April 2015

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:

— CMS Regulatory Developments. CMS has issued several proposed rules to update Medicare prospective payment systems (PPS) for FY 2016, including the Medicare inpatient PPS, the long-term care hospital PPS, the skilled nursing facility PPS, the inpatient rehabilitation facility PPS, and the inpatient psychiatric facility PPS. CMS has also proposed updating Medicare and Medicaid Electronic Health Record Incentive program rules, mental health parity rules, and funding for Medicaid eligibility and enrollment systems. For details, see https://www.healthindustrywashingtonwatch.com/articles/regulatory-developments/hhs-developments/other-cms-developments/.

— Other HHS Developments. CMS has released information on Medicare DMEPOS competitive bidding, 2016 Medicare Advantage/Part D rates and policies, and Hospital Compare star ratings (https://www.healthindustrywashingtonwatch.com/articles/other-cms-developments-1/). The ONC has issued updated electronic health information privacy/security guidance (https://www.healthindustrywashingtonwatch.com/articles/other-hhs-developments/). The FDA and CMS are establishing an interagency task force on laboratory-developed test oversight, and FDA draft guidance addresses medical device clinical data from studies conducted abroad (https://www.healthindustrywashingtonwatch.com/articles/other-fda-developments/).

— OIG Developments. The OIG has partnered with industry associations to issue guidance for health care governing boards on compliance oversight, and the OIG has issued its Medicaid Fraud Control Units FY 2014 Annual Report (https://www.healthindustrywashingtonwatch.com/articles/other-oig-developments/).

— Legislative Developments. President Obama has signed legislation to permanently reform the Medicare physician reimbursement framework and make other policy changes. Pending trade legislation would extend Medicare sequestration. The House has approved the “Ensuring Patient Access and Effective Drug Enforcement Act.” Congressional panels have held hearings on several health policy issues. See https://www.healthindustrywashingtonwatch.com/articles/legislative-developments/.

— Health Industry Events. Upcoming CMS events will focus on home health star ratings and HCPCS coding applications (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

On April 30, 2015, the Centers for Medicare & Medicaid Services (CMS) is publishing its proposed rule to update the Medicare acute hospital inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2016.  CMS will accept comments on the proposed rule until June 16, 2015. The final rule will be published by August 1, 2015, and generally will apply to discharges occurring on or after October 1, 2015.

With regard to the IPPS, CMS projects that the rate and policy changes in the proposed rule would increase IPPS operating payments by approximately 0.3%, or about $120 million in FY 2016. The proposed rule would provide for a 1.1% operating payment rate update for hospitals that submit quality data and are meaningful users of Electronic Health Records (EHR). This update reflects a 2.7% market basket update, adjusted by a -0.6 percentage point multi-factor productivity (MFP) cut and an additional -0.2 percentage point cut (as mandated by the Affordable Care Act, or ACA), with an additional -0.8 percentage point documentation and coding recoupment adjustment required by the American Taxpayer Relief Act of 2012.Continue Reading CMS Issues Proposed Rule to Update FY 2016 IPPS, LTCH PPS Rates, Policies

The House and Senate are considering trade legislation that would be financed in part by $700 million from extended Medicare sequestration authority – much to the consternation of the health care provider community. By way of background, under the “Protecting Access to Medicare Act of 2014” (PAMA), Congress “front-loaded” the Medicare reimbursement cuts under the

CMS issued a proposed rule on April 24, 2015 that would update FY 2016 Medicare payment policies and rates for the Inpatient Psychiatric Facilities (IPF) PPS. The proposed rule also would update quality measures and reporting requirements under the the IPF Quality Reporting Program, under which facilities report on quality measures or are subject

The Office of the National Coordinator for Health Information Technology (ONC) has released a revised Guide to Privacy and Security of Electronic Health Information. The guide is intended to help health care providers – especially those from smaller organizations – address federal health information privacy and security requirements in their practices. The new version

CMS published a proposed rule on April 15, 2015 that would modify the Medicare and Medicaid Electronic Health Record (EHR) Incentive program to reduce complexity, simplify reporting requirements, and align Stage 1 and Stage 2 objectives and measures with Stage 3. Notably, CMS proposes to change the Medicare and Medicaid EHR Incentive Program reporting period

On April 23, 2015, CMS released its proposed rule to update Medicare prospective payment system (PPS) rates for inpatient rehabilitation facilities (IRFs) for FY 2016, which begins October 1, 2015. CMS estimates that rates would increase by 1.7% overall ($130 million) under the proposed rule compared to FY 2015 levels. This proposed increase reflects

As discussed on our Life Sciences Legal Update blog, the FDA has released draft guidance clarifying its acceptance of medical device clinical data from studies conducted outside of the United States. The draft guidance highlights special considerations that apply when using foreign clinical data, including applicability to populations within the US, and provides recommendations

CMS has published a proposed rule that would apply provisions of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to Medicaid beneficiaries who receive services through managed care organizations or alternative benefit plans and to the Children’s Health Insurance Program (CHIP). In general, such programs will be required to meet the mental

On April 21, 2015, the House of Representatives approved H.R. 471, the Ensuring Patient Access and Effective Drug Enforcement Act of 2015. The bipartisan legislation would clarify the Controlled Substances Act to establish consistent enforcement standards intended to protect against diversion while promoting patient access to medically-necessary controlled substances.

On April 16, 2015, CMS published a proposed rule that would revise the definition of Medicaid mechanized claims processing and information retrieval systems to include Medicaid eligibility and enrollment (E&E) systems, which would make enhanced federal financial participation (FFP) available for such systems on an ongoing basis (current regulatory authority for such enhanced funding

CMS and FDA are establishing an interagency task force to reinforce their collaboration regarding the oversight of laboratory-developed tests (LDTs), which are tests intended for clinical use and designed, manufactured, and used within a single lab. According to an FDA blog post, the goals of the FDA/CMS task force include: (1) identifying areas of similarity

On April 21, 2015, CMS announced its plans to recompete the supplier contracts awarded under the Round 1 Recompete of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program, as the statute requires CMS to do at least every three years.  The current Round 1 Recompete contract period expires December 31, 2016; the new “Round 1 2017” contracts are scheduled to go into effect January 1, 2017. 

For the recompete, CMS is making limited changes to the composition of the product categories and the number of competitive bidding areas (CBAs). The product categories to be included in the Round 1 2017 competition are as follows: Continue Reading CMS Announces Recompete of Round 1 of the Medicare DMEPOS Competitive Bidding Program for 2017

On April 20, 2015, the Office of the Inspector General of the Department of Health and Human Services (“OIG”) released educational guidance designed to assist governing boards of health care organizations (“Boards”) in their compliance oversight functions. This guidance, entitled “Practical Guidance for Health Care Governing Boards on Compliance Oversight” (the “Guidance”), was developed in a collaborative effort among the OIG, the Association of Healthcare Internal Auditors (“AHIA”), the American Health Lawyers Association (“AHLA”), and the Health Care Compliance Association (“HCCA”). The Guidance updates previous guidance issued by OIG and AHLA, and incorporates insight from the AHIA and HCCA to help assist the internal auditors, compliance officers, and lawyers that report to the Boards. The document addresses four key issues relating to a Board’s oversight and review of compliance program functions: (1) the roles and relationships among an organization’s audit, compliance, and legal departments; (2) the mechanisms and processes for reporting to the Board; (3) identifying and auditing regulatory risk; and (4) methods to encourage organization-wide accountability for achieving compliance goals and objectives.
Continue Reading OIG Partners with Industry Associations by Issuing Practical Guidance for Health Care Governing Boards on Compliance Oversight

The OIG has released its Medicaid Fraud Control Units (MFCU) Fiscal Year 2014 Annual Report, which highlights statistical achievements of the 50 MFCUs nationwide, along with related OIG oversight activities. With regard to criminal cases, the report notes:

  • MFCUs reported 1,318 criminal convictions, most frequently involving home health care aides, certified nursing aides, and other medical