CMS Issues Proposed Rule to Update FY 2016 IPPS, LTCH PPS Rates, Policies

On April 30, 2015, the Centers for Medicare & Medicaid Services (CMS) is publishing its proposed 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) 2016.  CMS will accept comments on the proposed rule until June 16, 2015. The final rule will be published by August 1, 2015, and generally will apply to discharges occurring on or after October 1, 2015.

With regard to the IPPS, CMS projects that the rate and policy changes in the proposed rule would increase IPPS operating payments by approximately 0.3%, or about $120 million in FY 2016. The proposed rule would provide for a 1.1% operating payment rate update for hospitals that submit quality data and are meaningful users of Electronic Health Records (EHR). This update reflects a 2.7% market basket update, adjusted by a -0.6 percentage point multi-factor productivity (MFP) cut and an additional -0.2 percentage point cut (as mandated by the Affordable Care Act, or ACA), with an additional -0.8 percentage point documentation and coding recoupment adjustment required by the American Taxpayer Relief Act of 2012.

Updates to IPPS hospitals are subject to several quality-related adjustments under the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, the Hospital-Acquired Condition (HAC) Reduction Program, the Hospital Inpatient Quality Reporting (IQR) Program, and the EHR Incentive Program. Hospitals that do not successfully participate in the Hospital IQR Program will be subject to a one-fourth reduction of the market basket update, which CMS estimates would equal 0.675 percentage points. Hospitals that are not meaningful EHR users would be subject to a separate reduction equal to half of the market basket update in FY 2015 (currently estimated to be a 1.35 percentage point reduction).

The proposed rule also would make numerous changes to hospital quality programs, including updates to quality measures. CMS also would increase the reduction to base diagnosis related group (DRG) payments under the Hospital VBP Program from 1.5% to 1.75%. In addition, CMS addresses, among many other things: proposed changes to MS-DRG classifications and recalibration of relative weights, new technology add-on payment applications, rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis, distribution of Medicare disproportionate share hospital (DSH) allotments in accordance with the ACA, and a potential future expansion of the Bundled Payments for Care Initiative.

With regard to LTCHs, the proposed rule would provide for a standard federal rate of $41,884, reflecting an adjusted market basket increase of 1.9%. Nevertheless, CMS estimates that LTCH PPS payments would decrease by 4.6% (approximately $250 million) under the proposed rule. CMS attributes this cut largely to implementation of the Pathway for SGR Reform Act of 2013, which requires CMS to establish an alternative site-neutral payment rate, generally based on IPPS rates, for Medicare inpatient discharges from an LTCH that fail to meet certain statutory-defined, patient-level clinical criteria, beginning with LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015. Under the patient-level clinical criteria, LTCHs will be reimbursed under LTCH PPS only if, immediately preceding the patient’s LTCH admission, the patient was discharged from a general acute care hospital paid under IPPS and the patient’s stay included at least three days in an intensive care unit or coronary care unit or the patient is assigned to an MS LTC DRG for cases receiving at least 96 hours of ventilator services in the LTCH. Patient’s discharge from an LTCH with a principal diagnosis relating to psychiatric or rehabilitation services may not be reimbursed under LTCH PPS. For any Medicare patient who does not meet the patient-level clinical criteria, the LTCH will be paid a lower “site neutral” payment rate, which will be the lower of (1) the IPPS comparable per diem payment rate including any outlier payments, or (2) 100% of the estimated costs for services.

The proposed rule would establish the patient-level clinical criteria by adopting a new rule at 42 C.F.R. § 412.522 and address implementation issues, including the transitional blended payment rate methodology for FYs 2016 and 2017. CMS projects that payments for these site neutral payment rate cases will decrease by approximately 14.3% (or about $293 million). On the other hand, about 54% of LTCH cases are expected to meet the criteria for exclusion from the site neutral payment rate in FY 2016, and be paid based on the LTCH PPS standard federal payment rate. CMS projects that payment for those cases that qualify for the standard LTCH PPS payment rate will increase by 1.9%, reflecting a 2.7% market basket update reduced by a 0.6 percentage point multi-factor productivity adjustment and an additional adjustment of -0.2 percentage point under the ACA.

ONC Updated Electronic Health Information Privacy/Security Guidance

The Office of the National Coordinator for Health Information Technology (ONC) has released a revised Guide to Privacy and Security of Electronic Health Information. The guide is intended to help health care providers – especially those from smaller organizations – address federal health information privacy and security requirements in their practices. The new version updates information regarding compliance with privacy and security requirements under the Medicare and Medicaid EHR Incentive Programs, along with the HIPAA Privacy, Security, and Breach Notification Rules.

CMS Proposes Updates to EHR Meaningful Use Rules

CMS published a proposed rule on April 15, 2015 that would modify the Medicare and Medicaid Electronic Health Record (EHR) Incentive program to reduce complexity, simplify reporting requirements, and align Stage 1 and Stage 2 objectives and measures with Stage 3. Notably, CMS proposes to change the Medicare and Medicaid EHR Incentive Program reporting period in 2015 for all eligible professionals, eligible hospitals, and critical access hospitals (regardless of prior participation) to a 90-day period aligned with the calendar year. According to CMS, this 90-day EHR reporting period for 2015 would give providers more time to address any remaining issues with implementation of technology certified to the 2014 Edition and to accommodate the changes to the objectives and measures of meaningful use included in the proposed rule. CMS also proposes that EPs, eligible hospitals, and CAHs demonstrating meaningful use for the first time may use a 90-day EHR reporting period during calendar year 2016, but returning participants would use an EHR reporting period of the full calendar year 2016. In 2017, all providers would use an EHR reporting period of one full calendar year (with a limited exception for Medicaid providers demonstrating meaningful use for the first time).

In addition, CMS proposes that beginning with an EHR reporting period in 2015, providers would no longer be required to attest to certain objectives and measures that are redundant or "topped out." CMS also proposes various changes to individual objectives and measures for Stage 2 of meaningful use, beginning with the EHR reporting period in 2015. CMS will accept comments on the rule until June 15, 2015.  

HHS Publishes Proposed Stage 3 EHR Incentive Program, Health IT Certification Rules

On March 30, 2015, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule on Stage 3 meaningful use criteria, which focus on the advanced use of Electronic Health Record (EHR) technology to promote improved outcomes for patients. The proposed rule would establish the requirements that eligible professionals (EPs), eligible hospitals, and critical access hospitals must achieve to demonstrate meaningful use, qualify for Medicare and Medicaid EHR Incentive Program incentive payments, and avoid downward Medicare payment adjustments. CMS generally intends for the proposed changes to respond to provider concerns regarding the burden associated with the number of program requirements, the multiple stages of program participation, and the timing of EHR reporting periods. 

Notably, while CMS had previously announced that Stage 3 would begin in 2017, CMS is making Stage 3 compliance optional for 2017. Instead, beginning in 2018 all providers would report on the same definition of meaningful use at the Stage 3 level regardless of their prior participation. The proposed rule also would reduce the overall number of meaningful objectives to eight to focus on advanced use of EHRs (Protect Patient Health Information, Electronic Prescribing (eRx), Clinical Decision Support (CDS), Computerized Provider Order Entry (CPOE), Patient Electronic Access to Health Information, Coordination of Care through Patient Engagement, Health Information Exchange (HIE), and Public Health and Clinical Data Registry Reporting). In addition, CMS would align clinical quality measure reporting with other CMS quality reporting programs that use certified EHR technology (e.g., the Hospital Inpatient Quality Reporting and Physician Quality Reporting System programs), enhance alignment across care settings, and remove measures that are redundant or topped out. 

CMS expects net incentive payment spending under the Medicare and Medicaid EHR Incentive Programs to total $3.7 billion between 2017 and 2020 (which reflects $0.8 billion in negative payment adjustments for Medicare providers who do not achieve meaningful use). The comment period ends on May 29, 2015.

In a related development, on March 30 the Office of the National Coordinator for Health Information Technology (ONC) published a proposed rule to establish the 2015 edition health information technology certification criteria, establish a new 2015 Edition Base EHR definition, and modify the ONC Health Information Technology (IT) Certification Program to make it more broadly applicable to other types of health IT health care settings and programs. Among other things, the rule would: (1) adopt new and updated vocabulary and content standards for the structured recording and exchange of health information; (2) include enhanced data portability, transitions of care, and application programming interface capabilities in the 2015 Edition Base EHR definition; (3) align certification criteria with proposals for Stage 3; (4) provide certification to standards for the collection of social, psychological, and behavioral data to address health disparities; (5) provide for the exchange of sensitive health information and for the accessibility of health IT; (6) ensure all health IT presented for certification possesses the relevant privacy and security capabilities; (7) take a series of steps to improve patient safety; and (8) establish surveillance and disclosure requirements. Comments are due May 29, 2015.

OIG Issues 2015 Compendium of Unimplemented Recommendations

The OIG has released its March 2015 “Compendium of Unimplemented Recommendations,” which highlights the OIG’s top 25 recommendations for cost savings and/or quality improvements in HHS programs, along with other significant unimplemented recommendations. High-priority recommendations address the following areas, among others:

  • Payment Policies and Practices: Expand the DRG window to include additional days prior to the inpatient admission and other hospital ownership arrangements; establish a hospital transfer payment policy for early discharges to hospice care; and reduce hospital outpatient department payment rates for ambulatory surgical center-approved procedures.
  • Billing and Payment: Develop oversight mechanisms for the home health face-to-face requirement; change the method for determining how much therapy is needed to ensure appropriate skilled nursing facility payments; detect and recoup improper Medicare payments made for services rendered to incarcerated beneficiaries; implement an automated system to recalculate outlier claims to facilitate reconciliations; and provide states with definitive guidance for calculating the federal upper payment limit (UPL), including using facility-specific UPLs that are based on actual cost report data.
  • Contractor Oversight: Utilize and report Zone Program Integrity Contractors’ (ZPICs') workload statistics in ZPIC evaluations.
  • Grants and Contracts: The National Institutes of Health (NIH) should promulgate regulations addressing institutional financial conflict of interest.
  • Program and Financial Management: Reduce significant variation in states’ personal care services laws and regulations; and standardize administrative law judge level case files and make them electronic.
  • Quality of Care and Safety: Broaden patient safety efforts to include all types of adverse events; require states to report on vision and hearing screening data; strengthen oversight of state access standards for Medicaid managed care; and expand regulatory authority and oversight of dietary supplements.
  • Emergency Preparedness: Establish effective hospital emergency preparedness and response policies.
  • Health Information Technology: Improve the Transformed Medicaid Statistical Information System; and address fraud vulnerabilities in EHRs.
  • Program Integrity: Increase reviews of clinicians associated with high cumulative payments; and restrict certain beneficiaries to a limited number of pharmacies or prescribers.
  • Affordable Care Act: Improve internal CMS controls related to determining applicants’ eligibility for enrollment in quality health plans and eligibility for insurance affordability programs.

While some of these recommendations could be achieved administratively, other policies would require legislative changes to implement. 

CMS Proposed Rules in the Pipeline

CMS recently sent several major proposed rules to the White House Office of Management and Budget for regulatory clearance – the last step before publication in the Federal Register. OMB is reviewing proposed rules to update the skilled nursing facility, inpatient rehabilitation facility, and inpatient psychiatric facility prospective payment systems (PPS) for fiscal year (FY) 2016, and the FY 2016 acute inpatient PPS proposed rule also should be joining them in the near future. Other CMS regulations pending at OMB include proposed rules updating the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program meaningful use requirements for 2015 through 2017 and Medicaid managed care regulations.

CMS Call on Physician Quality Reporting Programs (March 18)

On March 18, 2015, CMS is hosting a call to discuss how providers may report once across various 2015 Medicare Quality Reporting Programs, including the Physician Quality Reporting System (PQRS), the Medicare Electronic Health Record (EHR) Incentive Program, the Value-Based Modifier (VM) program, and the Medicare Shared Savings Program. Providers that satisfactorily report will avoid the 2017 PQRS negative payment adjustment, satisfy the Clinical Quality Measure component of the Medicare EHR Incentive Program, and satisfy requirements for the VM.

Ways and Means Committee to Markup Medicare Fraud, Competitive Bidding, and other Medicare Policy Bills

On February 26, 2015, the House Ways and Means Committee is scheduled to vote on the following bills:

  • H.R. 1021, “Protecting the Integrity of Medicare Act of 2015” – a sweeping bill to promote Medicare program integrity and efficiency. Among many other things, the bill would: eliminate civil money penalties for inducements to physicians to limit services that are not medically necessary; create a Part D drug management program for beneficiaries at risk of prescription drug abuse; require MACs to establish improper payment outreach and education programs for providers; expand the Senior Medicare Patrol program; require the HHS Secretary to issue guidance on the application of the “Common Rule” protecting individuals involved in research; and require the Secretary to issue a report on how to establish a permanent physician-hospital gainsharing program.
  • H.R. 284, “Medicare DMEPOS Competitive Bidding Improvement Act of 2015” -- which would require Medicare suppliers that bid under a durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to submit binding bids or risk forfeiture of a surety bond.
  • H.R. 876, “NOTICE Act” – which would require hospitals to provide certain notifications to individuals classified as being under observation status rather than admitted as inpatients.
  • H.R. 887, “Electronic Health Fairness Act of 2015” -- which addresses the treatment of patient encounters in ambulatory surgical centers in determining meaningful electronic health record use.

** These bills were approved with amendments

ONC Seeks Comments on Draft Health IT Interoperability Roadmap, Standards Advisory

On January 30, 2015, the HHS Office of the National Coordinator for Health Information Technology (ONC) released a draft “Roadmap” to promote safe and secure exchange and use of electronic health information. The document “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap Version 1.0,” focuses on actions intended to reach the ambitious goal of enabling a majority of individuals and providers to send, receive, find, and use a common set of electronic clinical information at the nationwide level by the end of 2017. To that end, the report focuses on: (1) establishing a coordinated governance framework and process for nationwide health IT interoperability; (2) improving technical standards and implementation guidance for sharing and using a common clinical data set; (3) enhancing incentives for sharing electronic health information according to common technical standards; and (4) clarifying privacy and security requirements that enable interoperability. Comments on the draft Roadmap document will be accepted until April 3, 2015.

ONC also released a draft of the 2015 Interoperability Standards Advisory, containing an initial version of what ONC currently considers to be the best available standards and implementation specifications for many clinical health data interoperability purposes. The public comment period for the Standards Advisory closes May 1, 2015.

CMS Plans Spring Rulemaking to Modify Meaningful Use Requirements

CMS has announced that it plans to issue regulations this spring to address provider concerns about the burden associated with compliance with Medicare and Medicaid Electronic Health Record (EHR) Incentive Program meaningful use requirements. Specifically, in a January 29, 2015 blog post by Patrick Conway, MD, Deputy Administrator for Innovation and Quality and CMS Chief Medical Officer, CMS announced that upcoming regulations would:

  • Realign hospital EHR reporting periods to the calendar year facilitate hospitals incorporation of 2014 Edition software into their workflows and better align with other CMS quality programs;
  • Modify other aspects of the program to reduce complexity and lessen providers’ reporting burdens; and
  • Reduce the EHR reporting period in 2015 to 90 days to accommodate these changes.

These changes are separate from another rulemaking expected to be released next month that would address the Stage 3 meaningful use criteria for 2017 and subsequent years.

Stage 3 EHR Incentive Program, Health IT Certification Rules at OMB

HHS has sent to the White House Office of Management and Budget (OMB) for final regulatory clearance a proposed rule on Stage 3 meaningful use criteria for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. The Stage 3 rule will focus on advanced use of EHR technology to promote improved outcomes for patients, and it propose changes to the reporting period, timelines, and structure of the program, including providing a single definition of meaningful use. Likewise, HHS is seeking review of proposed rule that would, among other things, establish a new 2015 Edition Base EHR definition and modify the ONC Health Information Technology (IT) Certification Program to make it more broadly applicable to other types of health IT health care settings and programs. The rules are not available yet, but could be approved for publication in the Federal Register at any time.

CMS Call on Changes to Physician Quality Reporting Programs for 2015 (Dec. 2)

On December 2, 2014, CMS is hosting a provider call to discuss changes to the Medicare physician quality reporting programs in the 2015 Medicare Physician Fee Schedule final rule. Among other things, the call will cover changes impacting the Physician Quality Reporting System (PQRS), Value-based Payment Modifier, Physician Compare, Electronic Health Record (EHR) Incentive Program, Comprehensive Primary Care Initiative (CPC), and Medicare Shared Savings Program.

ONC Final Rule on EHR Certification Criteria

The Office of the National Coordinator for Health Information Technology (ONC) published a final rule on September 11, 2014 that is intended to introduce regulatory flexibilities with regard to certification to the 2014 Edition Electronic Health Records (EHR) Certification Criteria. The rule also codifies certain revisions to the ONC Health Information Technology (HIT) Certification Program for certification to the 2014 Edition and future editions, and it makes administrative updates to associated regulations. ONC specifies that EHR technology developers do not have to update and recertify their products to the revised 2014 Edition Release (also referred to as the “2014 Edition Release 2”), nor do eligible providers have to upgrade to EHR technology certified to the 2014 Edition Release 2, although ONC encourages such stakeholders “to consider whether the 2014 Edition Release 2 offers any opportunities that they might want to pursue.”

CMS Final Rule Revises EHR Meaningful Use Timeline

The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) have issued a final rule that gives providers additional options in how they use certified electronic health record (EHR) technology (CEHRT) to meet meaningful use requirements for the 2014 EHR Incentive Program reporting period. Under the final rule, eligible providers can use the 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT for an EHR reporting period in 2014. All eligible professionals, eligible hospitals, and critical access hospitals will be required to use the 2014 Edition CEHRT in 2015. Among other things, the final rule also extends meaningful use Stage 2 through 2016 for certain providers (Stage 2 meaningful use criteria focus on exchange of clinically relevant information between providers and promote patients’ secure online access to their health information). The rule also provides that Stage 3 will begin in 2017 for providers who first became meaningful EHR users in 2011 or 2012 (under Stage 3, meaningful use will include demonstrating improvement in quality of health care). 

CMS Call: How to Avoid 2016 Negative Payment Adjustments under Medicare Quality Reporting Programs

On September 17, 2014, CMS is hosting a call on negative payment adjustments that could apply under several Medicare quality reporting programs in 2016.  Specifically, the call will offer instructions on how eligible professionals and group practices can avoid the 2016 Physician Quality Reporting System negative payment adjustment, satisfy the clinical quality measure component of the EHR Incentive Program, and avoid the automatic CY 2016 Value-Based Modifier downward payment adjustment.

CMS Finalizes Medicare IPPS/LTCH PPS Update for FY 2015

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.

With regard to the IPPS, the final rule provides for a 1.4% operating payment rate update for hospitals that submit quality data and are meaningful Electronic Health Record (EHR) users. This update reflects a 2.9% market basket update, adjusted by a -0.5 percentage point multi-factor productivity (MFP) cut and an additional -0.2 percentage point cut (both mandated by the Affordable Care Act), with an additional -0.8 percentage point documentation and coding recoupment adjustment. Despite the positive operating rate update, total IPPS payments (capital and operating payments) are projected to decrease by about $756 million in FY 2015 as a result of reductions under the Hospital Readmissions Reduction Program, the Hospital Acquired Condition (HAC) Reduction Program, Medicare disproportionate share hospital (DSH) payment changes, and other policy changes. Moreover, CMS is revising the labor market areas used in the wage index, but adopting a 1-year transition policy for FY 2015 to mitigate potential negative payment impacts.

The rule makes numerous changes to hospital quality programs, including updating measures aligning certain reporting requirements in both the EHR Incentive Program and the Hospital Inpatient Quality Reporting Program. In addition, the rule modifies the Hospital Value-Based Purchasing Program to increase the applicable percent reduction (the portion of Medicare payments available to fund incentive payments under the program) to 1.5% of the base operating DRG payment amounts to all participating hospitals, which will generate approximately $1.4 billion for value-based incentive payments in FY 2015. In addition, the rule increases the maximum reduction in payments under the Hospital Readmissions Reduction program from 2% to 3%. The rule also implements the ACA HAC Reduction Program, which will reduce by 1% Medicare inpatient payments to hospitals with the highest rates of certain conditions that are reasonably preventable when those conditions are acquired after the beneficiary has been admitted to the hospital for a different condition.

Other IPPS policies in the rule address, among other things, the low-volume hospital payment adjustment and the Medicare Dependent Hospital program, graduate medical education funding, and critical access hospital payments. CMS also reminds hospitals of their statutory obligation to establish and make public a list of its standard charges for items and services.

With regard to the LTCH PPS, CMS estimates that estimated payments per discharge will rise by 0.8% in FY 2015, and total payments will increase by 1.1%, or approximately $62 million. This increase is attributable to several factors, including a 2.2% rate update, which is based on a market basket update of 2.9% adjusted by a -0.5 percentage point MPF adjustment and an additional adjustment of -0.2 percentage points. CMS is also applying a “one-time” prospective budget neutrality adjustment to standard federal rate of approximately -1.3% under the last year of a three-year phase-in. For 2015, the standard federal rate will be $40,240.51 (compared to the FY 2014 rate of $40,607.31), and the fixed-loss amount for high cost outlier cases will be $14,972 (compared to the FY 2014 amount of $13,314). Note that LTCHs are subject to a 2.0 percentage point reduction for failure to submit required quality data for FY 2015.

The final rule also eliminates the 5 percent readmissions policy for LTCH patients discharged on or after October 1, 2014. Under this policy readmissions from co-located providers in excess of 5 percent are paid a single LTCH payment instead of separate admission and readmission payments. CMS indicated that this policy is not needed in light of recent statutory changes establishing clinical criteria for standard LTCH-PPS payments that will be implemented for discharges beginning on or after October 1, 2015. CMS did not finalize an earlier proposal to change the fixed-day threshold under the LTCH PPS greater than 3-day interrupted stay policy.

Separately, CMS has published corrections to the August 19, 2013 FY 2014 IPPS/LTCH final rule to restore regulatory text related to the administration of pneumococcal vaccines that had been inadvertently removed.

CMS Formally Proposes Modified Electronic Health Record (EHR) Meaningful Use Timeline

CMS has published a proposed rule that would formally adopt a previously-announced change to the EHR meaningful use stage timeline. Specifically, the rule would extend Stage 2 through 2016 and begin Stage 3 in 2017 (instead of 2016). The proposed rule also would allow providers to use 2011 Edition Certified Electronic Health Record Technology (CEHRT) or a combination of 2011 and 2014 Edition CEHRT for the EHR reporting period in 2014; beginning in 2015, all eligible hospitals and professionals would be required to report using 2014 Edition CEHRT.  CMS will accept comments on the proposed rule until July 21, 2014.

CMS Issues FY 2015 Medicare SNF PPS Proposed Rule

This post was written by Susan Edwards.

The Centers for Medicare & Medicaid Services (CMS) published the fiscal year (FY) 2015 proposed skilled nursing facility (SNF) prospective payment system (PPS) rule on May 6, 2014 (Proposed Rule). CMS estimates that the Proposed Rule’s implementation would result in a $750 million increase in aggregate payments to SNFs during FY 2015 as compared to FY 2014. The Proposed Rule anticipates a market basket update of 2%, resulting from a market basket increase of 2.4 percentage points, reduced by the Multifactor Productivity Adjustment of 0.4 percentage points, as required by the Affordable Care Act (ACA). We discuss highlights of the Proposed Rule below, including: (1) the proposed wage index update; (2) a proposed policy change to the change of therapy (COT) Other Medicare Required Assessment (OMRA); (3) proposed revisions to the Civil Money Penalties (CMP) regulations; (4) CMS’s request for public comment on services excluded from consolidated billing; (5) CMS’s observations on therapy trends; and (6) CMS’s discussion regarding electronic health record (EHR) use in SNFs. CMS will accept public comments regarding the Proposed Rule until June 30, 2014.

Proposed Wage Index Update

CMS is required by statute to adjust federal rates using a wage index that reflects geographic differences in wage levels.  CMS proposes modifying the SNF PPS wage index to conform with a February 28, 2013 Office of Management and Budget (OMB) bulletin (OMB Bulletin No. 13-01that made changes to the delineation of Metropolitan Statistical Areas, Micropolitian Statistical Areas, Combined Statistical Areas, and the guidance on uses of these delineations.

CMS proposes to implement OMB Bulletin No. 13-01 through a one-year transition that would use a blended SNF PPS wage index for FY 2015.  Under this policy, 50% of the wage index would use prior OMB delineations (the Core-Based Statistical Area geographic designations adopted in FY 2006) and 50% of the wage index would use the 2013 OMB delineations.  CMS also proposes using OMB delineations to identify whether a SNF is urban or rural for rate purposes.  CMS estimates that 15% of providers would have a higher wage index under the proposed new labor market area delineations, while 22% would have a lower wage index. 

COT OMRA Policy Update

CMS also proposes revisions to the COT OMRA policy, which is used to classify a resident into a new resource utilization group (RUG) due to changes in therapy use, to address industry-wide confusion regarding CMS’s current policy.  While CMS has addressed this policy during industry calls, until the proposed rule, CMS had not formalized what the agency says is its current standard that “the resident must be classified into a RUG-IV therapy category or into a nursing RUG because of index maximization (while receiving a level of therapy sufficient for classification into a RUG-IV therapy category) in order for the COT OMRA requirements to apply.”  In the Proposed Rule, CMS proposes that a COT OMRA would be permitted for patients classified into non-therapy RUGs, but only in certain circumstances.  Specifically, if a SNF patient were previously classified into a therapy-RUG and had no discontinuation of therapy services between Day 1 of the COT observation period for the COT OMRA that classified the resident into his/her current non-therapy RUG and the assessment reference date of the COT OMRA that reclassified the patient into a therapy RUG, a SNF could complete a COT OMRA even though the patient was in a non-therapy RUG.


The Proposed Rule would modify 42 C.F.R. § 488.433 to clarify certain statutory provisions established by Section 6111 of the ACA regarding how states may use CMPs and how states must obtain approval for CMP use from CMS.  While the current regulations specify that CMS must approve states’ use of CMP funds and that CMPs “must be used entirely for activities that protect or improve the quality of care for residents,” CMS contends that states have used CMP funds without CMS approval, have used CMP funds even though CMS disapproved the state’s intended use, and/or have not used CMP funds at all.  As a consequence, CMS proposes modifications to § 488.433 to strengthen the regulations, provide more guidance to states regarding the approval process and the permissible uses of CMPs, and increase state accountability with respect to CMP funds.

CMS Request for Additional Services to Be Excluded from Consolidated Billing

The Proposed Rule also discusses the statutory consolidated billing provisions applicable to SNFs, which require that, with the exception of certain delineated services, SNFs submit consolidated bills to Medicare Administrative Contractors for all of the services SNF patients receive during a Medicare Part A-covered stay.  SNF consolidated billing excludes a number of services, such as those furnished by physicians and other practitioners, and certain “high-cost, low probability” services within certain specific categories.  In the Proposed Rule, CMS invites comments on whether the agency should exclude any additional services from consolidated billing within the four service categories excluded under the statute:  (1) chemotherapy items; (2) chemotherapy administrative services; (3) radioisotope services; and (4) customized prosthetic devices.  The current list of excluded services, listed by HCPCS codes, is available here.     

Agency’s Observations on Therapy Utilization Trends

In the Proposed Rule, CMS observes that the percentage of SNF residents classified into an Ultra-High Rehabilitation groups has increased “rather steadily” (according the agency, from 44.8% in FY 2011 to over 50% in FY 2013).  CMS also notes that many patients are receiving the minimum minutes of therapy to qualify for a given therapy RUG.  CMS states that it will continue to follow and analyze these trends and requests comments regarding such “observations.” 

Accelerating Health Information Exchange in SNFs

In the Proposed Rule, CMS emphasizes the government’s favorable view of health information exchange through the SNFs’ use of EHR, while acknowledging that SNFs are not eligible for EHR incentive payments.  The comment period affords industry an opportunity to suggest to CMS how the government could accelerate the adoption of EHR among SNFs.

CMS Expands Medicare EHR "Meaningful Use" Hardship Exception to Cover Vendor Issues

Medicare eligible professionals and eligible hospitals that are not “meaningful users” of certified electronic health record (EHR) technology will be subject to payment adjustments under the Medicare EHR Incentive Programs beginning on October 1, 2014 for hospitals and on January 1, 2015 for eligible professionals. Eligible professionals and hospitals may be exempt from payment adjustment, however, if demonstrating meaningful use would result in a significant hardship. CMS recently released the hardship exception applications, which outline the specific circumstances that CMS has determined pose a significant barrier to achieving meaningful use. Of particular interest, CMS has added an exception category for “2014 EHR Vendor Issues,” to cover circumstances under which the professional’s or hospital’s EHR vendor was unable to obtain 2014 certification, or the eligible professional or hospital was unable to implement meaningful use due to 2014 EHR certification delays. The hardship application is due by April 1, 2014 for eligible hospitals, and by July 1, 2014 for eligible professionals. Important to certain specialists, the application for eligible professionals states that physicians classified in the Medicare Provider Enrollment, Chain and Ownership System (PECOS) with a primary area of practice of Diagnostic Radiology (30), Nuclear Medicine (36), Interventional Radiology (94), Anesthesiology(05), or Pathology (22) are automatically exempt from the 2015 payment adjustment and are not required to complete the exception application.

ONC Proposes Updated Electronic Health Record (EHR) Certification Criteria for 2015

The Office of the National Coordinator for Health Information Technology (ONC) is seeking comments on revisions to health information technology certification regulations for 2015. CMS is updating these criteria more frequently to provide more incremental regulatory changes, give stakeholders earlier information and greater opportunity for input, and respond more quickly to newer industry standards to enhance interoperability. ONC observes that its previous two to three-year regulatory cycle was “sub-optimal” because it “created cycles of significant peaks and valleys from a health IT development standpoint; resulted in missed opportunities to improve interoperability and programmatic alignment because of mismatched regulatory and standards balloting cycle timelines; and adversely affected EHR technology developers’ ability to strategically plan their development and product rollout processes due to uncertain regulatory timelines.” The proposed rule provides that the 2015 Edition EHR certification criteria would be voluntary; providers would not need to adopt this edition, and no EHR technology developer who has certified its EHR technology to the 2014 Edition would need to recertify to the 2015 Edition for users to participate in the Medicare and Medicaid EHR Incentive Programs. The proposed rule also includes revisions to the ONC HIT Certification Program intended to improve regulatory clarity, simplify certification of EHR Modules not used for achieving meaningful use; and discontinue the use of the “Complete EHR” certification concept. ONC will accept comments on proposed rule until April 28, 2014.

Older Entries

February 18, 2014 — FTC Workshop on Health Care Competition (March 20-21)

February 13, 2014 — Bipartisan/Bicameral SGR Reform Bill Released; Offsets Not Yet Identified

January 30, 2014 — OIG Finds Medicare Contractors Lax on Medicare Vulnerabilities Associated with EHR Use

January 29, 2014 — Reed Smith Client Alert: CMS/OIG Extend Protections for Electronic Health Record Donations

January 7, 2014 — OIG Report Addresses Potential Hospital EHR Technology Vulnerabilities

December 27, 2013 — Final Rules Issued Extending Protections of Electronic Health Record Donations

December 10, 2013 — CMS Updates Medicare Physician Fee Schedule, Other Part B Policies for CY 2014

December 10, 2013 — CMS Blog Post Announces Delay in Electronic Health Record (EHR) Incentive Program "Stage 3" Meaningful Use Start

November 25, 2013 — CMS Call on Medicare Physician Quality Reporting in 2014 (Dec. 17)

October 30, 2013 — GAO Reports Jump in Medicare EHR Payments

October 29, 2013 — CMS Call to Discuss Streamlined Access to PECOS, EHR, and NPPES (Nov. 15)

July 5, 2013 — CMS Call on EHR Incentive Program Clinical Quality Measures (July 23)

June 6, 2013 — CMS Call on Medicare and Medicaid EHR Incentive Programs and Certified EHR Technology (June 27)

May 13, 2013 — HHS Update on HIT Activities

April 15, 2013 — CMS Resources on Provider EHR Audits

April 15, 2013 — CMS Meeting on Billing and Coding with Electronic Health Records (May 3)

April 12, 2013 — CMS, OIG Propose Extension of Electronic Health Record Donation Protections

March 13, 2013 — HHS Invites Comments on Advancing Interoperability and Health Information Exchange

January 14, 2013 — Hospital Readiness for Electronic Quality Reporting

January 11, 2013 — CMS Call on Meaningful Use Stage 1 & 2 (Jan. 16)

December 19, 2012 — OIG Highlights Vulnerabilities in CMS Oversight of the Medicare EHR Incentive Program

December 19, 2012 — GAO Examines Characteristics of Providers Receiving Medicaid EHR Incentive Payments

December 17, 2012 — Interim Rule Revises EHR Certification Criteria, Incentive Program Specifications

December 14, 2012 — PQRS and eRx Incentive Program National Provider Call (Dec. 18)

October 31, 2012 — CMS Publishes Corrections to FY 2013 IPPS, EHR Incentive Program Final Rules

October 31, 2012 — CMS Posts Specifications for Electronic Clinical Quality Measures (eCQMs)

September 28, 2012 — Hospitals Return Fire After Administration Warns Hospitals Against Gaming Payments through Electronic Health Records

September 6, 2012 — CMS Issues Final "Stage 2" Medicare/Medicaid Electronic Health Record (EHR) Incentive Program Rules, EHR Certification Standards

September 5, 2012 — CMS Call: Stage 2 Requirements for the Medicare/Medicaid EHR Incentive Programs (Sept. 13)

July 19, 2012 — CMS Issues Proposed OPPS, ASC Policies for 2013

June 27, 2012 — OIG Assesses Extent of Physician EHR Use

June 22, 2012 — CMS/ONC Call: Using Certified EHR Technology to Meet Meaningful Use (June 27)

May 31, 2012 — CMS Releases Data on Medicare EHR Incentive Program Payment Recipients

May 29, 2012 — CMS Call on Medicare & Medicaid EHR Incentive Programs (June 7)

May 14, 2012 — GAO Offers Recommendations for EHR Program Safeguards

April 23, 2012 — CMS Invites Feedback on Proposed 2014 Clinical Quality Measures

April 23, 2012 — CMS Posts Draft Electronic Clinical Template for Documenting Power Mobility Device (PMD) Encounters

March 26, 2012 — CMS Call on Medicare & Medicaid EHR Incentive Program Basics (March 29)

March 10, 2012 — CMS Calls on Stage 2 Requirements for the Medicare and Medicaid EHR Incentive Programs (March 12 & 27)

February 28, 2012 — Stage 2 Electronic Health Record (EHR) Meaningful Use Proposed Rules Released

January 25, 2012 — Fall 2011 Regulatory Agenda (Belatedly) Released

December 13, 2011 — HHS Announces New Deadlines for Meaningful Use Compliance/EHR Incentives

September 29, 2011 — Final Federal Health IT Strategic Plan

September 1, 2011 — CMS Issues Final Medicare E-Prescribing Incentive Program Rule

August 29, 2011 — CMS Call: EHR Incentive Programs Registration and Attestation for Eligible Professionals (Sept. 9)

August 16, 2011 — HHS ONC Seeks Comments on Health IT Metadata Standards

August 9, 2011 — CMS Call on Medicare and Medicaid EHR Incentive Programs: Understanding Meaningful Use (Aug 18, 2011)

July 29, 2011 — States' Planned Medicaid Electronic Health Record Incentive Program Oversight

May 31, 2011 — CMS Proposes Changes to Electronic Prescribing Quality Rules.

May 31, 2011 — OIG Reports on the Security of Electronic Patient Health Information

May 31, 2011 — CMS Guidance to States on the Medicaid EHR Incentive Program

May 11, 2011 — CMS Call on Medicare/Medicaid EHR Incentive Programs: Understanding Meaningful Use (May 19)

April 27, 2011 — HHS Extends Comment Deadline on Federal Health IT Strategic Plan to May 6, 2011

April 27, 2011 — National Provider Calls on Attestation for the Medicare EHR Incentive Program (May 3 & 5)

April 13, 2011 — Medicare EHR Attestation Begins April 18, 2011

April 11, 2011 — CMS Calls on 2011 Physician Quality Reporting System & eRx Incentive Program (April 14 & April 19)

March 23, 2011 — CMS Call on Hospital Registration for EHR Incentives (April 6)

March 7, 2011 — Inconsistencies in Electronic Prescribing Incentive Programs

February 14, 2011 — CMS Call on Eligible Professional Registration for the Medicaid EHR Incentive Program (Feb. 18).

January 28, 2011 — HIT Extension Program Revisions

January 13, 2011 — Final Rule Establishes Electronic Health Record (EHR) Certification Programs

January 13, 2011 — Correction to Medicare/Medicaid EHR Incentive Program Rule

December 29, 2010 — Electronic Health Record (EHR) Incentives Program Registration Opens Jan. 3, 2011

December 13, 2010 — HIT Quality Measures Workgroup Comment Opportunity

October 27, 2010 — ONC Seeks Comments on Authentication of Provider Organizations (Due Oct. 29)

September 30, 2010 — ONC Conference on Personal Health Records (Dec. 3, 2010)

August 31, 2010 — CMS Guidance on Federal Funding for Medicaid HIT Activities

August 31, 2010 — Office of the National Coordinator (ONC) Holds Informational Sessions on Meaningful Use

August 13, 2010 — ONC Temporary Certification Program Test Tools and Test Procedures

July 29, 2010 — Medicare and Medicaid Electronic Health Record Incentive Program, Initial Standards Rules Finalized

July 29, 2010 — CMS Calls on Medicare/Medicaid EHR Incentive Programs (Aug. 10 - 12, 2010)

July 20, 2010 — CMS Educational Call on HIT Certification, Medicare/Medicaid EHR Incentive Rules (July 22)

July 14, 2010 — Ways & Means Hearing on Incentives for Meaningful Use of Electronic Health Records (July 20)

July 12, 2010 — Temporary Certification Rule for Electronic Health Records Technology Finalized

July 12, 2010 — CMS Rule on E-Prescribing and the Medicare Prescription Drug Program

June 18, 2010 — PECOS Enrollment Required for Medicare Electronic Health Record (EHR) Incentive Program

May 27, 2010 — Health Facility Corridor Width Requirements

May 13, 2010 — HHS Requests Information to Inform Rulemaking for Revised HIPAA Accounting Requirements

March 11, 2010 — ONC Issues Proposed Rule Establishing Health Information Technology Certification Programs

February 26, 2010 — Entities Reporting Breaches of Protected Health Information

February 26, 2010 — GAO Report on Electronic Personal Health Information Exchange

February 22, 2010 — CMS Teleconference on Medicare and Medicaid EHR Incentives (Feb. 23)

January 13, 2010 — HIT Rules Released: HIT Standards and Definition of "Meaningful Use" and Criteria for Electronic Health Record Incentive Program

January 7, 2010 — 2010 PQRI National Provider Call (Jan. 12, 2010)

September 4, 2009 — Guidance to States on ARRA Electronic Health Record Provisions

September 4, 2009 — Electronic Health Record Grants

August 17, 2009 — CMS Issues Guidance to State Survey Agencies, Medicaid Directors

May 29, 2009 — Health Information Technology Extension Program - Comments on Draft Plan Due June 11, 2009

April 24, 2009 — PQRI Electronic Health Record Test Specifications

March 4, 2009 — American Recovery and Reinvestment Act -- Health Information Privacy/Incentives, Medicaid Funding & Other Health Provisions