According to a recent OIG report, "Incorrect Place-of-Service Coding Resulted in Potential Medicare Overpayments Costing Millions,” physicians did not always correctly code the place of service on Part B claims. This resulted in potential overpayments of approximately $33.4 million for services provided from January 2010 through September 2012. The OIG explains that physicians performed these services in facility locations, but physicians incorrectly coded the services as performed in higher-paying nonfacility locations. The OIG attributes these overpayments to physician internal control weaknesses and insufficient contractor postpayment reviews. The OIG therefore recommends that CMS direct its Medicare contractors to recover identified overpayments, educate physicians and billing personnel on the importance of internal controls to ensure correct place-of-service coding, and expand data matches to identify potentially miscoded claims. CMS concurred with the recommendations.
On May 20, 2015, CMS is hosting its final call to discuss paper and clinical templates intended to assist physicians and practitioners in documenting patient eligibility for Medicare home health benefits.
CMS has published corrections to its final 2015 Medicare physician fee schedule rule. Among other things, the rule reflects a previously-announced correction to the conversion factor for the first quarter of 2015 ($35.7547), revises the April 1 – December 31, 2015 conversion factor to $28.1872 (assuming that Congress does not take action to avert this pending cut), makes numerous code-specific relative value unit corrections, and revises quality measure details. CMS is also adding regulatory text that had been inadvertently omitted regarding general supervision of non-face-to-face aspects of transitional care management services.
The Medicare Payment Advisory Commission (MedPAC) has released its annual recommendations to Congress on Medicare policies, including Medicare fee-for-service (FFS) payment updates and a status report on the Medicare Advantage and Medicare Part D programs. The following are highlights of the recommendations for 2016 (many of which were recommended previously):
- With regard to physician services, Congress should repeal the Sustainable Growth Rate (SGR) methodology for physician services and replace it with a 10-year path of statutory updates that includes a higher rate update for primary care services than for specialty care services (note that Congress may take up SGR reform legislation as early as this month, before the latest temporary patch expires and a 21.2% fee schedule cut goes into effect April 1, 2015). In addition, Congress should direct the Department of Health and Human Services (HHS) Secretary to increase shared savings opportunities for physicians and health professionals in two-sided risk accountable care organizations (ACOs). MedPAC also endorsed the collection of data to establish more accurate work and practice expense values, along with reductions to the relative values for overpriced fee-schedule services to reduce fee schedule spending by at least 1% annually for each of five consecutive years. Congress also should establish a prospective per beneficiary payment to replace the Primary Care Incentive Payment program (which provides a 10% bonus payment for certain primary care practitioner services) after it expires at the end of 2015.
- MedPAC recommends a 3.25% update to inpatient and outpatient hospital payment rates for 2016, concurrent with changes to the outpatient payment system and the long-term care hospital (LTCH) payment system. Specifically, MedPAC calls on Congress to direct the Secretary to reduce or eliminate differences in payment rates between outpatient departments and physician offices for selected ambulatory payment classifications. Second, MedPAC recommends reducing payment for LTCH services furnished to patients whose illness is not characterized as chronically critically ill (CCI) to the same rate that an acute care hospital would be paid for such care; savings from this provision would fund an outlier pool for acute care hospitals that treat costly CCI patients (this provision would be phased in from 2016 to 2018).
- Congress should eliminate the skilled nursing facility (SNF) market basket update. Congress also should direct the Secretary to revise the SNF prospective payment system (PPS) to rely on patient characteristics and begin a process of rebasing a year after these revisions are implemented, with an initial reduction of 4% and subsequent reductions until Medicare’s payments better align with providers’ costs.
- Congress should eliminate the fiscal year 2016 Medicare rate update for inpatient rehabilitation facilities (IRFs) and direct the Secretary to eliminate payment differences between IRFs and SNFs for selected conditions, with IRF payment reductions phased in over 3 years. IRFs also should receive relief from regulations specifying the intensity and mix of services for site-neutral conditions.
- Congress should eliminate the ambulatory surgical center (ASC) payment update for 2016 and require ASCs to submit cost data.
- Congress should direct teliminate the home health market basket update for 2016, rebase rates, revise the home health case-mix system to rely on patient characteristics to set payment for therapy and nontherapy services, and expand medical review activities and exercise program integrity authorities. In addition, Congress should direct the Secretary to reduce payments to HHAs with relatively high risk-adjusted rates of hospital readmission and establish a per episode copay for home health episodes that are not preceded by hospitalization or post-acute care use.
- Congress should eliminate the 2016 update for LTCHs, hospices, and outpatient dialysis services.
While MedPAC’s recommendations are not binding, Congress and CMS often take into account MedPAC’s assessments when updating Medicare payment policies.
Under the ACA, the Physician Value-Based Modifier (Value Modifier) policy rewards physicians and groups of physicians who provide high quality and cost effective care, while penalizing those who did not meet objectives. Physicians in group practices of 100 or more eligible professionals who submit claims to Medicare under a single tax identification number are subject to the value modifier in 2015, based on performance in 2013. CMS has provided details on Value Modifier payment adjustments for applicable physician groups in 2015, including how groups that elected quality-tiering performed.
The OIG has issued a report on its findings that Medicare in some cases continued to make payments to physicians who have delinquent Medicare debts that have been referred to Treasury for collection. For instance, CMS paid a total of $10.7 million to 23 individual physicians who collectively owed CMS a total of $8.84 million. The OIG recommended that CMS take a series of steps to ensure that it does not pay individual physicians with delinquent debts after referring their Medicare debts to Treasury for collection; CMS concurred. For more information, see the full report, “CMS Made Payments Associated With Providers After Referring Individual Providers' Debts to the Department of the Treasury for Collection.”
OIG Report: Medicare Payments for Power Mobility Device Claims that Did Not Meet Physician Face-To-Face Exam Rules
As a condition of Medicare coverage for power mobility devices (PMDs), a physician must conduct and document a face-to-face examination of the beneficiary and write a prescription for the PMD. CMS established an optional Healthcare Common Procedure Coding System (HCPCS) code, G0372, for a physician to report the need for a PMD. Based on a review of a limited sample of claims (200 total), the OIG determined that while PMD claims with a corresponding physician G-code claim generally conformed with requirements for face-to-face examinations of beneficiaries, almost half of the 100 PMD claims without a corresponding physician G-code claim did not meet the face-to-face examination requirement. On the basis of its sample results, the OIG estimates that Medicare paid approximately $35.2 million in 2010 for PMD claims that did not meet federal requirements. The OIG recommends that CMS, among other things, adjust the sampled claims representing overpayments to the extent allowable; require physicians to use the G0372 code when prescribing PMDs; and educate physicians on the use of the G0372 code and the documentation requirements for face-to-face examinations. The report, “Medicare Paid Suppliers for Power Mobility Device Claims That Did Not Meet Federal Requirements for Physicians' Face-to-Face Examinations of Beneficiaries,” is available at http://oig.hhs.gov/oas/reports/region9/91202068.pdf.
As part of the final 2015 Medicare physician fee schedule rule, CMS is adopting – with certain refinements – its proposed changes to the regulations implementing the Physician Payment Sunshine Act. By way of background, the Sunshine Act requires pharmaceutical and medical device manufacturers and group purchasing organizations to submit to CMS certain information on payments and transfers of value to physicians and teaching hospitals, as well as physician ownership information. This data is being made publicly available on the CMS “Open Payments” website, http://go.cms.gov/openpayments.
Specifically, In the final rule, published on November 13, 2014, CMS adopted the following provisions pertaining to the Sunshine Act regulations:
- CMS deleted the reporting exclusion for payments made to speakers at accredited continuing medical education events. Importantly, CMS points out that such payments may still be excluded from reporting, since “payments or other transfers of value, including payments made to physician covered recipients for purposes of attending or speaking at continuing education events, which do not meet the definition of an indirect payment, as defined at §403.902, are not reportable.” Under §403.902, indirect payments refer to payments or other transfers of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient(s).
- The Final Rule requires the reporting of the marketed name and therapeutic area or product category of the related covered drug, device, biological, or medical supply, unless the payment or other transfer of value is not related to a particular covered or non-covered drug, device, biological or medical supply. Previously, for devices or medical supplies manufacturers had the option of reporting the therapeutic area or product category instead of the marketed name. In the Final Rule, CMS also removed language allowing manufacturers the option to report “up to five” related covered products. It is not clear from the Final Rule whether such an option will still be available in practice, or if manufacturers will only be able to report a single, related covered product. Reporting marketed names for non-covered drugs, devices, biologicals, or medical supplies will continue to be optional. CMS also acknowledges that a payment or other transfer of value associated with a research payment regarding a device or medical supply may not have a marketed name. Therefore, CMS is specifying that manufacturers will continue to have an option to report either a device or medical supply marketed name, therapeutic area or product category when reporting research payments.
- CMS is requiring applicable manufacturers to report stocks, stock options, or any other ownership interest as distinct categories.
- CMS is deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply.”
CMS is implementing data collection requirements for these provisions beginning January 1, 2016, for reporting to CMS in 2017.
On December 2, 2014, CMS is hosting a provider call to discuss changes to the Medicare physician quality reporting programs in the 2015 Medicare Physician Fee Schedule final rule. Among other things, the call will cover changes impacting the Physician Quality Reporting System (PQRS), Value-based Payment Modifier, Physician Compare, Electronic Health Record (EHR) Incentive Program, Comprehensive Primary Care Initiative (CPC), and Medicare Shared Savings Program.
CMS is expected to publish several major final Medicare payment rules for 2015 in the coming days. The agency has already submitted to the White House Office of Management and Budget (OMB) for regulatory clearance the final 2015 rules updating Medicare payments for outpatient hospitals, ambulatory surgical centers, home health agencies, and end-stage renal disease facilities, along with reimbursement policy updates impacting suppliers of durable medical equipment, prosthetics, orthotics, and supplies. The final Medicare physician fee schedule rule is not yet at OMB, but it should be following shortly. While the text of the regulations are not yet available, we expect that the rules will be put on display at the Federal Register in the near future. We will be providing summaries of the final rules in future updates.
On October 23, 2014, CMS is hosting a call on 2013 Quality and Resource Use Reports (QRURs) for physician group practices and physician solo practitioners. The 2013 QRURs contain quality and cost performance data that will be used in determining the applicable Value-Based Payment Modifier for 2015.
On August 28, 2014, CMS announced the latest changes to the deadlines associated with the Sunshine Act “Open Payments" System review and dispute process resulting from additional system down-time. Specifically, because the system will be periodically unavailable on August 30 and September 5, CMS is making the following changes to the data review and correction periods:
- Review and dispute (45 days): 7/14/2014 – 8/3/2014, 8/14/2014 – 9/10/2014
- Correction period (15 days): 9/11/2014 – 9/25/2014
CMS is still standing by its September 30, 2014 target date for public release of the data, although it remains to be seen whether continuing questions about the data integrity and the shrinking window to resolve all technical issues will permit CMS to meet this deadline.
* Note that CMS announced on September 9 that it was extending the review and dispute period for one more day, through September 11, 2014.
CMS Revises Sunshine Act "Open Payments" System Review/Dispute Deadlines Amid Concerns about Data Accuracy
CMS has reopened the Open Payments system after it was taken offline temporarily to “resolve a data integrity issue.” According to a CMS press release, applicable manufacturers and group purchasing organizations (GPOs) had submitted intermingled data (e.g., wrong state license number or national provider identifier) for doctors with the same last and first names, which erroneously linked payments in the Open Payments system. CMS has enhanced its algorithms and validation checks in an attempt to resolve the issues and removed incorrect payment transactions. CMS states that it will remove the questionable data from the current review and dispute process and will not publish this data this year; according to multiple press reports, this has resulted in the removal of one-third of the records from the system.
CMS has also extended the Open Payments review and dispute deadline and the following 15-day corrections period deadline for each day the Open Payments system was offline. The review and dispute period now ends September 8, 2014, the correction period will run through September 9-23, 2014, and the public website launch date remains September 30, 2014.
CMS contends that its correction efforts underscores that it “is committed to ensuring the integrity of data made available to the public.” Nevertheless, the scope of the reported errors and the exclusion of millions of records raise broader questions about the accuracy and completeness of the database and heighten concerns about the potential for public and press misinterpretation of the incomplete data set.
On July 14, 2014, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule to update the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year (CY) 2015. The following are highlights of this major rulemaking:
- OPPS rates would increase by 2.1% compared to 2014 levels, although rate changes for individual Ambulatory Payment Classifications (APCs) vary. This update reflects a 2.7% market basket increase, which is partially offset by a 0.4% multifactor productivity (MFP) adjustment and an additional 0.2% reduction, both of which were mandated by the Affordable Care Act (ACA). Hospitals that fail to meet the Hospital Outpatient Quality Reporting (OQR) Program reporting requirements are subject to an additional reduction of 2.0%. The actual update for individual procedures can vary based on changes in relative weights and other policies in the proposed rule. Overall, CMS expects to make $800 million in additional payments for OPPS services furnished in CY 2015 under the rule.
- CMS proposes expanding its packaging policy adopted in the 2014 final rule. Beginning in CY 2015, CMS proposes conditional packaging of all ancillary services when they are integral, ancillary, supportive, dependent, or adjunctive to a primary service (except for preventive, psychiatry, and drug administration services). The services proposed to be packaged under this policy are services assigned to APCs with a geometric mean cost of $100 or less. CMS proposes to make separate payment for these ancillary services when they are furnished by themselves. CMS expects to update and expand this policy in future years. CMS also proposes packaging all add-on codes, but it would allow certain combinations of primary service codes and especially costly add-on codes representing a more costly, complex variation of a procedure to trigger a complexity adjustment.
- The proposed rule would implement, with revisions, a policy discussed in the final 2014 rule to replace existing device-dependent APCs in CY 2015. In short, CMS would make a single payment for all related or adjunctive hospital services provided to a patient in the furnishing of certain device dependent services, with certain exceptions. Under this policy, the comprehensive APC payment would include all outpatient services, including diagnostic procedures, laboratory tests and other diagnostic tests, and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; services and supplies used during the service; outpatient department services delivered by therapists as part of the comprehensive service; durable medical equipment (DME), as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other outpatient components reported by HCPCS codes that are provided during the comprehensive service (except for certain services including mammography services, ambulance services, brachytherapy seeds, and pass-through drugs and devices). CMS proposes refining its 2014 policy to establish a total of 28 comprehensive-APCs for 2015 versus the 29 comprehensive APCs described in the 2014 final rule.
- CMS proposes to continue to calculate which the OPPS relative payment weights using distinct cost-to-charge ratios for cardiac catheterization, CT scan, MRI, and implantable medical devices.
- Under the proposed rule, the threshold for separate payment for outpatient drugs in 2015 would be a cost per day that exceeds $90, the same threshold as in 2014.
- The proposed rule would revise OQR measures and modify OQR Program validation, review, and corrections provisions.
- CMS proposes collecting data on services furnished in off-campus provider-based departments beginning in 2015. Hospitals and physicians would report a modifier for services furnished in an off-campus provider-based department on both hospital and physician claims. This information ultimately is intended to be used to improve the accuracy of Medicare physician fee schedule (MPFS) practice expense payments for services furnished in off-campus provider-based departments.
- The proposed rule would revise the expansion exception process for physician-owned hospitals under the rural provider and hospital ownership exceptions to the physician self-referral law. Specifically, CMS proposes to permit physician-owned hospitals to use additional data sources to demonstrate eligibility for an expansion exception as a “high Medicaid facility.”
- For CY 2015, CMS proposes an ASC prospective payment system update of 1.2%, reflecting a CPI-U update of 1.7%, offset by a 0.5% MFP adjustment. Payment updates for individual procedures vary. ASCs that do not meet quality reporting requirements are subject to a 2% payment reduction. CMS proposes adding 10 procedures to the ASC list of covered surgical procedures and refining the ASC quality program.
- CMS proposes to require a physician certification only for long-stay cases (defined as 20 days or more) and outlier cases. An admission order would continue to be required for all admissions.
- CMS proposes establishing a process to recover overpayments that result from the submission of erroneous payment data by a Medicare Advantage (MA) organization or Part D prescription drug plan sponsor if the plan fails to correct the data upon CMS request, with an appeals process for MA organizations and Part D sponsors.
CMS will accept comments on the proposed rule until September 2, 2014.
On July 11, 2014, CMS published its proposed rule to update the Medicare physician fee schedule for CY 2015. The proposed rule reflects enactment of the Protecting Access to Medicare Act (PAMA) of 2014, which provides for a 0% update to the conversion factor (CF) for MPFS services furnished between January 1, 2015 and March 31, 2015. In the Proposed Rule, CMS estimates that with the application of a budget neutrality adjustment, the CF for the first quarter of 2015 would be $35.7977 (compared to $35.8228 in 2014). Under PAMA, the CF will be adjusted on April 1, 2015 according to the Sustainable Growth Rate (SGR) formula unless Congress takes additional legislative action. CMS does not speculate on the CF that will be applicable April 1, 2015 through December 31, 2015, but CMS previously estimated that the SGR would result in about a 20.9% cut in MPFS payments for 2015 if Congress does not again intervene. There is an expectation that Congress eventually will override this payment cut, but the timing and extent of any such relief cannot be assured at this time. Other key provision in the proposed rule include the following:
- The proposed rule includes numerous proposals to review addition codes as being potentially misvalued, and to revise the data considered by CMS in assessing the value of procedures. CMS proposes to add about 80 codes to its list of potentially misvalued codes, most of which are high-expenditure specialty services that have not been recently reviewed. CMS also discusses implementation of a PAMA provision authorizing CMS to use alternative approaches to establish practice expense (PE) relative value units (RVUs), including the use of data from other suppliers and providers of services. CMS is specifically seeking comments on the possible use of the Medicare hospital outpatient cost data in the PE valuation methodology. In addition, CMS is proposing to transform all 10- and 90-day global surgery codes to 0-day global codes. Under this provision, CMS would include in the value for these procedures all services provided on the day of surgery, and pay separately for visits and services actually furnished after the day of the procedure, effective beginning in CY 2017.
- CMS proposes a new process intended to enhance transparency in MPFS ratesetting and ensure that all payment input revisions are subjected to public comment prior to being used for payment. In short, beginning with the MPFS proposed rule for CY 2016, CMS will include proposed values for all new, revised, and potentially misvalued codes for which it has complete American Medical Association’s Relative Value Update Committee (RUC) recommendations by January 15th of the preceding year (thus for the CY 2016 rulemaking, CMS would include in the proposed rule proposed values for services for which it has RUC recommendations by January 15, 2015). CMS would delay consideration of RUC recommendations received after January 15th of a year. For codes that describe wholly new services, CMS will work with the RUC to try to receive recommendations in time to include proposed values in the proposed rule; if not, and CMS determines that it is in the public interest for Medicare to begin using the code, CMS would establish values for the code’s initial year as under current policy. CMS is also revising how it accounts for costs associated with radiation therapy equipment and x-ray services.
- CMS proposes numerous changes to the Physician Quality Reporting System (PQRS), including the addition of 28 new individual measures and two measure groups, and removal of 73 measures. CMS also proposes that eligible professionals who see at least one Medicare patient in a face-to-face encounter report measures from a new cross-cutting measures set in addition to other required measures. The proposed rule also includes revisions to Shared Savings Program/accountable care organization (ACO) quality requirements, including changes to the scoring strategy to recognize quality improvement, revisions to quality measure benchmarks, and revisions to individual quality measures.
- CMS proposes changes to the Physician Value-Based Payment Modifier program, under which CMS will adjust payment to physicians based on the quality of care compared to costs. For 2017 (the last year in a three-year phase-in period), CMS proposes to apply the Value Modifier to physicians in groups with two or more eligible professionals (EPs) and to physicians who are solo practitioners. CMS also would apply the Value Modifier beginning in CY 2017 to non-physician EPs in groups with two or more EPs and to non-physician EPs who are solo practitioners. Moreover, CMS proposes a number of changes to the payment adjustment framework for 2017, increasing the potential upward and downward adjustment to +/- 4%.
- CMS raises concerns about “operational and program integrity issues” arising from the use of substitute (locum tenens) physicians to fill staffing needs or to replace a physician who has permanently left a medical group, particularly with regard to potentially inappropriate use of the departed physician’s Provider Transaction Access Numbers (PTAN) or National Provider Identifier (NPI). CMS solicits comments on specific questions associated with substitute physician billing arrangements as the agency considers whether to adopt regulations in this area, including with regard to implications for the physician self-referral law.
- CMS is proposing changes to its Physician Payment Sunshine Act regulations, also known as the Open Payments program. These provisions are discussed in a separate post.
- Among many other things, the proposed rule also would: establish a revised local coverage determination (LCD) process for all new draft clinical diagnostic laboratory test LCDs published on or after January 1, 2015; require physicians (and hospitals) to report a modifier for services furnished in an off-campus provider-based department; update malpractice RVUs; revise Geographic Practice Cost Indices; reduce beneficiary cost-sharing associated for anesthesia related to screening colonoscopies; and add to the list of services that can be furnished to Medicare beneficiaries under the telehealth benefit annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services.
CMS will accept comments on the rule until September 2, 2014.
CMS has made a series of announcements related to the Sunshine Act Open Payments system, including information about the Open Payments review, dispute and correction process that runs from July 14 through August 27, 2014. This period allows physicians and teaching hospitals to review and initiate any disputes they may have regarding the data reported about them by applicable manufacturers and applicable group purchasing organizations. CMS has also extensively updated the Open Payments User Guide, which is intended to provide industry, physicians, and teaching hospitals with a comprehensive understanding of the Open Payments system and reporting requirements.
CMS Proposes Changes to Sunshine Act "Open Payments" Regulations in 2015 Medicare Physician Fee Schedule Rule
Today the Centers for Medicare & Medicaid Services (CMS) issued an advance copy of the CY 2015 Medicare Physician Fee Schedule (PFS) proposed rule, which includes certain changes to the regulations implementing the Physician Payment Sunshine Act, also known as the Open Payments program. These proposed changes come just three days after the inaugural deadline for applicable manufacturers and group purchasing organizations (GPOs) to report to CMS detailed information regarding payments and transfers of value made to physicians and teaching hospitals, as well as physician ownership information.
As previously reported, the Physician Payment Sunshine Act and related regulations require pharmaceutical and medical device manufacturers and GPOs to register with and submit to CMS data on their financial relationships with physicians and teaching hospitals. This financial data will be made publicly available on the CMS Open Payments website.
In the PFS proposed rule, CMS proposes the following changes to the Physician Payment Sunshine Act regulations:
- Deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply”
- Deleting the reporting exclusion for payments made to speakers at accredited continuing medical education events when certain requirements are met. Although CMS is deleting this express exclusion, it notes that such payments may still be excluded generally from reporting under the separate exclusion for indirect payments, which applies in those instances in which the applicable manufacturer is unaware of the identity of the covered recipient. In other words, the practical impact of this change may not be significant in the long run.
- Requiring the reporting of the marketed name of the drug, device, biological, or medical supply related to the payment being reported. Previously, CMS finalized that for drugs and biologicals, manufacturers must report the market name of a related product, but that for devices and medial supplies, manufacturers could report either the name under which the product is marketed or the general therapeutic area or product category associated with the device or medical supply.
- Requiring manufacturers to report stocks, stock options or any other ownership interest as distinct categories.
The proposed rule will be published in the Federal Register on July 11, 2014, and comments are due to CMS by September 2, 2014.
Today the HHS OIG issued a Special Fraud Alert highlighting its concerns regarding two trends involving transfers of value from laboratories to physicians that the OIG believes “present a substantial risk of fraud and abuse under the anti-kickback statute.” Specifically, the OIG details risks involved with certain compensation paid by laboratories to referring physicians and physician group practices for (1) blood specimen collection, processing, and packaging, and (2) submitting patient data to a registry or database. The Special Fraud Alert reiterates the OIG’s “longstanding concerns” when payments from laboratories to physicians exceed the fair market value of the physicians’ services or reflect the volume or value of referrals of federal health care program business. Reed Smith is preparing an analysis of the Alert.
The GAO recently examined “self-referral” for outpatient physical therapy (PT) services, which the GAO defines as a provider referring patients to entities in which the provider or the provider's family members have a financial interest. According to the GAO, non-self-referred PT services per 1,000 Medicare FFS beneficiaries increased by 41% from 2004 to 2010, while the number of self-referred PT was generally flat. Expenditures associated with non-self-referred PT services also grew at a higher rate than for self-referred services. The GAO observed that these findings differ from its prior reviews of self-referrals involving advanced imaging, anatomic pathology, and intensity-modulated radiation therapy, in which the GAO found that self-referred services and expenditures grew faster than non-self-referred services and expenditures. The GAO suggests that a potential reason for this difference is that non-self-referred PT services can be performed by providers who can directly influence the amount, duration, and frequency of PT services through the Medicare written plan of care, whereas radiologists, for example, generally do not have the discretion to order more imaging services or more intense imaging procedures.
In addition, the GAO found that the relationship between provider self-referral status and PT referral patterns was mixed, and varied on the basis of referring provider specialty, Medicare beneficiary practice size, and geography. Self-referring providers in the three specialties that GAO examined (family practice, internal medicine, and orthopedic surgery) generally referred more beneficiaries for PT services on average than non-self-referring providers, but ordered fewer PT services per beneficiary compared to non-self-referring providers. The GAO also found that PT service referrals in the year a provider began to self-refer increased at a higher rate relative to non-self-referring providers of the same specialty.
In the report, “Medicare Physical Therapy: Self-Referring Providers Generally Referred More Beneficiaries but Fewer Services per Beneficiary,” the GAO concluded that regardless of referral patterns, the substantial growth in PT services raises concerns about costs for Medicare and beneficiaries. The GAO suggests that CMS’s initiative to collect additional information on beneficiary functional status on all PT claims may help CMS better assess the appropriateness of PT treatment provided by both self-referring and non-self-referring providers.
The House Energy and Commerce Committee has scheduled a May 21 hearing entitled “Keeping the Promise: Site of Service Medicare Payment Reforms,” which will focus on two bills that seek to equalize payments between different providers:
- The Medicare Patient Access to Cancer Treatment Act of 2014, which would establish payment parity under the Medicare program for ambulatory cancer care services furnished in the hospital outpatient department and the physician office setting.
- The Bundling and Coordinating Post-Acute Care (BACPAC) Act of 2014, which would provide bundled payments for post-acute care services under Medicare Parts A and B.
The Committee will examine whether such proposals can save money for beneficiaries and the Medicare program without compromising quality of care.