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

By Debra A. McCurdy on 22 October 2019 Posted in Other Health Policy Developments

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

By Debra A. McCurdy on 15 October 2019 Posted in Other CMS Developments

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

By Debra A. McCurdy on 15 October 2019 Posted in Health Care Industry Events

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

By Debra A. McCurdy on 15 October 2019 Posted in Centers for Medicare & Medicaid Services Regulations

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

By Nancy Halstead and Nicole Aiken-Shaban on 9 October 2019 Posted in Department of Health & Human Services Regulations

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:

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

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

By Debra A. McCurdy on 26 September 2019 Posted in Legislative Developments

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

By Debra A. McCurdy on 26 September 2019 Posted in Centers for Medicare & Medicaid Services Regulations

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.

CMS Finalizes Hospital/HHA Discharge Planning Requirements

By Debra A. McCurdy on 26 September 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has finalized changes to the discharge planning conditions of participation (CoPs) for hospitals (including long-term care hospitals (LTCHs) and inpatient rehabilitation hospitals (IRFs)), critical access hospitals (CAHs), and home health agencies (HHAs). CMS believes the rule, which implements statutory requirements under the Improving Medicare Post-Acute Care Transformation Act of 2014, “will empower patients to be active participants in the discharge planning process and will help them to make informed choices about their care, which may lead to more competition, lower costs, and improved quality of care.”

CMS notes that it made numerous changes in the final rule to “avoid any unnecessarily costly and burdensome requirements.” In fact, CMS credits public comments as being “exceptionally useful in identifying weak or unjustified provisions in the proposed rule as well as in identifying alternatives.” CMS still estimates that the final rule will impose $262 million in costs during the first year and $215 million annually thereafter – but that is about half of the cost estimates for the proposed rule. Virtually all of the annual costs will be borne by HHAs under a new requirement that an HHA’s discharge planning process provide certain information to patients discharged or transferred to another post-acute care provider, in order to assist patients and families in selecting a provider that meets the patient’s needs and goals.

The final rule also requires hospitals to have an effective discharge planning process that focuses on the patient’s goals and treatment preferences and includes the patient and his or her caregivers/support persons as active partners in discharge planning for post-discharge care. While CMS had proposed requiring hospitals to prepare a discharge plan for all inpatients and certain categories of outpatients, in the final rule CMS scaled back this provision. Instead, a hospital’s discharge planning process must identify, at an early stage of hospitalization (ideally when the patient is admitted as an inpatient, or shortly thereafter), those patients who are likely to suffer adverse health consequences upon discharge in the absence of adequate discharge planning. The hospital must provide a discharge planning evaluation for those patients so identified, as well as for other patients upon the request of the patient or the patient’s representative or physician. Under the final rule, a discharge planning evaluation must assess a patient’s likely need for appropriate post-hospital services, including hospice care services, post-hospital extended care services, and home health services, and must also determine the availability of those services. CMS also established a new Patients’ Rights CoP ensuring a patient’s right to access his or her own medical information from a hospital.

In other notable changes from the proposed rule, CMS withdrew most of its proposed discharge instruction provisions related to patients discharged home, and the agency did not finalize “design” language that would have established prescriptive discharge planning procedural requirements. Furthermore, CMS is not requiring hospitals, HHAs or CAHs to consult with their state’s Prescription Drug Monitoring Programs (PDMPs) and review a patient’s risk of non-medical use of controlled substances and substance use disorders, nor will CMS require providers to use or access PDMPs during the medication reconciliation process.

CMS clarifies that the final rule applies to all classifications of hospitals, including short-term acute care hospitals (and their inpatient prospective payment system-excluded rehabilitation or psychiatric units), psychiatric hospitals, LTCHs, rehabilitation hospitals, children’s hospitals, and cancer hospitals. These requirements also apply to distinct part psychiatric and rehabilitation units in CAHs.

The final rule will be published on September 30, 2019 and is effective 60 days thereafter. CMS intends to provide additional subregulatory interpretive guidance to facilitate implementation of these requirements.

Congressional Committees Renew Focus on Drug Pricing, Other Health Policy Topics

By Debra A. McCurdy on 23 September 2019 Posted in Legislative Developments

On September 25, 2019, the House Energy and Commerce Committee is holding a hearing entitled “Making Prescription Drugs More Affordable: Legislation to Negotiate a Better Deal for Americans.” A background memo and text of the bills are available here. Likewise, a second House panel – the Education and Labor Health, Employment, Labor, and Pensions Subcommittee – will consider related drug pricing and transparency legislation on September 26.

In other health policy developments:

The House Energy and Commerce Committee held hearings entitled “Profits Over Consumers: Exposing How Pharmaceutical Companies Game the System,” and “Improving Maternal Health: Legislation to Advance Prevention Efforts and Access to Care.”
The House Committee on Small Business held a hearing on “Utilization Management: Barriers to Care and Burdens on Small Medical Practice.”
On September 25, the House Appropriations Committee is holding a hearing on “Investments in Medical Research at Five Institutes and Centers of the National Institutes of Health.”

SAMHSA Proposes Clarifications to Rules Governing the Confidentiality of Substance Use Disorder Patient Records

By Debra A. McCurdy on 17 September 2019 Posted in Department of Health & Human Services Regulations

The Department of Health & Human Services (HHS) Substance Abuse and Mental Health Services Administration (SAMHSA) has proposed revisions to federal rules governing the confidentiality of patient records created by federally-assisted substance use disorder (SUD) treatment programs. The proposed rule is intended to support coordinated care among providers that treat patients with SUDs, while maintaining privacy safeguards for patients seeking SUD treatment. Comments on the proposed rule will be accepted until October 25, 2019. The proposed rule is summarized on our Life Sciences Legal Update blog.

CMS Issues Final FY 2020 Medicare IPPS/LTCH Update, Including New Medical Device Technology Policies

By Gail L. Daubert, Paul W. Pitts and Debra A. McCurdy on 29 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has finalized Medicare acute inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) rates and policies for fiscal year (FY) 2020, which begins October 1, 2019. Key provisions of the final rule are outlined below.

IPPS Payment Update

CMS projects total Medicare IPPS spending in FY 2020 will increase by about $3.8 billion under the final rule taking into account operating, capital, new technology, and low volume hospital payments. The IPPS market basket update is 3.0%, which is reduced by a 0.4 percentage point productivity adjustment and a +0.5 percentage point statutory adjustment. The final FY 2020 standardized amount is $6,263.74 for hospitals that submit quality data and are meaningful electronic health record (EHR) users, with reduced payment to hospitals that do not report quality data and/or are not meaningful EHR users. Specific hospital payments can be impacted by other factors, including penalties for excess readmissions under the Hospital Readmissions Reduction Program, poor performance under the Hospital-Acquired Condition Reduction Program, and adjustments under the Hospital Value-Based Purchasing Program.

Promoting Access to Innovative Devices and Antimicrobial Products

CMS adopted several policies intended to improve beneficiary access to innovative medical technologies in the IPPS setting for FY 2020.

CMS adopted an alternative IPPS new technology add-on payment (NTAP) pathway for certain “transformative” medical devices beginning in FY 2021. Specifically, if a new medical device is part of the Food and Drug Administration’s (FDA) Breakthrough Devices Program and receives FDA marketing authorization, the device would be considered new for NTAP purposes and it would not need to demonstrate substantial clinical improvement (SCI). In other words, the device would only need to meet the NTAP cost criterion
In response to comments, CMS extended the alternative NTAP pathway to antimicrobial products designated by the FDA as a Qualified Infectious Disease Product (QIDP), but not to technologies approved under an FDA expedited program for drugs.
CMS adopted its proposed increase in NTAP payments for discharges beginning on or after October 1, 2019. Specifically, CMS is increasing the NTAP payment to the lesser of: (1) 65% (up from 50%) of the costs of the new medical service or technology; or (2) 65% (rather than 50%) of the amount by which the costs of the case exceed the standard DRG payment. In the case of a QIDP, the NTAP amount rises to 75%.
CMS clarified the SCI criterion for evaluating NTAP applications and provided examples of information sources and outcomes that may be used to demonstrate SCI. CMS will continue to consider comments received on the proposed rule’s solicitation of input on longer-term changes to related CMS policies.

Note that CMS also has proposed similar proposals to promote innovative medical technologies as part of the pending calendar year 2020 Medicare hospital outpatient PPS proposed rule. Continue Reading

Medicare Sequestration Extended through FY 2029 under New Budget Law

By Debra A. McCurdy on 20 August 2019 Posted in Legislative Developments

While the latest federal budget agreement signed into law earlier this month provides a reprieve from statutory budget caps for certain defense and domestic programs, it extends Medicare sequestration cuts for an additional two years. Specifically, section 402 of the Bipartisan Budget Act of 2019 (P.L. 116-37) extends the 2% across-the-board reduction to Medicare provider and plan payments through fiscal year 2029. Note that for the last year of sequestration, the Medicare savings are “front loaded,” with a 4% reduction imposed during the first 6 months of the fiscal year and no reduction applied during the second half.

Congress has regularly relied on extension of the Medicare sequestration authority to offset the costs of unrelated budget bills. Chances are that this extension will not be the last.

For background on Medicare sequestration policy, see this detailed Congressional Research Service report and our previous sequestration updates.

Medicare Payments to Inpatient Rehabilitation Facilities to Rise 2.5% in FY 2020 under Final CMS Rule

By Debra A. McCurdy on 19 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has published its final rule to update the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2020. CMS expects IRF PPS payments to increase by $210 million – or 2.5% – relative to FY 2019 payments under the final rule, due to a 2.9% IRF market basket update reduced by a 0.4 percentage point multifactor productivity adjustment. An IRF that does not submit required quality data to CMS would be subject to a 2.0 percentage point decrease in its annual update. CMS finalized its proposal to rebase and revise the IRF market basket to use a 2016 base year, rather than the current 2012 base year. The final FY 2020 standard payment conversion factor is $16,489, compared to $16,021 in FY 2019. The final outlier threshold amount for FY 2020 is $9,300, down from $9,402 for FY 2019.

To align with other post-acute care settings and support the eventual transition to a unified post-acute care system, CMS adopted its proposal to use the concurrent (rather than prior year) FY inpatient prospective payment system wage index beginning with FY 2020. Other policy updates include: revisions to case-mix groups based on FY 2017 and FY 2018 data; updated relative weights and average length of stay values for the revised case-mix groups; revisions to IRF Quality Reporting Program (QRP) measures and standardized patient assessment data elements; and clarification that the determination as to whether a physician qualifies as a “rehabilitation physician” is made by the IRF. After considering public comments, CMS did not adopt its proposal to expand QRP data collection to all patients regardless of payer, but CMS intends to revisit this policy in future rulemaking.

CMS Issues Final Medicare Inpatient Psychiatric Facility Update for FY 2020

By Debra A. McCurdy on 19 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations, Department of Health and Human Services

The Centers for Medicare & Medicaid Services (CMS) will increase Medicare inpatient psychiatric facility (IPF) prospective payment system (PPS) payments by 1.5%, or $65 million, in fiscal year (FY) 2020 under a recently-published final rule. The final FY 2020 market basket increase is 2.9%, which is reduced by two statutory reductions for an IPF payment rate update of 1.75%. CMS also projects that total payments to IPFs will be further reduced by 0.23 percentage points due to the final update to the outlier fixed dollar loss threshold amount, which increases from $12,865 in FY 2019 to $14,960 in FY 2020 under the final rule. The IPF PPS federal per diem base rate will increase from $782.78 in FY 2019 to $798.55 in FY 2020, with a $782.85 per diem base rate for providers who fail to report quality data). The final rule also: rebases the IPF market basket using a 2016 base year (instead of 2012); updates IPF Quality Reporting Program requirements; and eliminates the current one-year lag in wage index data.

CMS Proposes Medicare DMEPOS Policy Updates, Including New Methodology for Pricing New Codes

By Elizabeth B. Carder-Thompson and Debra A. McCurdy on 19 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) is planning a potentially-significant overhaul of Medicare pricing rules for new items of durable medical equipment (DME), prosthetics, orthotics and supplies (DMEPOS) as part of its proposed annual DMEPOS policy update for calendar year (CY) 2020. The proposed rule also includes DMEPOS competitive bidding program (CBP) updates and proposals to streamline requirements for ordering DMEPOS items.

Under a decades-old policy, CMS uses a highly imprecise “gap-fill” process to establish fees for new items of DMEPOS for which charges in the statutory “base year” are unavailable. In such cases, CMS and its contractors use fees for comparable items, supplier prices, manufacturer’s suggested retail prices, or wholesale prices plus a markup to approximate current pricing. To remove the impact of inflation, CMS next “deflates” the prices back to the base year period (1986 or 1987 depending on the item – well before the time the item was available or likely even invented). CMS then applies the annual covered item update factors specified in the statute to establish current rates.

CMS notes that it has “heard frequently from manufacturers that do not agree that their newly developed DMEPOS item is comparable to older technology DMEPOS items and services.” Nevertheless, CMS contends that there are benefits to identifying and basing rates on comparable items, including avoiding providing a competitive advantage to manufacturers of new items. To improve transparency and predictability in the sources of data and selection of comparable items and services for gap-fill purposes, however, CMS proposes to codify a framework for establishing fees for new DMEPOS items (i.e., new Healthcare Common Procedure Coding System (HCPCS) codes) that do not have a fee schedule pricing history).

CMS’ proposal is complex. In general, under the proposal, CMS would first seek to use existing fee schedule amounts for DMEPOS that it determines to be “comparable” based on one or more of the following “components and attributes”:

Comparable Item Analysis (Any combination of, but not limited to, the categories below for a device or its subcomponents)

Components	Attributes
Physical Components	Aesthetics, Design, Customized vs. Standard, Material, Portable, Size, Temperature Range/ Tolerance, Weight.
Mechanical Components	Automated vs. Manual, Brittleness, Ductility, Durability, Elasticity, Fatigue, Flexibility, Hardness, Load Capacity, Flow-Control, Permeability, Strength.
Electrical Components	Capacitance, Conductivity, Dielectric Constant, Frequency, Generator, Impedance, Piezo-electric, Power, Power Source, Resistance.
Function and Intended	Function, Intended Use.
Additional Attributes and Features	‘‘Smart’’, Alarms, Constraints, Device Limitations, Disposable Parts, Features, Invasive vs. Non-Invasive

If CMS determines that there are no items with existing fee schedule amounts considered comparable to the new item, CMS would establish the fee schedule amount based on either: Continue Reading

CMS Proposes Medicare ESRD PPS Update for CY 2020

By Debra A. McCurdy on 19 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has proposed updating Medicare end-stage renal disease (ESRD) prospective payment system (PPS) rates by 1.7% for calendar year 2020. This update reflects a proposed 2.1% market basket increase, partially offset by a -0.4% productivity adjustment. After application of a wage index budget-neutrality adjustment, the proposed CY 2020 ESRD PPS base rate is $240.27, compared with the 2019 rate of $235.27. The same rate would apply to renal dialysis services furnished by an ESRD facility to individuals with acute kidney injury (AKI).

CMS proposes to revise the eligibility criteria for the Transitional Drug Add-on Payment Adjustment (TDAPA). In addition, CMS proposes to change the basis for TDAPA payment for calcimimetics (from average sales price (ASP) plus 6% to ASP without any markup.. The proposed rule also addresses: a new transitional add-on payment adjustment for new and innovative equipment and supplies; discontinuation of the erythropoiesis-stimulating agent (ESA) monitoring policy; annual outlier payment adjustments; modifications to ESRD Quality Incentive Program policies; and comment solicitations regarding the ESRD PPS wage index and options for improving data collection to refine the ESRD PPS case-mix adjustment model. CMS will accept comments on the proposed rule until September 27, 2019.

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

Medicare Hospice Payments to Rise by $520 Million in FY 2020 under Final CMS Rule

By Debra A. McCurdy on 16 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has published its final fiscal year (FY) 2020 Medicare hospice payment rule. CMS forecasts that the final rule will result in an estimated $520 million increase in FY 2020 payments to hospices due to the final hospice payment update percentage of 2.6%. The final FY 2020 hospice cap is $29,964.78, compared with the FY 2019 cap amount of $29,205.44.

The rule makes a number of modifications to the requirements for hospice election statement content, to provide additional transparency for patients regarding the scope of hospice benefits and their potential financial liability, effective for hospice elections beginning October 1, 2020. Specifically, the hospice must provide notification of the individual’s (or representative’s) right to receive an election statement “addendum” if there are conditions, items, services, and drugs the hospice has determined to be unrelated to the individual’s terminal illness and related conditions and would not be covered by the hospice. CMS sets forth detailed requirement for: content of the addendum, including a list and understandable rationale for such unrelated items; timelines for delivery of the addendum; and notification of the right for advocacy through a Medicare Beneficiary and Family Centered Care-Quality Improvement Organization (BFCC–QIO) if the individual disagrees with the hospice’s determination.

Among other things, the final rule also: Continue Reading

CMS Proposes Medicare Physician Fee Schedule Rates and Policies for CY 2020

By Thomas W. Greeson and Debra A. McCurdy on 15 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has published its proposed Medicare physician fee schedule (PFS) rule for calendar year (CY) 2020. In addition to updating rates for physician services, CMS proposes changes to numerous other Medicare Part B policies. Highlights of the proposed rule include the following:

The proposed 2020 conversion factor (CF) is $36.0896, up slightly from the 2019 CF of $36.0391. CMS also proposes updates to work and practice expense relative value units (RVUs) for numerous new, revised, and potentially misvalued codes.
CMS solicits feedback on contractor reports regarding the number and level of postoperative visits for surgical procedures. The data is intended to inform potential revisions to the global surgical package.
CMS requests comments on new opportunities for unspecified bundled payment rates for PFS services that are furnished together. Such bundles might include per-beneficiary payments for multiple services or condition-specific episodes of care.
CMS proposes additional updates to evaluation and management (E/M) visit coding and payment policies for 2021 to align with CPT Editorial Panel changes. CMS notes that the E/M changes would provide the greatest RVU increase to specialties that bill higher level established patient visits, while specialties that do not generally bill office/outpatient E/M visits, because of budget neutrality, could see large payment decreases. For instance, CMS estimates that endocrinology charges could increase 16% and rheumatology charges could rise by 15%, while radiology charges would fall by 8% and ophthalmology charges would drop 10% as a result of the proposed E/M policies if implemented for CY 2021. CMS adds that the 2021 implementation date allows “a year of preparatory time and time for potential refinement over the next year as we take into account any feedback from stakeholders on these proposed changes.”
CMS proposes to replace the current Medicare requirement for general physician supervision of physician assistants (PAs), including the immediate availability of the supervising physician to the PA for consultation, with medical direction and appropriate supervision as provided by State law. In the absence of State law governing physician supervision of PA services, the physician supervision required by Medicare for PA services would be evidenced by documentation in the medical record of the PA’s approach to working with physicians in furnishing their professional services.
CMS proposes to streamline documentation requirements by allowing the physician, PA, or advanced practice registered nurse who furnishes and bills for his or her professional services to review and verify — rather than fully re-document — information included in the medical record by physicians, residents, nurses, students or other members of the medical team. This principle would apply to all Medicare-covered services paid under the PFS.
CMS continues to implement a statutory requirement that modifiers be reported to identify certain therapy services that are furnished in whole or in part by physical therapy (PT) and occupational therapy assistants (OTA), beginning January 1, 2020. CMS has adopted a de minimis standard under which a service is considered to be furnished in whole or in part by a PTA or OTA when more than 10% of the service is furnished by the PTA or OTA. CMS proposes to make the 10% calculation based on the respective therapeutic minutes of time spent by the therapist and the PTA/ OTA, rounded to the nearest whole minute. Beginning January 1, 2022, claims that contain a therapy assistant modifier will be paid at 85% of the otherwise applicable payment amount.
CMS proposes to establish bundled payments for opioid use disorder treatment services furnished by opioid treatment programs.
CMS proposes changes to Open Payments reporting requirements, including: codifying a statutory expansion of the definition of a covered recipient to include PAs, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives; adding Debt Forgiveness, Long-Term Medical Supply or Device Loan, and Acquisitions to the “nature of payment” categories; consolidating medical education program categories; and standardizing data reporting requirements for drugs, devices, biologicals, and medical supplies.
CMS requests comments on a series of potential changes to the physician self-referral (Stark Law) advisory opinion process.
CMS proposes a number of changes to the Quality Payment Program (QPP). Notably, CMS proposes establishing new Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) beginning in the 2021 performance period to allow clinicians to report on a smaller set of outcomes-based, specialty-specific measures. The QPP proposals are detailed in a CMS fact sheet.
Other topics addressed by the rule include, among many others:documentation of beneficiary consent for cost sharing associated with communication technology-based services; collection of ground ambulance cost data; Medicare Shared Savings Program quality reporting requirements; and payment for chronic care management, transitional care management, and principal care management services.

CMS will accept comments on the proposed rule through September 27, 2019.

CMS Finalizes Medicare SNF PPS Rates and Policies for FY 2020

By Debra A. McCurdy on 15 August 2019 Posted in Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) has published its final rule updating the Medicare skilled nursing facility (SNF) prospective payment system (PPS) for fiscal year (FY) 2020, which begins October 1, 2019. CMS expects SNF PPS payments to increase by 2.4%, or $851 million, in FY 2020, down from the $887 million increase forecasted in the proposed rule. The final update is based on a 2.8% market basket increase offset by a 0.4 percentage point multifactor productivity adjustment.

In the final rule, CMS discusses the October 1, 2019 implementation of the new SNF Patient-Driven Payment Model (PDPM), which focuses on a resident’s clinical condition and care needs rather than the volume of care provided. CMS previously established a limit on group and concurrent therapy, which provides that for each therapy discipline (i.e., physical therapy, occupational therapy, and speech-language pathology), no more than 25% of the therapy services furnished to a SNF resident during a covered Medicare Part A stay may be in a group or concurrent setting. While CMS initially defined group therapy for PDPM purposes as exactly four patients, CMS has adopted its proposal to modify the definition to align with the definition used under the Medicare Inpatient Rehabilitation Facility (IRF) PPS. Specifically, under the final rule, group therapy under the SNF PDPM means treating two to six patients at the same time who are performing the same or similar activities. CMS plans to monitor the usage of group and concurrent therapy and review clinical outcomes, noting that “[i]f the results of our monitoring efforts indicate substantial non-compliance with the 25 percent limit, we may consider taking additional action in future rulemaking.” However, CMS expects “providers will pay close attention to the warning provided on their validation reports and be aware that we are monitoring their use of group and concurrent therapy as well.”

The final rule also, among other things, implements a subregulatory process for updating ICD-10 code lists used under the PDPM and updates various SNF Quality Reporting Program (QRP) and SNF Value-Based Purchasing Program requirements. CMS discusses a previous request for comments on expanding data collection for SNF QRP quality measures to all SNF residents regardless of payer beginning with the FY 2022 program year; however, CMS is not finalizing such a proposal at this time.