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.

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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.

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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.”

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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. 

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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. 

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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.

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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.

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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.

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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.

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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. 

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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.
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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.  

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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.

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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. 

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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.

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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.
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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. 

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