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On June 6, 2023, the Center for Medicare and Medicaid Services (“CMS”) released a Quality Safety & Oversight memorandum (“QSO Memo”) reminding state survey agencies, accrediting organizations, and hospitals of the requirements for discharges and transfers to post-acute care (“PAC”) providers. 

The standard for hospital discharge planning is set forth in 42 CFR 482.43, which requires a hospital 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 person(s) as active partners in the discharge planning for post-discharge care.”  Moreover, the hospital “must discharge the patient, and also transfer or refer the patient where applicable, along with all necessary medical information pertaining to the patient’s current course of illness and treatment, post-discharge goals of care, and treatment preferences, at the time of discharge, to the appropriate post-acute care service providers and suppliers, facilities, agencies, and other outpatient service providers and practitioners responsible for the patient’s follow-up or ancillary care.”  42 C.F.R. 482.43(b). Continue Reading CMS Issues Requirements for Hospital Discharges to Post-Acute Care Providers

On December 28, 2022, the Department of Health and Human Services’ Office of Inspector General (OIG) issued a favorable advisory opinion on a proposal by a drug manufacturer to enter into an arrangement with certain hospitals to provide up to a specified number of free samples of a long-acting antipsychotic drug for inpatient use.

The OIG indicated it would not impose administrative sanctions, despite the fact that there is no safe harbor available under the federal Anti-Kickback Statute (AKS) to protect the proposed arrangement.Continue Reading OIG approves arrangement involving free drug samples for inpatient hospital use

The Centers for Medicare & Medicaid Services (“CMS”) issued the first round of civil monetary penalties to two hospitals in Georgia for failure to comply with the requirements of the Hospital Price Transparency Final Rule (the “Rule”) on June 7, 2022.

According to the Notices of Imposition of a Civil Monetary Penalty published on the CMS Price Transparency Website, Northside Hospital Atlanta (“Northside Atlanta”) and Northside Hospital Cherokee (“Northside Cherokee”) failed to publish their standard charges and provide access to a machine-readable searchable tool, which would include standard prices for the hospitals’ items and services. CMS took this action after both hospitals failed to respond to the Warning Notices and Requests for Corrective Action Plans issued by CMS.

Effective January 1, 2021, hospitals must publish a machine-readable file that discloses the hospital’s negotiated rates with health plans, gross charges, discounted cash prices, and de-identified minimum and maximum negotiated charges for all items and services. Additionally, hospitals must publish a consumer-friendly, searchable tool that displays in plain language the prices of 300 shoppable medical services that a consumer can schedule in advance.Continue Reading CMS levies penalties for non-compliance with Hospital Price Transparency Rule

On February 4, 2022, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued a favorable advisory opinion on a proposal by a nonprofit children’s hospital to enter into an arrangement with two individual donors, who intend on making a testamentary gift to the hospital that would be used to reduce and subsidize costs incurred by patients.

The OIG indicated it would not impose administrative sanctions, despite the fact that the proposed arrangement would not fall squarely within any safe harbor under the federal Anti-Kickback Statute (“AKS”) or exception to the definition of “remuneration” for purposes of the beneficiary inducement prohibition (“Beneficiary Inducement CMP”).

Arrangement created restricted endowment fund

Under the proposed arrangement, the hospital would be the beneficiary to a restricted endowment fund established through a testamentary gift from two donors. The fund would be used to subsidize bills for families with children who have an established care relationship with the hospital’s physicians and who receive services provided by the hospital’s programs.Continue Reading OIG approves arrangement involving a testamentary gift to a nonprofit hospital to reduce costs for pediatric patients

Just when the procedures thought they were out(patient), CMS pulls them back in(patient).

Last year, in the final CY 2021 Outpatient PPS rule, CMS announced its intention to eliminate the Inpatient Only (IPO) List by January 1, 2024. The IPO list featured more than 1,700 procedures that were surgically invasive or required more than 24 hours of post-operational recovery time. As a result, any procedure on the list would only be paid for by Medicare on an inpatient basis.

With the CY 2021 rule, those procedures would be released to outpatient providers in stages, allowing physicians to clinically determine whether inpatient admission was indicated for a particular procedure.

However, in the proposed CY 2022 Outpatient PPS rule, announced on July 19, 2021, CMS reversed that decision and announced that it will now keep the IPO List, reinstating the 298 procedures that were removed by the 2021 rule. CMS said it was responding to concerns from stakeholders about patient safety. In particular, CMS indicated that the 2021 rule removed the procedures on too steep of a timeline. The agency said it wanted to provide “greater consideration of the impact removing services from the list has on beneficiary safety and to allow providers impacted by the COVID-19 PHE additional time to prepare to furnish appropriate services safely and efficiently before continuing to remove large numbers of services from the list.”Continue Reading CMS Gives the IPO List the Godfather 3 Treatment

On May 3, 2021, the Centers for Medicare & Medicaid Services (CMS) published an 81-page final rule to both extend and change the Comprehensive Care for Joint Replacement (CJR) model. We previously reported on the proposed rule here. The CJR model was initially implemented by way of notice-and-comment rulemaking in April 2016; the recent…

Earlier this month and with little fanfare, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would invoke CMS’s rarely used retroactive-rulemaking authority to essentially ensure that, despite the Supreme Court’s adverse rulemaking decision in Azar v. Allina Health Services, 139 S. Ct. 1804 (2019), CMS will apply the same Medicare payment methodology found procedurally improper in Allina. CMS’s invocation of its retroactive-rulemaking authority to effectively circumvent Allina sets a potentially dangerous precedent that should not go unnoticed by all Medicare stakeholders.
Continue Reading “Contrary to the Public Interest”: CMS invokes retroactive-rulemaking authority to escape consequences of Allina

On June 9, 2020, the U.S. Department of Health and Human Services (HHS) announced additional distributions from the CARES Act Provider Relief Fund to several groups of providers, totaling approximately $25 billion. $15 billion of these funds is targeted towards eligible Medicaid and Children’s Health Insurance Program (CHIP) providers participating in state Medicaid and CHIP…

The Medicare Payment Advisory Commission (MedPAC) released its 2021 Medicare provider rate update recommendations on March 13, 2020 – the same day President Trump declared a national emergency due to COVID-19.  MedPAC’s recommendations were based on an assessment of various Medicare “payment adequacy indicators” that are unlikely to reflect the state of the health…

Shortly after President Trump declared a national emergency related to COVID-19, CMS issued blanket waivers under section 1135 of the Social Security Act that are intended to ensure there are sufficient health care items and services available to meet the increased need, as well as reduce related administrative burdens on health care providers.

Our comprehensive…

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 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 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 proposed Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rates and policies for calendar year 2020.  In addition to making annual updates to the OPPS and ASC payment systems, CMS includes a controversial proposal to require all hospitals to disclose payer-specific pricing, including “consumer-friendly” information for hundreds of “shoppable” services.  CMS is accepting comments on the proposed rule through September 27, 2019.  The following are highlights of the proposed rule.

Hospital Outpatient Provisions

CMS proposes a 2.7% update to OPPS rates for 2020, with the update reduced by 2.0% for hospitals that fail to meet quality reporting requirements.  Payment changes for individual procedures vary.  CMS estimates total OPPS payments would increase by $6 billion in CY 2020 compared with 2019 under the rule.

Other OPPS policy proposals include the following, among many others:
Continue Reading CMS Proposes 2020 Medicare OPPS and ASC Update, Floats Plan for Hospital Disclosure of Payer-Specific Prices

On June 24, 2019, President Trump signed an executive order (EO) intended to improve health care price and quality transparency, boost tax-preferred health savings accounts, and protect patients from surprise medical bills.  This is not the first time the Trump Administration has tacked health price disclosure.  For instance, new hospital price transparency rules went into…

The Centers for Medicare & Medicaid Services (CMS) has instructed state survey agencies that they must conduct onsite complaint investigations related to Emergency Medical Treatment and Labor Act (EMTALA) complaints and surveys of death in restraint or seclusion in hospitals and critical access hospitals within two business days instead of five.  This change brings these …

CMS has scheduled a June 27, 2019 listening session to get public feedback on its recent draft guidance on how state surveyors should evaluate hospital co-location arrangements for compliance with the Medicare hospital conditions of participation (COPs).  In particular, CMS is looking for input on how the guidance addresses staffing, contracted services, emergency services, …