On December 8, 2014, CMS published a proposed rule that would revise the regulations governing 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) to provide cost-effective, coordinated care to Medicare beneficiaries. The Shared Savings Program now includes more than 330 ACOs in 47 states and serves more than 4.9 million Medicare fee for service (FFS) beneficiaries.Continue Reading...
On December 12, 2014, CMS published a proposed rule to revise selected conditions of participation (CoPs) for providers, conditions for coverage (CfCs) for suppliers, and requirements for long-term care (LTC) facilities to conform with the Supreme Court decision in United States v. Windsor, and ensure that same-sex spouses in legally-valid marriages are recognized and afforded equal rights in Medicare and Medicaid participating facilities. The proposed rule addresses nine specific provisions located in the CoPs and CfCs for ambulatory surgical centers, hospices, hospitals, LTC facilities, and community and mental health centers that CMS believes could be interpreted to support the denial of federal rights and privileges to a same-sex spouse if the state of residence does not recognize same-sex marriages. CMS states that its “goal is to provide equal treatment to spouses, regardless of their sex, whenever the marriage was valid in the jurisdiction in which it was entered into, without regard to whether the marriage is also recognized in the state of residence or the jurisdiction in which the health care provider or supplier is located, and where the Medicare program explicitly or impliedly provides for specific treatment of spouses.” Comments on the proposed rule will be accepted until February 10, 2015.
CMS has issued a proposed rule that would establish ACA Marketplace health plan payment parameters and essential benefit standards for 2016. Specifically, the wide-ranging proposed rule addresses, among other things: the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters; user fees for federally-facilitated exchanges; standards for qualified health plans, including network adequacy and quality improvement; the Small Business Health Options Program; guaranteed availability and renewability, rate review; the medical loss ratio program; and minimum essential health benefits (including new policies and procedures for enrollee requests for prescription drugs not included on a plan’s formulary). CMS will accept comments on the proposed rule until December 22, 2014.
CMS Finalizes Rule to Strengthen Medicare Provider Enrollment Regulations and Permit Revocations for Patterns/Practices of Improper Claims Submissions; Defers Expanded Awards for Medicare Fraud Tipsters
On December 5, 2014, the Centers for Medicare & Medicaid Services (CMS) published a final rule that expands the circumstances under which it may deny or revoke the Medicare enrollment of entities and individuals on program integrity grounds, effective February 3, 2015.Continue Reading...
CMS has announced that it is delaying a provision of its 2015 Medicare Advantage/Medicare Part D final rule, published on May 23, 2014, that requires physicians and other eligible professionals who prescribe Part D drugs to be enrolled in Medicare (or have a valid opt-out affidavit on file) for their prescriptions to be covered under Medicare Part D. While the final rule stated that the effective date for this requirement would be June 1, 2015, CMS has announced that it is delaying enforcement of this provision until December 1, 2015. CMS notes that Part D drug prescribers must submit their Medicare enrollment applications or opt-out affidavits to their Medicare Administrative Contractors by June 1, 2015 to provide sufficient processing time and prevent prescription drug claims from being denied beginning December 1, 2015.
Today CMS published a notice announcing that the CY 2015 provider enrollment application fee is $553, up from $542 in 2014. This application fee is required for institutional providers that are initially enrolling or revalidating enrollment in the Medicare or Medicaid program or the Children's Health Insurance Program (CHIP) or adding a new Medicare practice location on or after January 1, 2015 and on or before December 31, 2015. Note that CMS uses a broad definition of institutional entities subject to the application fee; it applies to “[a]ny provider or supplier that submits a paper Medicare enrollment application using the CMS-855A, CMS-855B (not including physician and non-physician practitioner organizations), CMS-855S, or associated Internet-based PECOS enrollment application,” along with additional categories of Medicaid-only and CHIP-only institutional providers.
On December 3, 2014, CMS published a final rule that defines “uninsured” for purposes of calculating the Medicaid hospital-specific disproportionate share hospital (DSH) payment limit. Under the Social Security Act, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or “have no health insurance (or other source of third party coverage) for the services furnished during the year.” The final rule provides this test will be applied on a service-specific basis; that is, the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage. Although the final rule’s definition of uninsured may affect the calculation of the hospital-specific DSH limit, the rule does not modify the DSH allotment amounts and will have no effect on a state’s ability to claim federal financial participation (FFP) for DSH payments made up to the published DSH allotment amounts. The final rule also provides additional clarification to states and hospitals regarding costs eligible for inclusion in the calculation of the hospital-specific DSH limit. The rule is effective on December 31, 2014.
On December 2, 2014, CMS published a correction to its November 6, 2014 final 2015 Medicare home health prospective payment system (PPS) rule to correct a technical error related to the applicability date for a therapy reassessment provision. Separately, on November 24, 2014, CMS published a notice making technical amendments to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) supplier surety bond requirements under 42 CFR 424.57. According to the preamble, the notice corrects non-substantive regulatory paragraph designations, an omission, and a technical correction to previously published regulatory text, and makes terminology and cross-references changes.
CMS intends to conduct a three-year Medicare prior authorization model for non-emergent hyperbaric oxygen therapy services in Illinois, Michigan, and New Jersey, where CMS contends there have been high rates of improper payments for these services. Under this model, CMS will require that all relevant clinical or medical documentation requirements are met before services are rendered to beneficiaries and before claims are submitted for payment; no new clinical documentation requirements will be created. The model is scheduled to begin on March 1, 2015. CMS also recently announced a similar prior authorization model for repetitive scheduled nonemergent ambulance transports.
Today CMS published a notice extending the comment period on its October 9, 2014 proposed rule that would revise the conditions of participation (CoPs) that home health agencies must meet to participate in the Medicare and Medicaid programs. Specifically, the comment period is extended for 30 days, from December 8, 2014 until January 7, 2015.
On November 12, 2014, CMS published its final rule to update the Medicare physician fee schedule (MPFS) for CY 2015. Highlights of the sweeping rule include the following:
- The Protecting Access to Medicare Act (PAMA) of 2014 provides for a 0% update to the conversion factor (CF) for MPFS services furnished between January 1, 2015 and March 31, 2015, with the CF adjusted afterwards according to the statutory Sustainable Growth Rate (SGR) formula. In the final rule, CMS determined that based on the zero percent update under PAMA and adjustments necessary to maintain budget neutrality, the CF for the first quarter of 2015 will be $35.8013 (compared to $35.8228 in 2014). CMS also announced that the CF for April 1, 2015 through December 31, 2015 will be $28.2239 – a 21.2% reduction -- unless Congress establishes an alternative CF or otherwise modifies the SGR formula. While there is an expectation that Congress eventually will override this payment cut, the form any such action might take is speculative at this point.
On November 10, 2014, CMS published its final rule to update the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year (CY) 2015. The following are highlights of this major rulemaking:
- The final OPPS fee schedule increase factor is 2.2%. This update reflects a hospital market basket increase of 2.9%, which is offset by two Affordable Care Act (ACA) provisions: a 0.2% reduction and a -0.5% “multi-factor productivity” (MFP) adjustment. The update for individual procedures can vary, and hospitals that do not meet Hospital Outpatient Quality Reporting (OQR) Program requirements are subject to a 2.0% reduction. CMS projects a 2.3% increase in total OPPS payments (about $900 million) for 2015, considering all policies in the rule.
CMS Adopts Major Changes to Medicare DMEPOS Payment/Coverage Policy Inside/Outside of Competitive Bidding Areas
On November 6, 2014, CMS published a final rule that makes significant and highly technical changes to Medicare payment policies for durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS). Notably, the rule finalizes a new methodology for adjusting Medicare DMEPOS fee schedule payment amounts across the country using information from the Medicare DMEPOS Competitive Bidding Program (CBP). CMS estimates that this methodology will cut Medicare DMEPOS reimbursement by more than $4.4 billion over fiscal years 2016 through 2020. The rule also finalizes a mechanism to test the use of bundled monthly payment amounts for certain DME under competitive bidding; modifies CBP change of ownership (CHOW) and termination of contract rules; and codifies Medicare hearing aid coverage policy. Note that CMS did not adopt its proposal to clarify practitioner qualifications for providing custom fitting services for orthotics. The following is a summary of the final rule, with particular emphasis on revisions to CMS’s July 11, 2014 proposed rule.Continue Reading...
On November 6, 2014, CMS published a final rule to update the Medicare home health prospective payment system (HH PPS) for CY 2015. CMS estimates that the final rule will cut Medicare payments to home health agencies (HHAs) by 0.30%, or $60 million, in 2015. Specifically, while the rule provides a 2.1% home health payment update percentage ($390 million increase), that update is more than offset by a reduction of 2.4% ($450 million) attributable to a rebasing adjustment (the second year of a four-year phase-in). Under the final rule, the national standardized 60-day episode payment for CY 2015 is $2,961.38.
The final rule also adopts a number of policy proposals. Notably, CMS is simplifying the home health face-to-face encounter documentation requirements, including eliminating the narrative as part of the certification of eligibility and providing more flexibility in procedures for obtaining documentation supporting patient eligibility. The final rule specifies that associated physician claims for certification/re-certification of eligibility will not be covered when a patient does not meet home health eligibility criteria. CMS also discusses comments it received on a potential HHA Value-Based Purchasing (VBP) model, under which CMS would test whether payment incentives would lead to higher quality of care for beneficiaries. CMS is considering testing such a model beginning in 2016; additional details will be provided in future rulemaking. The final rule also, among other things: recalibrates HH PPS case-mix weights; simplifies therapy reassessment timeframes; establishes a minimum OASIS assessment submission threshold; revises the speech-language pathology personnel conditions of participation; and places limitations on the reviewability of civil monetary penalties imposed for HHA noncompliance with federal participation requirements.
CMS published its final rule to update the Medicare end-stage renal disease (ESRD) PPS for CY 2015 on November 6, 2014. For CY 2015, the final ESRD PPS base rate is $239.43, which reflects a 0.0 percent update mandated by section 217(b)(2) of PAMA, and the application of a wage index budget-neutrality adjustment factor to the CY 2014 ESRD PPS base rate of $239.02. Nevertheless, CMS estimates that the rule will increase payments to ESRD facilities by approximately $30 million in 2015 due to updates to the outlier threshold amounts. The final rule also, among other things: rebases the ESRD bundled market basket using 2012 data; revises the market basket measures; updates the labor-related share value with a two-year transition; clarifies the eligibility criteria for the low volume payment adjustment; and implements a PAMA provision providing that payment for ESRD-related oral-only drugs will not be made under the ESRD PPS prior to January 1, 2024. CMS also adopted updates to the ESRD Quality Incentive Program (QIP) for payment years 2017 and 2018, including changes to the measure sets and establishment of a new scoring methodology beginning in 2018. Finally, the rule makes significant changes to Medicare reimbursement policy for DME, prosthetics, orthotics, and supplies (DMEPOS), as discussed in a separate post.
As part of the final 2015 Medicare physician fee schedule rule, CMS is adopting – with certain refinements – its proposed changes to the regulations implementing the Physician Payment Sunshine Act. By way of background, the Sunshine Act requires pharmaceutical and medical device manufacturers and group purchasing organizations to submit to CMS certain information on payments and transfers of value to physicians and teaching hospitals, as well as physician ownership information. This data is being made publicly available on the CMS “Open Payments” website, http://go.cms.gov/openpayments.
Specifically, In the final rule, published on November 13, 2014, CMS adopted the following provisions pertaining to the Sunshine Act regulations:
- CMS deleted the reporting exclusion for payments made to speakers at accredited continuing medical education events. Importantly, CMS points out that such payments may still be excluded from reporting, since “payments or other transfers of value, including payments made to physician covered recipients for purposes of attending or speaking at continuing education events, which do not meet the definition of an indirect payment, as defined at §403.902, are not reportable.” Under §403.902, indirect payments refer to payments or other transfers of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient(s).
- The Final Rule requires the reporting of the marketed name and therapeutic area or product category of the related covered drug, device, biological, or medical supply, unless the payment or other transfer of value is not related to a particular covered or non-covered drug, device, biological or medical supply. Previously, for devices or medical supplies manufacturers had the option of reporting the therapeutic area or product category instead of the marketed name. In the Final Rule, CMS also removed language allowing manufacturers the option to report “up to five” related covered products. It is not clear from the Final Rule whether such an option will still be available in practice, or if manufacturers will only be able to report a single, related covered product. Reporting marketed names for non-covered drugs, devices, biologicals, or medical supplies will continue to be optional. CMS also acknowledges that a payment or other transfer of value associated with a research payment regarding a device or medical supply may not have a marketed name. Therefore, CMS is specifying that manufacturers will continue to have an option to report either a device or medical supply marketed name, therapeutic area or product category when reporting research payments.
- CMS is requiring applicable manufacturers to report stocks, stock options, or any other ownership interest as distinct categories.
- CMS is deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply.”
CMS is implementing data collection requirements for these provisions beginning January 1, 2016, for reporting to CMS in 2017.
CMS Announces 3-State Medicare Prior Authorization Model for Repetitive Nonemergent Ambulance Transport
In light of government reports finding high utilization and potential improper Medicare payments associated with repetitive scheduled nonemergent ambulance transports, CMS will test a prior authorization model program for these services in New Jersey, Pennsylvania, and South Carolina. CMS defines repetitive ambulance service as medically necessary ambulance transportation that is furnished in 3 round trips or more times during a 10-day period, or at least once per week for at least 3 weeks. CMS notes that such repetitive ambulance services are often needed by beneficiaries receiving dialysis, wound care, or cancer treatment. The use of prior authorization will not create new clinical documentation requirements for suppliers; instead information that is already required to support Medicare payment will be furnished earlier in the process, prior to rendering services. The prior authorization program is scheduled to begin December 1, 2014 and last three years.
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.