On December 31, 2008, CMS published a notice correcting a number of technical and typographical errors in the November 19, 2008 final Medicare physician fee schedule rule for calendar year 2009. In addition, on December 30, 2008, CMS published a notice correcting certain wage data included in the October 3, 2008 final FY 2009 Medicare hospital inpatient prospective payment system rule.
On December 19, 2008, the Centers for Medicare & Medicaid Services (CMS) published a final rule implementing provisions of the Medicare Modernization Act of 2003 related to state auditing and reporting of Medicaid disproportionate share hospital (DSH) payments, effective January 19, 2009. CMS also published a separate notice announcing the final federal share DSH allotments for federal fiscal year (FY) 2007 and the preliminary federal share DSH allotments for FY 2009. The notice also announces the final FY 2007 and the preliminary FY 2009 limitations on aggregate DSH payments that states may make to institutions for mental disease and other mental health facilities.
CMS published a final rule on December 19, 2008 that implements a provision of the Deficit Reduction Act of 2005 that provides states with additional flexibility to establish a non-emergency medical transportation brokerage program, and to receive the federal medical assistance percentage matching rate. The rule is effective January 20, 2009.
CMS published a document on December 22, 2008 correcting technical errors that appeared in the November 3, 2008 notice updating Medicare home health agency (HHA) prospective payment system (PPS) rates for 2009.
HHS has published the federal medical assistance percentages and enhanced federal medical assistance percentages for fiscal year (FY) 2010. The percentages in this notice apply to state expenditures for most medical services and medical insurance services, and assistance payments for certain social services.
On December 3, 2008, the Centers for Medicare & Medicaid Services (CMS) published a final rule to provide states with increased flexibility under an approved state plan to define the scope of covered Medicaid benefits, as authorized by the Deficit Reduction Act of 2005 (DRA). Under the rule, states may offer coverage of the following benchmark or benchmark-equivalent benefit packages to certain Medicaid recipients: the standard Blue Cross/Blue Shield preferred provider option service benefit plan under the Federal Employees Health Benefit Plan; state employee coverage; coverage offered by the state’s largest commercial health maintenance organization; or coverage approved by the Secretary of the Department of Health and Human Services (HHS). The rule is effective February 2, 2009. Note that CMS characterizes the rule as a codification of guidance CMS issued on March 31, 2006 to state Medicaid directors, and the agency points out that states have already begun implementing this provision in advance of this final rule.
On December 3, 2008, CMS issued FY 2009 hospital wage index changes to implement Section 124 of the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA). The notice contains revised final wage indices and hospital reclassifications for 27 hospitals and are applicable for discharges beginning October 1, 2008.
On November 24, 2008, the Centers for Medicare & Medicaid Services (CMS) published an interim final rule with comment period making technical changes to the methodology used to compute each state's preliminary and final allotments available to pay the Medicare Part B premiums for qualifying individuals (QIs). The rule also contains charts providing the states' final QI allotments for the federal fiscal year (FY) 2008 and preliminary QI allotments for FY 2009. While the rule is effective November 24, 2008, the final allotments for FY 2008 are effective October 1, 2007 and the preliminary allotments for FY 2009 are effective October 1, 2008. CMS will accept comments on the rule until January 23, 2009.
On November 25, 2008, CMS published a final rule on Medicaid premiums and cost sharing to implement requirements of the Deficit Reduction Act of 2005 and the Tax Relief and Health Care Act of 2006. Among other things, the legislation provided state Medicaid agencies with increased flexibility to impose premium and cost sharing requirements on certain Medicaid recipients, including drug cost sharing requirements designed to encourage the use of preferred drugs and to allow higher cost-sharing for non-emergency care furnished in a hospital emergency department. The rule is effective 60 days after publication.
On November 21, 2008, CMS published a notice correcting technical and typographical errors identified in the September 18, 2008 interim final rule with comment period that revises the regulations governing the Medicare Advantage program, the Part D prescription drug benefit program, and section 1876 cost plans to conform with provisions of the Medicare Improvements for Patients and Providers Act (MIPPA). The correcting amendment is effective November 21, 2008, and is applicable on September 18, 2008.
On November 14, 2008, the Centers for Medicare & Medicaid Services (CMS) published an interim final rule with comment period revising marketing requirements for Medicare Advantage (MA) plans and Medicare Part D prescription drug plans (PDPs). Specifically, the rule amends requirements just issued on September 18, 2008 to further limit the compensation that can be paid to agents or brokers with respect to MA and Part D plans in order to limit incentives to switch beneficiaries between plans to generate commissions, as authorized by the Medicare Improvements for Patients and Providers Act (MIPPA). Under the September 18 rule, plans were required to pay compensation on a six-year cycle, comprised of an initial enrollment year and five renewal years, with compensation in the initial year capped at 200% of the amount paid for renewal years. CMS received complaints, however, that plans were misinterpreting the rule’s intent by proposing structures under which compensation in the initial year in the cycle was less than the renewal years and renewal compensation varied from year to year. Among other things, the November 14 rule modifies the marketing requirements by:
The rule is effective November 10, 2008; CMS is accepting comments on the rule until December 15, 2008.
On November 7, 2008, CMS published a final rule clarifying the definition of outpatient hospital services under Medicaid to align it more closely with the Medicare definition of such services. CMS stresses that the regulation does not eliminate any Medicaid benefit category, place reimbursement restrictions on those categories, or alter the qualifications that must be met to provide a Medicaid covered service. Note that while the proposed version of the rule, published September 28, 2007, included provisions regarding methods for demonstrating compliance with the upper payment limit (UPL), in consideration of the Congressional moratorium on a separate proposed rule on UPLs published January 18, 2007, CMS is reserving action on the proposed provisions related to outpatient hospital UPLs. CMS may consider publication of the UPL guidance at a future date. The rule is is effective December 8, 2008.
On October 30, 2008, the Centers for Medicare & Medicaid Services (CMS) released the text of its final rule updating the Medicare physician fee schedule (MPFS) for calendar year (CY) 2009. As required under the “Medicare Improvements for Patients and Providers Act of 2008” (MIPPA), the rule increases physician payments by 1.1% in 2009, rather than the 5.4% cut CMS anticipated would result from the Sustainable Growth Rate (SGR) formula when it issued the July 7, 2008 proposed rule. Note that MIPPA did not amend the underlying SGR formula or modify payments for years after 2009; the Congressional Budget Office estimates that physician payment rates will be cut by 21% in 2010 unless Congress takes further action. In addition to making changes to physician payment rates, the sweeping rule includes many other policy changes, include the following.
Continue Reading...On October 30, 2008, CMS released its final rule with comment period updating Medicare hospital outpatient prospective payment system (HOPPS) and ambulatory surgical center (ASC) reimbursement and related policies for CY 2009. CMS expects that the final rule will increase HOPPS spending by 3.9 percent overall as a result of the inflation update and other policy changes. With respect to HOPPS policy, the final rule, among many other things:
CMS has adopted more limited changes for ambulatory surgical centers for 2009. The ASC prospective payment system (ASC PPS) is in the second year of a four-year transition that aligns ASC rates with HOPPS rates. For CY 2009, rates are be based on a blend of 50% of the CY 2007 ASC payment weight for the procedure and 50% of the CY 2009 fully implemented ASC weight (generally 65% of the corresponding HOPPS rate). CMS notes that the statute does not allow an inflation update to the ASC PPS for CY 2009. The rule also, among other things, refines the lists of covered ASC services, office-based procedures that are subject to special payment policies, and device-intensive procedures. The rule also finalizes updates to the ASC conditions for coverage (proposed August 31, 2007) to reflect current ASC practices and to establish new requirements to promote patient health and safety.
While CMS has released the advance text of the rule, and the official version is scheduled to be published in the Federal Register on November 18, 2008. CMS will accept comments until December 29, 2008 on HOPPS payment classification for certain HCPCS codes and number of policy issues outlined in the rule.
On November 3, 2008, CMS published a notice updating the 60-day national episode rates and the national per-visit amounts under the Medicare home health prospective payment system (HH PPS), effective January 1, 2009. The notice includes a 2.9 percent home health market basket increase, but this increase is largely offset by a 2.75 percent reduction to the HH PPS rates to account for the changes in case-mix that are unrelated to patient’s health status (the second year of a four-year phase-in) and an adjustment to the wage index for 2009. CMS estimates that overall Medicare home health payments will increase by a total of $30 million in CY 2009. As mandated by the Deficit Reduction Act of 2005, if a home health agency does not submit quality data, the home health market basket percentage increase will be reduced 2 percentage points. The required quality measures for meeting the submission requirements for CY 2009 are the same as those used for CY 2008.
On October 10, 2008, the Centers for Medicare & Medicaid Services (CMS) published a notice soliciting comments on the Medicare Part D/Medicare Advantage Calendar Year (CY) 2010 Bid Pricing Tool and the CY 2010 Plan Benefit Package software and formulary submission. CMS also has posted the forms and related documents regarding the information collections. CMS will accept comments on the forms through December 9, 2008.
On October 3, 2008, CMS published a notice updating the final Medicare hospital inpatient prospective payment system (IPPS) wage indices, hospital reclassifications, payment rates, and other tables for fiscal year (FY) 2009, which began October 1, 2008. The data reflects the extension of the expiration date for certain geographic reclassifications and special exception wage indices as required by the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA). In a related development, CMS published a separate notice correcting a series of technical and typographical errors that appeared in August 19, 2008 IPPS final rule, including corrections of regulatory language related to physician self-referral provisions.
On October 1, 2008, CMS published a document correcting technical errors that appeared in the August 8, 2008 Medicare skilled nursing facility (SNF) prospective payment system final rule for FY 2009.
On October 2, 2008, CMS published a notice soliciting nominations for individuals to serve on the Program Advisory and Oversight Committee (PAOC), which advises the Secretary of Health and Human Services on Medicare competitive bidding program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). CMS has a particular interest in individuals with expertise in DMEPOS and competitive bidding, as well as experience in furnishing services and items in the rural and the urban marketplace. CMS will select 10-12 PAOC members representing beneficiaries, physicians, suppliers, professional standards organizations, financial standards specialists, and association representatives, among others. These individuals will replace the previous members of the PAOC (although CMS could reappoint previous members). Nominations are due November 3, 2008.
On October 3, 2008, CMS published a final rule to provides guidance to states that seek to administer self-directed personal assistance services through their state plans, as authorized by the Deficit Reduction Act of 2005. The state plan option allows beneficiaries, through an approved self-directed services plan and budget, to purchase personal assistance services, rather than have those services directed by an agency. Beneficiaries could hire qualified family members to perform certain personal assistance (but not medical) services. Allotments also could be used to purchase items that promote independence, such as a wheelchair ramp. The rule provides guidance to ensure beneficiary health and welfare and financial accountability of the state plan option. To request state plan change, the state must have an existing personal care services benefit or be operating a home or community-based services waiver program. Beneficiary enrollment would be voluntary, and the state also must provide traditional agency-delivered services if the beneficiary wishes to discontinue self-directed care. The rule is effective November 3, 2008.
On October 7, 2008, CMS pubished a final rule revising the definition of "multiple source drug" under the Medicaid program. The rule also responds to public comments received on the March 14, 2008 interim final rule with comment period. The final rule adopts the March 2008 interim final rule with the following change: in §447.205, paragraph (3)(i) of the definition of multiple source drug, the term "covered outpatient drug" is revised to read "drug product" and "listed product" respectively to reflect the statutory language. As noted in the interim final rule with comment period, to the extent that this rule may affect Medicaid reimbursement rates for retail pharmacies, it is subject to the injunction issued by the United States District Court for the District of Columbia in National Association of Chain Drug Stores et al. v. Health and Human Services. The rule is effective is effective November 6, 2008.
On October 6, 2008, CMS announced expanded efforts to combat Medicare DMEPOS and home health fraud and abuse, including targeted reviews of home health agencies (HHAs) in Florida and greater scrutiny of DMEPOS suppliers in Florida, California, Texas, Illinois, Michigan, North Carolina, and New York. In particular, CMS will be reviewing DMEPOS items with high expenditures and high growth rates, such as oxygen supplies and equipment, power mobility devices/power wheelchairs, and diabetic test strips. Targeted steps will include:
In addition, CMS has announced that it has awarded contracts to four permanent Recovery Audit Contractors (RACs) to review all Medicare Part A and B paid claims to identify Medicare overpayments and underpayments. The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find. The nationwide RAC program follows a three-year demonstration program in six states that collected over $900 million in overpayments and returned nearly $38 million in underpayments. Finally, CMS is consolidating the Medicare’s program safeguard contractors (PSCs) and the Medicare Drug Integrity Contractors (MEDICs) with new Zone Program Integrity Contractors (ZPICs), which eventually will be responsible for ensuring the integrity of all Medicare-related claims.
CMS has issued an educational article clarifying issues related to Medicare payment of certain routine costs associated with clinical trials. The article focuses on the prohibition on payment for items or services which neither the beneficiary nor any other person or organization has a legal obligation to pay (i.e., items and services furnished gratuitously without regard to the beneficiary’s ability to pay and without expectation of payment from any source, such as free x-rays or immunizations provided by health organizations). CMS discusses the application of this policy in three scenarios: when a research sponsor says it will pay for routine costs if there is no reimbursement from any insurance company; when a research sponsor pays for the routine costs provided to an indigent non-Medicare patient; and when a research sponsor pays Medicare copayments for beneficiaries in a clinical trial.
CMS has announced that because of the impact of recent hurricanes, it will grant a data submission waiver to IPPS hospitals in selected counties of Louisiana and Texas that are unable to meet the submission of quality data requirements for the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) for FY 2010. Hospitals that have questions about this process should contact their local Quality Improvement Organization.
On October 1, 2008, CMS published a notice correcting technical errors that appeared in the August 8, 2008 SNF PPS FY 2009 final rule.
On September 18, 2008, the Centers for Medicare & Medicaid Services (CMS) published two final rules modifying Medicare Advantage (MA) and Part D Prescription Drug Plan (PDP) marketing and other requirements.
On September 26, 2008, CMS published a final rule establishing contracting requirements under the Medicaid integrity audit program, including procedures for identifying and resolving organizational conflicts of interest, competitive procedures to be used, and procedures under which a contract may be renewed. The rule is effective October 27, 2008.
CMS published a final rule September 26, 2008 setting forth the criteria for terminating a provider or supplier from non-random prepayment complex medical review, as mandated by the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The rule is effective January 1, 2009.
CMS has announced that the 2009 “amount in controversy” threshold for administrative law judge hearings is $120, and the threshold for judicial review is $1,220.
The Food and Drug Administration (FDA) has published a notice announcing animal drug and generic animal drug user fee rates and payment procedures for fiscal year 2009.
On August 22, 2008, HHS proposed new code sets to be used by the public and private sectors for reporting diagnoses and inpatient procedures in health care transactions under the Health Insurance Portability and Accountability Act (HIPAA) effective October 1, 2011. Specifically, the proposed rule would adopt the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD–10–CM) for diagnosis coding, and the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD–10–PCS) for inpatient hospital procedure coding. These new codes would replace the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD–9–CM) Volumes 1 and 2, and the International Classification of Diseases, Ninth Revision, Clinical Modification (CM) Volume 3 for diagnosis and procedure codes, respectively. HHS believes the adoption of the ICD-10 code set will: support value-based purchasing by accurately defining services and providing specific diagnosis and treatment information; support comprehensive reporting of quality data; ensure more accurate payments for new procedures; result in fewer rejected and improper claims; and facilitate comparisons to international data. While HHS expects the transition to the new codes to save billions of dollars in the long-term, short-term implementation costs (training, productivity losses, and systems changes) could reach hundreds of millions of dollars. HHS will accept comments on the proposed rule, including the cost/benefit assumptions, until October 21, 2008.
On August 22, 2008, HHS published a proposed rule that would adopt updated versions of the standards for electronic transactions under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The rule also would adopt a transaction standard for Medicaid Pharmacy Subrogation and two standards for billing retail pharmacy supplies and professional services, and would clarify who the “senders” and “receivers” are in the descriptions of certain transactions. HHS will accept comments on the proposed rule until October 21, 2008.
On August 21, 2008, CMS published a notice correcting technical errors that appeared in its May 23, 2008 final rule with comment period revising and clarifying various regulations governing provider reimbursement determinations, appeals before the Provider Reimbursement Review Board, appeals before the intermediaries, and Administrator review of decisions made by the Board.
On August 18, 2008, the Centers for Medicare & Medicaid Services (CMS) published its final Medicare hospital inpatient prospective payment system (IPPS) rule for fiscal year (FY) 2009, which begins October 1, 2008. CMS estimates that the rate updates and other policies in the rule will increase Medicare payments to acute care hospitals by almost $4.75 billion in FY 2009, although the impact on particular procedures varies. The following are highlights of the sweeping regulation.
Continue Reading...On August 8, 2008, CMS published its Medicare inpatient rehabilitation facility (IRF) PPS rule for FY 2009. While the rule provides a freeze in the standard federal rate as required by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), CMS estimates that the rule will cut IRF payments by $40 million, or 0.7%, for FY 2009, primarily due to an increase in the outlier payment threshold amount to $10,250. As required by the MMSEA, the final rule retains the requirement that at least 60% of a facility’s patient population have one of 13 qualifying conditions, and CMS will continue to count comorbidities under certain conditions when determining an IRF’s compliance with the threshold. The rule also, among other things, updates the case mix group relative weights, average length of stay values, and wage index tables. The updated IRF PPS rates are applicable for discharges on or after October 1, 2008 and on or before September 30, 2009.
On August 8, 2008, CMS published the Medicare skilled nursing facility (SNF) prospective payment system (PPS) final rule for FY 2009, which includes a 3.4% inflation update that CMS estimates will increase overall payments by $780 million. Most notably, CMS did not adopt a controversial provision included in its May 7, 2008 proposed rule to recalibrate case mix weights to compensate for increased expenditures resulting from refinements made in January 2006. The recalibration would have cut overall SNF PPS payments by 3.3% ($770 million) in FY 2009. The preamble to the final rule also addresses several SNF policy issues, including, among others, revisions to the Minimum Data Set (MDS), development of an integrated post-acute payment system, rehabilitative services in SNFs, and consolidated billing.
On August 8, 2008, CMS published a final rule updating the Medicare hospice wage index for FY 2009. CMS is adopting a 3.6% inflation update for hospices in FY 2009, but this increase is partially offset by a 1.1% decrease in payments in FY 2009 resulting from a phase-out of the hospice wage index budget neutrality adjustment factor (BNAF). Specifically, CMS is phasing out the BNAF over three years, beginning with a 25% reduction in FY 2009, an additional 50% reduction (for a total of a 75% reduction) in FY 2010, and a complete elimination in FY 2011. CMS estimates that phasing-out this adjustment will reduce Medicare hospice spending by $2.18 billion over five years. In addition, the final rule clarifies two wage index issues pertaining to the definition of rural and urban areas and multi-campus hospital facilities. The rule is effective October 1, 2008.
On August 13, 2008, CMS published a final rule requiring all long-term care (LTC) facilities that participate in Medicare or Medicaid to be equipped with sprinkler systems by August 13, 2013, and to maintain their sprinkler systems once they are installed.
On August 11, 2008, CMS published a notice correcting proposed drug administration ambulatory payment classifications (APCs) included in its July 18, 2008 proposed 2009 Medicare hospital outpatient prospective payment system (HOPPS) rule. In addition, on August 1, CMS published a notice making a series of technical changes to its July 7, 2008 proposed 2009 Medicare physician fee schedule rule.