Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

On May 6, 2011, CMS is publishing a final rule updating PPS rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs) for discharges occurring during rate year (RY) 2012, which begins July 1, 2011. CMS estimates that the rule would increase overall IPF PPS payments by approximately $120 million, reflecting a $130 million increase from an update to payment rates (a market basket update of 3.2% reduced by 0.25 percentage points as required by the ACA), and a $10 million decrease due to an adjustment to outlier threshold from approximately 2.2% in RY 2011 to 2.0% in RY 2012). The rule also changes the IPF PPS payment rate update period to coincide with federal fiscal years (beginning October 1); in order to transition to a FY update period, RY 2012 is a 15-month period. Other provisions of the rule modify the IPF PPS teaching adjustment, rebase and revise the applicable market basket, and make other clarifications to IPF PPS policies.

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On January 27, 2011, CMS published a proposed rule that would update prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs) for discharges occurring July 1, 2011 through September 30, 2012 and make other changes to the IPF PPS. The proposed rule also would rebase and revise the Rehabilitation, Psychiatric, and Long-Term Care (RPL) market basket, and make certain clarifications and corrections to terminology and regulations text. Comments will be accepted until March 22, 2011.

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

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

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

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The OIG has issued a report entitled “Nationwide Review of Medicare Payments for Interrupted Stays at Inpatient Psychiatric Facilities for Calendar Years 2006 and 2007.” The OIG estimates that Medicare made $3.9 million in improper payments to IPFs in calendar years 2006 and 2007 for claims on behalf of beneficiaries who had been discharged from another IPF within the prior 3 days, in violation of CMS’s “interrupted stay” policy. The OIG made a series of recommendations to recover inappropriate payment and prevent future errors, including systems edits, claims reviews, and revised billing instructions. CMS concurred with the OIG’s recommendations.

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On April 30, 2010, CMS published a notice on that updates Medicare prospective payment system (PPS) payment rates for inpatient psychiatric hospital services provided by inpatient psychiatric facilities (IPFs) for discharges occurring during the rate year beginning July 1, 2010 through June 30, 2011. CMS estimates that the rule will increase Medicare payments by $91 million, resulting from a 2.4% market basket increase, partially offset by a 0.25% reduction mandated by the PPACA, and an update to the outlier fixed dollar loss threshold amount.  

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On August 5, 2009, CMS published a correction to its July 13, 2009 proposed rule on Medicare physician fee schedule payments and policies for calendar year (CY) 2010. The notice makes technical questions and adds quality reporting measures regarding Functional Communications. CMS also has published a notice correcting typographical errors that appeared in its May 1, 2009 notice on Medicare inpatient psychiatric facilities prospective payment system (PPS) rates effective July 1, 2009. In addition, on August 13, 2009, CMS republished its August 6, 2009 Medicare home health PPS proposed rule for CY 2010 to correct data in the tables.

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On May 1, 2009, CMS published a notice updating Medicare inpatient psychiatric facility (IPF) PPS payments for rate year 2010, which begins July 1, 2009. CMS estimates that the notice will increase payments to IPFs by about 2.0% overall, taking into account a 2.1% market basket update offset somewhat by an increase to the outlier fixed dollar loss threshold amount. CMS waived issuance of a proposed rule in this case because it is not making any substantive changes in policy, but only applying previously-established methodologies. Nevertheless, CMS will accept comments on the update until June 30, 2009. In particular, CMS solicits data on variations in cost structures between freestanding and hospital-based IPFs to assist CMS in developing a stand-alone IPF market basket, and it is requesting information on the cap on full-time equivalent residents that may be used to calculate the IPF PPS teaching status adjustment.

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