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According to a recent Government Accountability Office (GAO) report, bonuses and penalties triggered by the Medicare Hospital Value-based Purchasing (HVBP) program have had no apparent impact on quality measure performance trends to date. The HVBP program, which was established by the Affordable Care Act, adjusts inpatient hospital payments based on individual hospital performance on designated…

The latest CMS “innovation model” focuses on options for redesigning Medicare Advantage (MA) to improve health outcomes while reducing expenditures. Specifically, the Medicare Advantage Value-Based Insurance Design (VBID) Model will allow MA plans in seven states to apply to offer supplemental benefits or reduced cost sharing to enrollees with specified chronic conditions. The five-year initiative…

CMS has released its proposed calendar year (CY) 2016 Medicare home health prospective payment system (HH PPS) update, which CMS estimates would reduce overall Medicare payments to home health agencies (HHAs) by $350 million in 2016, compared with 2015 levels. This decrease reflects a 2.3% home health payment update percentage (derived from a 2.9% market basket update minus a 0.6% multifactor productivity adjustment), that is more than offset by (i) a 1.72% proposed reduction to account for nominal case-mix coding intensity growth, and (ii) a -2.5% rebasing adjustment (the third year of a four-year phase-in). The proposed CY 2016 national, standardized 60-day episode payment rate would be $2,938.37; the rate for an HHA that does not submit the required quality data would be reduced by 2 percentage points to $2,880.92. The proposed rule also would recalibrate HH PPS case-mix weights and update the CY 2016 home health wage index. CMS also is proposing to establish a new Home Health Value-Based Purchasing (HHVBP) Model, which is intended to shift from volume-based payments to a framework that promotes the delivery of higher quality care to Medicare beneficiaries. Under this proposal, CMS would randomly select nine states representing each geographic area in the nation (the states initially selected under this methodology are Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee – but this is subject to change in the final rule). All Medicare-certified HHAs delivering services within those states would be required to compete for payment adjustments based on quality performance (both achievement and improvement). CMS explains that it is proposing to mandate participation by HHAs in the selected states because “in our experience, Medicare-providers are generally reluctant to participate voluntarily in models in which their Medicare payments could be subject to possible reduction,” which in turn causes self-selection bias in statistical assessments that may present challenges in evaluating the model. The baseline year for the new program would be 2015, and the first performance year would be 2016. The maximum quality-based payment adjustment (upward or downward) would be 5% in each of the first two payment adjustment years (2018 and 2019), 6% in the third payment adjustment year (2020), and 8% in the fourth and fifth years (2021 and 2022). The proposed rule includes a detailed discussion of the initial set of proposed HHVBP measures, which encompass both process and outcome measures, and the scoring/payment adjustment methodology. There would be no aggregate increase or decrease in payments to HHAs competing in the model, but CMS projects an estimated $380 million in total savings from CY 2018 through 2022 attributable to a reduction in unnecessary hospitalizations and skilled nursing facility usage as a result of these home health quality improvements. CMS invites comments on the elements of the proposed HHVBP Model.
Continue Reading CMS Proposed Medicare Home Health PPS Rule Would Reduce HHA Payments by $350 Million in 2016

On May 12, 2015, CMS is hosting a call that will provide an overview of all Medicare hospital inpatient quality reporting and value-based purchasing programs. Specifically, the call will cover: the Hospital Inpatient Quality Reporting (IQR) Program; the Hospital Value-Based Purchasing (HVBP) Program; the Hospital Acquired Condition Reduction Program (HACRP); the Hospital Readmission Reduction Program…

On April 30, 2015, the Centers for Medicare & Medicaid Services (CMS) is publishing its proposed rule to update the Medicare acute hospital inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2016.  CMS will accept comments on the proposed rule until June 16, 2015. The final rule will be published by August 1, 2015, and generally will apply to discharges occurring on or after October 1, 2015.

With regard to the IPPS, CMS projects that the rate and policy changes in the proposed rule would increase IPPS operating payments by approximately 0.3%, or about $120 million in FY 2016. The proposed rule would provide for a 1.1% operating payment rate update for hospitals that submit quality data and are meaningful users of Electronic Health Records (EHR). This update reflects a 2.7% market basket update, adjusted by a -0.6 percentage point multi-factor productivity (MFP) cut and an additional -0.2 percentage point cut (as mandated by the Affordable Care Act, or ACA), with an additional -0.8 percentage point documentation and coding recoupment adjustment required by the American Taxpayer Relief Act of 2012.Continue Reading CMS Issues Proposed Rule to Update FY 2016 IPPS, LTCH PPS Rates, Policies

Today HHS Secretary Sylvia M. Burwell announced ambitious plans to move from “volume to value in Medicare payments” by accelerating the share of Medicare fee-for-service (FFS) payments that are tied to quality and value and reimbursed through alternative payment models. The first goal in the initiative is for 30% of Medicare provider payments to be…

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

CMS has released its final rule updating the Medicare physician fee schedule (MPFS) for 2013 and modifying numerous other Medicare Part B policies. Most significantly, the final rule includes a 26.5% across-the-board cut in physician fee schedule payments as a result of the statutory sustainable growth rate (SGR) formula. While Congress is widely expected to mitigate this policy in future legislation, the timing and scope of any such “fix” is highly uncertain. The following are highlights of the sweeping rule:Continue Reading CMS Issues Final 2013 Medicare Physician Fee Schedule Rule, Including Other Part B Policy Updates

On October 29, 2012, CMS published additional corrections to its August 31, 2012 final FY 2013 Medicare inpatient prospective payment system (IPPS) rule. The corrections address the achievement thresholds and benchmark values presented in the Clinical Process of Care measures section of the final performance standards for the FY 2015 Hospital Value-Based Purchasing Program table. …

On July 30, 2012, CMS is publishing a proposed rule updating the Medicare physician fee schedule (MPFS) for 2013 and modifying numerous other Medicare Part B policies. Most significantly, the proposed rule would impose a 27% across-the-board cut in MPFS payments, largely due to the statutory Sustainable Growth Rate (SGR) update formula (although Congress is expected to eventually take action to block the automatic cuts, as it has in the past). Comments on the proposed rule are due by September 4, 2012. The following are highlights of the wide-ranging proposal:Continue Reading CMS Proposes Update to 2013 Medicare Physician Rates, Other Part B Policies

On February 9, 2012, CMS will host a national provider call on the Medicare Spending Per Beneficiary Measure (MSPB).  The MSPB measure was finalized for inclusion in Hospital Value-Based Purchasing (VBP) program in the FY 2012 hospital inpatient prospective payment system final rule. The call will provide background information and discuss how the measure is…

On January 20, 2012, the Obama Administration posted its Fall 2011 Regulatory Agenda, outlining its planned regulatory initiatives in a number of policy areas. Priorities for the Department of Health and Human Services (HHS) include, among many others:

  • Implementing Affordable Care Act (ACA) insurance reforms, including establishing Affordable Insurance Exchanges, establishing risk adjustment criteria

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POSTPONED.  CMS has postponed its scheduled December 6, 2011 national provider call on Hospital Value Based Purchasing (VBP). Prior to the call, eligible hospitals will receive a CMS-created simulated, hospital-specific report that is designed to help hospitals anticipate how the VBP will affect hospital payments in fiscal year (FY) 2013. The Simulated Hospital VBP Program…