2012 Medicare Clinical Lab Updates
CMS has released the 2012 clinical laboratory fee schedule files along with a transmittal providing instructions for the CY 2012 clinical laboratory fee schedule.
CMS Issues Final Medicare Physician Fee Schedule Rule for 2012
Medicare physician fee schedule (MPFS) payments are scheduled to be cut by 27.4% in 2012 under the Centers for Medicare & Medicaid Services’ (CMS) final rule to be published November 28, 2011. The steep reduction is a result of the statutory Sustainable Growth Rate (SGR) formula. While Congress is widely expected to take action to mitigate the SGR cuts, the scope and timing of any such “fix” is uncertain at this time. If the final rule goes into effect as written, however, the conversion factor for 2012 would be $24.6712, down from the current $33.9764. In addition to updating MPFS rates, the sweeping final rule includes numerous policy provisions impacting many types of providers, including the following:
- CMS has adopted a controversial policy to expand its multiple procedure payment reduction (MPPR) policy for advanced imaging services (computed tomography scans, magnetic resonance imaging, and ultrasound), which now applies to only the technical component (TC) of the service, to the professional component (PC) of the service. Effective January 1, 2012, the advance imaging procedures with the highest PC and TC payments will be paid in full, but the PC payment will be reduced by 25% for subsequent procedures furnished to the same patient, by the same physician -- including physicians in the same group practice -- in the same session on the same day (CMS initially had proposed reducing the PC by 50%). The TC payment will continue to be reduced by 50%. Note that in the proposed rule, CMS indicated it is considering more expansive MPPR policies in 2013 and beyond, which could include applying the MPPR to the all imaging services (not just advanced imaging studies) or to the technical component of all diagnostic tests (e.g., tests associated with radiology, cardiology, audiology, procedures furnished in the same encounter). CMS did not finalize any such broader expansion in the final rule.
- CMS is updating certain payment policies for Part B drugs to specify that the average manufacturer price (AMP) substitution policy will apply only when the average sales price (ASP) exceeds the AMP by 5% in two consecutive quarters immediately prior to the current pricing quarter, or three of the previous four quarters immediately prior to the current quarter. CMS will make an AMP substitution only for those situations in which AMP and ASP comparisons are based on the same set of NDCs for a billing code. CMS also is adopting a number of changes to the manufacturer ASP reporting template.
- CMS is updating a number of physician incentive programs, including the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program. CMS also is adopting performance measures for a new “value-based modifier,” mandated by the Affordable Care Act (ACA), that will reward physicians for providing higher quality and more efficient care. CMS is using 2013 as the initial performance year for purposes of adjusting payments in 2015.
- CMS is taking a number of steps to address payment for “potentially misvalued codes,” including reviewing the value of high-expenditure codes in each specialty and adopting a new public nomination process under which the public can nominate potentially misvalued codes and submit documentation supporting the need for review.
- CMS has formally retracted a widely-criticized policy adopted in the 2011 MPFS rule that required the signature of a physician or qualified nonphysician practitioners on a requisition for clinical diagnostic laboratory tests paid under the Clinical Laboratory Fee Schedule. In withdrawing the policy, CMS cites stakeholder concerns about the many negative practical effects of the policy on beneficiaries and providers, including potential adverse impacts on timely patient care.
- The rule also, among many other things: changes how CMS adjusts payment for geographic variation in practice costs;revises the criteria for updating services available through telehealth; updates the methodology for calculating the productivity adjustment for ambulatory surgical center (ASC), ambulance, clinical laboratory, and durable medical equipment (DME) prosthetics, orthotics, and supplies (DMEPOS) fee schedules; sets the 2012 outpatient therapy cap amount at $1,880; and clarifies the applicability of the “3-day payment window” policy to certain services furnished in a wholly owned or wholly operated physician practice.
Note that CMS will accept comments on a limited number of provisions in the rule, including the interim final relative value units for new, revised, potentially misvalued codes and the physician self-referral designated health services codes, until January 3, 2012.
CMS Proposes Direct Patient Access to Lab Results
On September 14, 2011, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule amending the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rules to give patients (and the patient's representatives) direct access to the patient’s own clinical laboratory test result reports. Specifically, the rule would provide that, upon a patient’s request, the laboratory would be required to provide access to completed test reports that, using the laboratory’s authentication process, can be identified as belonging to that patient. By amending the Privacy Rule, CMS would also preempt contrary state laws governing a patient’s direct access to lab result reports. Comments will be accepted through November 14, 2011, and CMS expects to publish a final rule responding to comments later this year.
CMS Extends Deadline for ACA Clinical Lab Test Demo Code Requests
CMS has extended the deadline for submission of requests for temporary codes under the ACA “Treatment of Certain Complex Diagnostic Laboratory Tests Demonstration” from August 1, 2011 to September 6, 2011. The Demonstration allows a separate payment to laboratories performing certain complex laboratory tests that would, under standard Medicare rules, be bundled into the payment to the hospital or critical access hospital.
CMS Proposes Retraction of Clinical Lab Test Signature Requirement
CMS has issued a proposed rule that would officially retract a controversial policy adopted in the calendar year 2011 Medicare physician fee schedule final rule that required the signature of a physician or qualified non-physician practitioner (NPP) on a requisition for clinical diagnostic laboratory tests paid under the Clinical Laboratory Fee Schedule. In withdrawing the policy, CMS cites stakeholder concerns about the practical impact of the policy on beneficiaries and providers, since in some cases the NPP directs staff to prepare requisitions for test but is then unavailable to provide his or her signature on the requisition. CMS continues to express concerns about the impact of fraud and abuse on the Medicare program, however, and states that “it is the responsibility of the clinical diagnostic laboratory, as it is for the provider of any service, to have sufficient processes and safeguards in place to ensure that all services are delivered only when ordered by the physician or NPP.” CMS will accept comments on the proposed rule until August 29, 2011.
CMS Launches ACA's Complex Diagnostic Laboratory Tests Demonstration Program, Announces July 21 Educational Call
CMS has published a notice inviting interested parties to participate in the ACA-mandated “Treatment of Certain Complex Diagnostic Laboratory Tests Demonstration.” The Demonstration allows a separate payment to laboratories performing certain complex laboratory tests that would, under standard Medicare rules, be bundled into the payment to the hospital or critical access hospital. CMS has posted a list of the lab tests subject to the demonstration and other background information on its web site. Potential participants must apply for a temporary billing code by August 1, 2011. Payment under the demonstration begins January 1, 2012, and the demonstration will last two years or until a $100 million ceiling is reached. CMS has scheduled an educational call to discuss the program on July 21.
CMS Schedules Meeting on Clinical Lab Code Payments/Genetic Test Codes for 2012 (July 18, 2011)
CMS has announced a July 18, 2011 public meeting to receive comments and recommendations from the public on the appropriate basis for establishing 2012 Medicare payment amounts for a specified list of new CPT codes for clinical laboratory tests. Registration is required. Background information will be posted on the CMS website prior to the meeting. Immediately following this meeting, CMS will host a separate information session to discuss new genetic testing codes (a listing of the new genetic test codes for 2012 is included in the notice. While CMS is not accepting payment recommendations at this time for genetic testing, the agency “is open discussions to the public on recommendations going forward on how these codes should be addressed,” including clinical laboratory versus physician fee schedule assignment, current codes used to reflect test steps, and how various genetic tests are similar to/different from existing laboratory tests.
ACA Laboratory Demonstration for Certain Complex Diagnostic Tests
CMS has provided updated information about implementation of Section 3113 of the ACA, which requires CMS to conduct a demonstration project to provide direct Medicare payment to clinical laboratories for certain complex diagnostic laboratory tests beginning January 1, 2012. The demonstration will last two years or until a $100 million ceiling is reached.
CMS Indefinitely Postpones Signature Requirement for Clinical Diagnostic Laboratory Test Orders; Will Seek Rule Change
The final 2011 Medicare physician fee schedule rule requires a physician's or qualified nonphysician practitioner's (NPP) signature on requisitions for clinical diagnostic laboratory tests paid under the clinical laboratory fee schedule effective January 1, 2011. In December 2010, CMS announced it was not going to enforce this policy during the first quarter of 2011 while it conducted provider education and outreach activities. After further consideration, CMS has decided “to focus for the remainder of 2011 on changing the regulation that requires signatures on laboratory requisitions because of concerns that physicians, NPPs, and clinical diagnostic laboratories are having difficulty complying with this policy.”
CMS Guidance on Laboratory Demonstration for Certain Complex Diagnostic Tests
On January 28, 2011, CMS issued instructions on implementation of the ACA’s Laboratory Demonstration for Certain Complex Diagnostic Tests. The voluntary demonstration will establish a separate payment method for certain lab tests (analysis of gene protein expression, topographic genotyping, or a cancer chemotherapy sensitivity assay) that typically would be bundled into the payment for an associated hospital inpatient stay, when certain conditions are met. The demonstration period is between July 1, 2011 and June 30, 2013, or when a $100 million ceiling is reached.
FDA Issues Advanced Notice of New GLP Rules for Non-clinical Studies
This post was written by Paul Sheives.
Following a workgroup’s conclusion that non-clinical studies should be conducted under a good laboratory practices (GLPs) quality system approach, FDA has decided to modify the existing GLP regulations for non-clinical studies. FDA seeks comments regarding potential changes to regulations addressing: (1) multi-site studies; (2) electronic automation systems; (3) sponsor responsibilities; (4) animal welfare; (5) information on quality assurance inspectional findings; (6) process-based systems; (7) test and control article information; and (8) sample storage container retention. In addition, FDA is considering whether to include in the regulations a core set of essential elements for such a GLP quality system. FDA is accepting written comments until February 22, 2011.
CMS Postpones Signature Requirement for Clinical Diagnostic Laboratory Test Orders
The final 2011 Medicare physician fee schedule rule requires a physician's or qualified nonphysician practitioner's (NPP) signature on requisitions for clinical diagnostic laboratory tests paid under the clinical laboratory fee schedule effective January 1, 2011. Because some physicians, NPPs, and clinical diagnostic laboratories are not aware of, or do not understand, this policy, CMS has decided to “focus in the first calendar quarter of 2011 on developing educational and outreach materials to educate those affected by this policy.” CMS notes that once this educational campaign “is fully underway, CMS will expect requisitions to be signed.”
Medicare Physician Fee Schedule Fix/Extenders Bill Awaits President's Signature
As previously reported, last week Congress approved legislation (H.R. 4994) that averts a 25% Medicare physician fee schedule cut scheduled to take effect January 1, 2011 under the statutory “sustainable growth rate” formula (Congress had already approved legislation to provide a one-month fix through December 2010). In addition, H.R. 4994 continues a variety of expiring Medicare provisions and makes other health policy changes, funded primarily through a change in limits on recoveries of excessive tax credits provided to subsidize insurance premiums under the ACA. The legislation still is awaiting the President’s signature, although the White House has previously expressed its support for the bill.
Congress Clears One-Year Medicare Physician Fee Schedule Fix and Other Health Policy Revisions
Today the House of Representatives overwhelmingly approved a bill (H.R. 4994) that averts a 25% Medicare physician fee schedule cut scheduled to take effect January 1, 2011 under the statutory “sustainable growth rate” formula (Congress had already approved legislation to provide a one-month fix through December 2010). The vote, which followed a unanimous Senate vote yesterday, sends the measure to the President, who has expressed his support for the legislation. In addition to extending current Medicare physician payment rates through the end of 2011, H.R. 4994 continues a variety of expiring Medicare provisions and makes other health policy changes, funded primarily through a change in limits on recoveries of excessive tax credits provided to subsidize insurance premiums under the Affordable Care Act (ACA). Other highlights of the legislation include:
- Extensions of: hospital geographic reclassifications authorized under section 508 of the Medicare Modernization Act, the Medicare physician fee schedule work geographic adjustment floor, the outpatient therapy services exception process, the authority for independent laboratories to receive direct payments for the technical component of certain pathology services, ambulance service and physician fee schedule mental health add-on payments, the outpatient hold harmless provision, Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished by certain rural hospitals, the qualifying individual program, the Transitional Medical Assistance program, and the Special Diabetes Programs.
- Implementation on October 1, 2010 of version four of the Resource Utilization Groups (RUG IV) case mix system for purposes of the Medicare skilled nursing facility prospective payment system.
- Clarification that residency positions that are being shared between teaching hospitals under an “affiliation agreement” may not be redistributed to other hospitals.
- Inclusion of orphan drugs in the definition of “covered outpatient drugs” with respect to children’s hospitals under the 340B drug discount program.
- Various technical corrections to Medicaid and CHIP relating to exclusion from participation, children’s income eligibility levels, payment error rate measurement, coverage of children of state employees, and payment for electronic health records.
- A $275 million reduction in the Medicare Improvement Fund over 10 years.
- $19 billion in savings by revising the limits on recoveries of tax credits under the ACA. Currently, if an individual’s income actually is higher than the amount that was used to calculate advanced premium tax credits, there is a limit on how much of the excessive credits certain low-income individuals and families must return to the government. The legislation replaces these limits with a scaled repayment structure.
As noted, this is the second time in a month that Congress has considered Medicare physician reimbursement. On November 30, 2010, President Obama signed into law H.R. 5712, “The Physician Payment and Therapy Relief Act of 2010.” The law provided a one-month continuation of physician fee schedule rates, paid for by adopting – with modification – the Centers for Medicare & Medicaid Services’ (CMS) new multiple procedure payment reduction (MPPR) policy for outpatient therapy procedures included in the 2011 MPFS final rule. As approved by Congress, the provision applies a 20% (rather than 25% in the CMS rule) MPPR to the practice expense component of Medicare payment for the second and subsequent therapy services when multiple outpatient therapy services are furnished to a single patient by a single provider on the same day.
CMS Releases 2011 Medicare Clinical Lab Fee Schedule Files
CMS has posted the 2011 Medicare clinical laboratory fee schedule files. The files include changes identified in CMS’s contractor instructions related to the clinical laboratory fee schedule update, mapping for new clinical laboratory test codes, and updates for laboratory costs subject to the reasonable charge payment.
FDA Oversight of Laboratory Developed Tests (LDTs): Meeting and Comment Period
The Food and Drug Administration (FDA) is reviewing its policy of enforcement discretion regarding LDTs to assure the public that lab tests are safe and effective. To that end, the FDA is hosting a public meeting on oversight of Laboratory Developed Tests on July 19 and 20, 2010. The agency also will accept comments from stakeholders on "reasonable and effective regulation of LDTs" until August 15, 2010. The FDA "believes that a risk-based application of oversight to LDTs is the appropriate approach to achieve the desired public health goals.” The agency seeks comments from stakeholders on the issues that pose the greatest concern to the public health. After the meeting and public comment period, the "FDA will move forward expeditiously to develop a draft oversight framework for public comment.”
CMS Public Meetings on New Clinical Lab Tests (July 22, 2010)
CMS is holding a public meeting on July 22, 2010 to receive public comments on the appropriate basis (cross-walk or gap-fill) for establishing payment amounts for new Clinical Procedural Terminology (CPT) codes for clinical laboratory tests for 2011. CMS also has posted the preliminary list of new lab CPT codes for 2011.
Medicare/Medicaid Provider and Supplier Enrollment, Ordering and Referring, and Documentation Requirements, and Changes in Provider Agreements
This post was written by Paul W. Pitts.
CMS published an interim final rule with comment period on May 5, 2010 implementing several enrollment and documentation changes to the Medicare and Medicaid programs as mandated by the PPACA. The rule is effective on July 6, 2010 and comments will be accepted through the effective date. In the final rule, CMS requires providers and suppliers to include their NPI on all Medicare enrollment applications, as well as all claims submitted to the Medicare and Medicaid programs. In addition, Part B services must be ordered or referred by a physician or, when permitted, another eligible professional. The final rule also requires physicians and other eligible professionals who order or refer Part B services for Medicare beneficiaries to be enrolled in the Medicare program or maintain a valid opt-out record. With respect to home health services, the services must be ordered by a physician (not an “eligible professional”). All claims submitted for Part B items or services must contain the legal name and NPI of the physician or eligible professional who ordered or referred the item or service. In addition, the rule requires both the furnishing and ordering provider or supplier of DMEPOS, home health, laboratory, imaging, or specialist services to maintain documentation of the order or referral for 7 years, including the NPI of the ordering or referring physician or eligible professional. The documentation of the order or referral must be supplied to CMS or the Medicare contractor upon request. Failure to comply with the documentation requirements may result in a 1 year revocation of enrollment and billing privileges in the Medicare program. Although much of the final rule was mandated by various sections of the PPACA, CMS is using its discretion to expand ordering and referring requirements to all Part B items and services except prescribed drugs. In the preamble to the final rule, CMS indicates that it “reserves the right” to apply these enrollment and ordering requirements to Part B drugs within the next year.
HHS/CMS PPACA Implementation Announcements
HHS Secretary Kathleen Sebelius has issued a letter to governors and independent insurance commissioners to gauge interest in the temporary high risk pool program established by the PPACA to provide coverage to people who are uninsured because of pre-existing conditions. CMS also has issued initial guidance to states on the new state option under the PPACA to provide Medicaid coverage for the lowest income adults without regard to disability, parental status, or most other categorical limitations. Likewise, CMS has issued a number of informal announcements about implementation of various PPACA provisions, including announcements addressing:
- The Extension of Ambulance Add-Ons for Ambulance Services
- Timely Filing Requirements for Medicare Fee-for-Service Claims
- Medicare Home Health Rural Add-On
- Extension of Moratorium that Allows Independent Laboratories to Bill for the Technical Component of Physician Pathology Services Furnished to Hospital Patients
- Extension of Therapy Cap Exceptions Process
- Continuation of Payments to Indian Health Service Providers, Suppliers, Physicians, and other Practitioners for Certain Part B Services
- Extension of the Outpatient Hold-Harmless Provision
- Extension of Reasonable Cost Payment for Clinical Lab Tests Performed by Hospitals with Fewer than 50 Beds in Qualified Rural Areas
CMS Guidance on Expiration of Therapy Cap Exceptions Process, Independent Lab Billing Policies
CMS has issued an educational article for providers regarding certain Medicare payment policies that expired as of December 31, 2009, including the therapy cap exceptions process and the ability of independent laboratories to bill for the technical component of physician pathology services furnished to hospital patients. CMS notes that these policies could be extended by Congress. Health care providers therefore may choose, to the extent possible, to hold their claims for Medicare services provided on or after January 1, 2010 until it becomes clearer as to whether new legislation will be enacted to extend these provisions.
2010 Medicare Clinical Lab Fee Schedule Posted
CMS has released the 2010 Medicare clinical laboratory fee schedule. In addition, CMS has issued a transmittal providing instructions to contractors regarding the 2010 clinical lab fee schedule update, including mapping for new lab test codes and updates for laboratory costs subject to the reasonable charge payment.
Clinical Laboratory Fee Schedule Payments
The OIG has issued a report on “Variation in the Clinical Laboratory Fee Schedule,” in which the OIG recommends that CMS seek legislative authority to establish a new process for setting laboratory test payment rates. According to the OIG, 97% of lab tests had at least one carrier rate that varied from the national limit amount. Setting all carrier rates at 73% of the median carrier rate (rather than the current 74% rate) would have eliminated variation without a change in overall Medicare payments. CMS stated that it is committed to improving payment policies for lab tests and to refining methodologies for setting new payment rates, and it will consider the OIG’s recommendation (although it did not endorse the measure at this time).
CMS Public Meeting on Clinical Lab Payments (July 14, 2009)
CMS is holding a public meeting on July 14, 2009 regarding Medicare payment amounts for new clinical laboratory tests for calendar year 2010. CMS specifically is interested in comments and recommendations (and data on which recommendations are based) regarding the appropriate basis for establishing payment amounts for a specified list of new CPT codes (cross-walking or gap-fill). CMS notes that the development of the clinical laboratory CPT codes is largely performed by the CPT Editorial Panel, however, and will not be further discussed at the CMS meeting.
Clinical Diagnostic Laboratory Services
The HHS Office of Inspector General (OIG) has issued a report entitled “MedicaidPayments for Outpatient Clinical Diagnostic Laboratory Services for Dual-Eligible Beneficiaries.” The OIG found that Medicaid programs in 8 of 11 selected states spent a total of $1.3 million in potential improper payments for clinical diagnostic laboratory services that were provided on an assignment-related basis to Medicare/Medicaid dual eligibles in FY 2005 and 2006. Over half of the potential improper payments identified corresponded to five Current Procedural Terminology codes (36415, 85025, 80053, 81000, and 87536). The OIG points out that state Medicaid programs should not pay for any portion of outpatient clinical diagnostic laboratory services that were provided on an assignment-related basis to dual eligibles who are enrolled in Medicare Part B.
Clinical Laboratory Certification/Public Health Testing, HHAs, and Hospices
CMS has issued a memo to state survey agencies clarifying CMS policies regarding the certification of laboratories performing limited public health testing. The memo also clarifies the policies and procedures for the certification of entities with multiple sites, specifically for home health agencies (HHAs) and hospices.
Submission of Laboratory Packages by Accredited Laboratories
On January 16, 2009, the FDA published a notice announcing “Draft Guidance for Industry on Submission of Laboratory Packages by Accredited Laboratories,” which is intended to enhance the quality and reliability of test results submitted by importers to demonstrate that their products meet the FDA's requirements. The guidance advises importers how to use accredited laboratories and makes recommendations about the quality and type of test data that these laboratories should produce to support test results submitted to the FDA. According to an FDA press release, the guidance also is intended to reduce the likelihood that an importer will submit only favorable test results to the FDA. Comments on the draft will be accepted through April 16, 2009.
Cytology Proficiency Testing
CMS published a proposed rule on January 16, 2009 that would amend the Clinical Laboratory Improvement Amendments of 1988 (CLIA) regulations for cytology proficiency testing. The rule would: amend definitions, lengthen the testing interval, require validation of cytology challenges before use in testing, increase the minimum number of cytology challenges per testing event, change the grading scheme, and allow flexibility to accommodate new cytology laboratory technologies. CMS will accept comments on the proposal until March 17, 2009.
Biosafety Laboratory Perimeter Security
The GAO has issued a report entitled “Biosafety Laboratories: Perimeter Security Assessment of the Nation's Five BSL-4 Laboratories.”. For this report, the GAO conducted a physical security assessment of the nation’s five biosafety level (BSL) 4 labs, which handle the world’s most dangerous agents and diseases. Based on findings of inconsistent levels of protection against unauthorized intrusions, the GAO recommends that the Director of the Centers for Disease Control and Prevention (CDC) adopt specific perimeter control requirements for all BSL-4 labs. HHS indicated that further study is required prior to additional regulation.
HHS Meeting on Genetic Testing
The HHS Secretary's Advisory Committee on Genetics, Health, and Society is meeting on December 2 and 3, 2008 to review a preliminary draft report that addresses questions about whether gene patents and certain licensing practices are affecting patient access to genetic tests. The meeting will also address diagnostic laboratory standards and technology platforms and the role they are playing in innovation of genetic technologies.
Clinical Laboratory, Medicare Part B Drug Payment Updates
CMS has posted its preliminary payment determinations for certain new clinical laboratory codes. CMS is accepting comments on the payment determinations until October 10, 2008. Separately, CMS has released the October 2008 Medicare Part B prescription drug average sales price (ASP) pricing files.
Medicare Physician Payment/DMEPOS Bidding Delay Legislation Enacted
On July 15, 2008, the House and Senate overrode the President's veto of H.R. 6331, the “Medicare Improvements for Patients and Providers Act of 2008” (MIPPA). The law rescinds a 10.6% cut in physician payments and delays a controversial medical equipment competitive bidding program, both of which temporarily went into effect July 1, 2008, and makes numerous other Medicare and Medicaid policy changes. Highlights of the law include the following:
- Physician Payments: MIPPA cancels a 10.6% Medicare physician fee schedule cut that was triggered on July 1, 2008 and provides a 1.1% increase for 2009 (rather than the forecasted 5.4% cut). The law also expands the Physician Quality Reporting Initiative, promotes electronic prescribing, and requires non-hospital advanced imaging providers to be accredited by 2012.
- DMEPOS Competitive Bidding. MIPPA delays and reforms the Centers for Medicare & Medicaid Services’ (CMS) competitive bidding program for certain categories of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). H.R. 6331 terminates contracts awarded under round one, rebids those areas in 2009, and delays round two bidding until 2011. The delay is financed by cutting fee schedule payments for round one items by 9.5% nationwide beginning January 1, 2009. MIPPA also includes a series of procedural improvements to the bidding process. A detailed Reed Smith analysis of the MIPPA DMEPOS bidding provisions is available on our website.
- Therapy Caps Exception Process. MIPPA extends through December 31, 2009 the outpatient therapy service cap exceptions process.
- Clinical Laboratory Services. The act repeals the clinical lab competitive bidding demonstration project and reduces the clinical lab fee schedule update by 0.5% in each of the next 5 years.
- Medicare Advantage (MA) Provisions. MIPPA makes a series of MA payment and policy changes, including a $1.8 billion cut in the regional MA stabilization fund in 2012 and a phase-out of the adjustment for indirect medical education.
- Medicare Part D Drug Plans. MIPPA sets timeframes for plan payments to pharmacies and long-term care pharmacy submission of claims; mandates coverage of certain classes of drugs; clarifies the use of Part D drug data; limits certain sales and marketing activities; and makes other Part D reforms.
- End-Stage Renal Disease (ESRD) Provisions. The law updates the ESRD composite rate by 1.0% for 2009 and 2010, and mandates a fully-bundled ESRD payment system and quality incentive program by January 1, 2011.
- Medicaid Drug Reimbursement. MIPPA delays the adoption of Medicaid payment based on average manufacturer price (AMP) for multiple source drugs and prevents publication of AMP data until October 1, 2009.
Reed Smith is preparing a client memo analyzing the new law, which will be available on our web site.
MIPPA: Medicare Physician Payment/DMEPOS Bidding Delay Legislation Enacted
On July 15, 2008, the House and Senate overrode the President's veto of H.R. 6331, the "Medicare Improvements for Patients and Providers Act of 2008” (MIPPA). The law rescinds a 10.6% cut in physician payments and delays a controversial medical equipment competitive bidding program, both of which went into effect July 1, 2008, and makes numerous other Medicare and Medicaid policy changes. The vote was 70-26 in the Senate and 383-41 in the House, following the President's veto earlier in the day.
The following are highlights of the legislation:
- Physician Fee Schedule: MIPPA maintains physician payment rates for 2008 (rather than implement the 10.6% cut that was triggered on July 1, 2008), and provides a 1.1% increase for 2009 (rather than the forecasted 5.4% cut). The law also extends for two years the Physician Quality Reporting Initiative (PQRI), increases incentive payments for reporting by 2%, and makes other reforms to the program. The act promotes electronic prescribing (e-prescribing) by providing incentive payments for practitioners who use a qualified e-prescribing systems in 2009 through 2013, and reducing payments by 2% for providers practitioners who fail to e-prescribe beginning in 2011 (with limited exceptions). MIPPA also requires non-hospital advanced imaging providers to be accredited by 2012 and establishes a voluntary demonstration program to test the use of appropriateness criteria for advanced diagnostic imaging services.
- DMEPOS Competitive Bidding. MIPPA delays and reforms the Centers for Medicare & Medicaid Services' (CMS) competitive bidding program for certain categories of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The first round of the program went into effect in 10 geographic areas on July 1, 2008. H.R. 6331 terminates contracts awarded under round one and rebids those areas in 2009, with bidding for round two delayed until 2011. The delay is financed by cutting fee schedule payments for all items covered by round one bidding program by 9.5% nationwide beginning January 1, 2009, followed by a 2% increase in 2014 (with certain exceptions). MIPPA also includes a series of procedural improvements to the bidding process, and addresses quality by, among other things, requiring subcontractor accreditation, excluding complex rehabilitation wheelchairs and negative pressure wound therapy from bidding, and exempting of certain rural and low-population areas from bidding. Separately, MIPPA repeals current oxygen equipment transfer of ownership requirements.
- Therapy Caps Exception Process. MIPPA extends through December 31, 2009 the exceptions process relative to the annual per-beneficiary limitations on outpatient therapy services.
- Clinical Laboratory Services. The act repeals the competitive bidding demonstration project for clinical laboratory services and instead reduces the fee schedule update for clinical lab services by 0.5% in each of the next 5 years.
- Medicare Advantage (MA) Provisions. MIPPA makes a series of payment and policy changes affecting Medicare Advantage plans, including a $1.8 billion cut in the MA stabilization fund for regional preferred provider organizations in 2012 and a phase-out of the adjustment for indirect medical education.
- Medicare Part D Drug Plans. MIPPA establishes timeframes for plan payments to pharmacies and long-term care pharmacy submission of claims; codifies current coverage of certain “protected classes” of drugs; clarifies the use of Part D drug data for research and other purposes; limits certain sales and marketing activities; and makes other Part D reforms.
- End-Stage Renal Disease Provisions. The law provides a 1.0% update to the composite rate for renal dialysis services for 2009 and 2010, requires the Secretary to establish a fully bundled ESRD payment system by January 1, 2011, and establishes a quality incentive payment program for ESRD providers, effective January 1, 2011.
- Medicaid Drug Reimbursement. MIPPA delays the adoption of Medicaid payment based on average manufacturer price (AMP) for multiple source drugs and prevent publication of AMP data until October 1, 2009.
Additional details regarding the legislation are available on the House Ways and Means Committee web site.
Clinical Lab Test Payments
CMS has announced that a public meeting to discuss payment determinations for specific new CPT codes for clinical laboratory tests is scheduled for Monday, July 14, 2008 from 9:00 a.m. to 2:00 p.m., EST. The registration deadline is July 9, 2008.
