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The Department of Health and Human Services Office of Inspector General (OIG) has released a favorable advisory opinion on an arrangement involving donations from a children’s therapy provider to an independent grant foundation.

According to OIG, although the arrangement would generate remuneration that would be prohibited under the Federal Anti-Kickback Statute (AKS) if the requisite…

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

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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)

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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…

The Centers for Medicare & Medicaid Services (CMS) recently released its 232-page proposed rule to update the Medicare skilled nursing facility (SNF) prospective payment system (PPS) for federal fiscal year (FY) 2020, which begins on October 1, 2019. Overall, CMS projects that SNF PPS payments would rise by $887 million under the proposed rule. Specifically,…

The Centers for Medicare & Medicaid Services (CMS) has finalized its annual update to Medicare skilled nursing facility (SNF) PPS rates and policies for fiscal year (FY) 2019, without significant changes to the rule as proposed.  Most notably, CMS adopted the Patient-Driven Payment Model (PDPM) case mix classification system.  The PDPM, which will replace the existing Resource Utilization Groups, Version IV (RUG–IV) model beginning in FY 2020 (effective October 1, 2019), focuses on a resident’s clinical condition and care needs, rather than the volume of care provided.  CMS characterizes PDPM as a value-based, unified post-acute care payment system that prioritizes the unique care needs of patients and reduces the administrative burden associated with the system.

With regard to the annual payment update, CMS (as proposed) increased rates by 2.4%, as mandated by the Bipartisan Budget Act of 2018; the annual market basket percentage is reduced by 2 percentage points for SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting Program (QRP).  Based on this update, CMS estimates an increase of $820 million in Medicare payments to SNFs in FY 2019.  CMS also finalized various updates to the SNF Value-Based Purchasing Program (VBP), which adjusts a SNF’s payments up or down based on its performance on a 30-day hospital readmissions measure.

As we noted in our post on the proposed rule, CMS expressed concerns that its proposed change in how therapy services would be used to classify residents under the PDPM could incentivize the use of group and concurrent therapy rather than individual therapy. CMS finalized its proposal to establish a combined 25% limit on concurrent therapy and group therapy for each discipline of therapy provided.  CMS reiterated its position that individual therapy permits the greatest degree of interaction between the resident and therapist, and should therefore represent, at a minimum, the majority of therapy provided to an SNF resident.  While CMS finalized the proposed cap, it left room for future changes and stated that it will monitor whether group and concurrent therapy are being over- or underutilized and will consider revising the policy and undertaking enforcement efforts as necessary.
Continue Reading PDPM Activated:  CMS Finalizes FY 2019 SNF Rule Largely as Proposed

The Centers for Medicare & Medicaid Services (CMS) has issued its proposed Medicare physician fee schedule (PFS) rule for calendar year (CY) 2019.  In addition to updating rates for physician services, the sweeping rule proposes changes to numerous other Medicare Part B policies.  Highlights of the proposed rule include the following:

  • CMS proposes a

…

The Centers for Medicare & Medicaid Services (CMS) has issued its annual proposed update to Medicare skilled nursing facility (SNF) PPS rates and policies for fiscal year (FY) 2019. In addition to providing a $850 million boost to Medicare payments for FY 2019, CMS proposes a new case mix classification system to replace the…

The new Bipartisan Budget Act of 2018 (the Act), recently signed into law by President Trump, includes extensive Medicare, Medicaid, and other health policy and payment provisions.  Policy changes that will be welcome to health care providers and manufacturers include:  repeal of the Independent Payment Advisory Board (IPAB); elimination of the Medicare outpatient therapy caps;…

In addition to keeping the federal government operating through February 8, 2018, the newly-enacted Continuing Appropriations Act provides temporary relief from three health-related taxes imposed by the Affordable Care Act (ACA) and funds the Children’s Health Insurance Program (CHIP) through fiscal year 2023. With regard to the ACA taxes, the Continuing Appropriations Act:

  • Imposes a

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Included in the 21st Century Cures Act are numerous changes to Medicare and Medicaid policies, including provisions with significant reimbursement impacts for certain types of Medicare providers and suppliers, along with changes intended to reduce the regulatory and administrative burdens associated with the use of electronic health records.  Furthermore, the law once again expands the…

Medicare outpatient therapy limits are set to increase slightly in 2017. Specifically, the 2017 cap will be $1,980 for physical therapy and speech-language pathology combined and $1,980 for occupational therapy, compared to $1,960 for 2016. The therapy caps exceptions process continues through December 31, 2017 under the Medicare Access and CHIP Reauthorization Act of 2015.

CMS has released information about its plans for implementing Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provisions regarding the manual medical review process for outpatient therapy services over the annual threshold. By way of background, the Medicare program has an annual limit on the amount of expenses a patient can accrue for outpatient…

The HHS Office of Inspector General (OIG) continues to question the appropriateness of payments to skilled nursing facilities (SNFs) under the Medicare SNF prospective payment system (PPS). Based on Medicare Part A SNF claims data and cost reports over the last decade and beneficiary assessments for fiscal years (FYs) 2011 to 2013, the OIG concluded that Medicare payments for therapy greatly exceeded SNFs’ costs for therapy. According to the OIG, there was a 29% difference between Medicare payments for therapy and SNFs’ costs for therapy in FY 2012 (compared to an overall 14% Medicare “margin” for SNF payments). Moreover, SNFs increasingly billed for higher levels of therapy, or resource utilization groups (RUGs), and increasingly provided the minimum number of therapy minutes for the higher levels of therapy, or RUGs, which the OIG characterized as a “strategy to optimize revenues.” According to the OIG, during the same period that SNFs increased their therapy billing, key beneficiary characteristics remained largely the same. The OIG estimates that the increase in SNF therapy billing not related to key beneficiary characteristics (“case mix creep”) resulted in $1.1 billion in Medicare payments in FY 2012 and 2013.
Continue Reading OIG Again Calls for Reforms to Medicare SNF Reimbursement Policy

In FYs 2011 and 2012, CMS adopted new patient assessments for skilled nursing facilities (SNFs) that were intended to capture when beneficiaries start therapy, end therapy, and decrease or increase therapy. The HHS Office of Inspector General (OIG) has questioned the effectiveness of these complex policies, however, noting that SNFs reviewed often used the start…

The Advisory Panel on Hospital Outpatient Payment will be holding its first semi-annual meeting for 2015 on March 9-10, 2015. The purpose of the Panel is to advise CMS on (1) the clinical integrity of the Ambulatory Payment Classification groups and their associated weights, and (2) hospital outpatient therapeutic services supervision issues. Registration will be…

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