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.
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.
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 published corrections to its August 22, 2014 final update to the Medicare Hospital Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System for FY 2015. Among other things, CMS made technical errors in its calculation of the operating and capital IPPS budget neutrality factors, outlier threshold, operating standardized amounts, capital federal rates, and impacts. CMS also made errors in determining the FY 2015 readmissions payment adjustment factors; CMS has revised the estimated savings under the Hospital Readmissions Reduction Program to $428 million, from $424 million in the final rule.
CMS has published a notice announcing the annual adjustment in the amount in controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) hearings and judicial review under the Medicare appeals process. Specifically, the calendar year 2015 AIC threshold amounts are $150 for ALJ hearings and $1,460 for judicial review. These amounts are effective for requests for ALJ hearings and judicial review filed on or after January 1, 2015.
On September 5, 2014, CMS is publishing a final rule that specifies additional options for annual eligibility redeterminations and renewal and re-enrollment notice requirements for qualified health plans (QHP) offered through the ACA insurance Exchange/Marketplace, beginning with annual redeterminations for coverage for plan year 2015. The rule provides an auto-enrollment process intended to provide current Marketplace consumers with a simple way to keep their 2014 QHP, although CMS encourages consumers to reevaluate their plan options and financial assistance eligibility for 2015. The rule also gives state-based Marketplaces flexible options to implement annual redetermination procedures.
On August 22, 2014, CMS will publish a final rule to update the Medicare hospice wage index for FY 2015 and make other payment and policy changes. CMS estimates that hospice payments will increase by 1.4% ($230 million) in FY 2015 compared to FY 2014 under the final rule. Specifically, CMS will update the hospice per diem rates by 2.1% (reflecting a 2.9% market basket increase that is reduced by 0.8 percentage points under ACA-mandated adjustments), but this update is partially offset by a 0.7 percentage point cut resulting from the use of updated wage data and CMS’s continued phase-out of its wage index budget neutrality adjustment factor. Hospices that fail to report quality data will have their market basket update reduced by 2 percentage points.
CMS is finalizing a number of policy proposals. For instance, the final rule requires hospices to file a beneficiary Notice of Election (NOE) within five calendar days after the effective date of hospice election (compared to three days in the proposed rule). If an NOE is not filed timely, the days from the effective date of election to the date of filing the NOE would be the financial responsibility of the hospice (unless there are exceptional circumstances). Likewise, CMS is requiring hospices to file a notice of termination/revocation within five (rather than the proposed three) calendar days of a beneficiary’s discharge or revocation, unless the hospice has already filed a final claim. The rule also, among other things: requires the hospice to identify the attending physician on the election form; revises the applicability of quality reporting penalties to new hospices; requires hospices to complete their hospice cap determinations within five months after the cap year but no sooner than 3 months after the cap period and remit any overpayments; and describes the development of the CAHPS® Hospice Survey.
This post was written by Susan Edwards.
The Centers for Medicare & Medicaid Services (CMS) published the final FY 2015 Medicare skilled nursing facility (SNF) prospective payment system (PPS) rule on August 5, 2014 (Final Rule). The Final Rule largely adopts the proposals set forth in the FY 2015 proposed SNF PPS rule (Proposed Rule). CMS estimates that the Final Rule will result in a $750 million increase in aggregate payments to SNFs during FY 2015 as compared to FY 2014. The Final Rule will implement a market basket update of 2%, resulting from a market basket increase of 2.5 percentage points, reduced by the Multifactor Productivity Adjustment of 0.5 percentage points, as required by the Affordable Care Act (ACA). Below we discuss highlights of the Final Rule, including: (1) the adopted wage index update; (2) revised change of therapy (COT) Other Medicare Required Assessment (OMRA) policy; (3) revisions to the Civil Money Penalties (CMP) regulations; and (4) CMS’s responses to comments regarding the agency’s observations on therapy trends.Continue Reading...
On August 22, 2014, CMS is publishing a final 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) 2015, which begins October 1, 2014. The following are highlights of the sweeping regulations.Continue Reading...
On August 6, 2014, CMS published its final rule to update Medicare payment policies under the inpatient rehabilitation facility (IRF) PPS for FY 2015. Under the final rule, CMS expects aggregate Medicare payments to IRFs will increase by $180 million, or 2.4%, compared to 2014 levels. The standard payment conversion factor for discharges for FY 2015 is $15,198, up from $14,846 in FY 2014. The update to the conversion factor reflects a 2.9% market basket update, reduced by a -0.5% MFP adjustment and an additional -0.2 percentage point adjustment mandated by the ACA. CMS also is decreasing the outlier threshold amount for FY 2015 to $8,848 from $9,272 in FY 2014, which increases IRF PPS payments by about 0.2%. In addition, CMS adopted a freeze in the facility-level adjustment factors (e.g., adjustments for Low-Income Percentage, teaching status, and location in a rural area, if applicable) for FY 2015 and all subsequent years at FY 2014 levels while the effects of FY 2014 changes are evaluated.
In other policy areas, the final rule revises the list of impairment group codes that presumptively meet the “60 percent rule” compliance criteria; however, in response to public comments, CMS is delaying the effective date for these changes and revisions finalized in the FY 2014 IRF PPS final rule until compliance review periods beginning on or after October 1, 2015. In addition, the rule adds a therapy data item to the IRF patient assessment instrument. Beginning October 1, 2015, IRFs must record the total number of therapy minutes received and the type of therapy provided (i.e. individual, group, concurrent or co-treatment) during the first two weeks of an IRF stay. CMS also is revising the IRF Quality Reporting Program to update measures, add a reconsideration policy, and adopt a data accuracy validation policy. The final rule also discusses the transition from ICD-9-CM to ICD-10-CM for use on Medicare claims (although this transition has been put on hold temporarily as a result of the Protecting Access to Medicare Act of 2014).
CMS has published a final rule that updates prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs) for FY 2015. Under the final rule, the federal per diem base rate will be increased by 2.1%, reflecting a market basket increase of 2.9%, offset by a 0.3 percentage point reduction and a productivity adjustment reduction of 0.5 percentage points (both reductions were mandated by the ACA). CMS also anticipates that the final update to the outlier fixed-dollar loss threshold amount will provide an additional 0.4% boost in overall payments to IPFs. In light of all payment policies, CMS estimates that total payments to IPFs under the final rule will increase by $120 million (2.5%) compared to FY 2014 payments. The final rule also, among other things, establishes a new methodology for updating the cost of living adjustment (consistent with the inpatient hospital methodology), expands quality measures under the IPF Quality Reporting Program, adopts coding changes related to comorbidity categories and unspecified codes, and discusses CMS’s future plans to propose an IPF-specific market basket. The final rule was published August 6, 2014.
CMS has announced that it is extending for an additional 6 months its current enrollment moratoria for new ground ambulance suppliers and home health agencies (HHAs)within designated metropolitan areas. The moratoria, which affect enrollment in Medicare, Medicaid, and the Children’s Health Insurance Program, apply to new ground ambulances in the Houston and Philadelphia metropolitan areas and new HHAs in the metropolitan areas of Chicago, Fort Lauderdale, Detroit, Dallas, Houston, and Miami. CMS discusses its rationale for extending the enrollment moratoria, including the qualitative and quantitative factors suggesting a high risk of fraud, waste, or abuse, in an August 1, 2014 notice. The extension is effective July 30, 2014. CMS may lift the moratoria before the end of the 6-month period or announce extensions in the Federal Register notice.
On July 14, 2014, the Centers for Medicare & Medicaid Services (CMS) published its proposed 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:Continue Reading...
On July 11, 2014, CMS published its proposed rule to update the Medicare physician fee schedule for CY 2015. The proposed rule reflects enactment of the Protecting Access to Medicare Act (PAMA) of 2014, which provides for a 0% update to the conversion factor (CF) for MPFS services furnished between January 1, 2015 and March 31, 2015. In the Proposed Rule, CMS estimates that with the application of a budget neutrality adjustment, the CF for the first quarter of 2015 would be $35.7977 (compared to $35.8228 in 2014). Under PAMA, the CF will be adjusted on April 1, 2015 according to the Sustainable Growth Rate (SGR) formula unless Congress takes additional legislative action. CMS does not speculate on the CF that will be applicable April 1, 2015 through December 31, 2015, but CMS previously estimated that the SGR would result in about a 20.9% cut in MPFS payments for 2015 if Congress does not again intervene. There is an expectation that Congress eventually will override this payment cut, but the timing and extent of any such relief cannot be assured at this time. Other key provision in the proposed rule include the following:Continue Reading...
On July 11, 2014, CMS published a proposed rule to update the Medicare end-stage renal disease (ESRD) PPS for CY 2015, which CMS anticipates would increase total payments to all ESRD facilities by 0.3% compared to CY 2014. While CMS projects that the ESRD market basket update, as adjusted for MFP, would have been 1.6%, the “Protecting Access to Medicare Act of 2014” (PAMA) sets the CY 2015 ESRD payment update at 0.0 percent. After applying a proposed wage index budget-neutrality adjustment factor, CMS estimates that the CY 2015 ESRD PPS base rate would be $239.33 under the proposed rule. The proposed rule also would, among other things: rebase the ESRD bundled market basket using 2012 data; update outlier Medicare Allowable Payment (MAP) and fixed dollar loss amounts (which will increase payments to ESRD facilities for beneficiaries requiring higher resource utilization); revise the market basket measures; update the labor -related share value with a two-year transition; clarify the eligibility criteria for the low volume payment adjustment ; and implement 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 proposes updates to the ESRD Quality Incentive Program (QIP) for payment years 2017 and 2018. Finally, the proposed rule would make significant changes to Medicare reimbursement policy for DME, prosthetics, orthotics, and supplies (DMEPOS). CMS will accept comments on the proposed rule until September 2, 2014.
CMS Proposes Major Changes to Medicare DMEPOS Payment/Coverage Policy Inside/Outside of Competitive Bidding Areas
On July 2, 2014, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule that would make a series of significant changes to Medicare coverage and payment policies for durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS). Notably, the proposed rule would establish a methodology for adjusting Medicare DMEPOS fee schedule payment amounts across the country using information from the Medicare DMEPOS Competitive Bidding Program (CBP) – which CMS estimates would cut Medicare DMEPOS reimbursement by more than $7 billion in FYs 2016 through 2020. The proposed rule also would: test the use of bundled monthly payment amounts for DME and enteral nutrition under the CBP; modify CBP change of ownership (CHOW) and termination of contract rules; clarify qualifications for providing custom fitting services for orthotics; and revise Medicare hearing aid coverage policy. These provisions, which were part of a broader proposed rule that would also update the Medicare end-stage renal disease prospective payment system for 2015, are summarized in our Client Alert.
CMS Proposes Changes to Sunshine Act "Open Payments" Regulations in 2015 Medicare Physician Fee Schedule Rule
Today the Centers for Medicare & Medicaid Services (CMS) issued an advance copy of the CY 2015 Medicare Physician Fee Schedule (PFS) proposed rule, which includes certain changes to the regulations implementing the Physician Payment Sunshine Act, also known as the Open Payments program. These proposed changes come just three days after the inaugural deadline for applicable manufacturers and group purchasing organizations (GPOs) to report to CMS detailed information regarding payments and transfers of value made to physicians and teaching hospitals, as well as physician ownership information.
As previously reported, the Physician Payment Sunshine Act and related regulations require pharmaceutical and medical device manufacturers and GPOs to register with and submit to CMS data on their financial relationships with physicians and teaching hospitals. This financial data will be made publicly available on the CMS Open Payments website.
In the PFS proposed rule, CMS proposes the following changes to the Physician Payment Sunshine Act regulations:
- Deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply”
- Deleting the reporting exclusion for payments made to speakers at accredited continuing medical education events when certain requirements are met. Although CMS is deleting this express exclusion, it notes that such payments may still be excluded generally from reporting under the separate exclusion for indirect payments, which applies in those instances in which the applicable manufacturer is unaware of the identity of the covered recipient. In other words, the practical impact of this change may not be significant in the long run.
- Requiring the reporting of the marketed name of the drug, device, biological, or medical supply related to the payment being reported. Previously, CMS finalized that for drugs and biologicals, manufacturers must report the market name of a related product, but that for devices and medial supplies, manufacturers could report either the name under which the product is marketed or the general therapeutic area or product category associated with the device or medical supply.
- Requiring manufacturers to report stocks, stock options or any other ownership interest as distinct categories.
The proposed rule will be published in the Federal Register on July 11, 2014, and comments are due to CMS by September 2, 2014.