On September 28, 2016, the Centers for Medicare & Medicaid Services (CMS) released a highly-anticipated final rule to strengthen requirements that long-term care (LTC) facilities must meet to participate in the Medicare and Medicaid programs. The sweeping rule – more than 700 pages – is intended to improve the safety, quality, and effectiveness of care delivered to facility residents. According to CMS, the final rule reflects nearly 10,000 public comments on the July 16, 2015 proposed rule. CMS adopted numerous changes from the proposed rule, including various revisions to staffing and training requirements, care planning rules, infection prevention, and control program provisions.
Continue Reading CMS Finalizes Major Changes to Medicare/Medicaid Requirements for Long-Term Care Facilities
CMS Adopts Final SNF PPS Rates and Policies for FY 2017
CMS has published its final rule to update Medicare skilled nursing facility (SNF) PPS rates and policies for FY 2017. CMS projects that the final rule will increase overall payments to SNFs by $920 million, or 2.4%, compared to FY 2016 levels (and compared to the $800 million/2.1% increase forecast in the proposed rule). The final update is based on a 2.7% market basket increase that is reduced by a 0.3 percentage point multifactor productivity adjustment.
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Bigger Apparently is Better in DOJ’s Eyes – DOJ Piles On as False Claims Act CMPs Set to Almost Double on August 1, 2016
Today the Department of Justice published an interim final rule with request for comments that applies an inflation adjustment to civil monetary penalty (CMP) amounts assessed by the Department, as mandated by the Bipartisan Budget Act of 2015. Notably, the new maximum CMP for False Claims Act (FCA) violations under 31 U.S.C. 3729(a) is
CMS Finalizes “Comprehensive Care for Joint Replacement” Model
On November 16, 2015, CMS released its final rule to establish a Medicare Comprehensive Care for Joint Replacement (CJR) model that will test whether bundled payments to acute care hospitals for lower extremity joint replacement surgery (LEJR) episodes of care will reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries. CMS estimates that this initiative – which will be mandatory for most hospitals operating in selected geographical areas –will include about 23% of all LEJR episodes nationally and will result in approximately $343 million in net Medicare savings over five years. The advance version of the final rule is lengthy (more than 1000 pages) and complex. The basic framework of the program aligns with the program specifications set forth in CMS’s July 14, 2015 proposed rule. CMS did, however, push back the start date for the initiative; the regulations, while effective on January 15, 2016, are applicable when the first model performance period begins on April 1, 2016. Our preliminary observations regarding key features of the final rule and notable changes from the proposed rule include the following:
Continue Reading CMS Finalizes “Comprehensive Care for Joint Replacement” Model
Bipartisan Budget Act Jacks Up Civil Monetary Penalties Under the Social Security Act and False Claims Act Penalties
The Bipartisan Budget Act of 2015 (H.R. 1314), signed into law by President Obama November 2, 2015, will increase the civil monetary penalties (CMPs) imposed under the Social Security Act (SSA) in addition to False Claims Act (FCA) penalties (among other civil penalties). Under an innocuous-sounding provision, entitled “Civil monetary penalty inflation adjustments,” the budget deal removed an inflation update exclusion that previously applied to the SSA as well as the Occupational Safety and Health Act (OSHA). The budget deal also requires that federal agencies implement a “catch up” penalty update through interim rulemaking no later than August 1, 2016, along with annual penalty updates thereafter. Pursuant to the provision requiring penalty “catch up” adjustments, agencies must update penalties to reflect Consumer Price Index (CPI) updates for each CMP from October of the calendar year during which the amount of such CMP was established or last adjusted under a provision of law other than the Federal Civil Penalties Inflation Adjustment Act of 1990. However, such “catch up” adjustment are capped at 150% of the current penalty amount. For example, a penalty now set at $10,000 may not increase to more than $25,000. Under this “catch up” methodology, per day CMPs imposed on nursing facilities under the SSA, currently capped at $10,000, will likely increase to approximately $20,000 no later than August 1, 2016. The nursing facility CMP update to approximately $20,000 would reflect the inflation updates since the establishment of these CMPs in 1987. After the initial, “catch up” update, annual adjustments will be made consistent with CPI cost-of-living updates.
Continue Reading Bipartisan Budget Act Jacks Up Civil Monetary Penalties Under the Social Security Act and False Claims Act Penalties
HHS OIG “Reminder” about Information Blocking & the Federal Anti-Kickback Statute
The HHS Office of Inspector General (OIG) recently released a “Policy Reminder” on how “information blocking” — defined by HHS as knowingly and unreasonably interfering with the exchange or use of electronic health information — may affect protection under the regulatory electronic health records (EHR) safe harbor to the federal anti-kickback statute (AKS).
Continue Reading HHS OIG “Reminder” about Information Blocking & the Federal Anti-Kickback Statute
CMS Issues FY 2015 Medicare SNF PPS Final Rule
The Centers for Medicare & Medicaid Services (CMS) published the final FY 2015 Medicare skilled nursing facility (SNF) prospective payment system (PPS) rule on August 5, 2014 (Final Rule). The Final Rule largely adopts the proposals set forth in the FY 2015 proposed SNF PPS rule (Proposed Rule). CMS estimates that the Final Rule will result in a $750 million increase in aggregate payments to SNFs during FY 2015 as compared to FY 2014. The Final Rule will implement a market basket update of 2%, resulting from a market basket increase of 2.5 percentage points, reduced by the Multifactor Productivity Adjustment of 0.5 percentage points, as required by the Affordable Care Act (ACA). Below we discuss highlights of the Final Rule, including: (1) the adopted wage index update; (2) revised change of therapy (COT) Other Medicare Required Assessment (OMRA) policy; (3) revisions to the Civil Money Penalties (CMP) regulations; and (4) CMS’s responses to comments regarding the agency’s observations on therapy trends.
Continue Reading CMS Issues FY 2015 Medicare SNF PPS Final Rule
CMS Issues FY 2015 Medicare SNF PPS Proposed Rule
The Centers for Medicare & Medicaid Services (CMS) published the fiscal year (FY) 2015 proposed skilled nursing facility (SNF) prospective payment system (PPS) rule on May 6, 2014 (Proposed Rule). CMS estimates that the Proposed Rule’s implementation would result in a $750 million increase in aggregate payments to SNFs during FY 2015 as compared to FY 2014. The Proposed Rule anticipates a market basket update of 2%, resulting from a market basket increase of 2.4 percentage points, reduced by the Multifactor Productivity Adjustment of 0.4 percentage points, as required by the Affordable Care Act (ACA). We discuss highlights of the Proposed Rule below, including: (1) the proposed wage index update; (2) a proposed policy change to the change of therapy (COT) Other Medicare Required Assessment (OMRA); (3) proposed revisions to the Civil Money Penalties (CMP) regulations; (4) CMS’s request for public comment on services excluded from consolidated billing; (5) CMS’s observations on therapy trends; and (6) CMS’s discussion regarding electronic health record (EHR) use in SNFs. CMS will accept public comments regarding the Proposed Rule until June 30, 2014.
Continue Reading CMS Issues FY 2015 Medicare SNF PPS Proposed Rule
President Signs Medicare Physician Fee Schedule/SGR Patch with Numerous Health Policy Provisions
On April 1, 2014, President Obama signed into law H.R. 4302, the “Protecting Access to Medicare Act of 2014” (“the Act”). The Act includes a one-year Medicare physician fee schedule fix that averts a nearly 24 percent payment cut set for April 1, 2014, but which falls far short of earlier hopes for full repeal of the current sustainable growth rate (SGR) formula. The Act also includes numerous other Medicare payment and policy changes, including skilled nursing facility value-based purchasing provisions, reforms to the physician fee schedule relative valuation process, a new framework for clinical laboratory payments, a variety of changes impacting imaging services, changes in the exceptions for long term care hospitals, and extension of certain expiring provisions. In other areas, the bill includes a one-year delay in the transition to ICD-10, changes to the timetable for Medicaid disproportionate share hospital cuts, and “front-loading” of the 2024 Medicare sequestration reduction.
Continue Reading President Signs Medicare Physician Fee Schedule/SGR Patch with Numerous Health Policy Provisions
Final Rules Issued Extending Protections of Electronic Health Record Donations
On December 27, 2013, the Office of Inspector General and the Centers for Medicare & Medicaid Services each published, in the Federal Register, a final rule that amends regulations protecting, from the Anti-Kickback Statute and Stark law, certain arrangements related to the donation of interoperable electronic health records (EHR) software or information technology and training services related to such EHR software. Among these amended regulations was the extension of protections of the Stark law exception and the Anti-Kickback safe harbor from December 31, 2013 to December 31, 2021 (the “sunset” provisions).
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Updated OIG Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) issued an updated “Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs ” (Updated Bulletin) on May 8, 2013, answering certain questions the OIG has received from providers and suppliers regarding exclusions and addressing other issues related to exclusions. The Updated Bulletin follows on a Special Advisory Bulletin regarding the same topic published by the OIG in September 1999. Since the OIG issued the 1999 Special Advisory Bulletin, Congress has enacted various statutory provisions that have strengthened the OIG’s authority to exclude individuals from federal health care programs and impose civil monetary penalties (CMPs) related to exclusion. The OIG states that in the development of the Updated Bulletin, it also relied on comments it received in response to a 2010 solicitation of comments on this topic.
The Updated Bulletin reflects a continuation of the OIG’s expansive view of the scope of the federal exclusion authorities, particularly relating to the prohibition against employing or contracting with excluded individuals and entities. The bulletin explains the statutory background of the exclusion and CMP authorities; describes the effect of exclusion; emphasizes the implications of violations of exclusion by an excluded individual and the implications for violating the prohibition against employment or contracting with an excluded individual for the furnishing of items or services paid for by a federal health care program; explains the scope of what conduct involving excluded individuals may lead to overpayment liability and CMPs; and provides guidance to providers and suppliers regarding how to screen for excluded individuals.Continue Reading Updated OIG Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs
OIG Publishes Updated Provider Self-Disclosure Protocol
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has issued a revised version of its Provider Self-Disclosure Protocol (Updated SDP), dated April 17, 2013, which established a process for health care providers to voluntarily identify, disclose, and resolve instances of potential fraud involving federal health care programs. Specifically,
Proposed Rule Would Reward Medicare Fraud Tipsters up to $9.9 Million, Revise Medicare Provider Enrollment Regulations
This post was also written by Andrew C. Bernasconi.
Yesterday the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would dramatically increase the potential reward to an individual who provides a tip leading to the recovery of Medicare funds from a current maximum of $1,000 to a maximum of $9.9 million under the Medicare Incentive Reward Program. Since 1998, an individual providing information regarding potential Medicare fraud and abuse to the Department of Health & Human Services’ Office of Inspector General or the Medicare contractor with jurisdiction over the suspected fraudulent provider or supplier may be eligible to receive 10 percent of the Medicare funds ultimately collected from the tip, or $1,000, whichever is less. Pursuant to the proposed rule CMS issued yesterday, an individual furnishing information that otherwise satisfies the requirements set forth in 42 C.F.R. § 420.405 would be eligible to receive 15 percent of a recovery up to $66 million. Therefore, a tipster could receive up to a $9.9 million reward for any information provided regarding suspected Medicare fraud and abuse.Continue Reading Proposed Rule Would Reward Medicare Fraud Tipsters up to $9.9 Million, Revise Medicare Provider Enrollment Regulations
CMS Updates Hospital Part B Inpatient Billing Policy
This post was also written by Rachel M. Golick. On March 13, 2013, the Centers for Medicare & Medicaid Services (CMS) concurrently issued a proposed rule and Administrator’s Ruling addressing the submission of Medicare Part B inpatient claims where a Medicare Part A claim for a hospital inpatient admission is denied by a Medicare review
Supreme Court Upholds ACA Insurance Mandate, Limits Withholding of Medicaid Funds to States
This post was also written by Tillman J. Breckenridge. As has been widely reported, today the U.S. Supreme Court ruled that the Affordable Care Act’s (ACA) individual health insurance mandate does not violate the Constitution because it may be viewed as a permissible tax on individuals who do not obtain health insurance. The only provision of the law that the Court invalidated is a Medicaid provision that threatened states with the loss of existing Medicaid funding if they decline to comply with the ACA’s Medicaid coverage extension. By preserving the vast majority of the landmark health reform law, the Court avoided the policy chaos that would have resulted from striking down the ACA in its entirety. There is now legal certainty for state and federal governments, health care providers and suppliers, drug and device manufacturers, employers and individuals. As discussed below, the focus in Washington will return to continuing implementation of the law. Nevertheless, although the legal battle is over, the political fight will continue and likely reverberate through the coming Presidential and Congressional election campaigns.
Continue Reading Supreme Court Upholds ACA Insurance Mandate, Limits Withholding of Medicaid Funds to States
CMS Publishes Two Home & Community-Based Services (HCBS) Rules
CMS recently published two rules — one proposed and one final — related to HCBS policy. Continue reading for summaries of the rules.
Continue Reading CMS Publishes Two Home & Community-Based Services (HCBS) Rules
Reed Smith Analysis and Overview of the Medicare Shared Savings Program for Accountable Care Organizations
The Centers for Medicare & Medicaid Services’ (“CMS”) Medicare Shared Savings Program final rule offers potential opportunities as well as risks to health care providers and suppliers interested in forming accountable care organizations (“ACOs”). While the core principle of the Medicare Shared Savings Program is simple—reward improvements in quality and cost containment through a share
CMS Releases Final Medicare Shared Savings Program/ACO Rule
Today the Centers for Medicare & Medicaid Services (CMS) released its long-awaited final rule to implement the Medicare Shared Savings Program as authorized by Section 3022 of the Affordable Care Act (ACA). The Shared Savings Program is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form accountable care organizations (ACOs) to provide cost-effective, coordinated care to Medicare beneficiaries. Under the final rule, an ACO that meets established quality and performance standards and surpasses a minimum savings target will be able to share a percentage of savings (in addition to traditional fee-for-service payments under Medicare Parts A and B).
Continue Reading CMS Releases Final Medicare Shared Savings Program/ACO Rule
President Obama Outlines Proposal to Deficit Reduction Super-Committee; Medicare Provisions Loom Large
On September 19, 2011, President Obama presented his deficit reduction plan – including $320 billion in proposed federal health spending cuts – to the Joint Select Committee on Deficit Reduction, which was created by the Budget Control Act of 2011 to craft a legislative package to cut the federal deficit by at least $1.5 trillion. If legislation is not adopted to achieve deficit reduction targets by January 2012, $1.2 trillion in across-the-board spending cuts (sequestration) would be triggered, effective January 2013.
Continue Reading President Obama Outlines Proposal to Deficit Reduction Super-Committee; Medicare Provisions Loom Large
CMS Guidance on Reporting Reasonable Suspicion of Crimes in Long-Term Care (LTC) Facilities
On June 17, 2011, CMS issued a memo to state survey agencies on implementation of an ACA provision requiring certain individuals in applicable LTC facilities to report any reasonable suspicion of crimes committed against a resident of that facility. For purposes of the survey guidance, CMS is defining the following Medicare and Medicaid participating provider types as LTC facilities: nursing facilities; skilled nursing facilities; hospices that provide services in LTC facilities; and intermediate care facilities for the mentally retarded. Among other things, the memo: provides instructions to LTC facilities regarding their obligations under the statute (including notification of employees about their reporting responsibilities and nonretaliation against reporting employees); suggests other “advisable functions” for LTC facilities to undertake to promote compliance with the provision; explains the reporting timeframes for covered individuals; and provides guidance to survey agencies on how to respond to reports of reasonable suspicion of a crime. An analysis of the memo, which is effective immediately, is available in the following Client Alert.
Continue Reading CMS Guidance on Reporting Reasonable Suspicion of Crimes in Long-Term Care (LTC) Facilities