The Centers for Medicare & Medicaid Services (CMS) has published its proposed rule to update the Medicare physician fee schedule (MPFS) for calendar year (CY) 2017. The proposed rule contains numerous Medicare payment and policy proposals, including consideration of potentially misvalued codes, revisions to diagnostic imaging policies, updates to Stark Law regulations, and new enrollment requirements for providers and suppliers furnishing services to Medicare Advantage enrollees. Highlights of the sweeping rule include the following: Continue Reading
HHS has announced a series of actions to address the nation’s opioid epidemic, as Congress has cleared the Comprehensive Addiction and Recovery Act for the President’s signature. As part of the HHS activities, the Substance Abuse and Mental Health Services Administration (SAMHSA) has published a final rule to expand from 100 to 275 the number of patients that qualified practitioners may treat with buprenorphine, a medication to treat opioid use disorder. Furthermore, as noted in a separate post, the proposed 2017 OPPS rule would remove certain pain management questions from consideration for purposes of Hospital Value-Based Purchasing (VBP) Program payment adjustments “to mitigate even the perception that there is financial pressure to overprescribe opioids.” In addition, HHS announced its research priorities regarding opioid misuse and pain treatment, and the Indian Health Service adopted a requirement that prescribers and pharmacists check state Prescription Drug Monitoring Program (PDMP) databases before prescribing or dispensing opioids for pain.
These actions come as the OIG has highlighted significant Medicare Part D spending on commonly abused opioids, which the OIG estimates exceeded $4 billion in 2015. In fact, almost one in three Medicare Part D beneficiaries received a commonly abused opioid in 2015, according to the OIG. The OIG recommends that CMS take additional actions to prevent opioid abuse within the Medicare program, signaling the potential for additional policies in this area.
In another related development, this month both the House and Senate approved the conference report to accompany S 524, the Comprehensive Addiction and Recovery Act. Among many other things, the bipartisan legislation would:
- authorize various grants for programs to address heroin and prescription opioid addiction and implement prescription drug monitoring programs;
- coordinate related federal prevention, education, and research efforts;
- expand access to opioid overdose reversal drugs and medication-assisted treatment programs;
- allow Medicare Advantage and Medicare Part D prescription drug plans to establish programs, for plan years beginning in 2019, restricting “at-risk” beneficiaries’ access to drugs that are frequently abused or diverted (as identified by the HHS Secretary) to drugs prescribed by one or more prescribers and obtained from one or more pharmacies, but only after the Secretary develops, in consultation with various stakeholders, clinical guidelines for identifying “at-risk” beneficiaries and promulgates various related regulations, subject to beneficiary notice and appeal rights and various other requirements and exemptions; and
- exempt abuse-deterrent formulations of prescription drugs, as determined by the Secretary, from the Medicaid additional rebate requirements applicable to “line extensions” of existing drugs.
The legislation now moves to the President’s desk.
CMS has received questions from manufacturers regarding whether price concessions and services offered to payers within Value-Based Purchasing (VBP) arrangements in the pharmaceutical marketplace could impact their drug’s Medicaid best price and increase their Medicaid rebate obligations. In recent guidance, CMS notes that, in general, prices included in best price include all prices, such as applicable discounts, rebates, or other transactions that adjust prices either directly or indirectly to best price eligible entities, including providers. However, CMS has concluded that the impact of a VBP arrangement on a manufacturer’s best price will differ depending on the arrangement’s structure; CMS has offered to consult with manufacturers about specific arrangements. Additionally, CMS encourages states to consider negotiating supplemental rebates as part of VBP arrangements, and notes that to the extent that a VBP arrangement provides supplemental rebates pursuant to a CMS-approved supplemental rebate agreement with the state Medicaid agency, the rebates would be excluded from best price. CMS also urges states to consider negotiating supplemental rebates with manufacturers for some or all of their Medicaid managed care drug claims, although CMS reminds states to determine the impact of such a decision on their contracts with managed care organizations.
CMS has 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 CY 2017. CMS proposes a 1.55% OPPS update, reflecting a 2.8% market basket increase, which is partly offset by a -0.5% multifactor productivity (MFP) adjustment and an additional 0.75% reduction (both mandated by the Affordable Care Act). CMS expects that overall OPPS payments would increase by 1.6%, or $671 million, compared with 2016 levels, because of the proposed changes in the rule. Hospitals that fail to meet the Hospital Outpatient Quality Reporting (OQR) Program reporting requirements are subject to an additional reduction of 2.0 percentage points. The actual update for individual procedures can vary dramatically, however, based on changes in ambulatory payment classification (APC) assignment and other policies in the proposed rule. Other major provisions of the proposed rule include the following: Continue Reading
The House of Representative has overwhelmingly approved a bipartisan bill (H.R. 2646, the Helping Families in Mental Health Crisis Act) to reform the nation’s mental health care system. Key provisions of the legislation would: provide grants to increase access to treatment for children with mental disorders and individuals with serious mental illness and fund various other mental health programs; promote evidence-based models in mental health care; clarify Medicaid coverage provisions related to mental health services; promote compliance with mental health and substance use disorder coverage parity requirements; promote workforce development; direct the Secretary of HHS to clarify the circumstances under which disclosure of protected health information is permitted under HIPAA for patients with mental illness; and make various administrative reforms, including establishment of an Assistant Secretary for Mental Health and Substance Use to improve oversight of federal mental health and substance use programs. The Senate Health, Education, Labor and Pensions (HELP) Committee approved a separate bill, S 2680, the Mental Health Reform Act of 2016, in March.
Congressional committees held hearings on a wide variety of on health policy issues this month before going on summer recess. Notable hearings include the following:
- A Senate Finance Committee hearing on ways to improve and reform the Stark Law, particularly in light of the shift from Medicare fee-for-service to alternative payment models. Prior to the hearing, the Committee released a report entitled “Why Stark, Why Now? Suggestions to Improve the Stark Law to Encourage Innovative Payment Models.” The Finance Committee also held hearings on implementation of MACRA Medicare physician payment reforms; and the burden of Alzheimer’s disease on families and Medicare.
- The Ways and Means Committee held hearings on health insurance premiums under the ACA and funding for the ACA cost sharing reduction (CSR) program.
- House Energy and Commerce Committee hearings focused on trauma care; ACA CSR program funding; quality, privacy, and regulatory issues associated with the use of health care apps; and legislation to improve the delivery of care for children with complex medical conditions under Medicaid.
- The House Oversight Committee examined the viability of the ACA Consumer Operated and Oriented Plan (CO-OP) program and other ACA implementation issues.
On July 13, 2016, the Ways and Means Committee approved HR 5659, which would enable Medicare beneficiaries with end stage renal disease (ESRD) to enroll in Medicare Advantage plans. Earlier this month, the Committee 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. In addition, on July 12, the House Energy and Commerce Committee approved HR 3299, Strengthening Public Health Emergency Response Act, to provide incentives for companies to develop medical countermeasures for public health emergencies and biochemical attacks, and for other purposes.
The Department of Health and Human Services (HHS) has issued a proposed rule intended to address the significant backlog resulting from “an unprecedented and sustained increase” in Medicare appeals. According to HHS, its Office of Medicare Hearings and Appeals (OMHA) had more than 750,000 pending appeals as of April 30, 2016, while it has only an adjudication capacity of 77,000 appeals per year. This proposed rule comes following criticism from various branches of the federal government regarding the delay in processing Medicare appeals, including a recent Government Accountability Office Report (GAO-16-366) identifying opportunities to improve the appeals process; the D.C. Circuit Court of Appeals’ recent reversal and remand in American Hospital Association v. Burwell, 812 F.3d 183, 185 (D.C. Cir. 2016); and a Senate Finance Committee hearing in April 2015.
The proposed rule includes a series of reforms to speed the appeals process, including a provision to expand OMHA’s adjudicator pool by allowing OMHA to reassign a portion of its workload to non-Administrative Law Judge adjudicators. Specifically, the proposed rule would allow attorney adjudicators to issue decisions when an appellant decides it does not want a hearing or withdraws his or her request for an ALJ hearing. Decisions by attorney adjudicators can be reopened or appealed the same as if the ALJ made the decision.
In addition, to provide more consistency in appeals decisions at all levels of appeals, the proposed rule would designate select Medicare Appeals Council (MAC) decisions as precedential and binding on CMS and its contractors in making initial determinations, redeterminations, and reconsiderations. CMS would provide appellants a public listing of such final precedential decisions in order for appellant to evaluate whether to move forward with the appeals process. While certain precedential decisions may curb inconsistent ALJ decisions, it will be important to monitor how and if Medicare contractors properly implement such precedential decisions. In circumstances in which a precedential decision would apply to a factual question, CMS explains in the proposed rule that the “decision would be binding where the relevant facts are the same and evidence is presented that the underlying factual circumstances have not changed” since the MAC issued the precedential decision. CMS further explains that “many claim appeals turn on evidence of a beneficiary’s condition or care at the time discrete items or services are furnished,” and therefore the proposed rule on precedential decisions “is unlikely to apply to findings of fact in these appeals.”
Other policies in the proposed rule seek to create procedural efficiencies, limit proceedings in which CMS or its contractors can participate, revise the amount in controversy threshold, and clarify regulatory language and timeframes. In a blog post announcing the release of the rule, Chief Administrative Law Judge Nancy Griswold and Departmental Appeals Board Chair Constance B. Tobias note that the President’s FY 2017 proposed budget requests additional funding and legislative reforms to facilitate appeals processing and encourage resolution of appeals earlier in the process. Even if Congress grants the Administration’s requests, however, Griswold and Tobias acknowledge that the backlog of appeals still would not be eliminated before FY 2021.
Comments on the rule will be accepted until August 29, 2016.
CMS has published a final rule to allow organizations approved as “qualified entities” to confidentially share or sell analyses of Medicare and private-sector claims data to providers, employers, and other groups who can use the data to support improved care. CMS expects the rule to lead to “more transparency regarding provider and supplier performance and innovative uses of data that will result in improvements to the healthcare delivery system while still ensuring appropriate privacy and security protections for beneficiary-identifiable data.” As mandated by the Medicare Access and CHIP Reauthorization Act (MACRA), qualified entities will be required to combine the Medicare data with other claims data (such as private payer data) to produce reports on provider and supplier performance across multiple payers. The rule includes annual reporting requirements, along with privacy and security rules to protect beneficiary information, including protections for patient-identifiable data that are at least as stringent as what is required of covered entities and their business associates for protected health information (PHI) under HIPAA.
In the final rule, CMS addresses the confidentiality of analyses produced under this program, in light of a statutory provision that “data released to a qualified entity under this subsection shall not be subject to discovery or admission as evidence in judicial or administrative proceedings without consent of the applicable provider or supplier.’’ CMS interprets this statutory shield to apply only to data released to the qualified entity and when that data is in the possession of the qualified entity. Once the Medicare data is used to create non-public analyses and those non-public analyses are shared with authorized users, CMS does not believe the statutory shield applies.
The final rule builds on the current Qualified Entity Program established by the Affordable Care Act (ACA), which enables qualified entities to use Medicare claims data in combination with other non-Medicare claims data to evaluate the performance of providers and suppliers. Fifteen organizations have received approval to be a qualified entity under the ACA program, and two have completed public reporting. The rule is effective September 6, 2016.
On July 13, 2016, the House Ways and Means Committee approved an amended version of 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 delay further the full implementation of the “25 Percent Rule” for long-term acute care hospitals (“LTCHs”). Under the 25 Percent Rule, an LTCH is allowed to admit up to 25% of its patients from a single general acute care hospital; for patients admitted past the 25% threshold, an LTCH faces a significant Medicare reimbursement reduction.
Under current law, the Centers for Medicare & Medicaid Services (“CMS”) has been precluded from fully implementing the 25 Percent Rule for freestanding LTCHs for cost reporting years beginning before July 1, 2016, and for LTCH hospitals-within-hospitals (“HIHs”) for cost reporting years beginning before October 1, 2016. The SHIFT Act would prohibit full implementation of the 25 Percent Rule for nine months for both freestanding LTCHs and LTCH HIHs for discharges occurring on or after October 1, 2016 through June 30, 2017. (However, it would also allow the 25 Percent Rule to go into effect for LTCH HIHs for cost reporting years beginning on or after July 1, 2016 rather than October 1, 2016, thereby creating a gap period before the nine month prohibition would begin.)
The SHIFT Act also provides relief from certain other LTCH payment policies for a limited number of LTCHs with special circumstances. First, it would eliminate the exception to the statutory exclusion of site neutral and Medicare Advantage patients from the average-length-of-stay (“ALOS”) calculation for newer LTCHs, so that the ALOS calculation methodology would be the same for all LTCHs. Second, it would create a temporary exception to the application of the site neutral payment policy for certain LTCHs categorized as spinal cord specialty hospitals, and extend an exception to that policy for certain severe wound discharges from grandfathered LTCH HIHs. Third, the SHIFT Act would remove certain cancer hospitals specializing in neoplastic disease (so-called “subclause (II)” LTCHs) from their classification as LTCHs and provide for cost-based reimbursement for such hospitals.
Under current program integrity regulations, CMS may impose a moratorium on the enrollment of new Medicare providers and suppliers of a particular type in a particular geographic area. The SHIFT Act would broaden the impact of CMS’s imposition of such a moratorium. Specifically, it would prohibit Medicare or Medicaid payment for services furnished in a geographic area covered by a moratorium by a provider or supplier who enrolls on or after the effective date of the moratorium, even if the provider or supplier was not located within the geographic area covered by the moratorium.
On June 22, 2016, the Department of Health and Human Services Office of Inspector General (“OIG”) issued a comprehensive report detailing its nationwide analysis of common characteristics in home health fraud cases. In tandem with this report, the OIG issued an Alert on improper arrangements and conduct by and among home health agencies (“HHAs”) and physicians. Essentially, the OIG has broadcast a warning shot—it will increase its already aggressive prosecution of home health services fraud.
The Centers for Medicare & Medicaid Services (“CMS”) has also stepped up its own efforts to combat health care fraud. Specifically, the agency announced that it will implement a pre-claim review demonstration for HHAs in five states — Illinois, Florida, Texas, Michigan, and Massachusetts — identified as particularly susceptible to home health services fraud. This pre-claim review demonstration mandates that HHAs seeking Medicare reimbursement for home health services submit currently-mandated documentation to the Medicare Administrative Contractor (“MAC”) earlier in the claims payment process. Although HHAs need not wait for a determination prior to furnishing services, the documentation is intended to determine if the service level complies with Medicare coverage requirements. CMS intends this review process to aid investigative and enforcement efforts by both CMS and OIG.
The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) has issued new guidance to help long-term care facilities comply with anti-discrimination obligations when they administer the Minimum Data Set (MDS) patient assessment tool so that the facilities’ residents receive care in the most integrated setting appropriate to their needs.
Those obligations arise under Section 504 of the Rehabilitation Act (29 U.S.C. § 701 et seq.) (Section 504) and the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) (ADA), which prohibit long-term care facilities receiving federal financial assistance from discriminating against individuals based on disability. The unnecessary placement of residents in an inpatient setting when they could live in a more integrated setting may constitute discrimination under Section 504 and the ADA, as interpreted by the U.S. Supreme Court in Olmstead v. L.C., 527 U.S. 581 (1999).
OCR’s guidance, issued May 20, 2016, includes recommendations concerning MDS administration. OCR issued the guidance after finding that long-term care facilities have misinterpreted certain required questions when administering the MDS to their residents, namely – MDS Section Q, questions Q0400, Q0500 and Q0600. Those questions, as well as others in Section Q of the MDS, are intended to ensure that long-term care facilities provide all residents with the opportunity to learn about home and community-based services. The guidance sets forth detailed instructions concerning how operators should answer each of the three questions. According to OCR, proper administration of these questions is critical to assisting residents to receive services in the most integrated setting. Continue Reading
CMS has proposed a series of complex and detailed revisions to Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) policies for 2017, including changes to the competitive bidding program (CBP) requirements and adjustments to DMEPOS fee schedules based on CBP pricing. The proposed DMEPOS policies are included in the Medicare ESRD PPS proposed rule for CY 2017.
With regard to the CBP, CMS proposes to implement a Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provision requiring entities bidding in the DMEPOS competitive bidding program to submit proof of an authorized “bid surety bond” for each competitive bidding area (CBA) in which the supplier is bidding. Under the proposed rule, the surety bond amount would be set at $100,000 for each CBA associated with the bid. If the bidder is offered a contract for any product category in the CBA, and the supplier’s bid for the product category was at or below the median composite bid rate used to calculate single payment amounts, the bid bond would be forfeited and CMS would collect on the bond if the supplier does not accept the contract. In all other cases, the bid bond would be returned to the bidder within 90 days of CMS’s public announcement of the contract suppliers for the CBA. This provision is intended to prevent suppliers from submitting – but not accepting — “low-ball” bids that artificially drive down prices to improve the supplier’s chances of being offered a contract. The rule also addresses penalties for bidders that provide falsified surety bonds or accept a contract offer and then renege on it in order to avoid surety bond forfeiture. Continue Reading
The Centers for Medicare & Medicaid Services (CMS) has published its proposed rule to update the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2017. CMS anticipates that the proposed rule would increase overall Medicare payments to ESRD facilities by 0.5 percent in 2017 compared with CY 2016 levels (with a slightly higher increase – 0.7 percent — for hospital-based ESRD facilities). This update reflects a 0.35 percent market basket increase and the application of wage index and self-dialysis training budget-neutrality adjustment factors. The proposed CY 2017 ESRD PPS base rate is $231.04, compared to the CY 2016 base rate of $230.39. Continue Reading
Today the Department of Justice published an interim final rule with request for comments that applies an inflation adjustment to civil monetary penalty (CMP) amounts assessed by the Department, as mandated by the Bipartisan Budget Act of 2015. Notably, the new maximum CMP for False Claims Act (FCA) violations under 31 U.S.C. 3729(a) is $21,563, up from $11,000 (the minimum FCA CMP under the rule is $10,781). The adjusted CMPs are applicable to civil penalties assessed after August 1, 2016 and whose associated violations occurred after November 2, 2015 (the date of enactment of the 2015 Amendments). The DOJ will accept comments on the rule through August 29, 2016.
The DOJ acknowledges that the statute authorizes it to increase a civil penalty by less than the otherwise required amount in certain circumstances, but “the Department is not invoking that authority in this rule,” contending that its amended penalties “are calculated pursuant to the statutory formula.” Nevertheless, an argument will likely be made that the new CMPs are prima facie excessive compared to the actual per-claim damages in many FCA cases, raising doubts about their enforceability and constitutionality. No doubt some other commentators will argue that the increased penalties give the Department of Justice a more powerful weapon when prosecuting FCA cases, and may result in even greater governmental leverage in FCA-related settlement discussions with providers, suppliers, and manufacturers. Instead, we think this is just “piling on” when the current penalties (and damages provisions) were more than sufficient.
The Centers for Medicare & Medicaid Services (“CMS”) published the long-awaited final rule February 12, 2016, clarifying the specific procedures applicable to the statutory requirement under the Affordable Care Act (“ACA”) for providers and suppliers to report and return overpayments within 60 days. While the final rule eased some of the law’s more unforgiving aspects, its limited scope brought up new questions about the breadth of the law itself.
Despite concerns raised by a number of commenters in response to the proposed rule, CMS limited the scope of the final rule to Medicare Parts A and B only. In other words, the final rule clarifies the obligations of Medicare providers and suppliers to report and return overpayments originating under Medicare Parts A and B. Commenters expressed concern about this limitation and the lack of rationale for distinguishing Medicare Parts A and B from Medicare Parts C and D; they also voiced the need shared by all providers and suppliers for guidance on the overpayment requirements. In response, CMS reasoned that differences in how the Medicare programs are administered necessitated separate rulemakings. Interestingly, the agency did not indicate whether a separate rulemaking would be forthcoming, but instead directed providers and suppliers to their existing statutory obligations under the ACA, and a prior rulemaking applicable to reporting and returning overpayments in the Medicare Parts C and D context, for further guidance. In its response, CMS appears to assume, without stating expressly, that the law and the agency’s prior rulemaking apply to providers and suppliers receiving payments under Parts C and D.
CMS has released its proposed rule to update the Medicare home health prospective payment system (HH PPS) for 2017. CMS estimates that the policies in the proposed rule would reduce overall Medicare payments to home health agencies (HHAs) by $180 million (1.0%) in 2017 compared to 2016 payments. This projected decrease reflects a 2.3% home health payment update percentage (derived from a 2.8% market basket update minus a 0.5% multifactor productivity adjustment), that is more than offset by (i) a proposed 0.97% reduction to account for nominal case-mix coding intensity growth, and (ii) a -2.3% rebasing adjustment (the final year of a four-year phase-in). CMS also proposes changes to its calculation of outlier payments that would decrease payments by an estimated 0.1%. The proposed CY 2017 national, standardized 60-day episode payment rate would be $2,936.68; the rate for an HHA that does not submit the required quality data would be reduced by 2 percentage points to $$2,879.27. The proposed rule also would recalibrate HH PPS case-mix weights and update the home health wage index using more current hospital wage data. Continue Reading
CMS has released the July 1, 2016 update to Medicare durable medical equipment (DME) prosthetic orthotics and supplies (DMEPOS) fee schedule amounts in non-competitive bidding areas, reflecting full implementation of adjustments to nationwide rates based on DMEPOS competitive bidding program (CBP) pricing. As previously reported, the Affordable Care Act mandates that CMS use pricing information from competitive bidding to adjust DME fee schedule amounts for items furnished in areas where the CBP is not implemented. CMS is implementing these adjustments in two steps. For the period January 1, 2016 through June 30, 2016, CMS is basing fee schedule amounts on a blend of 50% of the fee schedule amount that would have gone into effect on January 1, 2016 if not adjusted based on information from the CBP, and 50% of the adjusted fee schedule amount. Beginning July 1, 2016, CMS will implement new fee schedules reflecting 100% of the adjusted fee schedule amounts. The July 1 rates will also reflect new pricing information from the Round 2 Recompete and National Mail Order Recompete programs.
According to a CMS fact sheet announcing the July 1 rates, the cumulative cuts to DMEPOS fee schedule amounts under the fully-adjusted rates are substantial, with fees for many items reduced by 50% – 80% compared to 2015 rates, as illustrated in the following table: Continue Reading
CMS has just announced that it has enhanced its financial accounting system to allow it to recover Medicare payments made to a provider or supplier that shares the same Tax Identification Number (TIN) with a provider or supplier with an outstanding Medicare overpayment across multiple states within a Medicare Administrative Contractor jurisdiction. CMS implemented this change in January 2016 based on its authority “to adjust the payments of such a provider of services or supplier regardless of whether it has been assigned a different billing number or NPI from that of the provider of services or supplier with the outstanding Medicare overpayment.” The policy is discussed in an educational article entitled “Recovering Overpayments from Providers Who Share Tax Identification Numbers” issued on June 22, 2016.
On June 23, 2016, the Centers for Medicare & Medicaid Services (CMS) is publishing a major final rule to base Medicare clinical laboratory fee schedule (CLFS) reimbursement on private insurance payment amounts, as required by the Protecting Access to Medicare Act of 2014 (PAMA). In an important change from the proposed rule, CMS will implement the new payment policy beginning January 1, 2018, rather than in 2017. Once in effect, the impact will be significant; CMS estimates that the final rule will reduce Medicare payments by $390 billion in FY 2018 and by $3.93 billion through FY 2025. The following is an overview of the complex new payment methodology.