CMS has published a notice announcing the preliminary federal share disproportionate share hospital (DSH) allotments for fiscal year (FY) 2014, along with the preliminary federal share FY 2014 limits on aggregate DSH payments that states may make to institutions for mental diseases (IMD) and other mental health facilities. The CMS notice also includes additional information regarding the calculation of the FY 2014 DSH allotments and FY 2014 IMD DSH limits.
On February 26, 2014, CMS published an advance notice of proposed rulemaking (ANPRM) seeking public comments on two potential changes to Medicare reimbursement for durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) that could impact payment to DMEPOS suppliers nationwide regardless of whether they participate in competitive bidding. At this point, CMS is providing more questions than answers on the future of Medicare DMEPOS reimbursement policy, as discussed below.Continue Reading...
CMS Extends and Expands Moratoria on Enrollment of Home Health Agency, Ambulance Suppliers in Designated Areas
Citing significant potential for fraud and abuse, CMS has announced that it is temporarily suspending new home health agency (HHA) and ground ambulance enrollment in Medicare, Medicaid, and the Children’s Health Insurance Program in several geographic areas, and it is extending the current enrollment moratoria for these provider types in separate areas. Specifically, effective January 30, 2014, CMS is establishing a 6-month moratorium on HHA enrollment in the following metropolitan areas: Fort Lauderdale, Detroit, Dallas and Houston. CMS also is temporarily suspending enrollment of new ground ambulance suppliers in the Greater Philadelphia area. In addition, CMS is extending for six-months a current enrollment moratoria (announced in July 2013) impacting HHAs in Chicago and Miami and ground ambulance suppliers in Houston. Note that CMS may lift the moratoria earlier or extend them for another six months through issuance of a Federal Register notice.
While existing providers and suppliers can continue to deliver and bill for services in moratoria areas, no new applications for the designated provider types will be approved, unless the provider’s enrollment application has already been approved, but not yet entered into PECOS or the State Provider/Supplier Enrollment System at the time the moratorium is imposed. According to CMS, the initial moratoria that began in July 2013 resulted in the denial of the enrollment applications of 231 HHAs and 7 ambulance companies in the geographic areas affected by the moratoria. A CMS notice explains the rationale for the imposition and extension of the moratoria.
On February 14, 2014, CMS published a notice announcing an open period for additional organizations to be considered for participation in Models 2, 3, and 4 of the Bundled Payments for Care Improvement initiative. The three models are described as follows:
- Model 2--Retrospective bundled payment models for hospitals, physicians, and post-acute providers for an episode of care consisting of an inpatient hospital stay followed by post-acute care.
- Model 3--Retrospective bundled payment models for post-acute care where the episode does not include the acute inpatient hospital stay.
- Model 4--Prospectively administered bundled payment models for the acute inpatient hospital stay and related readmissions.
Interested parties must submit the requisite forms by April 18, 2014.
CMS has published a notice inviting applications for a new Frontier Community Health Integration Project Demonstration, which will test new models of integrated health care delivery in sparsely-populated rural counties with the goal of improving health outcomes and reducing Medicare expenditures. The demonstration is limited to critical access hospitals in Alaska, Montana, Nevada, North Dakota, and Wyoming. Applications are due by May 5, 2014.
On January 16, 2014, CMS published a final rule that implements expanded federal support for HCBS offered as an optional benefit through state Medicaid programs, as authorized by the Affordable Care Act (ACA) and the Deficit Reduction Act. Specifically, the rule establishes eligibility requirements for Medicaid HCBS provided under sections 1915(c), 1915(i), and 1915(k) of the Social Security Act. In a fact sheet accompanying the rule, CMS emphasized the important stakeholder input it received during the rulemaking process, which resulted in CMS “moving away from defining home and community-based settings by ‘what they are not,’ and toward defining them by the nature and quality of individuals’ experiences” (although certain institutional facilities, including nursing facilities, institutions for mental diseases, intermediate care facilities for individuals with intellectual disabilities, and hospitals generally are not considered to meet the definition of a home and community-based setting).
Under the rule, CMS intends to promote access to the most integrated settings that provide alternatives to services provided in institutions, using an “outcome-oriented definition” of HCBS settings instead of one based on location, geography, or physical characteristics. Under the rule, home and community-based settings must: be integrated in and support full access to the greater community; be selected by the individual from among setting options; ensure individual rights of privacy, dignity and respect, and freedom from coercion and restraint; optimize autonomy and independence in making life choices; and facilitate choice regarding services and who provides them. Note that the rule includes additional requirements for provider-owned or controlled home and community-based residential settings, including that the individual has a lease or other legally enforceable agreement, and standards related to the individual’s privacy, control over schedule and visitors, and physical accessibility of the setting.
In addition to defining home and community-based settings, the final rule addresses many other aspects of Medicaid HCBS programs, including requirements that services under section 1915(c) and 1915(i) be established through a person-centered planning process that addresses health and long-term services and support needs in a manner that reflects individual preferences and goals. It also implements new flexibility for states to target services to specific populations and to combine multiple target populations in one waiver, while streamlining waiver administration.
The rule is effective March 17, 2014, but CMS is providing transition periods both for states adopting new programs, and for those states with currently-approved waivers and state plans that may need to develop a plan to bring their program into compliance. The text of the rule is available at , and additional materials are posted at http://www.medicaid.gov/HCBS. CMS also stresses that there will be continued opportunities for stakeholder input as it works with states to implement this final rule.
As previously reported, the Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) published final rules in December amending Anti-Kickback Statute (AKS) and Stark Law regulations permitting certain arrangements involving the donation of interoperable electronic health record (EHR) software or information technology and training services. Reed Smith has prepared a summary of the final rules, including a side-by-side comparison of the EHR AKS Safe Harbor and the Stark Law’s EHR Exception that highlights the recent revisions.
On January 6, 2014, CMS released a proposed rule that would revise the Medicare Advantage (MA) and Part D prescription drug program regulations to implement various statutory requirements, strengthen beneficiary protections, improve program efficiencies and payment accuracy; and clarify program requirements. CMS estimates that the proposed rule would reduce Medicare spending by $1.3 billion between 2015 and 2019. The sweeping proposed rule is summarized after the jump.Continue Reading...
On December 27, 2013, CMS published a proposed rule that would establish national emergency preparedness requirements for Medicare- and Medicaid-participating providers and suppliers to ensure that they can meet the needs of patients and residents during emergency situations, both natural and man-made. The proposed requirements cover four aspects of emergency preparedness:
- Risk assessment and planning: Providers and suppliers must perform a risk assessment using an “all-hazards'' approach focusing capabilities needed to prepare for a full spectrum of emergencies. This approach is location-specific considering the types of hazards most likely to occur in a provider or supplier’s area.
- Policies and procedures: Providers must develop and implement policies and procedures based on their emergency plan and risk assessment.
- Communication plan: Providers must develop and maintain an emergency preparedness communication plan that complies with both federal and state law. Patient care must be well-coordinated within the facility, across health care providers, and with state and local public health departments and emergency systems to protect health and safety.
- Training and testing: Providers must develop and maintain emergency preparedness training and testing programs, including initial and annual training and annual emergency drills.
The new requirements would apply to 17 provider types (with certain variations): hospitals; critical access hospitals; long-term care facilities; psychiatric residential treatment facilities; intermediate care facilities for individuals with intellectual disabilities; religious nonmedical health care institutions; transplant centers; hospice, ambulatory surgical centers, Program for the All-inclusive Care for the Elderly organizations; home health agencies; comprehensive outpatient rehabilitation facilities; community mental health centers; organ procurement organizations; clinics, rehabilitation, and therapy providers; rural health clinics/federally qualified health clinics; and end-stage renal disease providers.
CMS is seeking comments on numerous aspects of its proposal, including when these requirements should be implemented; comments will be accepted until February 25, 2014.
** February 21 update: CMS has extended the comment period until March 31, 2014.
In October 2011, CMS and the FDA formally launched a voluntary parallel review pilot program for sponsors of medical devices. At the time, the agencies stated that they intended to run the pilot program for two years, with the possibility of an extension. In a December 18, 2013 notice, the FDA and CMS announced that they were extending the program for another two years in light of the significant interest in the pilot. The agencies are working through the process with the approved pilot program participants, and they will formally evaluate the program after a “representative group of participants have completed the pilot process.”
CMS has published its proposed methodology and data sources necessary to determine federal payment amounts made to states that elect to establish a Basic Health Program (BHP) under the Affordable Care Act (ACA) to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges. The BHP, which will be available for states to implement effective January 1, 2015, is intended to make affordable health benefits coverage available for individuals under age 65 with household incomes between 133% and 200% of the federal poverty line who are not otherwise eligible for Medicaid, the Children’s Health Insurance Program, or affordable employer sponsored coverage. Comments will be accepted until January 22, 2014.
CMS has published an interim final rule with comment period that sets a December 23, 2013 deadline for individuals to select a qualified health plan through an Exchange for an effective coverage date of January 1, 2014, to conform to a previously-announced policy. The prior regulation imposed a December 15, 2013 deadline. State Exchanges may select a different deadline. The rule pertains to the individual market and Small Business Health Options Program in both the Federally-facilitated Exchanges and State Exchanges; it does not change the plan selection or premium payment dates for coverage offered outside of the Exchanges.
CMS has published an advance notice of proposed rulemaking soliciting comments on the imposition of civil money penalties (CMPs) for failure to comply with Medicare Secondary Payer (MSP) reporting requirements for certain group health and non-group health plans arrangements. Importantly, the SMART Act revised the language addressing CMPs of $1000 per day for responsible reporting entities (for example, certain tort defendants, and clinical trial sponsors) that fail to report payments to Medicare beneficiaries in accordance with MMSEA section 111, from mandatory to permissive language. This provides the Secretary with discretion regarding whether to impose CMPs for failure to report. CMS is seeking input on, among other things, specific practices that should be subject to CMPs, certain definitions, the criteria for evaluating whether to impose CMPs, and the dollar amount of CMPs that should be levied. Comments will be accepted until February 10, 2014. For additional analysis, see our sister blog, Life Sciences Legal Update.
Separately, CMS also has issued a proposed rule that would implement MSP appeals provisions under the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act). Specifically, the rule addresses the right of appeal and a new multilevel appeal process for liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans when Medicare pursues an MSP recovery claim directly from the applicable plan. Comments will be accepted until February 25, 2014.
On December 27, 2013, the Office of Inspector General and the Centers for Medicare & Medicaid Services each published, in the Federal Register, a final rule that amends regulations protecting, from the Anti-Kickback Statute and Stark law, certain arrangements involving the donation of interoperable electronic health records (EHR) software or information technology and training services related to such EHR software. The final rules:
- Extend the protections of the Stark law exception (42 C.F.R. § 411.357(w)) and the Anti-Kickback safe harbor (42 C.F.R. § 1001.952(y)) from December 31, 2013 to December 31, 2021 (the “sunset” provisions)
- Exclude laboratory companies from the types of entities that may donate EHR items and services
- Update the provisions under which an EHR donor or recipient can ascertain, with certainty, that EHR is interoperable pursuant to the exception and safe harbor (the “deeming” provisions)
- Remove the requirements that donated EHR include electronic prescribing capability
- Clarify the requirement prohibiting any action that limits or restricts the use, compatibility, or interoperability of donated items or services
With the exception of the amendments to the sunset provisions, which go into effect December 31, 2013, the amended regulations will be effective as of March 27, 2014.
Reed Smith will prepare a comprehensive Client Alert on the final rules, which will be published shortly.
Reed Smith lawyers have significant experience advising clients on EHR technology issues and will continue to monitor regulatory changes in this area. For more information regarding how we can assist you, please contact your principal Reed Smith lawyer or a lawyer listed in this publication.
On December 10, 2013, CMS published a final rule that updates Medicare payment and other policies under the hospital outpatient prospective payment system (OPPS) and the ambulatory surgical center (ASC) prospective payment system (PPS) for calendar year (CY) 2014. Key provisions of the final rule include the following:Continue Reading...
On December 10, 2013, CMS published its final rule updating Medicare physician fee schedule (PFS) rates and polices for calendar year (CY) 2014, which includes a 20.1% across-the-board cut in PFS rates in 2014 (down from 24.4% projected under the proposed rule). The cuts are largely due to the statutory Sustainable Growth Rate (SGR) update formula, although lawmakers are seeking agreement on legislation to block the automatic cuts. The rule also includes a number of significant Part B policy changes, including the following highlights:
On December 2, 2013, CMS published its final rule updating Medicare end-stage renal disease (ESRD) PPS rates and policies for 2014. Instead of cutting rates by more than 9%, as CMS proposed this summer, the final rule holds 2014 rates flat compared to 2013. This improved reimbursement picture is a result of CMS adopting a multi-year phase-in of a drug utilization adjustment to the base rate mandated by the ATRA, which is intended to reflect changes in ESRD-related drugs and biologicals use since 2007. Instead of making the full drug utilization adjustment in 2014, which would be -$29.93, CMS is applying a $8.16 reduction in 2014, and the remainder of the adjustment will be phased in over the next two to three years (to be determined in the 2016 rulemaking). The 2014 drug utilization adjustment offsets other payment updates in the rule, including the 2.5% base rate update (derived from a 3.2% market basket update reduced by a 0.4% productivity adjustment). The rule also finalizes a 50% increase to the home dialysis training add-on payment adjustment for peritoneal dialysis and home hemodialysis training treatments. Moreover, CMS is updating ESRD Quality Incentive Program measures and scoring methodologies for 2016. Note that 2014 is the last year of the transition to the ESRD PPS; all ESRD facilities will be paid 100% of the ESRD PPS rate for services furnished on or after January 1, 2014. In addition to ESRD policy changes, the final rule addresses Medicare coverage of and payment for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), which are discussed in a separate post.
On December 2, 2013, CMS published a proposed rule that would establish 2015 payment parameters and oversight provisions for federally-facilitated Health Insurance Exchanges under the ACA. The rule specifically addresses risk adjustment, reinsurance, and risk corridors programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally-facilitated Exchanges. It also proposes additional standards for composite rating, privacy and security of personally-identifiable information, the annual open enrollment period for 2015, the actuarial value calculator, cost sharing for dental plans, the meaningful difference standard for qualified health plans offered through a federally-facilitated Exchange, patient safety standards for issuers of qualified health plans, and the Small Business Health Options Program. Comments will be accepted until December 26, 2013.
CMS has announced the 2014 application fee for institutional providers that are initially enrolling in the Medicare or Medicaid program or the Children's Health Insurance Program (CHIP); revalidating their Medicare, Medicaid or CHIP enrollment; or adding a new Medicare practice location (unless a hardship exemption applies). The fee for 2014 is $542, up from $532 in 2013. CMS uses a broad definition of institutional entities subject to the application fee; it applies to “any 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.
As part of the CY 2014 Medicare end stage renal disease (ESRD) prospective payment system (PPS) final rule, published on December 2, 2013, CMS has adopted updates to three Medicare durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) policies.
- 3-Year Minimum Lifetime Requirement (MLR). CMS previously issued regulations providing that, effective for items classified as DME after January 1, 2012, the item must have an expected life of at least 3 years to be considered “durable.” The final ESRD PPS rule clarifies the treatment of a “grandfathered item” classified as DME on or before January 1, 2012 if that product is subsequently modified (e.g., upgraded, refined, or reengineered). Specifically, effective April 1, 2014, if a grandfathered product is modified, and the modified product has an expected life that is shorter than that of the original product, the modified item will lose its grandfathered status and it will be subject to the 3-year MLR requirement. The impact of the loss of grandfathered status on coverage would depend on the new expected lifetime of the modified product. For instance, if a grandfathered product covered as DME prior to 2012 with a lifetime of four years is modified, resulting in a product with a lifetime of 2.5 years, this product would lose its grandfathered status and no longer meet the definition of DME because the 3-year MLR would not be met. On the other hand, if this modification reduced the lifetime of the product to 3.5 years, the product would lose its grandfathering status but would satisfy the 3-year rule and continue to meet the definition of DME.
- Reclassification of Routinely-Purchased DME. The final clarifies the definition of routinely purchased equipment at §414.220(a)(2) to address inconsistencies in how CMS has classified certain expensive items as routinely purchased, rather than capped rental. CMS adopted its proposal to reclassify as capped rental items about 80 DME and DME accessory HCPCS codes added after 1989 that are currently classified as routinely purchased (although CMS agreed with commenters that E0760, Osteogenesis Ultrasound Stimulator, should remain classified as routinely purchased equipment). The complete list of codes subject to this provision is set forth in Table 11. The effective dates for the reclassifications are: (1) April 1, 2014, for items not included in DMEPOS competitive bidding (which is 3 months later than CMS initially proposed); (2) July 1, 2016, for (a) items furnished in all areas of the country if the item is included in a Round 2 competitive bidding program (CBP) and not in a Round 1 Recompete CBP, and (b) for items included in a Round 1 Recompete CBP but furnished in an area other than one of the nine Round 1 Recompete areas; and (3) January 1, 2017, for items included in a Round 1 Recompete CBP and furnished in one of the nine Round 1 Recompete areas.
- Fee Schedules for Splints, Casts, and Certain IOLs. CMS has adopted its proposal to implement on a budget-neutral basis Medicare fee schedules for splints and casts, and intraocular lenses (IOLs) inserted in a physician’s office. This provision is effective for services furnished on or after April 1, 2014. In future years, the fee schedule amounts will be updated by the percentage increase in the CPI-U for the 12-month period ending with June of the preceding year, reduced by the multifactor productivity adjustment.
CMS also has adopted certain technical amendments to DMEPOS payment regulations.