Posted on January 27, 2010 by Debra A. McCurdy

MedPAC Votes on 2011 Medicare Provider Update Recommendations

The Medicare Payment Advisory Commission (MedPAC) recently voted on recommendations it will make to Congress regarding Medicare payment updates for 2011. At the meeting, MedPAC voted to recommend increasing acute inpatient and outpatient prospective payment system reimbursement in 2011 by the projected rate of increase in the hospital market basket index (MBI). This rate increase would be coupled with implementation of a quality incentive payment program, along with an offset in 2011 through 2013 to recover payments attributable to hospital documentation and coding improvements. MedPAC also recommends that Congress increase payments for physician services in 2011 by 1.0%. For ambulatory surgical centers (ASCs), MedPAC recommends a 0.6% increase in rates, together with a requirement that ASCs to submit cost and quality data. MedPAC recommends updating the end stage renal disease (ESRD) composite rate by the ESRD MBI increase minus a productivity growth adjustment. MedPAC approved a series of recommendations regarding home health services, including elimination of the inflation update for 2011, rebasing of home health rates with provisions to protect quality of care, development of quality outcomes measures, and implementation of certain program integrity safeguards. With regard to other post-acute services, MedPAC recommends no payment update in 2011 for skilled nursing facilities, inpatient rehabilitation facilities, or long-term care hospitals. MedPAC also recommends updating hospice rates by the projected MBI for 2011, minus an adjustment for productivity gains. These recommendations will be included in MedPAC's March 2010 report to Congress. While the recommendations are not binding, MedPAC’s assessments often help shape federal policy. 

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Posted on December 4, 2009 by Debra A. McCurdy

CMS Meetings on Applications for IPPS/OPPS New Medical Service/Technology Payments (Feb. 10)

CMS is hosting a town hall meeting on February 10, 2010 to discuss FY 2011 applications for add-on payments for new medical services and technologies under the hospital inpatient prospective payment system (IPPS).  Also on February 10, CMS is hosting a workshop on the application process and criteria for new medical services and technologies under the IPPS and on the outpatient prospective payment system (OPPS) transitional pass-through payment for drugs, biologicals, and devices and new technology Ambulatory Payment Classification assignment for new services application processes.

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Posted on October 15, 2009 by Debra A. McCurdy

IPPS/LTCH PPS/IRF PPS Correction Notices

On October 7, 2009, CMS published a notice correcting typographical and technical errors in its August 27, 2009 final rule updating 2010 Medicare payment rates and policies for the acute hospital inpatient prospective payment system (IPPS) and the long-term care hospital (LTCH) PPS. CMS published a separate document on October 1, 2009 correcting technical errors in its August 7, 2009 final rule updating Medicare inpatient rehabilitation facility (IRF) PPS payments for FY 2010.

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Posted on August 4, 2009 by Debra A. McCurdy

Medicare Final FY 2010 Inpatient PPS Proposed Rule

On July 31, 2009, the Centers for Medicare & Medicaid Services (CMS) released its final fiscal year (FY) 2010 Medicare policies and payment rates for acute inpatient prospective payment system (IPPS) hospitals. The rule reflects a 2.1% market basket update, derived using a rebased and revised market basket. In order to receive the full market basket update, hospitals must successfully participate in the Hospital Quality Data for Annual Payment Update (RHQDAPU) program; hospitals that do not participate in the quality reporting program will get the update less 2 percentage points. In a significant change from the proposed rule, CMS has decided not to implement a negative 1.9% across-the-board budget neutrality adjustment to compensate for higher aggregate payments resulting from changes in hospital coding practices associated with the new Medicare Severity Diagnosis-Related Groups (MS-DRGs) patient classification system that do not, in CMS' view, reflect increases in patient acuity. Based on public comments, CMS has decided not to make the adjustment in FY 2010 without complete data on FY 2009 spending, but the agency will consider phasing in future adjustments over an extended period beginning in FY 2011 depending on further data analysis. CMS also is not making any policy changes related to MS-DRG relative weights in FY 2010. Among other things, the final rule also: adds four new measures for reporting under the RHQDAPU program; increases the outlier threshold to $23,140 (compared to $24,240 in the proposed rule), provides teaching hospitals with the full capital indirect medical education adjustment in FY 2010 (instead of finalizing CMS’s proposal to phase out the adjustment); establishes a 68.8% labor-related share for FY 2010; adjusts payment for disproportionate share hospitals, modifies regulations regarding the waiver of Emergency Medical Treatment and Labor Act (EMTALA) sanctions during an emergency; continues implementation of wage index adjustments; clarifies the definition of a new medical residency training program; implements a number of revisions to critical access hospital policies; and finalizes MS-DRG reassignments for certain orthopedic procedures. The final rule also provides an update on the status of five applications for new technology add-on payments discussed in the proposed rule, three of which were subsequently withdrawn. CMS approved the Spiration® IBV® Valve System for new technology payment of up to $3,437.50 per case because the technology represents a new treatment option for patients with prolonged air leaks following certain lung surgeries and may prevent some patients from having to undergo another invasive lung surgery to resolve the air leak. CMS did not approve the LipiScan™ Coronary Imaging System for new technology add-on payment because CMS determined there was not sufficient available evidence to demonstrate that the technology represents a substantial clinical improvement relative to existing technologies. As discussed below, the IPPS rule also includes changes to the long-term care hospital (LTCH) payment policies. The rule is scheduled to be published in the Federal Register on August 27, 2009, and it generally is effective October 1, 2009.

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Posted on May 8, 2009 by Debra A. McCurdy

Medicare Inpatient PPS Proposed Rule

On May 1, 2009, the Centers for Medicare & Medicaid Services (CMS) released its proposed FY 2010 Medicare policies and payment rates for acute inpatient prospective payment system (IPPS) hospitals. CMS proposes a 2.1% market basket update, derived using a proposed rebased and revised market basket update based on data from FY 2006 (rather than FY 2002). However, that inflation increase would be offset largely by a negative 1.9% across-the-board budget neutrality adjustment to compensate for higher aggregate payments resulting from changes in hospital coding practices associated with the new Medicare Severity Diagnosis-Related Groups (MS-DRGs) patient classification system that do not, in CMS' view, reflect increases in patient acuity. Overall, the policy and payment changes in the rule is expected to decrease average IPPS payments by 0.5%. CMS notes that the proposed 1.9% budget neutrality reduction does not fully offset higher payments since the MS-DRG system was adopted in FY 2008. Based on current estimates, CMS expects that total adjustments of approximately 8.5% eventually will need to be made, which would require additional cuts totaling approximately 6.6% in FY 2011 and FY 2012.  CMS is requesting public comment on the magnitude of the adjustment for FY 2010. In other provisions of the rule, CMS continues to link the inflation update to the reporting of quality measures. Specifically, hospitals that successfully report the 2010 quality measures included in the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program will get the full market basket update, while hospitals that do not participate in the quality reporting program will get the update less 2 percentage points. The proposed rule adds four new measures for reporting under the RHQDAPU program. Moreover, the proposed rule increases the outlier threshold to $24,240, includes payment adjustments affecting teaching hospitals and disproportionate share hospitals, clarifies the Emergency Medical Treatment and Labor Act (EMTALA) regulations, and discusses five applications for new technology add-on payments. The IPPS rule also includes changes to the long-term care hospital (LTCH) payment policies. The rule is scheduled to be published in the Federal Register on May 22, 2009. Comments on the proposed rule are due by June 30, 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 December 31, 2008 by Debra A. McCurdy

Corrections to Final 2009 Medicare Physician Fee Schedule, Inpatient Hospital Rules

On December 31, 2008, CMS published a notice correcting a number of technical and typographical errors in the November 19, 2008 final Medicare physician fee schedule rule for calendar year 2009. In addition, on December 30, 2008, CMS published a notice correcting certain wage data included in the October 3, 2008 final FY 2009 Medicare hospital inpatient prospective payment system rule. 

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Posted on December 8, 2008 by Debra A. McCurdy

Proposed Non-Coverage of "Never Events"

On December 2, 2008, CMS proposed three national coverage determinations (NCDs) to deny Medicare coverage of certain types of serious, preventable surgical errors. Specifically, under the proposed NCDs, Medicare would not cover: (1) wrong surgical or other invasive procedures performed on a patient; (2) surgical or other invasive procedures performed on the wrong body part; or (3) surgical or other invasive procedures performed on the wrong patient. The coverage policy is intended to complement CMS’s hospital-acquired conditions policy, under which Medicare will not make higher payments to hospitals for care associated with certain reasonably-preventable conditions unless the condition were reported as present on admission. CMS will accept comments on the proposed coverage policies until January 1, 2009.  

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Posted on December 6, 2008 by Debra A. McCurdy

Medicare Inpatient Hospital Payments/Wage Index Changes & Reclassifications

On December 3, 2008, CMS issued FY 2009 hospital wage index changes to implement Section 124 of the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA). The notice contains revised final wage indices and hospital reclassifications for 27 hospitals and are applicable for discharges beginning October 1, 2008. 

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Posted on November 24, 2008 by Debra A. McCurdy

FY 2010 IPPS New Technology Meeting - Feb. 17, 2009

On February 17, 2009, CMS is hosting a town hall meeting to discuss FY 2010 applications for add-on payments for new medical services and technologies under the Medicare hospital inpatient prospective payment system (IPPS).

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Posted on November 20, 2008 by Debra A. McCurdy

Baucus/Grassley Hospital Value-Based Purchasing Legislation -- Comment Opportunity

On November 19, 2008, Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley released a discussion draft of legislation that would establish a value-based purchasing program for Medicare inpatient hospital care. Under the plan, Medicare payments would be linked to hospital performance -- rather than just reporting -- on certain quality measures. The initial performance measures focus on treatment of heart attacks, heart failure, pneumonia, and surgical care. The budget-neutral plan would be phased in over five years, beginning in FY 2012, with full implementation beginning in FY 2016. Comments on the draft will be accepted through December 15, 2008. 

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Posted on October 30, 2008 by Debra A. McCurdy

Listening Session on Hospital-Acquired Conditions

On December 18, 2008, CMS and the Centers for Disease Control and Prevention are holding a listening session to solicit informal comments on hospital-acquired conditions and hospital outpatient healthcare-associated conditions in preparation for the fiscal year 2010 inpatient prospective payment systems and calendar year 2010 OPPS rulemaking processes. Hospitals, hospital associations, representatives of consumer purchasers, payors of health care services, and other interested parties are invited to attend and make comments in person or in writing. It also will be possible to listen to the session by teleconference. Registration is required.

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Posted on October 7, 2008 by Debra A. McCurdy

Revised FY 2008 Medicare Hospital Inpatient PPS Rates Released

On October 3, 2008, CMS published a notice updating the final Medicare hospital inpatient prospective payment system (IPPS) wage indices, hospital reclassifications, payment rates, and other tables for fiscal year (FY) 2009, which began October 1, 2008. The data reflects the extension of the expiration date for certain geographic reclassifications and special exception wage indices as required by the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA). In a related development, CMS published a separate notice correcting a series of technical and typographical errors that appeared in August 19, 2008 IPPS final rule, including corrections of regulatory language related to physician self-referral provisions.

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Posted on October 7, 2008 by Debra A. McCurdy

Hospital Quality Reporting in Hurricane Areas

CMS has announced that because of the impact of recent hurricanes, it will grant a data submission waiver to IPPS hospitals in selected counties of Louisiana and Texas that are unable to meet the submission of quality data requirements for the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) for FY 2010. Hospitals that have questions about this process should contact their local Quality Improvement Organization.

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Posted on October 7, 2008 by Debra A. McCurdy

Hospital-Associated Infections

The GAO has issued a report entitled “Health-Care-Associated (HAI) Infections in Hospitals:  An Overview of State Reporting Programs and Individual Hospital Initiatives to Reduce Certain Infections." The report looks at (1) the design and implementation of state HAI public reporting systems, (2) hospital initiatives to reduce MRSA infections, and (3) the experience of certain early-adopting hospitals in overcoming challenges to implement such initiatives. 

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Posted on September 10, 2008 by Debra A. McCurdy

IPPS New Technology Applications

CMS has posted the fiscal year 2010 Medicare inpatient prospective payment system (IPPS) new technology application on its website. The deadline for FY 2010 applications is November 17, 2008.

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