: Hospice : Health Industry Washington Watch

Posted on November 14, 2011 by Debra A. McCurdy

OIG Highlights Medicaid Rebate Program, Indian Health Services (IHS) Issues

The OIG has created a “spotlight page” on its website to highlight its reports and findings involving the Medicaid drug rebate program. The page features comparisons of drug spending under Medicaid and Medicare Part D, manufacturer compliance with Average Manufacturer Price reporting requirements, manufacturer development of new versions of existing brand-name drugs to minimize rebate obligations, and state collection of drug rebates, among other issues. Another new spotlight page concentrates on OIG investigations involving the IHS program. Previous OIG spotlight pages have focused on independent diagnostic testing facilities, hospice care, power wheelchairs, and Medicaid personal care services.

Tags: AMP Reporting, DMEPOS, Fraud and Abuse, Hospice, IDTFs, Medicaid Rebate, Medicare Part D Drugs, OIG, Office of Inspector General Developments

Posted on September 29, 2011 by Debra A. McCurdy

CMS Seeks Comments on Hospice Quality Reporting Forms

CMS is seeking comments on information collection requirements related to the ACA Hospice Voluntary Quality Data Reporting Program. Under the ACA, beginning with FY 2014, the Secretary must reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements with respect to that fiscal year. CMS described the hospice quality reporting requirements in the FY 2012 hospice wage index rule. CMS is now requesting approval of the “Quality Data Submission Form” that hospice providers will use to submit quality measures data to CMS related to Participation in a Quality Assessment and Performance Improvement (QAPI) Program that Includes at Least Three Quality Indicators Related to Patient Care. Comments will be accepted until November 1, 2011.

Tags: Centers for Medicare & Medicaid Services Developments, Department of Health & Human Services, Hospice, Patient Protection and Affordable Care Act (PPACA), Quality Reporting

Posted on August 16, 2011 by Debra A. McCurdy

CMS Issues Final Medicare Inpatient Hospital PPS Rule for FY 2012

CMS has released its final rule to update Medicare inpatient prospective payment system (IPPS) hospital and long-term care hospital prospective payment system (LTCH-PPS) payment and other policies for FY 2012. The official version of the rule will be published on August 18, 2011. Overall, CMS estimates that FY 2012 payments to general acute care hospitals for operating expenses would increase by $1.13 billion, or 1.1%, compared to 2012 (and compared to a projected decrease of $498 million under the proposed rule). The following are the highlights of the sweeping rule (the advance version is almost 1500 pages):

The higher final 1.1% update to payments reflects a 3% market basket update (compared to 2.8% in the proposed rule), which is reduced by a multi-factor productivity adjustment of 1.0% (compared to the proposed 1.2%) and an additional 0.1% reduction mandated by the ACA). This amount is further adjusted by a 2% reduction to account for changes in hospital documentation and coding practices that did not reflect actual increases in patients’ severity of illness (CMS initially proposed a 3.15% documentation and coding adjustment), along with an additional 1.1% increase in response to litigation involving the calculation of budget neutrality for the rural floor. Hospitals that do not successfully participate in the Inpatient Quality Reporting (IQR) program (formerly called the Reporting Hospital Quality Data for Annual Payment Update or RHQDAPU) will have their market basket update reduced by two percentage points.
The final rule includes a number of hospital quality initiatives. The rule expands the measures to be reported under the IQR program for the FY 2014 and FY 2015 payment determinations (there are a total of 76 measures for the FY 2015 payment determination), but streamlines reporting requirements in an effort to reduce the burden on participating hospitals. CMS also is implementing the ACA’s Hospital Readmissions Reduction Program, which will reduce payments beginning in FY 2013 to certain hospitals that have excess readmissions for certain selected conditions. CMS is finalizing measures regarding rates of readmissions for acute myocardial infarction, heart failure, and pneumonia, along with a methodology for calculating excess readmission rates. In addition, the rule builds on CMS’s January 13, 2011 separate proposed rule to implement the ACA’s Hospital Value-Based Purchasing program, which will tie Medicare payments to the quality of hospital services beginning in FY 2013, by adding a measure on Medicare Spending Per Beneficiary (this measure will also be used in the Hospital IQR Program). CMS did not adopt its proposal to add Acute Renal Failure after Contrast Administration to the list of hospital-acquired conditions in FY 2012.
The final rule also, among many other things: modifies Medicare severity diagnosis related group (MS-DRG) classifications for certain procedures; implements ACA policies providing additional payments to certain low-volume hospitals and to qualifying hospitals in certain geographic areas with low per-beneficiary Medicare spending; clarifies the payment policy for replacement of recalled devices to address partial credits; excludes hospice discharges from the disproportionate share hospital and indirect medical education adjustments; further clarifies that the “3-day payment window” policy applies to preadmission diagnostic and non-diagnostic services furnished at physicians’ practices that are wholly owned or wholly operated by the admitting hospital, revises how pension contributions are reported for wage index and cost finding purposes; discusses its decision to deny three applications for new technology add-on payments; modifies add-on payments for hospitals treating patients with end-stage renal disease; finalizes redistribution of graduate medical education caps; and updates the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits. The final rule also modifies Medicare “under arrangements” requirements to clarify that hospitals may provide only therapeutic and diagnostic services “under arrangements” with an outside entity; routine services, such as contracted nursing services, furnished outside the hospital can no longer be furnished “under arrangement” and covered by Medicare. Hospitals that cannot provide routine services directly (rather than under arrangement) to Medicare inpatients would be required to discharge the inpatient and transfer the patient to another hospital. The final rule also includes numerous changes impacting LTCHs.

The official version of the rule will be published on August 18, 2011.

Tags: Centers for Medicare & Medicaid Services Developments, Department of Health & Human Services, Hospice, Hospital, Long-term Care Hospital (LTCH), Patient Protection and Affordable Care Act (PPACA), Quality Reporting, hospital readmissions

Posted on August 9, 2011 by Debra A. McCurdy

CMS "Provider Compliance Group Outreach Calls" to Focus on Medicare Vulnerabilities (Aug. 23-25, 2011)

CMS has announced a series of calls on specific Medicare program vulnerabilities identified in HHS Office of Inspector General (OIG) reports. The topics of the calls are as follows: August 23: Inpatient Rehabilitation Facility Documentation, Power Wheelchairs/Power Mobility; August 24: Overview of Reviews, Hospice, and Electronic Submission of Medical Documentation (esMD); August 25: Diagnostic Radiology Services in Emergency Departments; Ambulatory Surgical Center Services and Ambulance Transportation Provided to Beneficiaries in Skilled Nursing Facility Stays. CMS Contractor Medical Directors, OIG representatives and CMS personnel will address compliance with Medicare policy, billing instructions, and medical review guidance related to reducing improper payments for these items and services. The calls will be broadcast over the internet.

Tags: Health Care Industry Events, DMEPOS, Fraud and Abuse, Hospice, Inpatient Rehabilitation Facilities, Medicare, OIG, Physicians, Radiology, Skilled Nursing Facilities, ambulance services, ambulatory surgical centers

Posted on August 1, 2011 by Debra A. McCurdy

CMS Releases Final FY 2012 Hospice Wage Index Rule

On July 29, 2011, CMS issued its final Medicare hospice wage index rule for FY 2012, which will increase overall payments by 2.5% as a result of a 3% market basket update, offset by an estimated 0.5% decrease resulting from updated wage index data and the continued phase out of the wage index budget neutrality adjustment factor. CMS has adopted its proposal to change the hospice aggregate cap calculation methodology to a “patient-by-patient proportional methodology” in response to litigation challenging CMS’s existing method for counting Medicare beneficiaries. Hospice providers have the option of electing to continue using the current methodology. Also, as previously reported, “to prevent future litigation, and alleviate the litigation burden on providers, CMS, and the courts,” CMS issued a related ruling dated April 15, 2011 that allows any hospice that has a timely-filed administrative appeal of the existing methodology for a cap year ending on or before October 31, 2011 to have its cap determination recalculated using the patient-by-patient proportional methodology. In addition, the final rule implements a hospice quality reporting program, as mandated by the ACA. The initial measures are limited to a National Quality Forum (NQF)-endorsed measure on pain management and a structural measure related to participation in a Quality Assessment and Performance Improvement (QAPI) Program that includes at least three indicators related to patient care. Hospices must begin collecting quality data in October 2012, to be submitted in 2013; hospices may also voluntarily begin collecting data on the QAPI measure in October 2011 for submission in 2012. Hospices that do not report quality data in 2013 will have their annual increase factor reduced by 2 percentage points in FY 2014. The final rule includes a number of other hospice policy changes, including: elimination of a current requirement that the hospice physician who performs a face-to-face encounter for recertification of a patient’s terminal illness and attests to that encounter be the same physician who certifies the patient’s terminal illness; clarification of the timeframes for face-to-face encounters; and revisions to the definition of hospice employee. The official version of the rule will be published on August 4, 2011.

Tags: Centers for Medicare & Medicaid Services Developments, Hospice, Patient Protection and Affordable Care Act (PPACA), Quality Reporting

Posted on July 29, 2011 by Debra A. McCurdy

Medicare Hospice Rule Correction Notice

On July 22, 2011, CMS published a notice making technical corrections to a May 9, 2011 notice on "Hospice Wage Index for Fiscal Year 2012." The correction changes the title of the notice to “Hospice Appeals for Review of an Overpayment Determination,” and corrects the effective date of a referenced CMS ruling to May 9, 2011.

Tags: Centers for Medicare & Medicaid Services Developments, Hospice, Medicare

Posted on July 29, 2011 by Debra A. McCurdy

OIG Report and "Spotlight" on Medicare Hospice Services

The OIG has issued a report on "Medicare Hospices That Focus on Nursing Facility Residents." According to the OIG, Medicare spending on hospice care for nursing facility residents increased by 69% from 2005 to 2009, from $2.55 billion to $4.31 billion, while the number of hospice beneficiaries in nursing facilities increased by 40%. For-profit hospices were paid, on average, 29% more per beneficiary than nonprofit hospices and 53% more than government-owned hospices in 2009. In 2009, almost 8% of hospices had two-thirds or more of their Medicare beneficiaries residing in nursing facilities; 72% percent of such “high percentage” hospices were for-profit (compared to 56% of all hospices). High-percentage hospices served beneficiaries who spent more days in hospice care, which led to higher Medicare payment; Medicare paid an average of $3,182 more per beneficiary for beneficiaries served by high-percentage hospices than hospices overall in 2009. The OIG also found that high-percentage hospices typically enrolled beneficiaries requiring less complex care and who already lived in nursing facilities. The OIG recommends that CMS: (1) monitor hospices that depend heavily on nursing facility residents, and (2) reduce Medicare payments for hospice care provided in nursing facilities, seeking statutory authority if necessary. CMS concurred with the recommendations. In a related development, the OIG has posted a "spotlight" page on its website highlighting fraud and abuse involving Medicare hospice services. Hospices that focus on nursing facility residents also was the subject of the OIG’s first podcast.

Tags: Other OIG Developments, Fraud and Abuse, Hospice, Medicare, Skilled Nursing Facilities

Posted on June 24, 2011 by Debra A. McCurdy

CMS Guidance on Reporting Reasonable Suspicion of Crimes in Long-Term Care (LTC) Facilities

This post was written by Susan A. Edwards.

On June 17, 2011, CMS issued a memo to state survey agencies on implementation of an ACA provision requiring certain individuals in applicable LTC facilities to report any reasonable suspicion of crimes committed against a resident of that facility. For purposes of the survey guidance, CMS is defining the following Medicare and Medicaid participating provider types as LTC facilities: nursing facilities; skilled nursing facilities; hospices that provide services in LTC facilities; and intermediate care facilities for the mentally retarded. Among other things, the memo: provides instructions to LTC facilities regarding their obligations under the statute (including notification of employees about their reporting responsibilities and nonretaliation against reporting employees); suggests other “advisable functions” for LTC facilities to undertake to promote compliance with the provision; explains the reporting timeframes for covered individuals; and provides guidance to survey agencies on how to respond to reports of reasonable suspicion of a crime. An analysis of the memo, which is effective immediately, is available in the following Client Alert.

Tags: Other CMS Developments, Hospice, Nursing Homes, Patient Protection and Affordable Care Act (PPACA), Skilled Nursing Facilities

Posted on May 31, 2011 by Debra A. McCurdy

Federal Agencies Outline Regulatory Review Plans

On May 26, 2011, the White House posted the preliminary regulatory reform plans submitted by individual federal departments and agencies under President Obama's Executive Order 13563. The agency plans include both discussions of general approaches to regulatory review and listings of specific regulations that may be revised. HHS lists numerous current regulations it identifies as candidates for regulatory review over the next two years in order to increase flexibility and reduce regulatory burdens. Such rules include, among many others, Centers for Medicare & Medicaid Services (CMS) rules on: quality reporting, Medicare appeals, hospital conditions of participation, and revisions to reduce documentation burdens and clarify requirements under a variety of payment rules (impacting inpatient rehabilitation facilities, ambulatory surgical centers, hospices, outpatient hospital departments, and physicians). The Food and Drug Administration (FDA) listing includes such items as revisions to the FDA's bar code rule, good manufacturing practice (GMP) regulations for both food and drugs, and medical device adverse event report requirements.

Tags: Appeals, Department of Health & Human Services, FDA, HOPPS, Hospice, Hospital, Medical Devices, Physicians, Quality Reporting, Regulatory review, ambulatory surgical centers

Posted on May 31, 2011 by Debra A. McCurdy

Correction to Medicare Hospice Wage Index Notice

CMS has published a notice announcing corrections to its May 9 Medicare hospice wage index proposed rule. CMS has moved up the comment deadline from July 8 to June 27, 2011 and has added Addendum B, FY 2012 Wage Index for Rural Areas.

Tags: Centers for Medicare & Medicaid Services Developments, Department of Health & Human Services, Hospice

Posted on April 29, 2011 by Debra A. McCurdy

CMS Releases FY 2012 Hospice Wage Index Proposed Rule, Notice of Ruling on Hospice Cap Challenges

On April 28, 2011, CMS released a proposed rule updating the Medicare hospice wage index for FY 2012. When a projected 2.8% market basket update is factored in, CMS expects Medicare hospice payments to increase by $310 million overall in FY 2012 (while the market basket update and updated wage data would increase payments by a total of $400 million, this increase would be offset partially by a $90 million reduction resulting from the continued phase out of the wage index budget neutrality adjustment factor). The proposed rule would change the hospice aggregate cap calculation methodology to a “patient-by-patient proportional methodology” in response to litigation challenging CMS’s existing method for counting Medicare beneficiaries. Hospice providers also would have the option of electing to continue using the current methodology. Moreover, “to prevent future litigation, and alleviate the litigation burden on providers, CMS, and the courts,” CMS issued a related ruling dated April 15, 2011 that allows any hospice that has a timely-filed administrative appeal of the existing methodology for a cap year ending on or before October 31, 2011 to have their cap determination recalculated using the patient-by-patient proportional methodology. The proposed rule also would begin implementation of a hospice quality reporting program, as mandated by the ACA. Under the proposed quality reporting system, hospices would be required to submit data on quality measures to CMS or have their annual increase factor reduced by 2 percentage points, starting in FY 2014. The initial measures would be limited to a National Quality Forum (NQF)-endorsed measure on pain management and one structural measure related to participation in a Quality Assessment and Performance Improvement (QAPI) Program that includes at least three quality indicators related to patient care. CMS proposes that hospices report the structural measure by January 2013 and the NQF measure by April 2013 in order to be used in the FY 2014 payment determination. The proposed rule includes a number of other hospice policy changes, include a proposal to revise the current requirement for a face-to-face encounter for recertification of a patient’s terminal illness to remove the requirement that the hospice physician who performs the face-to-face encounter and attests to that encounter be the same physician who certifies the patient’s terminal illness. CMS also proposes to more clearly define the timeframes for face-to-face encounters and clarify the definition of hospice employee. The official version of the proposed rule will be published May 9, 2011, and CMS will accept comments on the proposed rule until June 27, 2011.

Tags: Centers for Medicare & Medicaid Services Developments, Department of Health & Human Services, Hospice, Quality Reporting

Posted on April 13, 2011 by Debra A. McCurdy

Home Health/Hospice Face-to-Face Encounter Requirement

CMS is reminding home health agencies and hospices that, effective April 1, 2011, it will enforce new ACA face-to-face encounter requirements for purposes of certification of a patient’s eligibility for Medicare home health services and of recertification for Medicare hospice services.

Tags: Other CMS Developments, Home Health, Hospice, Patient Protection and Affordable Care Act (PPACA)

Posted on March 29, 2011 by Debra A. McCurdy

Compendium of Unimplemented OIG Recommendations

The OIG has released the March 2011 “Compendium of Unimplemented Recommendations,” which summarizes significant OIG recommendations that, if implemented, would result in cost savings and/or improvements in program efficiency and effectiveness. While the OIG recommendations address a wide range of provider and supplier types, high-priority recommendations address, among other things: hospital bad debt policy, hospice services provided to nursing facility residents; Medicare supplier enrollment standards and reimbursement policy; Medicare Advantage payment and marketing policies; Part D bid accuracy and fraud and abuse safeguards; Medicaid prescription drug reimbursement and rebate policies; and clinical investigator disclosure of financial interests.

Tags: Other OIG Developments, DMEPOS, Fraud and Abuse, Hospice, Hospital, Medicaid Rebate, Medicare, Medicare Advantage, Medicare Part D Drugs, OIG

Posted on March 29, 2011 by Debra A. McCurdy

MedPAC Report to Congress on 2012 Payment Recommendations

On March 15, 2011, MedPAC released its annual report to Congress on Medicare Payment Policy. The report includes MedPAC’s recommendations on payment rate updates and other policies, such as distribution of payments and program integrity, for Medicare fee-for-service payment systems. It also includes an overview of the status of the Medicare Advantage and Medicare Part D prescription drug programs. Major recommendations include the following:

Congress should increase acute care hospital inpatient and HOPPS payment rates by 1% in 2012, and require the HHS Secretary to adjust inpatient payment rates in future years to fully recover all overpayments due to documentation and coding improvements.
Congress should provide a 1% update to Medicare physician payments and outpatient dialysis services for 2012.
Ambulatory surgical center (ASC) payments should increase by 0.5% for 2012, and ASCs should submit cost and quality data.
Congress should: eliminate the update to payment rates for skilled nursing facility (SNF) services for FY 2012; revise payment for nontherapy ancillary services; establish a quality incentive payment program for SNFs; and strengthen SNF reporting requirements.
Congress should: eliminate the home health update for 2012 and direct the Secretary to: begin a two-year rebasing of home health rates in 2013 (and protect beneficiaries from lower quality of care in response to rebasing); revise the case-mix system; establish a per episode copay for home health episodes not preceded by hospitalization or post-acute care use; and expand certain program integrity efforts.
Congress should eliminate the update for inpatient rehabilitation facilities and long-term care hospitals for 2012.
Congress should increase hospice rates by 1% for FY 2012 and adopt a series of recommendations from March 2009 addressing payment and program integrity reforms.

Tags: Odds & Ends, ASC, ESRD, HOPPS, Home Health, Hospice, Inpatient Rehabilitation Facilities, Inpatient hospital, LTAC, MedPAC, Medicare, Physician Payments, Skilled Nursing Facilities

Posted on March 19, 2011 by Debra A. McCurdy

CMS Calls: Provider Compliance Group National Outreach/OIG Reports (March 22-24)

CMS is hosting three listening sessions on provider compliance issues March 22-24, 2011, focusing on a number of OIG reports. The schedule is as follows:

Tuesday, March 22

• Inappropriate Medicare Payments for Transforaminal Epidural Injections Services
• Medicare Part B Services During a Non-Part A Nursing Home Stays: Mental Health
• Medicare Part B services during Non-Part A Nursing Home Stays: Enteral Nutrition Therapy
• Review of Point Of Service (POS) Coding for Physician Services Processed by Part B Carriers

Wednesday, March 23

• Medicare Part B Payments for Ambulance Services Rendered to Beneficiaries During Inpatient Stays
• Review of Inpatient Rehabilitation Facilities (IRF) Compliance with Medicare Transfer Regulation
• Part A ER Department Adjust Nationwide Review of Medicare Part A Emergency Dept Adjustments for Inpatient Psychiatric Facilities
• Nationwide Review of IRF Transmission of Patients’ Assessment Instruments

Thursday, March 24

• Review of Claims for Capped Rental Durable Medical Equipment
• Questionable Billing for Physicians Services for Hospice Beneficiaries
• Questionable Billing for Medicare Outpatient Therapy Services
• Chiropractor Outreach and Education

Tags: Health Care Industry Events, DMEPOS, Fraud and Abuse, Hospice, Inpatient Rehabilitation Facilities, Nursing Homes, OIG, Physicians, Therapy, ambulance services, emergency care

Posted on March 7, 2011 by Debra A. McCurdy

Updates to Medicare Hospice Policies

CMS has updated the Medicare Benefits Policy Manual to incorporate a variety of hospice policies implemented as a result of statutory and regulatory changes. Among other things, CMS has added more detailed language regarding the requirements for a physician’s narrative explanation of the clinical findings that supports a life expectancy of 6 months or less, the face-to-face encounter requirement, and policies related to contracting for core services.

Tags: Other CMS Developments, Other HHS Developments, Hospice

Posted on February 18, 2011 by Debra A. McCurdy

CMS Proposes Requiring Providers to Notify Beneficiaries of Right to Access QIOs

CMS published a rule on February 2, 2011 that would require certain Medicare-certified providers and suppliers to inform their Medicare beneficiaries about their right to file written quality-of-care complaints with the local Quality Improvement Organization (QIO). The new standard would apply to: ambulatory surgical centers (ASCs); hospices; hospitals; long term care (LTC) facilities; home health agencies (HHAs); comprehensive outpatient rehabilitation facilities; critical access hospitals; clinics and rehabilitation agencies; portable x-ray services; and rural health clinics and federally qualified health centers. Providers and suppliers also would be required to provide Medicare beneficiaries with written notice of the QIO’s contact information, along with state survey agency contact information (ASCs, LTC facilities, and HHAs already are subject to survey information requirements). Comments on the proposed rule will be accepted until April 4, 2011.

Tags: ASC, Centers for Medicare & Medicaid Services Developments, Department of Health & Human Services, Hospice, Hospital, Nursing Homes, Quality Improvement Organizations (QIO)

Posted on January 10, 2011 by Debra A. McCurdy

MedPAC to Examine Medicare Provider Payment Adequacy (Jan. 13-14)

On January 13 and 14, 2011, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss Medicare payment adequacy for a number of Medicare providers, including: physicians and other health professionals, ambulatory surgical centers, hospital inpatient and outpatient services, outpatient dialysis providers, home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, long term care hospitals, and hospice providers. The meeting will also address Medicare Advantage program quality. MedPAC’s assessments will be presented to Congress later this year; while the panel’s recommendations are not binding, they often help shape federal policy.

Tags: Health Care Industry Events, ASC, ESRD, HOPPS, Home Health, Hospice, Inpatient Rehabilitation Facilities, Long-term Care Hospital (LTCH), MedPAC, Medicare Advantage, Medicare Spending, Nursing Homes, physician

Posted on December 29, 2010 by Debra A. McCurdy

Delayed Enforcement of Face-to-Face Encounter Requirement for Home Health & Hospice Eligibility Certifications

CMS has announced a delay in enforcement of ACA requirements that a physician have a face-to-face encounter with a patient for purposes of certifying eligibility for Medicare home health services or recertifying hospice eligibility. These requirements were scheduled to apply to home health patients with starts of care on or after January 1, 2011 and hospice recertifications on or after January 1, 2011. Given the agency’s concern that some home health agencies, physicians, and hospices may need additional time to establish operational protocols necessary to comply with this new law, however, CMS states that it expects appropriate documentation of these encounters beginning with the second quarter of 2011.

Tags: Other CMS Developments, Home Health, Hospice, Patient Protection and Affordable Care Act (PPACA)

Posted on December 6, 2010 by Debra A. McCurdy

CMS Open Door Forum on LTCH, IRF, and Hospice Quality Measures (Dec. 16)

On December 16, 2010, CMS is hosting a Special Open Door forum on Section 3004 of the ACA, which directs the Secretary to establish Medicare quality reporting programs for long term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), and hospice programs. Through the listening session, CMS is seeking to understand how provider experience with quality measures can inform the goals for the mandated quality measures. With regard to the timeline, the ACA requires that the quality measures be made available by 2012, with reporting on these measures expected to begin in FY 2013. For FY 2014 and each subsequent year, failure to submit required quality data will result in a 2% reduction in the annual payment update.

Tags: Health Care Industry Events, Hospice, Inpatient Rehabilitation Facilities, Long-term Care Hospital (LTCH), Patient Protection and Affordable Care Act (PPACA), Quality Reporting

Posted on November 29, 2010 by Debra A. McCurdy

MedPAC Meeting on Medicare Payment Adequacy (Dec. 2-3)

On December 2-3, 2010, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss the adequacy of Medicare payment for a variety of services, including hospital (inpatient and outpatient), physician, ambulatory surgical center, outpatient dialysis, hospice, skilled nursing facility, home health, inpatient rehabilitation facility, and long-term care hospital services

Tags: Health Care Industry Events, ASC, ESRD, HOPPS, Home Health, Hospice, Hospital, Inpatient Rehabilitation Facilities, Long-term Care Hospital (LTCH), MedPAC, Medicare Spending, Physician Payments, Skilled Nursing Facilities

Posted on November 16, 2010 by Debra A. McCurdy

Medicare 2011 Home Health PPS Final Rule, Including Home Health/Hospice Certification Provisions

On November 17, 2010, CMS is publishing a final rule updating Medicare home health PPS rates for 2011. CMS estimates that the combined policies of the rule will decrease Medicare payments to home health agencies (HHAs) by $960 million (4.89%) for CY 2011. This reimbursement rate reflects implementation of an ACA provision decreasing the 2011 home health market basket update by 1 percentage point. This results in a 1.1% update for 2011 for HHAs that submit the required quality data; if an HHA does not submit quality data, the market basket increase would be reduced by 2 percentage points to -0.9%. Rates are further impacted by an updated wage index, which is offset by outlier spending reductions mandated by the ACA, along with CMS’s adoption of its proposal to decrease home health PPS rates by 3.79% in 2011 to account for additional growth in aggregate case-mix that is unrelated to changes in patients’ health status (although in response to comments, CMS is not adopting an additional 3.79% case-mix adjustment in 2012 to allow for further analysis). In addition to updating rates, the rule also implements an ACA provision under which, prior to initial certification of a patient’s eligibility for the Medicare home health benefit, the physician must document that the physician or a non-physician practitioner has had a face-to-face encounter with the patient. In response to public comments, CMS has modified the proposed timeframes for the face-to-face encounters and removed proposed requirements concerning the physician’s own medical record documentation, among other refinements. With regard to hospice services, the rule also requires a hospice physician or nurse practitioner to provide a face-to-face encounter prior to the hospice physician re-certifying the patient’s eligibility for hospice services at the 180th day recertification of care and for all subsequent certifications (CMS adopted a series of clarifications and refinements to this proposal in the final rule). The final rule also: adopts exemptions and other clarifications to CMS’s policy requiring HHAs that change ownership within three years of initial enrollment to obtain a new state survey or accreditation; revises requirements for coverage of therapy services in the home health setting (including requirements that qualified therapists perform services and measure and document therapy effectiveness); and updates quality reporting requirements for the 2012 home health PPS rate update.

Tags: Centers for Medicare & Medicaid Services Developments, Home Health, Hospice, Patient Protection and Affordable Care Act (PPACA)

Posted on October 29, 2010 by Debra A. McCurdy

CMS Proposes Medicare/Medicaid Requirements for Long Term Care Facilities Providing Hospice Services

On October 22, 2010, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule that would revise the requirements that an institution must meet to qualify to participate as a skilled nursing facility (SNF) in the Medicare program, or as a nursing facility (NF) in the Medicaid program. Specifically, the rule requires SNFs and NFs that chose to arrange for the provision of hospice care through an agreement with one or more Medicare-certified hospice providers to have in place a written agreement with the hospice that specifies the roles and responsibilities of each entity. The rule also clarifies that if a facility chooses not to arrange for the provision of hospice services at the facility through an agreement with a Medicare-certified hospice, it must assist the resident in transferring to a facility that will arrange for the provision of hospice services when a resident requests a transfer. The comment deadline is December 21, 2010.

Tags: Centers for Medicare & Medicaid Services Developments, Department of Health & Human Services, Hospice, Medicaid, Medicare, Skilled Nursing Facilities

Posted on September 30, 2010 by Debra A. McCurdy

Questionable Billing for Hospice Physician Services

According to a recent OIG report, "Questionable Billing for Physician Services for Hospice Beneficiaries," Medicare made nearly $566,000 in questionable payments for Part B physician services provided to hospice beneficiaries in 2009 (i.e., payment was made to the physician through both Part A and Part B). Specifically, the OIG identified 9,272 questionable Part B claims for physician services provided to hospice beneficiaries in 2009, submitted by 3,116 physicians. In addition, 664 hospices were associated with Part B questionable claims. Six of the 10 physicians and 8 of the 10 hospices associated with the highest questionable Part B payments were in Florida. Although the OIG did not conclude that this problem is widespread, billing for physician services for hospice care is a potential program vulnerability given that Medicare may be billed under Part A and Part B. The OIG will refer the questionable claims to CMS for appropriate action.

Tags: Fraud and Abuse, Hospice, OIG, Office of Inspector General Developments, Physicians

Posted on September 17, 2010 by Debra A. McCurdy

CMS Guidance to States on ACA Hospice Care, Medicaid Coding Provisions

CMS has issued guidance to states on implementation of Section 2302 of the ACA, which allows children who are enrolled in either Medicaid or CHIP to receive hospice services without foregoing curative treatment related to a terminal illness. Likewise, CMS has provided states with guidance on Section 6507 of the ACA, which mandates that states use certain National Correct Coding Initiative (NCCI) methodologies to promote correct coding and control improper coding leading to inappropriate payment of Medicaid claims.

Tags: Coding, Fraud and Abuse, Hospice, PPACA Implementation, Patient Protection and Affordable Care Act (PPACA)

Posted on September 17, 2010 by Debra A. McCurdy

MedPAC Policy Meeting

On September 13 and 14, 2010, MedPAC met to discuss a variety of Medicare policy issues, including the following: the context for Medicare payment policy; Medicare’s shared savings program for accountable care organizations (ACOs); recent changes that affect Medicare beneficiaries’ financial liability; retainer-based physician practice; Medicare’s authority to apply least-costly alternative policies; growth in hospital observation care; the growth of ancillary services in physicians’ offices; and accountability for DME, home health, and hospice services.

Tags: Odds & Ends, Accountable Care Organizations, DMEPOS, Home Health, Hospice, Hospital, MedPAC, Medicare, Medicare Spending, physician

Posted on July 29, 2010 by Debra A. McCurdy

Medicare 2011 Home Health PPS Proposed Rule with Home Health/Hospice Certification Provisions

On July 23, 2010, CMS published a proposed rule updating Medicare home health PPS rates for 2011. CMS estimates that the combined policies of the rule would decrease Medicare payments to home health agencies (HHAs) by $900 million (4.75%) for calendar year (CY) 2011. Among other things, the rule would implement an Affordable Care Act (ACA) provision decreasing the CY 2011 home health market basket update by 1 percentage point. This results in a proposed 1.4% update for CY 2011 for HHAs that submit the required quality data; if an HHA does not submit quality data, the market basket increase would be reduced by 2 percentage points to -0.6%. CMS also proposes to decrease home health PPS rates by 3.79% in CY 2011 (and an additional 3.79% in 2012) to account for additional growth in aggregate case-mix that is unrelated to changes in patients’ health status, along with further reduction in rates under an ACA outlier policy. In addition to updating rates, the proposed rule would implement an ACA provision under which, prior to certifying a patient’s eligibility for the Medicare home health or hospice benefit, the physician must document that the physician or a non-physician practitioner has had a face-to-face encounter with the patient. CMS also proposes exemptions and other clarifications to its policy requiring HHAs that change ownership within three years of initial enrollment to obtain a new state survey or accreditation, along with changes impacting the coverage of therapy services in the home health setting. CMS is accepting comments on the proposed rule until September 14, 2010.

Tags: Centers for Medicare & Medicaid Services Developments, Home Health, Hospice, Medicare, Patient Protection and Affordable Care Act (PPACA)

Posted on July 29, 2010 by Debra A. McCurdy

FY 2011 Hospice Wage Index Notice, Transmittal

CMS published a notice with comment period on July 22, 2010 announcing the annual update to the hospice wage index for FY 2011. Under the notice, Medicare hospice rates increase by 1.8% overall, reflecting a 2.6% market basket increase partially offset by an 0.8% decrease due to updated wage index data and the second year of CMS’s seven-year phase-out of its wage index budget neutrality adjustment factor (BNAF). The notice is effective October 1, 2010; CMS will accept comments on the notice until September 20, 2010. In a related development, CMS has released a transmittal to contractors announcing FY 2011 hospice payment rates, the hospice aggregate cap amount, and the hospice wage index.

Tags: Centers for Medicare & Medicaid Services Developments, Hospice, Medicare

Posted on June 4, 2010 by Debra A. McCurdy

CMS Calls on Medicare Provider/Supplier Vulnerabilities (June 7, 8, & 9)

CMS has announced a series of “outreach listening sessions” to focus on vulnerabilities identified in previously-released OIG reports pertaining to DME claims, chiropractic services, ultrasound billing, hospice care, nursing home stays, psychiatric facilities, and other providers.

The first call is scheduled for Monday, June 7, 2010 and will concentrate on pressure reducing support surfaces, wheelchairs, and negative pressure wound therapy pumps.
A June 8 call will address chiropractic services, Medicare Part B billing for ultrasound, and hospice care services.
A June 9 call will focus on DME provided in nursing homes, inpatient psychiatric facilities, and physician place of service coding.

On each call, CMS Contractor Medical Directors will identify common themes and billing errors “to educate on ways provider and supplier behaviors can be changed to ensure full compliance with Medicare policy, billing instructions and medical review guidance.”

Tags: Health Care Industry Events, DMEPOS, Fraud and Abuse, Hospice, Physicians, Psychiatric Facilities, Radiology, Skilled Nursing Facilities

Posted on April 16, 2010 by Debra A. McCurdy

CMS Announces Series of "RAC 101" Calls

CMS is hosting a series of “Nationwide RAC 101 Calls” to educate providers on the Recovery Audit Contractor (RAC) program. The following calls are scheduled: an April 28, 2010 general call; a May 4 call for home health and hospice providers; a May 5 call for DMEPOS suppliers; and a May 12 call for physicians.

Tags: Health Care Industry Events, DMEPOS, Fraud and Abuse, Home Health, Hospice, Physicians

Posted on March 15, 2010 by Debra A. McCurdy

Unimplemented OIG Recommendations

On March 11, 2010, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) published its “2010 Compendium of Unimplemented Office of Inspector General Recommendations,” which outlines previous OIG recommendations designed to achieve savings and increase the effectiveness of HHS programs. The OIG highlights priority recommendations in a number of areas, including (among others): hospital bad debt payments; processing of remedies associated with noncompliant nursing homes; hospice claims for nursing facility beneficiaries; medical equipment supplier compliance with Medicare enrollment standards; Medicare payments for oxygen and inhalation drugs; Medicare payments to Medicare Advantage (MA) organizations; Medicare Part D drug plan payments and program integrity safeguards; Medicaid prescription drug reimbursement and rebate calculations; and oversight of clinical investigator and NIH grantee conflicts of interest.

Tags: Other OIG Developments, Conflicts of Interest, DMEPOS, Fraud and Abuse, Hospice, Hospital, Medicare Advantage, Medicare Part D Drugs, Skilled Nursing Facilities

Posted on January 27, 2010 by Debra A. McCurdy

CMS Transmittal Highlights Program Integrity Issues for Medicare Contractors

On January 15, 2010, CMS issued a transmittal on “Various OIG Reports that have Medical Review Implications.” The transmittal instructs Medicare contractors to take steps to strengthen program safeguards to prevent improper payment in areas identified by the HHS Office of Inspector General (OIG). Specifically, reports highlighted by CMS address negative pressure wound therapy pumps, ambulance transportation for skilled nursing facility residents, pressure reducing support surfaces, and hospice services. CMS instructs contractors to use the information contained in the OIG reports and follow the processes and procedures already in the Medicare Program Integrity Manual concerning data analysis, contractor strategies, and the progressive corrective action process.

Tags: Other CMS Developments, DMEPOS, Fraud and Abuse, Hospice, OIG, Skilled Nursing Facilities

Posted on September 28, 2009 by Debra A. McCurdy

Medicare Hospice Guidance

On September 18, 2009, CMS sent a letter to State Survey Agency Directors transmitting an advance copy of the hospice sections of Hospice State Operations Manual, including revised interpretive guidance related to revised hospice conditions of participation that went into effect in December 2008.

Tags: Other CMS Developments, Hospice

Posted on September 28, 2009 by Debra A. McCurdy

Medicare Hospice Care for Beneficiaries in Nursing Facilities

The OIG has issued two reports regarding Medicare hospice services for beneficiaries in nursing facilities based on a sample of 2006 claims. The first report concentrates on Medicare coverage requirements for hospice services in nursing facilities. Based on its review, the OIG concludes that 82% of hospice claims for beneficiaries in nursing facilities did not meet at least one Medicare coverage requirement, and Medicare paid approximately $1.8 billion for these claims. The OIG recommends that CMS provide more education and guidance to hospices and strengthen monitoring in this area. The second report outlines the types and frequency of hospice services provided to beneficiaries residing in nursing facilities.

Tags: Other OIG Developments, Fraud and Abuse, Hospice, Skilled Nursing Facilities

Posted on August 3, 2009 by Debra A. McCurdy

Hospice Wage Index Final Rule

CMS has released its final FY 2010 Medicare hospice wage index rule, which will increase hospice rates by 1.4% in FY 2010, compared to CMS’s earlier proposed rule which would have decreased rates by 1.1%. The rate increase reflects a 2.1% increase in the hospital market basket, offset by a 0.7% decrease resulting from the phase out of the hospice wage index budget neutrality adjustment factor (BNAF). In a change from the proposed rule, CMS is phasing out the BNAF reduction over 7 years, with a 10% BNAF reduction in FY 2010 and successive 15% reductions from FY 2011 through FY 2016. CMS notes that “[t]his more gradual phase-out provides opportunity for CMS to consider the effects of a reduction in payments in the context of hospice payment reform, which is under consideration.” The rule also will, among other things, revise the process for certification and recertification of terminal illness by requiring physicians to provide a brief narrative explanation to support a patient’s life expectancy of 6 months or less. The rule is effective October 1, 2009. The official version of the rule will be published August 6, 2009.

Tags: Centers for Medicare & Medicaid Services Developments, Hospice

Posted on April 24, 2009 by Debra A. McCurdy

Medicare Hospice Policy Proposed Rule

On April 24, 2009, CMS published its proposed FY 2010 Medicare hospice wage index rule. The proposed rule would continue the phase-out of the wage index budget neutrality adjustment factor (BNAF), which will conclude in 2011. It also would revise the process for certification and recertification of terminal illness by requiring a brief narrative explanation of the clinical findings that support a life expectancy of 6 months or less. In addition, CMS is requesting comments on requiring recertification visits by physicians or advanced practice nurses (e.g., nurse practitioners), and on issues of payment reform for use in possible future policy development. The proposed rule also would make several technical and clarifying changes to the current hospice regulations. CMS estimates that total Medicare hospice payments for FY 2010 will decrease by $340 million as a result of the application of the reduction in the BNAF and the updated wage data. This estimate does not take into account a hospital market basket update, however, which is currently estimated to be about 2.1% for FY 2010, and which would result in a $240 million increase in payments to hospices. The combined impact of the market basket update, the BNAF reduction, and the updated wage data is expected to decrease Medicare hospice payments by a total of $100 million in FY 2010. CMS will accept comments on the rule until June 22, 2009.

Tags: Centers for Medicare & Medicaid Services Developments, Hospice

Posted on February 27, 2009 by Debra A. McCurdy

MedPAC Report to Congress -- Medicare Payment/Transparency Provisions

On February 27, 2009, MedPAC released its March 2009 Report to the Congress: Medicare Payment Policy. The report includes a series of recommendations for Medicare payments designed to assure beneficiaries’ access to care and preserve Medicare’s long-term sustainability, particularly through reductions in payment updates for 2010. The report also includes recommendations to increase transparency of physician financial relationships. A listing of key recommendations follows after the jump.

Hospitals

The Congress should increase payment rates for the acute inpatient and outpatient prospective payment systems in 2010 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.
The Congress should reduce the indirect medical education adjustment (IME) in 2010 by 1 percentage point to 4.5 percent per 10 percent increment in the resident-to-bed ratio. The funds obtained by reducing the IME adjustment should be used to fund a quality incentive payment program.

Physicians and Ambulatory Surgical Centers

The Congress should update payments for physician services in 2010 by 1.1 percent.
The Congress should establish a budget-neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary-care-focused practitioners. Primary-care-focused practitioners are those whose specialty designation is defined as primary care and/or those whose pattern of claims meets a minimum threshold of furnishing primary care services. The Secretary would use rulemaking to establish criteria for determining a primary-care-focused practitioner.
The Congress should direct the Secretary to increase the equipment use standard for expensive imaging machines from 25 to 45 hours per week. This change should redistribute RVUs from expensive imaging to other physician services.
The Congress should increase payments for ambulatory surgical centers (ASC) services in calendar year 2010 by 0.6 percent. In addition, the Congress should require ASCs to submit to the Secretary cost data and quality data that will allow for an effective evaluation of the adequacy of ASC payment rates.

Dialysis Services

The Congress should maintain current law and update the composite rate in calendar year 2010 by 1 percent.

Skilled Nursing Facility Services

The Congress should eliminate the update to payment rates for skilled nursing facility services for fiscal year 2010.
The Congress should require the Secretary to revise the skilled nursing facility (SNF) prospective payment system by: adding a separate nontherapy ancillary (NTA) component, replacing the therapy component with one that establishes payments based on predicted patient care needs, and adopting an outlier policy.
The Secretary should direct SNFs to report more accurate diagnostic and service-use information by requiring that: claims include detailed diagnosis information and dates of service, services furnished since admission to the SNF be recorded separately in the patient assessment, and SNFs report their nursing costs in the Medicare cost report.
The Congress should establish a quality incentive payment policy for SNFs in Medicare and to improve quality measurement for SNFs, the Secretary should: add the risk-adjusted rates of potentially avoidable rehospitalizations and community discharge to its publicly reported post-acute care quality measures; revise the pain, pressure ulcer, and delirium measures currently reported on CMS’s Nursing Home Compare website; and require SNFs to conduct patient assessments at admission and discharge.

Home Health Services

The Congress should eliminate the market basket increase for 2010 and advance the planned reductions for coding adjustments in 2011 to 2010, so that payments in 2010 are reduced by 5.5 percent from 2009 levels.
The Congress should direct the Secretary to re-base rates for home health care services in 2011 to reflect the average cost of providing care.
The Congress should direct the Secretary to assess payment measures that protect the quality of care and ensure incentives for the efficient delivery of home health care. The study should include alternative payment strategies such as blended payments and risk corridors and outcome-based quality incentives.

Inpatient Rehabilitation Facilities

The update to the payment rates for inpatient rehabilitation services should be eliminated for fiscal year 2010.

Long-Term Care Hospitals

The Secretary should update payment rates for long-term care hospitals for fiscal year 2010 by the projected rate of increase in the rehabilitation, psychiatric and long-term care hospital (RPL) market basket index less the Commission’s adjustment for productivity growth.

Recommendations on Medicare Advantage Payments

The Congress should: Eliminate the stabilization fund for regional PPOs. Remove the effect of payments for indirect medical education from the MA plan benchmarks. Set the benchmarks that CMS uses to evaluate MA plan bids at 100 percent of FFS costs. Pay-for-performance should apply in MA to reward plans that provide higher quality care. Clarify that regional plans should submit bids that are standardized for the region’s MA-eligible population.
The Secretary should calculate clinical measures for the FFS program that would permit CMS to compare the FFS program with MA plans.

Recommendations on Public Reporting of Physician Financial Relationships

The Congress should require all manufacturers and distributors of drugs, biologicals, medical devices, and medical supplies (and their subsidiaries) to report to the Secretary their financial relationships with: physicians, physician groups, and other prescribers; pharmacies and pharmacists; health plans, pharmacy benefit managers, and their employees; hospitals and medical schools; organizations that sponsor continuing medical education; patient organizations; and professional organizations.
The Congress should direct the Secretary to post the information submitted by manufacturers on a public website in a format that is searchable by: manufacturer; recipient’s name, location, and specialty (if applicable); type of payment; name of the related drug or device (if applicable); and year.
The Congress should require manufacturers and distributors of drugs to report to the Secretary the following information about drug samples: each recipient’s name and business address; the name, dosage, and number of units of each sample; and the date of distribution. The Secretary should make this information available through data use agreements.
The Congress should require all hospitals and other entities that bill Medicare for services to annually report the ownership share of each physician who directly or indirectly owns an interest in the entity (excluding publicly traded corporations). The Secretary should post this information on a searchable public website.
The Congress should require the Secretary to submit a report, based on the Disclosure of Financial Relationships Report, of the types and prevalence of financial arrangements between hospitals and physicians.

Recommendations on Reforming the Hospice Benefit

The Congress should direct the Secretary to change the Medicare payment system for hospice to: have relatively higher payments per day at the beginning of the episode and relatively lower payments per day as the length of the episode increases; include a relatively higher payment for the costs associated with patient death at the end of the episode; and implement the payment system changes in 2013, with a brief transitional period. These payment system changes should be implemented in a budget neutral manner in the first year.
The Congress should direct the Secretary to: require that a hospice physician or advanced practice nurse visit the patient to determine continued eligibility prior to the 180th-day recertification and each subsequent recertification and attest that such visits took place, require that certifications and recertifications include a brief narrative describing the clinical basis for the patient’s prognosis, and require that all stays in excess of 180 days be medically reviewed for hospices for which stays exceeding 180 days make up 40 percent or more of their total cases.
The Secretary should direct the Office of Inspector General to investigate: the prevalence of financial relationships between hospices and long-term care facilities such as nursing facilities and assisted living facilities that may represent a conflict of interest and influence admissions to hospice, differences in patterns of nursing home referrals to hospice, the appropriateness of enrollment practices for hospices with unusual utilization patterns (e.g., high frequency of very long stays, very short stays, or enrollment of patients discharged from other hospices), and the appropriateness of hospice marketing materials and other admissions practices and potential correlations between length of stay and deficiencies in marketing or admissions practices.
The Secretary should collect additional data on hospice care and improve the quality of all data collected to facilitate the management of the hospice benefit. Additional data could be collected from claims as a condition of payment and from hospice cost reports.

Tags: Odds & Ends, ASC, Conflicts of Interest, Drugs, ESRD, HOPPS, Home Health, Hospice, Hospital, Hospital Ownership, Inpatient Rehabilitation Facilities, Inpatient hospital, LTAC, Medicare Advantage, Physician Ownership, Physicians, Skilled Nursing Facilities, Specialty Hospitals

Posted on February 11, 2009 by Debra A. McCurdy

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.

Tags: Other CMS Developments, Clinical Laboratories, Home Health, Hospice

Posted on January 12, 2009 by Debra A. McCurdy

Hospice Survey Guidance

CMS has posted an advance copy of updated Hospice Interpretive Guidance, which are used by state survey agencies to assess hospices' compliance with federal conditions of participation.

Tags: Other CMS Developments, Hospice

Posted on November 3, 2008 by Debra A. McCurdy

MedPAC Meeting

On November 6 and 7, 2008, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss a number of health care policy issues, including reporting of physicians’ financial relationships, medical imaging services, the Medicare Part D and Medicare Advantage programs, hospice payments, and physician resource use.

Tags: Health Care Industry Events, Hospice, MedPAC, Medicare Advantage, Medicare Part D Drugs, Physician Payments, Radiology

Posted on August 14, 2008 by Debra A. McCurdy

Medicare Hospice Wage Index

On August 8, 2008, CMS published a final rule updating the Medicare hospice wage index for FY 2009. CMS is adopting a 3.6% inflation update for hospices in FY 2009, but this increase is partially offset by a 1.1% decrease in payments in FY 2009 resulting from a phase-out of the hospice wage index budget neutrality adjustment factor (BNAF). Specifically, CMS is phasing out the BNAF over three years, beginning with a 25% reduction in FY 2009, an additional 50% reduction (for a total of a 75% reduction) in FY 2010, and a complete elimination in FY 2011. CMS estimates that phasing-out this adjustment will reduce Medicare hospice spending by $2.18 billion over five years. In addition, the final rule clarifies two wage index issues pertaining to the definition of rural and urban areas and multi-campus hospital facilities. The rule is effective October 1, 2008.

Tags: Regulatory Developments, Centers for Medicare & Medicaid Services Developments, Hospice, Medicare

Posted on June 19, 2008 by Debra A. McCurdy

MedPAC Report on Medicare Delivery System

On June 13, 2008, the Medicare Payment Advisory Commission (MedPAC) released its June 2008 report to the Congress on "Reforming the Delivery System." MedPAC discusses a variety of payment and delivery reforms to improve Medicare quality, coordinate care, and reduce cost growth.

Major recommendations include the following:

Primary Care -- MedPAC recommends a budget-neutral adjustment that increases fee schedule payments for primary care services furnished by clinicians focused on delivering primary care. It also proposes establishing a Medicare "medical home" coordinated care pilot program
Resource Use Around a Hospitalization -- MedPAC recommends several changes in Medicare payment for care provided around a hospitalization (e.g., inpatient stay plus 30 days postdischarge) to encourage care coordination and efficiency. First, the Secretary should confidentially report to hospitals and physicians information about resource use around a hospitalization and readmission rates, followed by public reporting of the data in two years. Medicare also should reduce payments to hospitals with relatively high readmission rates for select conditions while allowing hospitals and physicians to share in the savings that result from providing care more efficiently. MedPAC also recommends that CMS conduct a voluntary pilot program to test bundled payment for all services around a hospitalization for select conditions.
Skilled Nursing Facilities -- MedPAC recommends revising the SNF prospective payment system (PPS) to incorporate a nontherapy ancillary payment component, a therapy payment component, and an outlier policy based on exceptionally high ancillary costs per stay. MedPAC also recommends that CMS require SNFs to report on patient diagnoses, service use during the SNF stay, and nursing costs. MedPAC concurrently released a contractor report prepared by staff from the Urban Institute on "Model Alternative Designs for a Revised PPS".
Cost-Effectiveness -- MedPAC examines issues associated with creating a comparative effectiveness entity, including issues related to the structure and governance of the entity. MedPAC endorses a dedicated, broad-based, public and private financing mechanism.
Physician-Manufacturer/ASC Relationships -- MedPAC examines options for collecting data on physicians’ financial relationships with manufacturers, hospitals, and ambulatory surgical centers.
Hospice -- MedPAC observes that Medicare hospice spending increases have been largely driven by more beneficiaries using the hospice benefit and increases in hospice length of stay, in part due to incentives in Medicare’s hospice payment system that financially reward longer lengths of stay. Overall, Medicare payments to hospices appear adequate, but MedPAC found that this assessment masks considerable variation. In 2005, nonprofit and provider-based hospices had small negative margins, while for-profit and freestanding hospices had large positive margins.

While MedPAC’s recommendations are not binding on Congress, lawmakers often consider MedPAC’s advice as they develop Medicare policy.

Tags: Odds & Ends, Cost Effectiveness, Hospice, Hospital, MedPAC, Medicare, Skilled Nursing Facilities

Posted on June 3, 2008 by Debra A. McCurdy

Hospice Conditions of Participation

On June 5, 2008, the Centers for Medicare & Medicaid Services (CMS) published a final rule making extensive revisions to the conditions of participation (CoPs) that hospices must meet to participate in the Medicare and Medicaid programs. Most notably, the rule requires hospices to implement “an effective, ongoing, hospice-wide data-driven quality assessment and performance improvement (QAPI) program.” Rather than prescribing the precise areas or mechanisms to include in such an assessment, the rule states that “each hospice is free to decide how to implement the QAPI requirement in a manner that reflects its own unique needs and goals." The rule also revises CoP provisions related to patients’ rights; patient assessments; and interdisciplinary group (IDG), care planning, and coordination of services. In addition, the rule would modify a number of staffing policies, such as by requiring the physician member of the IDG and the medical director to be an employee of or under contract with the hospice, and permitting nurse practitioners to provide services to beneficiaries receiving hospice care if state law permits. Moreover, the rule clarifies a hospice’s responsibility for care furnished to hospice patients who reside in a nursing facility. The text of the rule is posted here. The rule is effective December 2, 2008. In a related development, CMS has announced that the hospice aggregate cap amount for the 2008 cap year is $22,386.15, and it has provided new guidance on signature requirements in the Medicare hospice benefit. Both documents are posted here.

Tags: Regulatory Developments, Centers for Medicare & Medicaid Services Developments, Hospice