The HHS Office of Disease Prevention and Health Promotion is soliciting public comment on the draft National Action Plan for Adverse Drug Event Prevention. The document focuses on the use of surveillance, prevention, incentives and oversight, and research to reduce adverse drug events. It identifies current federal activity across inpatient and outpatient settings, as

A new OIG report estimates that Medicare could realize significant savings if drug manufacturers were required to pay rebates on Medicare Part B drugs, similar to rebates under the Medicaid program. Specifically, Medicare could have collected $3.1 billion in 2011 if manufacturers had been required to pay rebates based on average manufacturer price (AMP)

CMS has finalized its financial integrity and oversight standards for ACA Affordable Insurance Exchanges (also called “Health Insurance Marketplaces”). Among other things, the rule establishes standards for: verification of eligibility for minimum essential coverage; eligibility appeals; consumer protections with regard to privacy and security; the roles of agents and brokers; methods of premium payment; and

The Internal Revenue Service (IRS) has issued final regulations to implement the ACA requirement that every individual have basic health insurance coverage, qualify for an exemption, or make a “shared responsibility” payment when filing a federal income tax return, beginning in 2014. Individuals are exempt from the payment obligation if coverage is unaffordable, if they

CMS has put on display a final rule that implements reductions to state Medicaid Disproportionate Share Hospital (DSH) allotments mandated by the ACA. The final rule sets forth the methodology to implement the annual reductions for fiscal years (FYs) 2014 and 2015, and it establishes additional DSH reporting requirements for use in implementing the DSH

On September 13, 2013, HHS published a notice requesting comments on existing regulations HHS should consider reviewing in order to reduce unnecessary or burdensome regulations, or to increase their effectiveness and flexibility. For instance, HHS welcomes suggestions for rules it should review to: promote economic growth, innovation, competitiveness, and job creation; address rules where costs

Almost two-thirds of critical access hospitals (CAHs) would not meet Medicare CAH location requirements if they were required to re-enroll today, according to the OIG. Many of these rural hospitals were permanently exempted from CAH distance requirements under previous authority of states to designate “necessary provider” (NP) CAHs. Medicare reimburses CAHs at 101% of their reasonable

On September 10, 2013, HHS published a notice inviting comments on its Draft Departmental Strategic Plan for FY 2014–2018. The document details HHS strategies for achieving four strategic goals: (1) Strengthen Health Care, (2) Advance Scientific Knowledge and Innovation, (3) Advance the Health, Safety, and Well-Being of the American People, and (4) Ensure Efficiency, Transparency,

A recent OIG report examines the extent of improper Medicare reimbursement for diabetes test strips (DTS), including the effect of mail-order DTS being subject to competitive bidding in nine geographic areas beginning in 2011 (CMS subsequently implemented a national competitive bidding program for mail-order DTS, effective July 1, 2013). According to the OIG, in

Two recent OIG reports point out the savings that state Medicaid programs could attain if they based reimbursement for DME, prosthetics, orthotics, and supplies (DMEPOS) on Medicare competitive bidding payment amounts – although at least one state is pushing back on this idea. In the first report, “Medicaid DMEPOS Costs May be Exceeding Medicare

The OIG has called on CMS to strengthen activities to prevent improper Medicare payments, including enhancements to the Recovery Audit Contractor (RAC) program. For instance, the OIG notes that RACs identified half of all claims they reviewed in FYs 2010 and 2011 as having resulted in improper payments totaling $1.3 billion. While CMS took corrective

In a recent report, “Medicaid Drug Pricing in State Maximum Allowable Cost Programs,” the OIG examines options for controlling state Medicaid prescription drug costs, particularly given a surge in Medicaid enrollment expected in the coming years as a result of the ACA. The OIG highlights the value of state Maximum Allowable Cost (MAC)

A September 18, 2013 House Oversight and Government Reform Committee hearing will focus on “Federal Implementation of ObamaCare: Concerns of State Governments.” In addition, on September 19, the House Judiciary Committee will host a hearing on the impact of the ACA on competition in health care, and the House Energy and Commerce Oversight Subcommittee will

Recent Congressional hearings on health policy issues include the following:

  • A House Energy and Commerce Health Subcommittee a hearing entitled “PPACA Pulse Check: Part 2,” focusing on ACA readiness and implementation issues (Part 1 of the hearing was on August 1, 2013).
  • A House Homeland Security Cybersecurity Subcommittee hearing on “The Threat to Americans’ Personal