CMS has posted the 2015 Medicare Star Ratings for Medicare Advantage (MA) and Medicare Part D prescription drug plans (PDPs). According to a CMS fact sheet, there are increases in the number of Medicare beneficiaries in high-performing MA plans and PDPs for 2015, while CMS notes “dramatic improvement” among plans that had received the low performing icon in 2014. CMS also is interested in receiving information from the public regarding potential data differences in MA and Part D quality measurements for dual-eligible versus non-dual-eligible enrollees. Information is due November 3, 2014. Finally, CMS has released the MA and PDP annual audit and enforcement report for 2013. According to the report, CMS imposed 43 CMPs totaling almost $8.4 million on 39 different organizations and 5 cases of immediate suspension of enrollment and marketing activities for issues identified in 2012 and 2013. Most violations cited in enforcement actions related to inappropriate delays or denials of access to health services and medications for enrollees.
Reed Smith Client Alert: Analysis of HHS OIG Proposed Rule to Amend the Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing Regulations
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has published a major proposed rule that would amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty rules to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the AKS. Reed Smith has prepared a Client Alert analyzing the proposed rule, highlighting areas where the OIG is seeking public comment. Overall, the OIG appears to recognize that new health care delivery mechanisms demand a more flexible approach to fraud and abuse enforcement than has been the case in the past, as discussed in our analysis.
The Client Alert is available here.
In a recent report, the OIG concluded that Medicare would have saved millions of dollars in 2011 if Medicare Part B prescription drug dispensing and supplying fees had been aligned with the rates paid by Medicare Part D plans or state Medicaid programs. Specifically, if Part B dispensing and supplying fees had been the same as average Part D rates in 2011, Part B would have saved $110.9 million, while use of average state Medicaid rates would have saved $106.3 million. The OIG recommended that CMS issue regulations to decrease Part B dispensing and supplying fees to rates similar to those of other payers, such as Part D and Medicaid. CMS did not concur with the OIG’s recommendation, and requested that the OIG study actual costs associated with dispensing these Part B drugs. For additionl information, see the full report, “Medicare Part B Prescription Drug Dispensing and Supplying Fee Payment Rates Are Considerably Higher than the Rates Paid by Other Government Programs."
MedPAC is meeting on October 9 and 10, 2014 to discuss a variety of Medicare policy issues, including: international comparison of rates paid to hospitals; sharing risk in Medicare Part D; potentially inappropriate opioid use in Medicare Part D; the next generation of Medicare beneficiaries; private-sector initiatives to manage post-acute care; and validating relative value units in Medicare’s fee schedule for physicians and other health professionals.
CMS Seeks Input on Potential Delivery Innovations in Medicare Part D, Medicare Advantage, & Other Programs
CMS is seeking input on initiatives to test care delivery innovations in the Medicare Part D program, Medicare and Medicaid managed care plans, and other government programs. CMS notes that while “[h]ealth plans increasingly have responded to market developments and fiscal pressures with innovations in care delivery, plan design, beneficiary and provider incentives, and network design,” adoption of such innovations has been more limited in stand-alone Medicare Prescription Drug Plans (PDP), Medicare Advantage (MA) and Medicare Advantage Prescription Drug plans (MA-PD), Medicaid managed care plans, Medigap plans, and Retiree Supplemental health plans. CMS therefore is seeking responses to a request for information (RFI) on potential of models to test innovations in these plans related to: (1) plan design, (2) care delivery, (3) beneficiary and provider incentives; and/or (4) network design.
For instance, with respect to drug plans, CMS is considering a PDP model that will test the impact of “robust medication therapy management programs and cost sharing differentials that effectively target Part D beneficiaries and will better coordinate care, manage health care costs, and improve outcomes.” CMS is likewise exploring potential initiatives to collaborate with Medigap and Retiree Supplemental plans on models to manage the care of complex, high-cost beneficiaries. CMS also may explore innovations in MA and MA-PD health plan design for Medicare beneficiaries, including:
- Value-based insurance design to incentivize beneficiaries with specific health conditions to use high-value health care services and/or providers;
- Inclusion of remote access technologies beyond what is covered by original Medicare; and
- Integration of hospice care benefits concurrently with curative care in the basic benefit package.
CMS points out that testing such models will require collaboration with health plans, states, and other stakeholders. Comments will be accepted on the RFI until November 3, 2014. The RFI does not commit CMS to contracting or making a grant award in this area.
OIG Releases Proposed Revisions to Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing
The OIG has just released a major proposed rule to amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty (CMP) rule to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the anti-kickback statute. In particular, with regard to the AKS, the OIG proposes:
- a technical correction to the existing safe harbor for referral services;
- protection for certain cost-sharing waivers, including: pharmacy waivers of cost-sharing for financially needy Medicare Part D beneficiaries, and waivers of cost-sharing for emergency ambulance services furnished by state- or municipality-owned ambulance services;
- protection for certain remuneration between Medicare Advantage organizations and federally qualified health centers;
- protection for discounts by manufacturers on drugs furnished to beneficiaries under the Medicare Coverage Gap Discount Program; and
- protection for free or discounted local transportation services that meet specified criteria.
The OIG also proposes to amend the definition of “remuneration” in the CMP regulations at 42 CFR 1003 by adding certain statutory exceptions for:
- copayment reductions for certain hospital outpatient department services;
- certain remuneration that poses a low risk of harm and promotes access to care;
- coupons, rebates, or other retailer reward programs that meet specified requirements;
- certain remuneration to financially needy individuals; and
- copayment waivers for the first fill of generic drugs.
The OIG also proposes to codify the gainsharing CMP rule set forth in section 1128A(b) of the Social Security Act. The official version will be published tomorrow; Reed Smith is preparing an analysis of this proposed rule.
In its September 19, 2014 Special Advisory Bulletin (SAB), the Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) noted the potential risks to federal health care programs presented by pharmaceutical manufacturers’ coupon programs designed to reduce or eliminate patient copayment requirements for brand-name drugs, and emphasized that coupon program sponsors and pharmacies are at risk of sanctions if they fail to take appropriate steps to carve out federal health care program beneficiaries from using the coupons. The OIG points out these coupon programs – which may take different forms, such as print coupons, electronic coupons, debit cards, and direct reimbursements – are remuneration offered to consumers to induce the purchase of specific items, and therefore implicate the criminal federal anti-kickback statute, 42 U.S.C § 1320a-7b(b). Where remuneration is knowingly and willfully paid with the intent to induce or reward referrals of items or services payable by a federal health care program, the anti-kickback statute is violated. The OIG goes on to observe that a claim that includes items or services resulting from a kickback violation would also constitute a false or fraudulent claim under the False Claims Act, 31 U.S.C. § 3729, and grounds for civil money penalties for beneficiary inducement if offer or acceptance of copayment coupons may induce a beneficiary to use a particular practitioner or pharmacy, 42 U.S.C § 1320a-7a(a)(5). While the SAB’s focus is on manufacturer coupon practices, in a footnote, the OIG states that pharmacies accepting coupons for Part D copayments may also be subject to these sanctions.
Notwithstanding the potential benefits of coupon programs to provide access to brand-name drugs and adherence to drug regimens, the OIG claims that such coupon programs may interfere with federal health care program cost-sharing requirements to promote prudent prescribing and purchasing choices by physicians and patients based on the “true costs” of drug and price competition in the market. As a result, the OIG writes, “[w]hile copayment coupons provide an immediate financial benefit to beneficiaries, they ultimately can harm both Federal health care programs and their beneficiaries.”
In the SAB, the OIG acknowledges that the pharmaceutical industry is aware of the potential anti-kickback concerns and generally has implemented a variety of controls to exclude federal health care program beneficiaries from these programs. The OIG’s concern seems to be that these controls don’t go far enough or don’t always work. In other words, the OIG sees the glass as “half empty.” The OIG does not seem to acknowledge that the glass may actually be half-full – i.e., the industry's attempt to have some controls (even if imperfect) evidences manufacturers’ intent to comply with the statute, making it difficult to show criminal liability.
In fact, the OIG’s report, “Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs” (OEI-05-12-00540) http://go.usa.gov/pdYQ, issued concurrently with the SAB, describes in detail mechanisms used by various manufacturers, most notably through claims processing and “switches,” to prevent use of the coupons for drugs paid for by Medicare Part D. The report identifies the principal shortcomings identified with these mechanisms as stemming from the fact that CMS does not permit manufacturers to submit Part D enrollment verification requests (“E1 transactions”) to the Part D Transaction Facilitator because of privacy concerns, so that manufacturers must use various “proxies” to attempt to determine whether the individual using the coupon is enrolled in a Part D plan. The report finds that these proxies, which may include elements as inexact as beneficiary age, may not be accurate enough to guarantee exclusion of Part D claims. Consequently, the OIG appears to be asserting that manufacturers may have liability for having imperfect controls, even though the current claims-processing system does not make a perfect solution available to them. The report did not identify any specific Part D claims for which coupons had in fact been used contrary to coupon terms and conditions.
The OIG recommends that CMS cooperate with industry stakeholders to improve the reliability of pharmacy claims edits, and make coupons transparent. CMS concurred with the recommendation.
The OIG attributes $32 million in Medicare Part D spending on HIV drugs in 2012 to claims associated with “questionable utilization patterns.” Specifically, nearly 1,600 Part D beneficiaries with HIV drug claims had no indication of HIV in their Medicare histories, received an excessive dose or supply of HIV drugs, received HIV drugs from a high number of pharmacies or prescribers, or received contraindicated drugs. The OIG observes that while some of this utilization may be legitimate, these patterns warrant further scrutiny, since they could indicate that a beneficiary is receiving inappropriate drugs or diverting drugs, a pharmacy is billing for drugs that the beneficiary did not receive, or a beneficiary’s identification number was stolen. The OIG recommend that CMS: expand sponsors’ drug utilization review programs and use of beneficiary-specific controls; expand the Overutilization Monitoring System to additional drugs; restrict certain beneficiaries to a limited number of pharmacies or prescribers and limit their ability to switch plans; increase monitoring of beneficiaries’ utilization patterns; and follow up on questionable utilization patterns.
The Government Accountability Office (GAO) has released data comparing retail prescription drug prices paid by the Department of Defense (DOD), Medicaid, and Medicare Part D for a sample of 78 high-utilization/high-expenditure drugs. In general, the GAO determined that Medicaid paid the lowest average net prices for both brand-name and generic drugs in the sample based on data for the third quarter of 2010. For the entire sample, Medicare Part D paid an estimated 32% higher average net price than Medicaid, while DOD paid 60% more than Medicaid (although Medicare Part D paid more for brand-name drugs than did DOD). Key factors affecting net prices paid by each program included the amount of any post-purchase price adjustments (e.g., refunds, rebates, or price concessions received by each program from drug manufacturers), which equaled approximately 15% of the gross price for Medicare Part D, 31% for DOD, and almost 53% for Medicaid across the entire sample.
The Chairman of the House Ways and Means Subcommittee on Health is seeking comments on a draft bill, the Protecting Integrity in Medicare Act of 2014, that is “aimed at combating fraud, waste and abuse in the Medicare program.” The bill covers a range of Medicare and Medicaid policies, from establishing new alternative sanctions for technical physician self-referral violations to providing more flexibility in meeting durable medical equipment (DME) documentation requirements. Among other things, the bill would:
- Establish an alternative fixed financial penalty for individuals and entities that voluntarily disclose a technical Stark violation (e.g., an arrangement that is not in writing or that is not signed by one or more parties) through the Self-Referral Disclosure Protocol; the per-arrangement penalty would be capped at $5,000 if submitted within the year of the noncompliance and $10,000 thereafter;
- Require a study on how to establish a permanent physician-hospital gainsharing program;
- Expand the professionals who can document DME face-to-face encounters beyond physicians to align with the professionals who can furnish such encounters;
- Establish claims processing edits to prevent Medicare payments for incarcerated, unlawfully present, and deceased individuals;
- Require Medicare administrative contractors (MACs) to establish improper payment outreach and education programs, and modify how MACs prioritize efforts to reduce improper payment or error rates;
- Allow Medicaid fraud control units to investigate abuse and neglect in home and community based facilities;
- Provide the HHS OIG with up to 1.5% of all amounts collected from Medicare false claim and fraud cases;
- Give the Secretary greater flexibility to protect Medicaid from fraud, waste, and abuse;
- Improve incentives for individuals to report Medicare fraud and abuse under the Senior Medicare Patrol;
- Require valid prescriber National Provider Identifiers to be included on pharmacy claims;
- Revise the process for renewing MAC contracts;
- Create a high-risk beneficiary drug management program under the supervision of a Part D plan sponsor;
- Require the Secretary to issue guidance on the application of the “Common Rule” to clinical data registries;
- Revoke eligibility for Medicare benefits for providers convicted of defrauding the Medicare program under certain circumstances;
- Require home health agencies to obtain a surety bond in the amount of at least $50,000 as a condition of Medicare participation;
- Require prior authorization (PA) for certain chiropractic visits, blepharoplasty, and browplasty surgeries and expand a PA demonstration for non-emergent ambulance services;
- Require Social Security numbers to be removed from beneficiary Medicare cards; and
- Require the Secretary to include vacuum erection systems in the DME competitive bidding program by 2016.
Subcommittee Chairman Kevin Brady (R-TX) will accept comments on the discussion draft until September 1, 2014.
CMS has revised its earlier policy on Medicare Part D payments for drugs used by beneficiaries enrolled in Medicare hospice. In a July 18, 2014 memo, CMS is modifying its March 10, 2014 guidance to Part D sponsors that imposed a prior authorization (PA) requirement for all drugs for hospice beneficiaries in light of operational issues and access concerns. The revised guidance narrows the Part D hospice PA provision to four categories of drugs that the OIG, in consultation with hospice providers, has identified as nearly always covered under the hospice benefit. Specifically, CMS will now “strongly encourage” Part D sponsors to place beneficiary-level PA requirements only on: analgesics, antinauseants (antiemetics), laxatives, and antianxiety drugs (anxiolytics). Part D sponsors are not expected to place hospice PA requirements on other categories of drugs or take special measures beyond normal compliance and utilization review activities to retrospectively review paid claims to determine whether drugs in the other categories were unrelated to the hospice beneficiary’s terminal illness and related conditions or payment recovery.
The OIG has released an ACA-mandated report assessing the extent to which formularies used by Medicare Part D drug plans include drugs commonly used by full-benefit dual-eligible individuals(i.e., individuals eligible for both Medicare and Medicaid and who receive full Medicaid benefits and assistance with Medicare premiums and cost-sharing). The report, which covered the 3,309 Part D plans operating in 2014, determined that on average, Part D plan formularies include 96% of the 195 commonly-used drugs identified by the OIG. In addition, 64% of the commonly-used drugs are included by all Part D plan formularies. The OIG observes that these results are largely unchanged from the 2013 report. Formularies applied utilization management tools to 28% of the unique drugs reviewed in 2014, also the same as in 2013.
On May 23, 2014, CMS published a final rule revising the Medicare Advantage (MA) and Part D prescription drug program regulations to implement various statutory requirements, strengthen beneficiary protections, improve program efficiencies and payment accuracy; and clarify program requirements, generally effective for contract year 2015. CMS estimates that the proposed rule would reduce Medicare spending by $1.615 billion between 2015 and 2024. Among many other things, the final rule:
- Requires that Part D “negotiated prices” be inclusive of all price concessions from network pharmacies except contingent price concessions that cannot reasonably be determined at the point-of-sale, effective beginning with contract year 2016. CMS also specifies that additional contingent amounts, such as incentive fees, that increase prices and that cannot reasonably be determined at the point-of-sale are always excluded from the negotiated price.
- Implements an ACA requirement that MA plans and Part D sponsors report and return identified Medicare overpayments.
- Addresses prescription drug abuse by, among other things, authorizing CMS to revoke a physician’s or eligible professional’s Medicare enrollment if he or she has a pattern of prescribing Part D drugs that is abusive and represents a threat to beneficiary health and safety or otherwise fails to meet Medicare requirements, or if the prescriber’s Drug Enforcement Administration (DEA) certificate of registration or state license is suspended or revoked. The rule also requires prescribers of Part D drugs to enroll in Medicare or have a valid record of opting out of Medicare as a condition of coverage for their prescriptions, effective June 1, 2015.
Note that CMS is not finalizing its proposed changes to the ACA “drug categories or classes of clinical concern” requirement; instead, CMS will maintain the existing six protected classes. CMS also is not finalizing its proposal to require consistently lower negotiated prices at pharmacies offering preferred cost sharing in light of its adoption of a different definition of negotiated price than originally proposed. Moreover, CMS is not finalizing its proposed “any willing pharmacy” contracting provisions, nor the proposed changes to limit the authorized levels of cost sharing, pending further study.
On May 8, 2014, CMS published its proposed rule to update the Medicare hospice wage index for FY 2015 and make other payment and policy changes. CMS estimates that hospice payments would increase by 1.3% ($230 million) in FY 2015 compared to FY 2014. Specifically, CMS would update the hospice per diem rates by 2.0% (reflecting a 2.7% market basket increase that is reduced by 0.7 percentage points under ACA adjustments), but this update is partially offset by a 0.7 percentage point cut resulting from the use of updated wage data and CMS’s continued phase-out of its wage index budget neutrality adjustment factor. Hospices that fail to report quality data will have their market basket update reduced by 2 percentage points.
The proposed rule includes a number of policy provisions. For instance, CMS is proposing to require hospices to file a beneficiary Notice of Election (NOE) within three calendar days after the effective date of hospice election; if an NOE is not filed timely, the days from the effective date of election to the date of filing the NOE would be the financial responsibility of the hospice. Likewise, CMS is proposing to require hospices to file a notice of termination/revocation within three calendar days of a beneficiary’s discharge or revocation, unless the hospice has already filed a final claim. The rule also would, among other things: require the hospice to identify the attending physician on the election form; revise the applicability of quality reporting penalties to new hospices; provide that claims will be returned to providers if the claim lists a nonspecific symptom diagnosis as the principal hospice diagnosis; and require hospices to complete their hospice cap determinations within 150 days after the cap period and remit any overpayments at that time.
CMS also is soliciting comments on several policy issues, including definitions of “terminal illness” and “related conditions” that are intended to “strengthen and clarify the current concepts of holistic and comprehensive hospice care under the Medicare hospice benefit.” CMS also seeks comments on processes that Part D drug plan sponsors could use to coordinate with Medicare hospices in determining coverage of drugs for hospice beneficiaries and resolving disagreements between the parties. Comments on the proposed rule will be accepted until July 1, 2014.
The Centers for Medicare & Medicaid Services (CMS) has released its 2015 rate announcement and final call letter for Medicare Advantage (MA) and Part D prescription drug plans. Notably, the final rate announcement increases 2015 MA rates by 0.4% compared to 2014 levels and compared to an estimated 1.9% reduction anticipated in the advance notice released in February 2014. Factors contributing to the rate boost include a modified phase-in schedule for a new risk-adjustment model, a refined risk adjustment methodology to account for the impact of baby boomers, and CMS’s decision not to finalize a proposal to exclude diagnoses from enrollee risk assessments. CMS also is not adopting at this time earlier proposals to implement a new Part D risk adjustment model; make changes to star ratings; or require additional coverage in the gap for generic and brand drugs in Enhanced Alternative plans. On the other hand, CMS is adopting a number of policies intended to strengthen beneficiary protections when MA plans make significant changes to their provider networks. Beginning in 2015, CMS will require MA organizations to provide CMS with 90 days notice of any significant changes to their provider networks. CMS also will allow enrollees to switch plans when they are affected by significant mid-year provider network terminations initiated by their MA plan without cause. In addition, the call letter establishes “best practices” for MA organizations to follow when they make significant changes to provider networks.
The OIG has released its “Compendium of Priority Recommendations,” which lists 25 priority issues for which the OIG has open recommendation and that, if implemented, would best protect the integrity of HHS programs. The 25 top priorities are as follows:
- Medicare Policies and Payments: address wasteful Medicare policies and payment rates for clinical laboratories, hospitals, and hospices; improve controls to address improper Medicare billings by community mental health centers, home health agencies, and skilled nursing facilities; detect and recover improper Medicare payments for services to incarcerated, unlawfully present, or deceased individuals; maximize recovery of Medicare overpayments; improve monitoring and reconciliation of Medicare hospital outlier payments; ensure that Medicare Advantage Organizations are implementing programs to prevent and detect waste, fraud, and abuse; and improve controls to address questionable billing and prescribing practices for Part D prescription drugs.
- Medicare Quality of Care and Safety Issues: address adverse events in hospital settings; improve care planning and discharge planning for beneficiaries in nursing home settings; address harm to patients, questionable resident hospitalizations, and inappropriate drug use in nursing homes; improve nursing home emergency preparedness and response; and ensure hospice compliance with Medicare conditions of participation.
- Medicaid Program Policies and Payments: ensure that state claims and practices do not inappropriately inflate federal reimbursements; ensure that states prevent, detect, and recover improper payments and return the federal share of recoveries to the federal government; assist states to better align Medicaid drug reimbursements with pharmacy acquisition costs; ensure that Medicaid Information Systems are fully functional; and address Medicaid managed care fraud and abuse concerns.
- Medicaid Quality of Care and Safety Issues: ensure that Medicaid home- and community-based care service providers comply with quality and safety requirements; and ensure that States improve utilization of preventive screening services for eligible children.
- Oversight of Food Safety: improve oversight of dietary supplements; and improve oversight of food inspections and traceability.
- HHS Grants and Contracts: improve oversight of grantee compliance, quality assurance, and conflicts of interest; and improve oversight of Medicare contractor performance and conflicts of interest.
- HHS Financial Stewardship: reduce improper payments and fraud; and correct deficiencies found in financial statement audits.
Note that some of these recommendations would require additional authority or other legislative change.
CMS has released data on Recovery Audit Contractor (RAC) operations fiscal year 2012. Key findings included the following:
- In FY 2012, Medicare fee-for-service (FFS) RACs collectively identified and corrected 1,272,297 claims for improper payments, which resulted in $2.4 billion in improper payments being corrected ($2.3 billion in overpayments/$109.4 million in underpayments). Subtracting fees, costs, and first level appeals, the Medicare FFS Recovery Audit Program returned over $1.9 billion to the Medicare trust funds.
- The Part D RAC’s initial review focused on identifying improper payments for prescriptions written by excluded prescribers or filled by excluded pharmacies beginning with contract year 2007. Recoupment of approximately $2 million in overpayments began in the first quarter of FY 2013 for those plans identified in the Part D RAC's initial audit review. The Part D RAC is continuing its review of excluded providers and pharmacies for contract years 2008 and 2009. In addition, CMS posted a notice on April 4, 2013, seeking potential contractors to perform Part C RAC activities.
- As of September 30, 2012, 36 states had implemented Medicaid RAC programs, and other states are in various stages of preparation. For FY 2012, the states have recovered a total federal and state share combined amount of $95.64 million. CMS expects recoveries to increase as more states have fully operational State Medicaid RAC programs.
As previously reported, CMS has “paused” its RAC audits in preparation for the procurement of new RAC contracts and to “allow CMS to continue to refine and improve the Medicare Recovery Audit Program.”
On March 10, 2014, CMS issued a final memorandum outlining the criteria it will use to determine payment responsibility for drugs for Medicare hospice beneficiaries, effective May 1, 2014. CMS cites the statutory requirement that the hospice cover all drugs or biologicals for the palliation and management of the terminal and related conditions; these drugs are excluded from coverage under Medicare Part D. For prescription drugs to be covered separately under Part D when the enrollee has elected hospice, the drug must be for treatment of a condition that is completely unrelated to the terminal condition or related conditions. Since CMS expects drugs will rarely be covered under Part D for hospice beneficiaries, CMS is requiring Part D sponsors to place beneficiary-level prior authorization requirements on all drugs for hospice beneficiaries to determine whether the drugs are coverable under Part D. This will require the hospice and/or the prescriber to make a case for why each drug is not related to the terminal illness or related conditions before sponsors will pay for the drug. The agency also recommends that hospice providers initiate the prior authorization process prior to submission of a Part D claim, as described in the memo.
CMS requires the Part D sponsor and hospice to negotiate the retrospective recovery of amounts paid if the sponsor has paid for drugs after the effective date of the hospice election, but prior to receipt of notification from CMS. If the drug is determined to be a hospice liability, the parties should negotiate repayment. In situations where the beneficiary is liable (e.g., drugs the patient was taking prior to the hospice election for the treatment -- as opposed to the palliation and management -- of the terminal illness, that are not covered by the hospice but that the beneficiary chooses to continue taking), the sponsor should send a recovery notice to the beneficiary. CMS notes that there are still outstanding issues, primarily for 2015 and beyond, that will be subject to future rulemaking.
A number of Congressional committees have held hearings recently to address various health policy issues, including the following:
- The House Energy and Commerce Committee conducted hearings on Medicare Part D drug policy, the role CMS contractors play in management of the Medicare program, and the public health threat of counterfeit drugs;
- The House Education and the Workforce Committee held a hearing on "Providing Access to Affordable, Flexible Health Plans through Self-Insurance";
- A House Oversight and Government Reform Committee hearing examined the rights of FDA whistleblowers; and
- A Senate Health, Education, Labor and Pensions Committee hearing focused on mental health treatment options and trends.
CMS has posted its advance rate announcement and draft call letter for Medicare Advantage (MA) and Part D prescription drug plans for 2015. These documents detail updates to payment methodologies, other policies, and program operations for MA organizations and Part D drug plan sponsors. While the factors that impact 2015 rates are complex, CMS generally intends to more closely align MA payments with fee-for-service (FFS) Medicare and improve payment accuracy through a series of rate adjustments. Among other things, CMS notes that its preliminary estimate of the combined effect of the MA growth percentage and the FFS growth percentage is -1.9%. CMS also proposes to apply a -5.16% adjustment to MA plan payments to account for diagnostic coding differences between MA and FFS providers. The call letter addresses numerous policy issues, including encouraging MA organizations to adopt best practices that improve enrollee notification of significant changes in the MA’s provider network (CMS indicates it will consider rulemaking that could limit the timing of such network changes). Comments on the documents will be accepted until March 7, 2014, and the final rate announcement and call letter will be published on April 7, 2014. Also looking ahead, CMS announced in the call letter that it intends to issue a request for information in the coming months about an initiative to partner with private payers to test innovations in health plan design for CMS beneficiaries, including to value-based arrangements, beneficiary engagement and incentives, and/or care coordination.