Centers for Medicare & Medicaid Services Regulations

The Centers for Medicare & Medicaid Services (CMS) finalized a “price transparency” rule that requires hospitals to make detailed charge data – including payer-specific negotiated charges – available for all inpatient and outpatient services.  Additionally, the final rule mandates that hospitals make “consumer-friendly” charge information available for at least 300 “shoppable” services.  While CMS deferred

The Centers for Medicare & Medicaid Services (CMS) has finalized Medicare hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system rates and policies for 2020.  The final rule provided a 2.6% update to both OPPS and ASC rates for 2020 for facilities meeting quality reporting requirements (compared to an anticipated 2.7%

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

  • The final 2020 conversion factor is

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

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

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

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

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

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

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

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

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

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule implementing the agency’s methodology for making statutory reductions to Medicaid disproportionate share hospital (DSH) allotments.  The DSH allotment reductions apply to fiscal years (FY) 2020 through 2025, with a $4 billion reduction applicable in FY 2020 and an $8 billion reduction applicable

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

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

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

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 DMEPOS Policy Updates, Including New Methodology for Pricing New Codes

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

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

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)