Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

On April 10, 2013, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule updating Medicare inpatient prospective payment system (IPPS) and long-term acute care hospital prospective payment system (LTCH PPS) rates and policies for fiscal year (FY) 2014, which begins October 1, 2013. Comments on the proposed rule will be accepted until June 25, 2013. Highlights of the sweeping rule include the following: 

• Print
• Comments
• Trackbacks
• Share Link

On May 6, 2013, CMS published a proposed rule to update Medicare skilled nursing facility PPS rates for FY 2014 and make other updates to SNF reimbursement policy. CMS estimates that the proposed rule would increase aggregate Medicare payments to SNFs in FY 2014 by $500 million, or 1.4%, compared to FY 2013. Specifically, SNF PPS rates would be updated to reflect a 2.3% market basket increase that is reduced by a 0.4 percentage point multifactor productivity adjustment required by the ACA, and that is further reduced by a proposed 0.5 percentage point forecast error correction. Specifically, CMS proposes a technical change in the methodology for determining whether to make a forecast error correction when the difference between the actual and projected market basket percentage change exceeds 0.5%. By modifying how CMS determines the forecast error when it rounds to 0.5%, this policy would result in a 0.5 percentage point reduction in the FY 2014 market basket update. CMS also proposes to rebase the SNF market basket to reflect FY 2010 data, rather than data from FY 2004, and to make changes to the components of the SNF market basket index. With regard to therapy services, CMS proposes to add an item to the Minimum Data Set (MDS) to record the number of distinct calendar days of therapy provided to a beneficiary by all rehabilitation disciplines over the 7-day look-back period, and to specify the number of calendar days of therapy required to qualify for the Medium Rehab (RM) and Low Rehab (RL) Category Resource Utilization Group (RUG). CMS will accept comments on the proposed rule until July 1, 2013.

• Print
• Comments
• Trackbacks
• Share Link

CMS published a proposed rule on May 10, 2013 that would increase Medicare hospice reimbursement by 1.1% -- or $180 million -- in FY 2014. Specifically, CMS would update the hospice per diem rates by 1.8% (reflecting a 2.5% market basket increase that is reduced by 0.7 percentage points for adjustments mandated by the ACA), 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 (as set forth in prior rulemaking).

The proposed rule also would clarify ICD–9–CM coding guidelines and CMS’s expectations for diagnosis reporting on hospice claims, especially regarding the use of nonspecific symptom diagnoses. CMS restates its expectation that hospice providers will “code the most definitive, contributory terminal illness in the principal diagnosis field with all other related conditions in the additional diagnoses fields for hospice claims reporting.” For instance, CMS clarifies that “debility” and “adult failure to thrive” would not be used as principal hospice diagnoses on the hospice claim form. CMS specifically solicits comments on its coding guideline clarifications.

CMS also proposes revisions to its hospice quality reporting requirements. By way of background, under the ACA, hospices that fail to meet quality reporting requirements will receive a 2 percentage point reduction to their market basket update beginning in FY 2014. In 2013, hospices began reporting data on two quality measures (a pain management measure and a structural measure on participation in a Quality Assessment and Performance Improvement Program) for the FY 2014 payment determination. Beginning with the 2016 payment determination, CMS is proposing to replace these two measures with a standardized patient-level data collection instrument called the Hospice Item Set (HIS). The proposed rule also discusses, among other things, CMS’s plans to require the use of a Hospice Experience of Care Survey beginning in 2015 for the FY 2017 payment determination, and its efforts to reform the hospice payment framework. Comments will be accepted until June 28, 2013.

• Print
• Comments
• Trackbacks
• Share Link

CMS published a proposed rule on May 8, 2013 that would update Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) rates for FY 2014. CMS proposes a 1.8% payment update for FY 2014, reflecting a 2.5% market basket increase factor, reduced by a 0.4% multi-factor productivity adjustment and an additional 0.3 percentage point reduction required by the ACA. The update would establish a standard payment conversion factor of $14,865 for discharges occurring in FY 2014, which is an increase from the FY 2013 standard payment conversion factor of $14,343. CMS also is proposing to update the outlier threshold, which would increase IRF PPS payments by an estimated 0.2%, for a total estimated increase of 2%. In addition, the proposed rule would revise and update quality measures and reporting requirements under the IRF quality reporting program. Beginning in FY 2014, CMS will apply a 2 percentage point reduction to the applicable market basket increase factor for IRFs that fail to comply with the quality data submission requirements. In the rule, CMS also proposes to revise the list of diagnosis codes that are used to determine presumptive compliance under the “60 percent rule” for a facility to be excluded from the IPPS and be paid under the IRF PPS. Under the proposed rule, CMS would remove from the “presumptive compliance” list certain non-specific diagnosis codes, arthritis diagnosis codes, unilateral upper extremity diagnosis, some congenital anomalies diagnosis codes, and other miscellaneous diagnosis codes. In addition, CMS proposes revisions to the conditions of payment for IRF units of acute care hospitals to specify a minimum number of hospital beds that the IPPS hospital must have to meet the regulatory standard for having an IRF unit. Under the rule, the institution of which the IRF unit is a part would be required to have at least 10 staffed and maintained hospital beds that are not excluded from the IPPS, or at least 1 staffed and maintained hospital bed for every 10 certified IRF beds, whichever number is greater. If the institution does not meet this threshold, CMS proposes that the IRF unit should instead be classified as an IRF hospital. CAHs that have IRF units would be excluded from these requirements because they already have specific bed size restrictions. The proposed rule also would, among other things: update the IRF facility-level adjustment factors; revise the Inpatient Rehabilitation Facility-Patient Assessment Instrument; and clarify various regulatory provisions.  CMS will accept comments on the rule until July 1, 2013.

• Print
• Comments
• Trackbacks
• Share Link

The ACA established the Early Retiree Reinsurance Program (ERRP) as a temporary program to reimburse employer and union sponsors of participating employment-based plans for a portion of the cost of health benefits for early retirees and their spouses, surviving spouses, and dependents. CMS has published a notice that sets forth termination dates for several operational processes in preparation for the January 1, 2014 ERRP program sunset date. These operational processes include: the submission of changes to information in a plan sponsor’s ERRP application; the reporting of plan sponsor change of ownership; the submission of reimbursement requests; the reporting and correction of data inaccuracies; and the request for reopenings of reimbursement determinations. The notice is effective April 19, 2013.

• Print
• Comments
• Trackbacks
• Share Link

This post was written by Paul W. Pitts.

On April 26, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released the proposed update to the Medicare long-term acute care hospital prospective payment system (“LTCH PPS”) policies and payment rates for fiscal year (“FY”) 2014. The proposed changes would apply to discharges occurring on or after October 1, 2013 through September 30, 2014. CMS will accept comments on the proposed rule until June 25, 2013, and will respond to comments in a final rule to be issued by August 1, 2013. Reed Smith has prepared a Client Alert that provides a summary of the most significant proposed changes to the LTCH PPS in the proposed rule.

• Print
• Comments
• Trackbacks
• Share Link

This post was written by Scot T. Hasselman, Andrew C. Bernasconi, Susan A. Edwards and Debra A. McCurdy.

Yesterday the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would dramatically increase the potential reward to an individual who provides a tip leading to the recovery of Medicare funds from a current maximum of $1,000 to a maximum of $9.9 million under the Medicare Incentive Reward Program.  Since 1998, an individual providing information regarding potential Medicare fraud and abuse to the Department of Health & Human Services’ Office of  Inspector General or the Medicare contractor with jurisdiction over the suspected fraudulent provider or supplier may be eligible to receive 10 percent of the Medicare funds ultimately collected from the tip, or $1,000, whichever is less.  Pursuant to the proposed rule CMS issued yesterday, an individual furnishing information that otherwise satisfies the requirements set forth in 42 C.F.R. § 420.405 would be eligible to receive 15 percent of a recovery up to $66 million.  Therefore, a tipster could receive up to a $9.9 million reward for any information provided regarding suspected Medicare fraud and abuse.

• Print
• Comments
• Trackbacks
• Share Link

On April 2, 2013, CMS published a final rule establishing increased Federal Medical Assistance Percentage (FMAP) rates for certain adult populations under states’ Medicaid programs effective January 1, 2014, as authorized by the Affordable Care Act (ACA). The rule sets forth the method states will use to claim the matching rate that is available for Medicaid expenditures of individuals with incomes up to 133% of the federal poverty level and who are defined as “newly eligible” and are enrolled in the new eligibility group. Under the rule, the federal government will pay 100% percent of the cost of this newly eligible adult population through 2016, and this rate will be phased down to a permanent 90% matching rate by 2020. The rule also describes a temporary general increase in FMAP rates for certain expansion states that meet required statutory criteria. The rule is effective June 3, 2013. Comments will be accepted until June 3, 2013 on a limited number of provisions of the rule, including the threshold methodology states will be required to use to document claims for the increased FMAP rate.

• Print
• Comments
• Trackbacks
• Share Link

On April 5, CMS published a proposed rule that would revise the survey, certification, and enforcement procedures related to CMS oversight of national accreditation organizations (AOs). These revisions would implement certain provisions of the Medicare Improvements for Patients and Providers Act of 2008 that removed legal distinctions between the Joint Commission hospital accreditation program and all other accreditation programs approved by CMS. It also would strengthen CMS oversight of AOs that apply for, and are granted, recognition and approval of an accreditation program, including expanding enforcement tools to address serious and pervasive areas of AO non-compliance with the Medicare requirements. As part of this rule, CMS also proposes expanding the scope of the accrediting organizations’ oversight regulations to include AOs with CMS-approved accreditation programs for advanced diagnostic imaging services. Comments on the rule will be accepted until June 4, 2013. 

• Print
• Comments
• Trackbacks
• Share Link

On April 5, 2013, CMS published a proposed rule that would establish standards for “Navigators” in federally-facilitated and state partnership Affordable Insurance Exchanges under the ACA. Under prior CMS regulations, Exchanges must award grants to Navigators to provide impartial information to consumers about health insurance, the Exchange, Qualified Health Plans (QHPs), various insurance affordability programs, and grievance procedures, among other functions. Navigators will not make eligibility determinations, select QHPs for consumers, or enroll applicants into QHPs, but they will help consumers through the eligibility and enrollment process. The April 5 proposed rule would establish conflict-of-interest, training and certification, and meaningful access standards applicable to Navigators (and certain other non-Navigator assistance personnel funded through federal Exchange Establishment grants). The proposed rule also would amend existing Exchange regulations to clarify certain licensing and certification requirements and to specify that entities with relationships to issuers of stop loss insurance are ineligible to become Navigators. Comments will be accepted until May 6, 2013.

• Print
• Comments
• Trackbacks
• Share Link

This post was written by Jennifer Pike.

CMS and the OIG have proposed new rules to extend existing protections that allow hospitals to donate electronic health record (EHR) technology to physicians who refer patients to their facilities. By way of background, in 2006, CMS established an exception to the Stark self-referral law to allow hospitals to donate EHR technology to physicians under certain circumstances. Likewise, in 2006, the OIG established a safe-harbor to protect such EHR donations from enforcement under the federal anti-kickback statute. While both protections are set to expire on December 31, 2013, the proposed rules would extend the provisions until the end of 2016 as a means to facilitate the adoption of EHR technology. The proposed rules also would (1) remove the requirement from the original rule that donated EHR technology contain electronic prescribing capability, and (2) update the provision under which EHR technology is deemed interoperable, which would expand the types of EHR systems that qualify for the protections. Comments on both proposed rules will be accepted until June 10, 2013.

• Print
• Comments
• Trackbacks
• Share Link

As previously reported, CMS has issued a proposed rule and an Administrator’s Ruling that address the submission of Medicare Part B inpatient claims where a Medicare Part A claim for a hospital inpatient admission is denied by a Medicare review contractor on the grounds that the inpatient admission was not “reasonable and necessary.” A Reed Smith Client Alert discusses the Administrator’s Ruling and proposed rule, and provides a summary of potential implications for hospitals.

• Print
• Comments
• Trackbacks
• Share Link

This post was written by Rachel M. Golick and Susan A. Edwards.

On March 13, 2013, the Centers for Medicare & Medicaid Services (CMS) concurrently issued a proposed rule and Administrator’s Ruling addressing the submission of Medicare Part B inpatient claims where a Medicare Part A claim for a hospital inpatient admission is denied by a Medicare review contractor on the grounds that the inpatient admission was not reasonable and necessary. The proposed rule also would apply to situations where a hospital determined, through a self-audit, that an inpatient admission was not reasonable and necessary. The Administrator’s Ruling, which is effective as of the issuance date, establishes an interim policy until CMS finalizes the proposed rule.

The Administrator’s Ruling (CMS Ruling Number CMS-1455-R) stems from an influx of Administrative Law Judge (ALJ) and Medicare Appeals Council (MAC) decisions upholding Medicare review contractors’ decisions denying inpatient admissions as not reasonable and necessary, but ordering payment of all services at issue as though they were rendered at an outpatient level of care. The Administrative Ruling notes that such ALJ and MAC decisions defy current Medicare regulations limiting such payment to a small set of outpatient services. The Administrator’s Ruling acquiesces, at least on a temporary basis, to the approach taken by the ALJs and the MAC, allowing hospitals to submit Part B inpatient claims for payment for nearly all reasonable and necessary services that would have been payable to the hospital had the beneficiary originally been treated as an outpatient, subject to certain limitations set forth in the Administrator’s Ruling.

The proposed rule would establish a permanent policy that would permit hospitals to submit Medicare Part B claims as if the hospital treated the Medicare beneficiary as an outpatient rather than admitted the beneficiary as an inpatient. Current Medicare policy allows hospitals to rebill Medicare Part B only a limited set of “ancillary services,” listed in Chapter 6, Section 10 of the Medicare Benefit Policy Manual, when Part A coverage is denied for certain reasons. As a consequence, the proposed rule would expand the services that hospitals could rebill to Part B when Part A coverage is denied. Notably, however, the proposed rule would exclude from rebilling services that specifically require an outpatient status, including emergency department visits and observation services. In addition, unlike the Administrator’s Ruling, which permits Part B inpatient and/or outpatient claims to be filed more than one year after the date of service (assuming timely filing of the original Part A inpatient claim), the proposed rule would impose a one-year timely filing deadline. In other words, a hospital would have to bill Part B claims within one calendar year of the date of service. This timely filing limitation would likely significantly reduce the number of denied Part A claims that a hospital could rebill to Medicare Part B.

The proposed rule would apply to all hospitals billing Part A services, including short-term acute care hospitals, hospitals paid under the outpatient prospective payment system, long-term acute care hospitals inpatient psychiatric facilities, inpatient rehabilitation facilities, critical access hospitals, children’s hospitals, cancer hospitals, and Maryland waiver hospitals. CMS is accepting comments on the proposed rule until May 17, 2013.

We are preparing a Client Alert providing a more detailed analysis of the proposed rule and Administrator’s Ruling. In the meantime, please contact Daniel A. Cody (415-659-5909), Rachel M. Golick (415-659-4802), Susan A. Edwards (202-414-9261) or any other member of the Reed Smith Health Care Group with whom you work, if you would like additional information or if you have any questions.

• Print
• Comments
• Trackbacks
• Share Link

On March 19, 2013, CMS published a final rule that adopts, with technical changes and a few clarifications, a February 18, 2011 interim final rule implementing an ACA provision imposing notification requirements in connection with closure of a Medicare skilled nursing facility (SNF) or Medicaid nursing facility (NF). Under the rule, in the case of a long-term care (LTC) facility closure, the SNF or NF administrator must provide written notification of the impending closure and a plan for the relocation of residents to the state survey agency at least 60 days prior to the impending closure (or, if the Secretary terminates the facility’s participation in Medicare or Medicaid, not later than the date the Secretary determines appropriate). Notice and the plan also must be provided to residents, their legal representatives or other responsible parties, and the state LTC Ombudsman. While the ACA authorizes civil monetary penalties (CMPs) of up to $100,000 and exclusion for an administrator's failure to comply with this provision, CMS is finalizing the lower levels of CMPs established in the interim final rule in recognition that there are cases in which an administrator may not have had control over implementing notice procedures. The final rule therefore sets CMPs of: a minimum of $500 for the first offense; a minimum of $1,500 for the second offense; and a minimum of $3,000 for the third and subsequent offenses (CMS states that interpretive guidelines are being developed that will establish criteria for determination of CMP amounts). CMS also provides appeal rights for an individual who is subject to administrator sanctions under the rule. The final rule is effective April 18, 2013 (although note that the statutory closure notice requirements are effective March 23, 2011).

• Print
• Comments
• Trackbacks
• Share Link

On March 21, 2013, the Internal Revenue Service, Employee Benefits Security Administration, and CMS published proposed rules providing that a group health plan (or health insurance issuer offering group health insurance coverage) may not apply any waiting period that exceeds 90 days, in conformance with the ACA. Under the proposed regulations, waiting period would be defined as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. The rules also would amend certain existing insurance market requirements, including preexisting condition limitations and other portability provisions added by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), in light of the ACA’s market reform protections. The proposed regulations generally would apply to plan years beginning on or after January 1, 2014. Comments will be accepted until May 20, 2013. 
 

• Print
• Comments
• Trackbacks
• Share Link

CMS published a notice on March 13, 2013 correcting previous technical errors to the Medicare inpatient prospective payment systems (IPPS) final rulemaking for FY 2013. Among other things, CMS is correcting statistics on the Hospital Readmissions Reduction Program with regard to (1) the amount by which payments to hospitals would be reduced; and (2) the number of hospitals that will have their base operating DRG payments reduced by the readmissions adjustment. 
 

• Print
• Comments
• Trackbacks
• Share Link

CMS is seeking comments on new forms it intends to require suppliers to use to report changes of ownership (CHOW) involving contract suppliers under the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program. CMS will evaluate the information in the forms to determine if a supplier that merges with or acquires a contract supplier meets the conditions for awarding a competitive bidding contract as specified in regulations. The proposed Change of Ownership Purchaser Form and Contract Supplier Notification Form will be used in all rounds of competition. CMS will accept comments on the forms through April 30, 2013.

• Print
• Comments
• Trackbacks
• Share Link

On March 7, 2013, CMS published a notice announcing changes to certain Medicare payment adjustments under the Medicare hospital inpatient prospective payment systems (IPPS) for fiscal year (FY) 2013, in accordance with the American Taxpayer Relief Act of 2012 (ATRA). Specifically, the ATRA extends changes to the payment adjustment for low-volume hospitals and extends the Medicare-dependent hospital (MDH) program for an additional year, through FY 2013, which is projected to increase FY 2013 payments to IPPS hospitals by $509 million. 

• Print
• Comments
• Trackbacks
• Share Link

This post was written by Elizabeth B. Carder-Thompson, Katie C. Pawlitz and Nancy E. Bonifant.

The Centers for Medicare & Medicaid Services (CMS) has published the long-awaited Final Rule to implement the “Sunshine” provisions of the Affordable Care Act of 2010 (ACA).  The Sunshine provisions – intended to provide increased transparency regarding the scope and nature of financial and other relationships among manufacturers, physicians, and teaching hospitals - require that certain manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid and CHIP report annually to the Department of Health and Human Services (HHS) certain payments or transfers of value they have made to physicians and teaching hospitals.  In addition, they require manufacturers and certain group purchasing organizations (GPOs) to report to HHS information on physician ownership and investment interests. 

While the Final Rule provides needed clarity on some troubling aspects of the proposal, it leaves a number of questions unanswered.  Please click here to read our detailed analysis of the Sunshine provisions, including an overview and summary of the Final Rule as well as discussion of the important issues that stakeholders should be considering as they prepare for Sunshine implementation.

• Print
• Comments
• Trackbacks
• Share Link

On February 15, 2013, CMS released a proposed rule implementing the ACA’s medical loss ratio (MLR) requirements for Medicare Advantage (MA) and prescription drug (Part C and Part D) plans. Under these provisions, which are intended to limit plan spending on marketing, overhead, and profit, MA organizations and Part D plan sponsors will be required to report their MLR, reflecting the percentage of contract revenue spent on clinical services, prescription drugs, quality improving activities, and direct benefits to beneficiaries in the form of reduced Part B premiums. CMS has generally aligned the Medicare MLR rules with commercial MLR regulations that went into effect January 1, 2011.  Plan sponsors that do not have an MLR of at least 85% will be subject to payment remittance; if a plan sponsor fails to meet MLR requirements for more than 3 consecutive years, it also will be subject to enrollment sanctions and, after 5 consecutive years, to contract termination. CMS expects the first year of MLR reporting to occur in 2015 for the 2014 contract year. Comments on the proposed rule will be accepted for 60 days. The official version of the proposed rule will be published in the Federal Register on February 22, 2013.

CMS also has released the 2014 Advance Notice and draft Call Letter, which detail updates to payment methodologies, other policies, and program operations for MA organizations and Part D drug plan sponsors. CMS notes that for the first time in the Part D program’s history, the costs of beneficiary coverage are falling, with 2014 defined standard Part D prescription drug benefit having lower co-payments and deductible than in 2013. CMS also is proposing a number of policy changes for 2014, including requiring Part D plan retail and mail pharmacies to obtain patient consent to deliver a prescription, new or refill, prior to each delivery. In addition, CMS proposes to require that Part D sponsors place beneficiary-level prior authorization requirements on certain categories of drugs which may be covered under the hospice or end stage renal disease (ESRD) benefits, so as to ensure that these drugs are appropriately payable under Part D before the prescriptions are filled.  Comments will be accepted until March 1, 2013.  The final 2014 Rate Announcement and Call Letter will be published on April 1, 2013.

• Print
• Comments
• Trackbacks
• Share Link