CMS Plans Stakeholder Surveys to “Further Strengthen” the DMEPOS Competitive Bidding Program; Comment Opportunity through December 20, 2019

The Centers for Medicare & Medicaid Services (CMS) is seeking public input on surveys that are intended to “further strengthen the monitoring, outreach, and enforcement functions” of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program – even though the agency has asserted that the program “has maintained beneficiary access to quality products from accredited suppliers in all competitive bidding areas.”

The new planned surveys will be sent to “key stakeholders,” such as beneficiaries, contract suppliers, and “referral agents” (e.g., Medicare enrolled providers, physicians, treating practitioners, discharge planners, social workers, pharmacists and other health care professionals who refer beneficiaries for services in a competitive bidding area).  The surveys are intended to determine whether, for instance:

  • The item/service was received and was compliant with the physician’s written order.
  • Beneficiary/referral agents had difficulty locating a contract supplier to provide the necessary item(s).
  • Beneficiaries experienced delays in receiving equipment or difficulty obtaining follow-up assistance.

CMS also requests feedback on “effective methods for contacting referral agents as they play a critical role in assisting beneficiaries in obtaining competitively bid DMEPOS items.”  CMS will accept comments emailed to DMEPOS@cms.hhs.gov through December 20, 2019; the subject line of the email must read “Competitive Bidding Surveys.”  CMS does not specify when it intends to conduct these surveys.

HHS Health Fraud Penalties Climb Again

Maximum civil monetary penalty (CMP) amounts that may be imposed by the Department of Health and Human Services (HHS) and its agencies have increased once again under the latest HHS inflation adjustment notice.  Specifically, in conformance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“the Act”), HHS is applying a 1.02522 inflation “multiplier” (i.e., a 2.522% increase) to all its applicable monetary penalties in 45 CFR § 102.3, including CMPs assessed by the Office of Inspector General, the Centers for Medicare & Medicaid Services, the Office for Civil Rights, and the Food and Drug Administration, among others.  The increased CMP amounts apply to penalties assessed on or after November 5, 2019, if the violation occurred on or after November 2, 2015 (the Act’s date of enactment).

CMS Finalizes CY 2020 Medicare Home Health PPS, Infusion Therapy Policies

Aggregate Medicare home health prospective payment system (HH PPS) payments in calendar year (CY) 2020 will increase by 1.3%, or $250 million, compared to 2019 levels, under the Centers for Medicare & Medicaid Services’ (CMS) final CY 2020 rule.  In addition to updating home health agency (HHA) policies, the final rule establishes a permanent home infusion therapy benefit that begins in CY 2021.

With regard to HH PPS payments, the rule finalizes a 1.5% payment update percentage, which is offset by a -0.2% rural add-on adjustment.  In conjunction with implementation on January 1, 2020 of a new case mix methodology, the “Patient-Driven Groupings Model,” CMS had proposed an -8.01% budget neutrality adjustment in anticipation of expected “behavior changes,” such as modifications to documentation and coding practices.  Based on comments and additional analysis, CMS instead finalizes a -4.36% behavior change adjustment.  The final CY 2020 30-day payment rate for an HHA that submits required quality data is $1,864.03, up from the proposed rate of $1,791.73.

Other HHA policy changes CMS adopts in the final rule include:  streamlined home health plan of care content requirements; authorization for physical therapy assistants to furnish maintenance therapy; modification of the split percentage payment policy (with elimination of split-percentage payments beginning in CY 2021); and updates to Home Health Quality Reporting Program and Home Health Value-Based Purchasing Model requirements.

The rule also finalizes transitional home infusion therapy rates for CY 2020 and establishes eligibility and payment policies for the permanent home infusion therapy benefit that begins in CY 2021.  In response to stakeholder concerns regarding local Medicare policies that limit coverage of infused drugs, CMS requests comments on the criteria it could consider, within the scope of the durable medical equipment benefit, to allow coverage of additional home infusion drugs.  The deadline for comments on this topic is December 30, 2019.

Medicare ESRD PPS Payments to Rise 1.6% for 2020 under Final CMS Rule

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule updating Medicare end-stage renal disease (ESRD) prospective payment system (PPS) rates for 2020 – which CMS expects to increase total payments to ESRD facilities by 1.6% compared with 2019.  The final 2020 ESRD PPS base rate is $239.33, compared with the 2019 rate of $235.27.  The same rate will apply to renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury (AKI).

The final rule also:

  • Restricts drugs that may qualify for the Transitional Drug Add-on Payment Adjustment (TDAPA) “by focusing eligibility on those drugs that are innovative,” and modifies the payment basis for the TDAPA.
  • Establishes a new “Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies” to “support ESRD facilities in the uptake of certain new and innovative renal dialysis equipment and supplies under the ESRD PPS.”
  • Updates outlier services fixed-dollar loss and Medicare Allowable Payment amounts.
  • Discontinues the erythropoiesis-stimulating agent monitoring policy.
  • Modifies ESRD Quality Incentive Program policies.
  • Updates wage index values.

As part of this rulemaking, CMS adopted significant changes to Medicare payment policies for durable medical equipment, prosthetics, orthotics, and supplies; these provisions are summarized in a separate post.

CMS Updates Basic Health Program Policies

The Centers for Medicare & Medicaid Services (CMS) has finalized the methodology and data sources it will use to determine 2019 and 2020 federal payment amounts to individual states that establish a Basic Health Program (BHP) under the Affordable Care Act.  A BHP provides health benefit coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges in states that elect to operate such a program.  CMS expects the methodology for benefit year 2020 to shift a portion of BHP costs from the federal government to the states operating a BHP.

CMS Announces Final 2020 HCPCS Codes

The Centers for Medicare & Medicaid Services (CMS) released its final 2020 alphanumeric Healthcare Common Procedure Coding System (HCPCS) update. The file includes HCPCS procedure and modifier codes, their long and short descriptions, and associated information on Medicare coverage and pricing.  CMS also has summarized its final determinations regarding HCPCS applications discussed at its 2019 public meetings, including brief statements setting forth the agency’s rationale for final coding decisions.

House Clears Prescription Drug Price Transparency, Health Workforce Legislation

The House of Representatives has approved — without objection — a series of bills intended to promote prescription drug pricing transparency and invest in the health care workforce.

With regard to drug pricing transparency, the House approved HR 2115, the Public Disclosure of Drug Discounts Act, as amended to include HR 3415, the Real-Time Beneficiary Drug Cost Bill.  The legislation would require the Secretary of Health and Human Services to make public certain aggregate information regarding rebates, discounts, and price concessions that pharmacy benefit managers (PBMs) negotiate with prescription drug manufacturers, beginning January 1, 2020.  The stated purpose of the provision is “to allow the comparison of PBMs’ ability to negotiate rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions and the amount of such rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions that are passed through to plan sponsors.”  The information must be displayed in a manner (i.e., by drug class) that prevents the disclosure of proprietary or confidential information on rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions with respect to an individual drug or an individual plan.

Furthermore, HR 2115 as approved would require the Medicare Part D program to implement by January 1, 2021 electronic, real-time benefit tools capable of integrating with prescribers’ electronic prescribing or electronic health record system and that transmit enrollee-specific, point-of-prescribing information.  Such information must include a list of any clinically-appropriate drug alternatives in the plan formulary; cost-sharing information for a drug and such alternatives; and formulary status, including any prior authorization or other utilization management requirements.  Additionally, the legislation expresses the “sense of Congress” that commercially available drug pricing comparison platforms that help patients find the lowest price for their medications at their local pharmacy “should be integrated, to the maximum extent possible, in the health care delivery ecosystem.”  Likewise, PBMs “should work to disclose generic and brand name drug prices to such platforms” so patients can benefit from the lowest available prices and “overall drug prices can be reduced as more educated purchasing decisions are made based on price transparency.”  The House approved the legislation by a vote of 403 – 0. Continue Reading

Three House Panels Approve HR 3, the Lower Drug Costs Now Act

Three House committees have approved drug pricing legislation that is a high priority of the House Democratic leadership.  Specifically, HR 3, the Lower Drug Costs Now Act of 2019, has been approved by the Energy and Commerce Committee, the Ways and Means Committee, and the Education and Labor Committee.  While the details of the committee-approved bills vary, they generally would require manufacturers of certain prescription drugs to negotiate prices with the Secretary of Health and Human Services or be subject to an excise tax on the sales of those drugs, under a complex framework.  The bills also would apply Medicare drug rebates for certain drugs with prices increasing faster than inflation in specific circumstances, and make various changes to the Medicare Part D benefit, including capping beneficiary out-of-pocket spending on drugs.  Differences in the bills need to be reconciled before floor consideration, which is targeted for November.

House leadership intends to use the savings from HR 3 – if enacted — to finance an expansion of Medicare benefits, including:  HR 4665, the Medicare Vision Act of 2019; HR 4618, the Medicare Hearing Act of 2019; and HR 4650, the Medicare Dental Act of 2019 (all of which have also been approved by the relevant committees).

CMS Updates Medicare DMEPOS Policies, Including Overhaul of Pricing Framework for New HCPCS Codes

The Centers for Medicare & Medicaid Services (CMS) has adopted — with limited changes — its controversial plan to rewrite Medicare pricing rules for new items of durable medical equipment (DME), prosthetics, orthotics and supplies (DMEPOS) as part of its annual DMEPOS policy update for calendar year (CY) 2020.  The rule also makes minor changes to DMEPOS competitive bidding program (CBP) rules, streamlines certain requirements for ordering DMEPOS items, and makes other related policy changes.  The rule is effective January 1, 2020.

Revised Pricing Policy for New DMEPOS

CMS currently uses an arcane “gap-fill” process to establish rates for new DMEPOS items.  In short, if pricing is not available for the item in the statutory “base year” (1986 or 1987, depending on the item), CMS considers current fees for comparable items, supplier prices, manufacturer’s suggested retail prices (MSRPs), or wholesale prices.  That amount is then subject to a series of deflation adjustments and statutory updates to achieve the new Medicare rate.  CMS’s reliance on the pricing of existing products has been a point of contention when a manufacturer does not believe any items currently on the market are comparable to the innovative technology.  At the same time, CMS does not believe that MSRPs “represent accurate pricing from actual retail markets.”

To “improve … transparency and predictability,” CMS is adopting a new framework for setting fees for new DMEPOS items (i.e., new Healthcare Common Procedure Coding System (HCPCS) codes that do not have a fee schedule pricing history).  As it proposed, CMS will first seek to use existing fee schedule amounts for DMEPOS that it determines to be “comparable” based on the following five components and attributes (the new product does not need to be comparable within each category, and there is no prioritization of the categories): Continue Reading

OIG, CMS Propose Changes to Stark, Anti-Kickback Rules to Promote Value-Based Arrangements:  Reed Smith Analysis

As previously reported, the Department of Health and Human Services has published highly anticipated proposed changes to align the regulations under the Physician Self-Referral Law, the federal Anti-Kickback Statute, and the Civil Monetary Penalties Law with value-based health care arrangements.  Reed Smith is providing a series of client alerts and teleseminars that analyze key aspects of the proposals and significant areas for comment (the comment period runs through December 31, 2019).

  • Part One, presented here, focuses on the new value-based arrangement framework proposed by the Office of Inspector General and the Centers for Medicare & Medicaid Services (CMS) and the new safe harbors and exceptions that would be available to persons and entities participating in those arrangements. Reed Smith will discuss these proposed changes in a teleseminar scheduled for October 31, 2019.
  • Part Two will address additional CMS proposed changes to the Stark Law regulations, with a teleseminar following on November 12, 2019.
  • Part Three will focus on what these proposals mean for digital health arrangements and companies, with a teleseminar following on November 21, 2019.

Additional analysis and details on the teleseminars will be available in the near future.

HHS to Rescind Standard Unique Health Plan Identifier and Other Entity Identifier

The Department of Health and Human Services (HHS) has adopted its proposal to rescind the standard unique health plan identifier (HPID) and the “other entity identifier” (OEID), along with related implementation specifications and requirements for their use.  HHS adopted the HPID and OEID in a September 5, 2012 final rule in order to improve the utility of the HIPAA transactions, but subsequently delayed enforcement due to implementation concerns raised by health plan and other stakeholder.  HHS notes that in response to its December 19, 2018 proposed rule, 19 timely commenters, including major health plan and provider associations and vendors, all supported rescinding the HPID and OEID.

HHS states that it will continue to “explore options for a more effective standard unique health plan identifier,” as required by statute.  In the meantime, HHS will deactivate each HPID and OEID record in the Health Plan and Other Entity Enumeration System (HPOES) on behalf of each enumerated entity and will communicate to affected organizations and stakeholders about the deactivation process.

Wrap-Up of October Congressional Health Policy Hearings

October Congressional hearings have focused on the following health policy topics:

In addition, the following hearings and markups are scheduled for later this week:

  • The Energy and Commerce Subcommittee on Health will hold a hearing October 30 entitled “Safeguarding Pharmaceutical Supply Chains in a Global Economy.”
  • Also on October 30, the Senate Finance Committee will hold a hearing on compliance with Medicaid eligibility requirements (October 30).
  • On October 31, the Senate Health, Education, Labor, and Pensions Committee will markup the following bills: S 1657, to expand activities to combat Lyme disease and other tick and vector-borne diseases; S 2619, to reauthorize the Healthy Start program, S 1399, to revise and extend nursing workforce development programs, S 995, to reauthorize the Lifespan Respite Care program; S 1130, to fund programs and improve guidelines related to sudden death in early life; S 1608, to require HHS to publish physical activity recommendations; S 2629, to establish a Ready Reserve Corps within the Public Health Service Commissioned Corps; and an original bill titled “Over-the-Counter Drug Safety, Innovation, and Reform Act of 2019.”

Expansive New CMS Enrollment and Participation Rules Set to Go Live November 4, Although Comments Still Being Accepted

The Centers for Medicare & Medicaid Services (CMS) has published a final rule with comment period establishing sweeping disclosure and monitoring obligations for providers and suppliers enrolled or enrolling in federal health programs, and expanding CMS’s authority to deny or revoke enrollment status.  In particular, the rule establishes an expansive new “affiliations” disclosure requirement that allows CMS to identify individuals and organizations that, according to CMS, pose an undue risk of fraud, waste or abuse based on their relationships (i.e., “affiliations”) with other enrolled or previously enrolled entities.  While the rule is scheduled to go into effect November 4, 2019, CMS is accepting public comments until that date.  A Reed Smith analysis of the rule highlighting key topics for comments is available here.

President Trump Signs Executive Order on “Protecting and Improving Medicare for Our Nation’s Seniors”

President Donald Trump has signed an executive order that commits the Department of Health and Human Services (HHS) to taking a series of regulatory and subregulatory actions intended to enhance the fiscal sustainability of the Medicare program, reduce regulatory burdens on providers, and increase beneficiary choice.  The planned initiatives, which would require further policy development and potentially statutory changes, generally are in line with market-based themes the Administration has emphasized previously.  The President also used the Executive Order to slam proposed “Medicare for All” legislation, which the Administration claims would “destroy our current Medicare program.”

In particular, the executive order provides that within one year, the HHS Secretary must propose regulations to:

  • Provide Medicare beneficiaries with diverse and affordable plan choices by: encouraging innovative MA benefit structures and plan designs (including allowing beneficiaries to share in cost savings); reducing barriers to obtaining Medicare Medical Savings Accounts; promoting supplemental benefit; and encouraging telehealth innovations.
  • Adjust MA plan network adequacy requirements to account for state health market competitiveness and access to telehealth services and other innovative technologies.
  • Eliminate rules that burden providers, create inefficiencies, or undermine patient outcomes. More specifically, HHS should eliminate burdensome billing requirements, conditions of participation, supervision requirements, benefit definitions, and Medicare licensure requirements that exceed statutory mandates.
  • Ensure appropriate Medicare reimbursement to primary and specialist health providers for time spent with patients and, to the extent allowed by law, reimburse clinicians based on work performed rather than the clinician’s occupation.
  • Streamline the approval, coverage, and coding processes to bring innovative products to market faster with appropriate reimbursement. This should include minimizing steps between Food & Drug Administration (FDA) approval and Centers for Medicare & Medicaid Services (CMS) coverage decisions; facilitating parallel FDA and CMS review; and clarifying Medicare coverage standards.  CMS also should modify the Value-Based Insurance Design payment model to remove disincentives to MA coverage of new technologies.
  • Improve the availability of quality and cost data to enable seniors to make better health care decisions and hold providers and plans accountable.

In addition to these regulatory mandates, the executive order directs HHS to:

  • Study how Medicare FFS payments could be modified to more closely reflect the prices paid by MA and commercial plans. Separately, the Secretary must study “approaches to transition toward true market-based pricing in the FFS Medicare program,” including through:  shared savings and competitive bidding in FFS Medicare; use of MA-negotiated rates to set FFS Medicare rates; and novel approaches to information development and sharing to enable markets to lower cost and improve quality for FFS Medicare beneficiaries.  Note that changes to the fundamental structure of Medicare FFS payments to providers (outside of an Innovation Center or other demonstration program) could require statutory changes.
  • Identify and remove unnecessary barriers to private contracts that allow Medicare beneficiaries to obtain the care of their choice and facilitate market-driven prices.
  • Ensure that Medicare policies promote site neutrality.
  • Use claims data to inform providers about practice patterns that may pose undue patient risks, are outliers, or are outside recommended standards of care.
  • Revise policies to preserve Social Security retirement benefits for seniors who choose not to receive Medicare Part A benefits, and propose administrative improvements to the Medicare beneficiary enrollment process.

The executive order also calls on HHS to enact policies to combat Medicare fraud, waste, and abuse, “including through the use of the latest technologies such as artificial intelligence.”  Citing the executive order, on October 21, 2019, CMS released a request for information (RFI) on “Using Advanced Technology in Program Integrity,” seeking “innovative, but fiscally prudent and operationally feasible, ways to conduct program integrity more effectively and efficiently.”  Among other things, the RFI requests comments on the potential impact of artificial intelligence medical record review technologies in reducing the burden of medical review; how to incorporate documentation requirement repositories; how to improve provider enrollment; and how to improve data analytic and data system capabilities.  Comments will be accepted until November 20, 2019.

CMS Posts Preliminary 2020 Medicare Clinical Lab Payment Determinations

Preliminary 2020 Medicare clinical laboratory fee schedule (CLFS) payment determinations for new and reconsidered clinical lab test codes are now available for review.  For each code, the Centers for Medicare & Medicaid Services (CMS) announces whether it intends to use crosswalking or gapfilling to establish the payment rate, along with the agency’s rationale for its decision.  CMS will accept public comments on these preliminary determinations through October 27, 2019, and final determinations will be announced in November.

CMS Schedules Town Hall Meeting to Consider FY 2021 IPPS New Technology Add-On Payment Applications

Fiscal year (FY) 2021 applications for Medicare inpatient prospective payment system (IPPS) new technology add-on payments will be discussed at a December 16, 2019 Centers for Medicare & Medicaid Services (CMS) town hall meeting.  Depending on the number of applications, a second day of meetings may be held on December 17.  The meetings provide an opportunity for interested parties to present data and recommendations regarding whether pending applications meet the CMS substantial clinical improvement criterion, as set forth in the final FY 2020 IPPS rule.  The registration deadline is December 9, 2019; additional dates for presenters, agenda items, and comments can be found in the CMS meeting notice.  CMS also will enable participation by phone or live-stream technology; CMS will provide details about those options on its website.

CMS Sets CY 2020 Amount in Controversy Thresholds for Medicare Appeals

The Centers for Medicare & Medicaid Services (CMS) is increasing the amount in controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) hearings and judicial review under the Medicare appeals process for 2020.  The CY 2020 AIC threshold amounts are:

  • $170 for ALJ hearings (compared with $160 in 2019), and
  • $1,670 for judicial review (up from $1,630 in 2019).

The new amounts apply to requests for ALJ hearings and judicial review filed on or after January 1, 2020.

Proposed Rules to Modernize Stark Law and Anti-Kickback Statute Released Today

Today, the Department of Health and Human Services (HHS) announced proposed changes to modernize the regulations that interpret the Physician Self-Referral Law (the Stark Law) and the Federal Anti-Kickback Statute. In a press release, HHS states these proposed rules are intended to “provide greater certainty for healthcare providers participating in value-based arrangements and providing coordinated care for patients . . . while maintaining strong safeguards to protect patients and programs from fraud and abuse.”

Over the last 30 years, HHS has issued a series of final regulations establishing exceptions and safe harbors that limit the reach of the Stark Law’s strict liability civil penalties and the Anti-Kickback Statute’s criminal penalties to protect from enforcement certain non-abusive and beneficial arrangements. These final regulations have not, however, reflected the significant shift in recent years in health care delivery and payment systems from a fee-for-service model to models based on improving value and quality of care provided to patients. As a result, many in the health care industry identify these laws, as well as the Civil Monetary Penalty (CMP) Law, as barriers to more effective care coordination and management that can deliver value-based care to improve quality of care, health outcomes, and efficiency. In response, on June 25, 2018, the Centers for Medicare & Medicaid Services (CMS) published a Request for Information seeking input on how it could address existing Stark Law barriers to these emerging value-based payment and delivery systems. Similarly, on August 27, 2018, the Office of Inspector General (OIG) published a Request for Information seeking feedback on how OIG could modify or add new safe harbors addressing these barriers. CMS and OIG received more than 350 comments each, which HHS has considered in publishing these proposed rules.

CMS and OIG Coordinated Proposals

The proposed rules, which span hundreds of pages, reflect close coordination between CMS and OIG, which tried to align the regulations, where appropriate, and the proposals are significant. More specifically, the coordinated proposals include:

  1. Three new exceptions and safe harbors for value-based payment arrangements
  2. Modifications to the existing electronic health record (EHR) exception and safe harbor
  3. The addition of a new exception and safe harbor related to the provision of cybersecurity technology and services

Continue Reading

Short-Term Government Funding Legislation includes Health Policy Extenders, Drug Rebate Definition Change, DSH Policies

On September 26, 2019 the Senate approved H.R. 4378, the Continuing Appropriations Act, 2020, and Health Extenders Act of 2019, which would fund the federal government through November 21, 2019.  The House has already approved the legislation, and President Trump is expected to sign the bill.  The legislation includes a number of health program funding and policy provisions, including the following:

  • Medicaid Drug Rebate Definitions. The bill would exclude a manufacturer’s authorized generic drug price from the average manufacturer price (AMP) of its brand product.  It also would remove manufacturers from the definition of “wholesaler” for Medicaid drug rebate purposes.  These policies would be effective on the first day of the first fiscal quarter that begins after the date of enactment.
  • Delay of Reductions in Medicaid DSH Allotments. The bill would delay reduction in the allotments for Medicaid disproportionate share hospitals (DSH) through November 21, 2019.  In the absence of this legislation, Medicaid DSH allotments will decrease by $4 billion effective October 1, 2019, as discussed in our recent blog post.
  • Health Program Extenders. The bill would fund through November 21, 2019 various expiring federal health programs, including:  Community Health Centers; the National Health Service Corps; the Teaching Health Center Graduate Medical Education program; the Special Diabetes Program; various HHS health education programs; the Certified Community Behavioral Health Clinic demonstration program; programs supporting outreach, enrollment, and education activities for low-income Medicare beneficiaries; the Health Profession Opportunity Grant demonstration; the Temporary Assistance for Needy Families and related programs; and funding for certain contracts relate to Medicare and Medicaid quality measurement and performance improvement activities.  It also would extend authorization for the Patient-Centered Outcomes Research Institute (PCORI) to receive funding from the Patient-Centered Outcomes Research Trust Fund through November 21, 2019.  Furthermore, the bill would extend the current 100% Federal Medical Assistance Percentage (FMAP) for the territories through November 21, 2019.
  • Medicaid Improvement Fund. The bill would increase the Medicaid Improvement Fund to $2.387 billion, to be available beginning fiscal year 2025.

CMS Issues Final Rule to Streamline Medicare, Medicaid Provider Requirements

The Centers for Medicare & Medicaid Services (CMS) has issued an “omnibus burden reduction” rule that finalizes a September 20, 2018 proposed rule intended to streamline various Medicare and Medicaid regulatory requirements, in alignment with the Administration’s “Patients over Paperwork” initiative.  The omnibus regulation also finalizes a November 4, 2016 proposed rule on fire safety requirements for certain dialysis facilities, along with June 16, 2016 proposed rule updating conditions of participation (CoPs) for hospitals and critical access hospitals (CAHs) to promote innovation, flexibility, and improvement in patient care.  CMS estimates that the rule will save providers more than $800 million annually, although certain provisions (including the hospital CAH quality of care provisions) are expected to increase provider costs.

Major provisions of the final rule include the following:

  • Emergency Preparedness Requirements. The final rule allows facilities (other than long-term care (LTC) facilities) to review and provide training on their emergency programs every two years, rather than annually.  The rule also reduces testing frequency for outpatient providers; provides more flexibility regarding testing methods; and eliminates certain documentation requirements.
  • Hospitals. The rule updates requirements for hospital Quality Assessment and Performance Improvement (QAPI) programs and infection control programs, and allows multi-hospital systems to have unified and integrated QAPI and infection control programs for all member hospitals if the arrangement meets all applicable state and local laws.  In addition, the rule requires hospitals to establish and maintain antibiotic stewardship programs.  The final rule allows hospitals to establish a medical staff policy describing the circumstances under which a pre-surgery/pre-procedure assessment for an outpatient could be utilized instead of a comprehensive medical history and physical examination.  In addition, the rule streamlines certain swing-bed provider requirements and allows discretion regarding when an autopsy is indicated in certain instances.
  • CAH, RHC, and FQHCs. The final rule requires CAHs to implement QAPI, infection prevention and control, and antibiotic stewardship programs.  In addition, the rule reduces the frequency with which CAHs, Rural Health Centers (RHCs) and Federally Qualified Health Centers (FQHCs) must perform reviews of certain policies and procedures.  The rule also removes the CoP requirement for CAHs to disclose the names of people with a financial interest in the CAH, in light of duplicative program integrity requirements.
  • Ambulatory Surgical Centers (ASCs). The final rule replaces the current requirement that ASCs have written transfer agreements or privileges with the local hospital with a requirement that ASCs periodically provide the local hospital with written notice of its operation and patient population served.  The rule also removes the requirement that a physician or other qualified practitioner conduct a complete comprehensive medical history and physical (H&P) assessment on each patient within 30 days of the scheduled  Instead, each ASC must develop and maintain a policy that identifies patients who require an H&P assessment prior to surgery, the timeframe for H&P assessment completion, and certain patient and surgery characteristics, based on nationally recognized standards of practice and guidelines and applicable state and local laws.  Upon admission, each patient must have a presurgical assessment completed by a physician or other qualified practitioner who will be performing the surgery.
  • Hospices. The rule removes federal qualification standards for hospice aides and defers to state licensure requirements; removes the requirement that the hospice staff include an individual with education and training in drug management; and addresses requirements for consultation between hospice and LTC facility staff.
  • Other Provisions. The final rule address numerous other policies, including:  home health agency verbal notification of patient rights and home health aide requirements; frequency of comprehensive outpatient rehabilitation facility utilization reviews; requirements for portable x-ray orders and conditions for coverage for portable x-ray technologists; organ transplant program re-approval requirements;  community mental health center client assessment requirements; and discharge planning in religious nonmedical health care institutions.

The final rule is scheduled to be published on September 30, 2019.  The rule is effective 60 days after publication, although hospitals and CAHs have 6 months to implement the antibiotic stewardship programs and CAHs have 18 months to implement required QAPI programs.

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