On September 17, 2014, CMS is hosting a call on negative payment adjustments that could apply under several Medicare quality reporting programs in 2016. Specifically, the call will offer instructions on how eligible professionals and group practices can avoid the 2016 Physician Quality Reporting System negative payment adjustment, satisfy the clinical quality measure component of the EHR Incentive Program, and avoid the automatic CY 2016 Value-Based Modifier downward payment adjustment.
On August 22, 2014, CMS is publishing a final rule to update the Medicare acute hospital inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2015, which begins October 1, 2014. The following are highlights of the sweeping regulations.
With regard to the IPPS, the final rule provides for a 1.4% operating payment rate update for hospitals that submit quality data and are meaningful Electronic Health Record (EHR) users. This update reflects a 2.9% market basket update, adjusted by a -0.5 percentage point multi-factor productivity (MFP) cut and an additional -0.2 percentage point cut (both mandated by the Affordable Care Act), with an additional -0.8 percentage point documentation and coding recoupment adjustment. Despite the positive operating rate update, total IPPS payments (capital and operating payments) are projected to decrease by about $756 million in FY 2015 as a result of reductions under the Hospital Readmissions Reduction Program, the Hospital Acquired Condition (HAC) Reduction Program, Medicare disproportionate share hospital (DSH) payment changes, and other policy changes. Moreover, CMS is revising the labor market areas used in the wage index, but adopting a 1-year transition policy for FY 2015 to mitigate potential negative payment impacts.
The rule makes numerous changes to hospital quality programs, including updating measures aligning certain reporting requirements in both the EHR Incentive Program and the Hospital Inpatient Quality Reporting Program. In addition, the rule modifies the Hospital Value-Based Purchasing Program to increase the applicable percent reduction (the portion of Medicare payments available to fund incentive payments under the program) to 1.5% of the base operating DRG payment amounts to all participating hospitals, which will generate approximately $1.4 billion for value-based incentive payments in FY 2015. In addition, the rule increases the maximum reduction in payments under the Hospital Readmissions Reduction program from 2% to 3%. The rule also implements the ACA HAC Reduction Program, which will reduce by 1% Medicare inpatient payments to hospitals with the highest rates of certain conditions that are reasonably preventable when those conditions are acquired after the beneficiary has been admitted to the hospital for a different condition.
Other IPPS policies in the rule address, among other things, the low-volume hospital payment adjustment and the Medicare Dependent Hospital program, graduate medical education funding, and critical access hospital payments. CMS also reminds hospitals of their statutory obligation to establish and make public a list of its standard charges for items and services.
With regard to the LTCH PPS, CMS estimates that estimated payments per discharge will rise by 0.8% in FY 2015, and total payments will increase by 1.1%, or approximately $62 million. This increase is attributable to several factors, including a 2.2% rate update, which is based on a market basket update of 2.9% adjusted by a -0.5 percentage point MPF adjustment and an additional adjustment of -0.2 percentage points. CMS is also applying a “one-time” prospective budget neutrality adjustment to standard federal rate of approximately -1.3% under the last year of a three-year phase-in. For 2015, the standard federal rate will be $40,240.51 (compared to the FY 2014 rate of $40,607.31), and the fixed-loss amount for high cost outlier cases will be $14,972 (compared to the FY 2014 amount of $13,314). Note that LTCHs are subject to a 2.0 percentage point reduction for failure to submit required quality data for FY 2015.
The final rule also eliminates the 5 percent readmissions policy for LTCH patients discharged on or after October 1, 2014. Under this policy readmissions from co-located providers in excess of 5 percent are paid a single LTCH payment instead of separate admission and readmission payments. CMS indicated that this policy is not needed in light of recent statutory changes establishing clinical criteria for standard LTCH-PPS payments that will be implemented for discharges beginning on or after October 1, 2015. CMS did not finalize an earlier proposal to change the fixed-day threshold under the LTCH PPS greater than 3-day interrupted stay policy.
Separately, CMS has published corrections to the August 19, 2013 FY 2014 IPPS/LTCH final rule to restore regulatory text related to the administration of pneumococcal vaccines that had been inadvertently removed.
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 a proposed rule to update the Medicare end-stage renal disease (ESRD) PPS for CY 2015, which CMS anticipates would increase total payments to all ESRD facilities by 0.3% compared to CY 2014. While CMS projects that the ESRD market basket update, as adjusted for MFP, would have been 1.6%, the “Protecting Access to Medicare Act of 2014” (PAMA) sets the CY 2015 ESRD payment update at 0.0 percent. After applying a proposed wage index budget-neutrality adjustment factor, CMS estimates that the CY 2015 ESRD PPS base rate would be $239.33 under the proposed rule. The proposed rule also would, among other things: rebase the ESRD bundled market basket using 2012 data; update outlier Medicare Allowable Payment (MAP) and fixed dollar loss amounts (which will increase payments to ESRD facilities for beneficiaries requiring higher resource utilization); revise the market basket measures; update the labor -related share value with a two-year transition; clarify the eligibility criteria for the low volume payment adjustment ; and implement a PAMA provision providing that payment for ESRD-related oral-only drugs will not be made under the ESRD PPS prior to January 1, 2024. CMS also proposes updates to the ESRD Quality Incentive Program (QIP) for payment years 2017 and 2018. Finally, the proposed rule would make significant changes to Medicare reimbursement policy for DME, prosthetics, orthotics, and supplies (DMEPOS). CMS will accept comments on the proposed rule until September 2, 2014.
Today CMS released its proposed rule to update Medicare home health prospective payment system (HH PPS) rates for CY 2015. CMS estimates that the rule would reduce Medicare payments to home health agencies by approximately $58 million (-0.3%) in 2015 compared to 2014 levels. Specifically, while CMS anticipates a 2.2% home health payment update percentage ($427 million increase), the increase would be more than offset by implementation of the second year of a four-year phase-in of the rebasing adjustments to the HH PPS rates, which would result in a -2.5% adjustment ($485 million decrease).
The proposed rule also includes a number of policy proposals, including: simplification of the face-to-face encounter documentation requirements and clarification of when such documentation is required; changes to the HH PPS case-mix weights; revisions to the home health quality reporting program; simplification of therapy reassessment timeframes; a revision to the Speech-Language Pathology personnel conditions of participation; and limitations on the reviewability of CMS’s decision to impose a civil monetary penalty for noncompliance with federal participation requirements. Finally, the rule discusses insulin injections under the HH PPS and the delay in implementation of ICD-10-CM, and it solicits comments on the HHA value-based purchasing.
The official version of the rule is scheduled to be published on July 7, 2014. CMS will accept comments until September 2, 2014.
On July 10, 2014, CMS is hosting a national provider call to discuss the new Five Star Rating system that will be added to Dialysis Facility Compare (DFC) in October 2014. Among other things, the call will address the methodology used to calculate the ratings and how to access and preview the ratings. In addition, CMS is holding a provider call on July 16 on the End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP), a pay-for-performance initiative that ties a facility's quality scores to payment during a payment year (PY). The call will focus on the preliminary ESRD QIP PY 2015 Performance Score Report, which previews how well facilities scored on the relevant quality measures. Finally, a July 23 call will focus on PY 2017 and PY 2018 ESRD QIP provisions in the upcoming ESRD prospective payment system proposed rule.
On June 18, 2014, CMS announced in a blog posting that it is planning to add a “Five Star” quality rating system to the Hospital Compare, Dialysis Facility Compare, and Home Health Compare websites on Medicare.gov. The agency will start making the new quality ratings available later this year and into early 2015. CMS already maintains star ratings on its Nursing Home Compare and Physician Compare sites.
On May 27, 2014, CMS published a final rule updating ACA Affordable Insurance Exchange and insurance market standards beginning in 2015. Among other things, the rule addresses standards related to: standardized consumer notices regarding insurance product discontinuation and renewal; Qualified Health Plan (QHP) quality data reporting to support quality ratings for plans on the insurance marketplace beginning in 2016; non-discrimination standards; employee choice in the Small Business Health Options Program (SHOP); enforcement remedies in federally-facilitated exchanges; the imposition of civil money penalties for providing false or fraudulent information to the Exchange and for improperly using or disclosing information; updated standards for “Navigators” and other consumer assistance programs; increases the risk corridor calculation ceiling on allowable administrative costs and the floor on profits by 2% “to account for uncertainty and changes in the market prior to and during benefit year 2015”; and modifies the allocation of reinsurance collections if those collections do not meet projections. The rule also provides for an expedited prescription drug exceptions process based on exigent circumstances (defined as when an enrollee is suffering from a health condition that may seriously jeopardize the enrollee’s life, health, or ability to regain maximum function, or when an enrollee is undergoing a current course of treatment using a non-formulary drug). Under this provision, health plans must make coverage determinations within 24 hours after receiving the request; once an exception is granted, issuers must continue to provide the drug throughout the duration of the exigency. CMS states that it will continue to monitor this issue to consider whether it should propose additional standards.
On May 6, 2014, CMS published a proposed rule that would update prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs) for FY 2015. Under the proposed rule, the federal per diem base rate would be increased by 2.0%, reflecting a market basket increase of 2.7%, offset by a 0.3 percentage point reduction and a productivity adjustment reduction of 0.4 percentage points (both of which were mandated by the ACA). CMS also anticipates a 0.1 percent overall increase in IPF outlier payments from the update to the outlier fixed-dollar loss threshold amount. When all FY 2015 proposed payment and policy changes are considered, CMS estimates that total payments to IPFs would increase by 2.1% compared to FY 2014 payments (approximately $100 million). The proposed rule also would, among other things, establish a new methodology for updating the cost of living adjustment (COLA) and expand quality measures under the IPF Quality Reporting Program. In the proposed rule, CMS also discusses its intention to propose an IPF-specific market basket for FY 2016, and the agency addresses various coding changes. CMS will accept comments on the proposed rule until June 30, 2014.
On May 7, 2014, CMS published its proposed rule to update Medicare payment policies under the inpatient rehabilitation facility (IRF) PPS for FY 2015. Under the proposed rule, rates would be updated by a 2.1% increase factor, which reflects a 2.7% market basket update, reduced by a -0.4% MFP adjustment and a -0.2 percentage point adjustment mandated by the ACA). Taking into account an additional 0.1% increase to aggregate payments resulting from an update to the outlier threshold, CMS expects IRF PPS rates to rise on average by 2.2% (or $160 million in aggregate) compared to FY 2014 levels. CMS proposes to freeze facility-level adjustment factors (e.g., adjustments for Low-Income Percentage, teaching status, and location in a rural area, if applicable) for FY 2015 and all subsequent years at FY 2014 levels while the effects of FY 2014 changes are evaluated. Among other things, the proposed rule would: revise the list of impairment group codes that presumptively meet the “60 percent rule” compliance criteria; add items to the IRF patient assessment instrument (PAI); and revise the IRF Quality Reporting Program to update measures and add a data accuracy validation policy. The proposed rule also discusses the transition from ICD-9-CM to ICD-10-CM for use on Medicare claims and IRF–PAI submissions (although this transition has been put on hold temporarily as a result of the Protecting Access to Medicare Act of 2014). CMS will accept comments on the proposed rule until June 30, 2014.
Late on April 30, 2014, CMS released the advance text of its proposed rule to update the Medicare acute hospital inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2015.
With regard to IPPS hospitals, the rule would provide for a 1.3% operating payment rate update, which reflects a 2.7% market basket update, adjusted by a -0.4 percentage point multi-factor productivity cut and an additional -0.2 percentage point cut (both mandated by the Affordable Care Act), with an additional -0.8 percentage point documentation and coding recoupment adjustment. Updates to IPPS hospitals are also subject to several other quality-related adjustments under the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, the Hospital-Acquired Condition (HAC) Reduction Program, the Hospital Inpatient Quality Reporting Program, and the Electronic Health Records Incentive Program. Despite the positive operating rate update, total IPPS payments (capital and operating payments) are projected to decrease by about $241 million in FY 2015 as a result of reductions under the Hospital Readmissions Reduction Program, the HAC Reduction Program, Medicare disproportionate share hospital payment changes, the expiration of certain statutory provisions that temporarily increased payments to hospitals, and other policy changes included in the sweeping 1688-page rule.
With regard to LTCHs, CMS estimates that the rule would increase LTCH PPS payments by 0.8%, or approximately $44 million. This increase would result from a 2.1% update to the standard federal rate (reflecting a 2.7% market basket update offset by a 0.4 percentage point multi-factor productivity adjustment and a -0.2 percentage point reduction under the ACA), a -1.3% budget neutrality adjustment, and a projected decrease in estimated high cost outlier payments. LTCHs are subject to a 2.0 percentage point reduction for failure to submit required quality data for FY 2015. Moreover, other policies in the proposed rule, including implementation of statutory provisions in the Pathway for SGR Reform Act of 2013 and the Protecting Access to Medicare Act of 2014 (including reinstating moratoria on full implementation of the “25 percent threshold” payment adjustment and on the development of new LTCHs and LTCH satellite facilities and additional LTCH beds) and a proposed expansion of the interrupted stay policy, among others, would reduce LTCH PPS payments by approximately $14 million, for a total net increase of approximately $30 million.
The official version of the proposed rule will be published on May 15, 2014. CMS will accept comments on the proposed rule until June 30, 2014. The final rule will be published by August 1, 2014, and will apply generally to discharges occurring on or after October 1, 2014.
On April 17, 2014, CMS announced that it making inpatient psychiatric facility quality data available as part of the Hospital Compare website. Specifically, CMS is now posting data for the period of October 1, 2012 through March 31, 2013 regarding the following measures: Hours of Physical Restraint Use; Hours of Seclusion Use; Post-Discharge Continuing Care Plan Created; and Post-Discharge Continuing Care Plan Transmitted to Next Level of Care Provider Upon Discharge. Next year, CMS also expects to post data regarding the measures “Patients Discharged on Multiple Antipsychotic Medications” and “Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification.”
A recent GAO report looked at how private health care entities provide performance data to physicians, and how such practices could be used to improve CMS efforts to provide feedback to providers. The GAO determined that the nine health insurers and statewide collaboratives it reviewed typically employ multiple benchmarks (e.g., peer group averages or past performance), while CMS only compares results to the national average rates of all physician groups that submitted data on any given measure. The GAO observes that CMS’s approach precludes physicians from viewing their performance in fuller context. The private entities also sent reports more than once a year, in contrast to CMS annual reports that may limit physicians' opportunity to make improvements in advance of their annual payment adjustments. The GAO suggests that as CMS implements and refines its physician feedback and Value Modifier programs, it should consider comparing physicians' performance against additional benchmarks, such as state or regional averages, and disseminating performance reports more frequently. The report is entitled “Medicare: Certain Physician Feedback Reporting Practices of Private Entities Could Improve CMS's Efforts.”
On May 1, 2014, CMS will begin accepting recommendations for potential Physician Quality Reporting System (PQRS) quality measures for 2016 and future rulemaking years. Quality measure proposals also will be considered for use in other physician quality programs, including the Value Based Modifier, Physician Compare, and the Medicare Shared Savings Program.
On April 8, 2014, CMS published a notice announcing that it is establishing a new “system of records” to collect data to support the Hospice Quality Reporting Program. The new “Hospice Item Set” (HIS) is a standardized mechanism for abstracting data from a patient’s medical record to confirm that the appropriate assessments were made and concerns were addressed for the following domains of care: (1) Pain; (2) Respiratory Status; (3) Medications; (4) Patient Preferences; and (5) Beliefs & Values. The notice is effective on May 8, 2014, and comments will be accepted until that date. Beginning July 1, 2014, hospices will be required to submit two HIS records for each patient admitted to their organization: an HIS-Admission record and an HIS-Discharge record.
The Federal Trade Commission (FTC) has scheduled a workshop on March 20-21, 2014 to examine developments in the U.S. health care industry, including those related to implementation of health care reform legislation and other trends related to cost, quality, access, and care coordination. Specifically, the workshop will address the following five topics:
- Professional Regulation of Health Care Providers -- how accreditation, credentialing, licensure, and scope of practice rules may affect competition and consumers.
- Innovations in Health Care Delivery -- including retail clinics and telemedicine that may offer significant cost savings while maintaining or improving quality of care and expanding consumer access to care.
- Advancements in Health Care Technology – implications of technology such as electronic health care records, health data exchanges, technology platforms for health care payers and providers, and certain other consumer-oriented technological advances.
- Measuring and Assessing Quality of Health Care – how developments in measuring and assessing health quality may impact competition and health care choices.
- Price Transparency of Health Care Services – how improved price transparency impacts costs to consumers and its potential to facilitate price coordination among health care providers.
On February 24, 2014, CMS is hosting a town hall meeting to discuss the future of the Physician Compare website and how to improve the information presented to consumers. For instance, CMS is seeking feedback on additional measures that might help consumers identify quality care, and measures to accurately and completely represent the various Medicare specialties. CMS is also considering including additional information such as Board Certification and other medical qualifications. Related resources are posted on the CMS website. CMS is accepting written comments on this topic until March 3, 2014.
A January 15, 2015 CMS call will focus on the 2016 Medicare End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP). Among other things, the call will cover the final measures, standards, scoring methodology, and payment reduction scale that are applied to the payment year 2016 program.
Under the final Medicare home health PPS (HH PPS) rule released on November 22, 2013, payments in 2014 will be cut by 1.05% (about $200 million) compared to 2013 levels (and compared to a -1.5% cut forecast in the proposed rule). This reduction reflects a 2.3% home health payment update, which is more than offset by a -0.62% ICD–9 grouper refinement and a -2.73% ACA-mandated rebasing adjustment to the national, standardized 60-day episode payment rate and other applicable payment amounts. The ACA rebasing adjustment is intended to reflect factors such as changes in the number of visits, the mix of services, the level of intensity, and the average cost of providing care in an episode.
CMS estimates that the difference between the 2013 average payment per episode and the average cost per episode is 13.09%; CMS is recouping this difference over four years (from CY 2014 to CY 2017). The final rule also revises the Home Health Quality Reporting Program, including adding quality measures relating to hospital readmissions and Emergency Department visits with the first 30 days of a home health stay; CMS will begin reporting feedback to HHAs on performance on these measures in CY 2014, and they will be added to Home Health Compare for public reporting in CY 2015. On the other hand, the final rule reduces the number of process measures reported on the certification and survey provider enhanced reports (CASPER) by eliminating the stratification by episode length for nine process measures. The rule also clarifies cost allocation of home health agency survey expenses; for that portion of costs attributable to Medicare and Medicaid, CMS will assign 50% to Medicare and 50% to Medicaid. The official version of the rule will be published in the Federal Register on December 2, 2013.
On November 14, 2013, CMS is hosting a call on ACA quality reporting program requirements for inpatient rehabilitation facilities. According to the CMS announcement, the call will address issues and concerns IRF providers experienced during the first reporting period and how they can be avoided, along with resouces available to IRFs to assist with reporting.