House of Representatives Approves Bill to Delay LTCH 25% Rule Implementation, Make Other LTCH Reforms, and Tighten Medicare Enrollment Moratorium Authority

On September 21, 2016, the House Ways and Means Committee approved H.R. 5713, the “Sustaining Healthcare Integrity and Fair Treatment Act of 2016” or “SHIFT Act.”  The primary focus of the SHIFT Act is to provide an additional delay in full implementation of the “25 Percent Rule” for long-term acute care hospitals (LTCHs).  The legislation also would tighten CMS’s authority to impose Medicare enrollment moratoria to prevent providers and suppliers from evading the moratoria by locating outside of moratoria areas.  Continue Reading

OIG Report Highlights MFCU Achievements

The OIG has released its Medicaid Fraud Control Units Fiscal Year 2015 Annual Report, which compiles data on investigations and prosecutions by the 50 MFCUs. According to the OIG, MFCUs attained 1,553 convictions in FY 2015, the highest in the last five years. Almost one-third of these convictions involved personal care services attendants, and 71% represented fraud cases. There were also 731 civil settlements and judgments in FY 2015, including 279 involving pharmaceutical manufacturers (typically related to the marketing of drugs) and 54 involving pharmacies. MFCUs were responsible for a total of $744 million in criminal and civil recoveries in FY 2015, down significantly from the $1.5 billion to $2.6 billion range over the previous four years. The OIG attributes this decrease to “a national trend of declining civil health care fraud complaint settlements, especially those involving large pharmaceutical companies.” Combined federal and state expenditures for MFCUs totaled approximately $251 million in FY 2015, $188 million of which represented federal funds.

House Approves Medicare ESRD Coverage, Rural Hospital Supervision Bills

On September 21, 2016, the House of Representatives approved HR 5659, the Expanding Seniors Receiving Dialysis Choice Act of 2016, which would allow Medicare beneficiaries with end stage renal disease (ESRD) to enroll in Medicare Advantage plans beginning in 2020. The House also approved HR 5613, to prevent CMS from enforcing a Medicare requirement for direct physician supervision of certain outpatient therapeutic services furnished in critical access hospitals and small rural hospitals through 2016. The bills have not yet been considered by the Senate.

Energy and Commerce Committee Clears Public Health Bills

On September 21, 2016, the House Energy and Commerce Committee unanimously approved the following public health bills:

  • H.R. 4365, Protecting Patient Access to Emergency Medications Act – to amend the Controlled Substances Act (CSA) to enable paramedics and other emergency medical services (EMS) professionals to continue to administer controlled substances to patients under standing orders issued by their EMS agency’s medical director.
  • H.R. 3537, the Synthetic Drug Control Act – to add synthetic drug compounds to Schedule I of the CSA.
  • H.R. 1192, National Clinical Care Commission Act – to establish a National Clinical Care Commission to improve coordination of federal programs that support care for people with diabetes and related metabolic conditions.
  • H.R. 1209, Improving Access to Maternity Care Act – to collect data to identify maternity care health professional shortage areas.
  • H.R. 1877, Mental Health First Aid Act – to require the Substance Abuse and Mental Health Services Administration to award grants to support mental health awareness training programs.
  • H.R. 2713, Title VIII Nursing Workforce Reauthorization Act – to reauthorize grants and scholarships for graduate and undergraduate nursing education in specified areas of nursing.

Congressional Hearings Focus on Health Policy Issues

A number of recent Congressional hearings have focused on health policy issues, including: 

On September 23, the House Energy and Commerce will hold a hearing on the inactivation of dangerous pathogens in bioresearch laboratories, and on September 27 the panel will examine expanded access to investigational therapies.  On September 28, the House Ways and Means Committee has scheduled a hearing on health care fraud investigations.

HHS Proposes Changes to State Medicaid Fraud Control Unit Rules

The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) have proposed amendments to the regulations governing State Medicaid Fraud Control Units (MFCUs). The proposed rule would reflect statutory changes and policies adopted since the MFCU regulations were initially issued in 1978. Among other things, the rule would incorporate statutory changes that:  increase the federal funding for ongoing MFCU operating costs from 50% to 75%; establish standards under which MFCUs must be operated; allow MFCUs to investigate and prosecute Medicare or other federal health care cases that are primarily related to Medicaid, with the approval of the relevant Inspector General; and allow MFCUs to investigate and prosecute patient abuse or neglect in board and care facilities, regardless of whether the facilities receive Medicaid payments.  The rule also would address:  the OIG’s delegated authority; MFCU authority, functions, staffing, and reporting; and disallowances.   Comments on the rule are due by November 21, 2016.

CMS Ends Temporary Suspension of Hospital “Two-Midnight” Short Stay Reviews

CMS has announced that it is allowing Beneficiary and Family Centered Care (BFCC) Quality Improvement Organizations (QIOs) to resume initial patient status reviews to determine the appropriateness of Part A payment for short stay inpatient hospital claims, effective September 12, 2016.  Such reviews had been “paused” since May 4, 2016 to promote consistent application of medical review policies regarding patient status for short hospital stays.  In a web post, CMS explains that it is lifting the review suspension because the BFCC-QIOs:  successfully completed re-training on the Two-Midnight policy; completed a re-review of claims that were previously formally denied; and initiated various provider outreach efforts related to this policy.  In addition, CMS examined and validated the BFCC-QIOs peer review activities related to their short stay reviews, and the agency will continue monthly re-reviews of a sample of BFCC-QIO completed claim reviews.

CMS Announces Flexibility for Physician First-Year Participation in MACRA Quality Payment Program

In a recent blog post, CMS Acting Administrator Andy Slavitt announced CMS’s plans to give physicians more options for complying with significant upcoming changes to Medicare physician fee schedule (MPFS) rules – which will help physicians avoid triggering a negative payment adjustment in the first year of the program.

As previously reported, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repealed the longstanding sustainable growth rate methodology for updating the MPFS.  Instead, MACRA established a period of stable MPFS annual updates, after which MPFS updates will be made pursuant to either a new Merit-based Incentive Payment System (MIPS) or based on participation in qualified Alternative Payment Models (APMs).  CMS published a proposed rule in May 2016 to implement the MIPS and APM reforms, which together CMS calls the “Quality Payment Program.”  The first reporting period for the Quality Payment Program begins on January 1, 2017, and it will impact physician payment in 2019. Continue Reading

CMS Posts PAMA Clinical Lab Fee Schedule Data Reporting Template and User Guide

In order to assist the clinical laboratory community in meeting new Medicare reporting requirements under the Protecting Access to Medicare Act of 2014 (PAMA), CMS has posted a Clinical Laboratory Fee Schedule Data Reporting Template and a “Quick User Guide” to the template.  By way of background, PAMA requires CMS to base Medicare clinical laboratory fee schedule (CLFS) reimbursement on private insurance payment amounts.  We previously issued a client alert summarizing CMS’s June 23, 2016 final rule implementing the complex new PAMA clinical lab reimbursement framework.

In the Quick User Guide CMS notes that applicable laboratories (as defined) must collect private payor payment rates and associated volume for covered tests identified by HCPCS codes for the period beginning January 1, 2016 through June 30, 2016.  Applicable laboratories must report specific data to CMS beginning January 1, 2017, through March 31, 2017, which CMS will use to calculate payment rates for calendar year 2018. The fields included in the template are: HCPCS Code, Test Name, Payment Rate, Volume, and National Provider Identifier.

GAO, OIG Issue Reports on Medicare Part B Drug Payment Issues

The HHS Office of Inspector General (OIG) and the Government Accountability Office (GAO) recently issued several reports on various Medicare Part B drug reimbursement issues. In a report entitled “Medicare Part B: Data on Coupon Discounts Needed to Evaluate Methodology for Setting Drug Payment Rates,” the GAO assessed the impact of manufacturer coupon programs on Medicare payment rates for high-expenditure Medicare Part B drugs. The GAO observed that while coupon programs are prohibited in the Medicare program, they are generally available to privately insured patients, and the Part B drug payment methodology, which is based on reported average sales price (ASP), does not take into account coupon discounts that reduce the effective market price. The GAO estimated that for 18 high-expenditure drugs for which it obtained coupon discount data, the ASP exceeded the effective market price by an estimated 0.7% in 2013. According to the GAO, Part B spending for these drugs could have been reduced by an estimated $69 million “if ASP equaled the effective market price.” The GAO suggested that “[u]pward trends in coupon program use and drug prices suggest that these programs could cause the methodology for setting Part B drug payment rates to become less suitable over time for drugs with coupon programs.” The GAO therefore recommended that Congress consider (1) giving CMS authority to collect data from drug manufacturers on coupon discounts for Part B drugs paid based on ASP; and (2) requiring CMS to periodically collect these data and report on the implications of coupon programs for this methodology.

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OIG Updates Corporate Integrity Agreement Independent Review Organization Guidance

The OIG has updated its guidance for providers under Corporate Integrity Agreements regarding the circumstances that might affect the independence and objectivity of independent review organizations (IROs). The updated guidance reflects 2011 revisions to Government Accountability Office (GAO) auditing standards (known as the “Yellow Book”).

CMS Finalizes Emergency Preparedness Requirements for Medicare/Medicaid Providers

The Centers for Medicare & Medicaid Services (CMS) has released a long-awaited final rule establishing emergency preparedness requirements for Medicare- and Medicaid-participating providers and suppliers to ensure that they can meet the needs of patients and residents during emergency situations, both natural and man-made. According to CMS, the final requirements “establish a comprehensive, consistent, flexible, and dynamic regulatory approach to emergency preparedness and response that incorporates the lessons learned from the past, combined with the proven best practices of the present.”  CMS projects that compliance with the rule will cost $373 million in the first year, with subsequent annual costs of approximately $25 million.

The new requirements apply to 17 provider types (with certain variations): hospitals; critical access hospitals (CAHs); long-term care (LTC) facilities; psychiatric residential treatment facilities; intermediate care facilities for individuals with intellectual disabilities; religious nonmedical health care institutions; transplant centers; hospices; ambulatory surgical centers; Program for the All-inclusive Care for the Elderly (PACE) organizations; home health agencies; comprehensive outpatient rehabilitation facilities; community mental health centers; organ procurement organizations; clinics, rehabilitation, and therapy providers; rural health clinics/federally qualified health clinics; and end-stage renal disease providers.

The sweeping final rule (the advance version spans 651 pages) covers four aspects of emergency preparedness: Continue Reading

DMEPOS Bidding Round 1 2017 Single Payment Amounts Announced

CMS has announced the single payment amounts for Round 1 2017 of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive bidding program.  As previously reported, this round represents a recompete (with product category changes) of the current Round 1 Recompete contracts, which expire December 31, 2016.  Round 1 2017 contracts will apply from January 1, 2017 through December 31, 2018. Continue Reading

CMS IMPACT Act Educational Calls – Focus on Care Coordination (Sept.15) and Data Elements (Oct. 13)

CMS has scheduled a September 15, 2016 Special Open Door Forum call on the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). This call will provide an overview of the IMPACT Act’s requirement for standardization of patient assessment data across post-acute care settings, and solicit input on the ways the IMPACT Act can help improve care coordination. In a related development, an October 13, 2016 CMS national provider call will cover how data elements are used in IMPACT Act measure development.

CMS Seeks Input on “Evolution” of State Innovation Models Initiative, Including Potential Inclusion in MACRA Advanced Alternative Payment Models (APMs)

CMS is soliciting public input on the “evolution” of its State Innovation Models (SIM) Initiative, which was launched in 2013 to accelerate state design and testing of multi-payer payment and delivery models to generate savings and improve care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries. In a September 8, 2016 press release, CMS suggests that states have a “unique leverage point to implement models consistent with the proposed Quality Payment Program (QPP) under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).” To that end, CMS has issued a Request for Information (RFI) to obtain input on how CMS can partner with states to implement delivery and payment models across multiple payers that could qualify as QPP APMs or Advanced Other Payer APMs to facilitate eligible clinicians in a state becoming qualifying APM participants and earning APM incentives. The RFI also seeks comments on: multi-payer delivery and payment reforms that focus on having providers and the state assume financial accountability for the health outcomes of the entire state population; assessing the impact of specific care interventions across multiple states; and facilitating alignment of state and federal payment and service delivery reform efforts. Comments will be accepted until October 28, 2016.

FDA to Host Public Hearing on Manufacturer Communications Regarding Unapproved Uses of Medical Products

On November 9 and 10, 2016, the Food and Drug Administration (FDA) is hosting a public hearing on “Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products.” The hearing is intended to inform FDA’s “comprehensive review of its regulations and policies” pertaining to such communications. The FDA poses a number of specific questions to stakeholders, covering such topics as: Continue Reading

Congressional Health Policy Hearings, Markups Resume After Summer Break

Congress has returned from recess, and health care policy continues to be on the agenda. The following health-related hearings and markups were held this week:

  • The House Ways and Means Committee approved H.R. 5942, a bill to establish a demonstration program to provide integrated care for Medicare beneficiaries with end-stage renal disease, and H.R. 954, the “CO-OP Consumer Protection Act of 2016,” which would provide an exemption from the requirement to maintain minimum essential coverage if an individual’s Consumer Operated and Oriented Plan (CO-OP) coverage is terminated.
  • The Ways and Means Health Subcommittee held a hearing on “the Evolution of Quality in Medicare Part A.”
  • The House Budget Committee examined the CMS Center for Medicare & Medicaid Innovation: Scoring Assumptions, and Real World Implications.
  • The House Energy and Commerce Health Subcommittee held a legislative hearing on bipartisan bills intended to improve public health, including: H.R. 1192, the National Diabetes Clinical Care Commission Act; H.R. 1807, the Sickle Cell Disease Research Surveillance, Prevention and Treatment Act; H.R. 3119, the Palliative Care and Hospice Education and Training Act; and H.R. 3952, the Congenital Heart Futures Reauthorization Act.

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CMS Proposes ACA Marketplace Benefit and Payment Parameters for 2018

CMS has proposed its annual Notice of Benefit and Payment Parameters, which would apply to participation in Affordable Care Act (ACA) Health Insurance Marketplaces for 2018. In particular, the rule proposes revisions to the risk adjustment methodology to address, among other things:   risk associated with enrollees who are not enrolled for a full 12 months; use of prescription drug utilization data; transfers to better account for the risk of high-cost enrollees; use of more recent data for recalibration of risk adjustment models; and establishment of a discrepancy identification and administrative appeals process.  Numerous other policies are addressed in the proposed rule, including cost-sharing parameters; user fees; standardized health plan options; qualified health plan requirements; consumer assistance tools; network adequacy; the Small Business Health Options Program; stand-alone dental plans; fair health insurance premiums; guaranteed renewability; the medical loss ratio program; eligibility and enrollment; appeals; and oversight.  CMS will accept comments on the proposed rule until October 6, 2016.

HHS Inflation Adjustment Rule Hikes CMPs Across Department Programs

The Department of Health and Human Services (HHS) is increasing maximum civil monetary penalty (CMP) amounts applicable to HHS agencies and programs, in compliance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (which was part of the Bipartisan Budget Act of 2015).  The magnitude of the individual CMP increases varies depending on when the specific type of penalty was last adjusted and consequently how large a “catch-up” adjustment is applied.  Increases range from 1% to 150%.  For instance: Continue Reading

CMS Posts Corrections to July 2016 DMEPOS Fee Schedule Rates

CMS has identified errors in its July 2016 update to Medicare durable medical equipment (DME) prosthetic orthotics and supplies (DMEPOS) fee schedule amounts for certain items in non-competitive bidding areas. According to an announcement on the CMS web page, the fee changes resulting from the corrections range from a 4% decrease to a 3% increase, with an average 0.03% decrease for affected codes. Suppliers may submit for adjustment previously-processed claims with dates of service on or after July 1, 2016. The updated rates are available here.