Medicare Update

Medicare Recovery Audit Contractors: Don't Be Left in the Dark

The Centers for Medicare & Medicaid Services (CMS) intends to implement the permanent Medicare Recovery Audit Contractor (RAC) program in phases beginning in March 2009.  Medicare providers should become informed about the RAC program and prepare for its implementation.  In this post, aspects of the nationwide RAC program are highlighted to assist Medicare providers in understanding the program.

House Passes Affordable Health Care for America Act

On November 7, 2009, the U.S. House of Representatives passed (in a 220-215 vote) the Affordable Health Care for America Act (H.R.3962).

The American Medical Association (AMA) reports that, earlier in the day, the House approved a rule (in a 242-192 vote) setting parameters for considering H.R.3962 and the Medicare Physician Payment Reform Act of 2009 (H.R.3961). However, a floor vote was not taken on H.R.3961.  The AMA reports that the House is now expected to consider H.R.3961 during the week of November 16, 2009.

As originally drafted, H.R.3691 would repeal the now 21.2 percent Medicare payment rate reduction for physician services in 2010 and restructure the sustainable growth rate (or SGR) formula.

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CMS Redesigns Medicare Provider Statistical & Reimbursement System

Over the last week, I have received a few inquires about a Medicare provider's responsibility with respect to obtaining a Provider Statistical & Reimbursement (PS&R) system report for cost report filing purposes.

On June 12, 2009, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 153 (Change Request 6519) announcing that the redesigned PS&R system (PS&R Redesign) is available for use.

According to Transmittal 153, the PS&R Redesign is to be used for filing and settling all cost reports with fiscal years ending on January 31, 2009 and later. Further, Transmittal 153 states in part:

"The PS&R Redesign will allow all users (Providers, FIs/MACs, CMS) the ability to download summary PS&R reports via the internet. Users will be able to log on to the system and request their summary reports on an as-needed basis.  FIs/MACs will no longer have to produce and distribute these summary reports to their providers. It will be the provider's responsibility to obtain their own reports needed for their cost report..."

To gain assess to the PS&R Redesign, Transmittal 153 indicates that users must establish an Individuals Authorized Access to CMS Computer Systems (IACS) account and be approved for PS&R access. Transmittal 153 also states that "[t]he Provider IACS verification process...may take weeks to complete the entire process." So, providers (that file cost reports) should not delay registration.

Information on the IACS process can be found here. Transmittal 153 also contains information regarding IACS registration including a web link.  Also, see MLN Matters article MM6519.

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CMS to Host Home Health, Hospice & DME Open Door Forum

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will hold the next Home Health, Hospice & DME Open Door Forum at 2:00 p.m. (ET) on December 2, 2009.

To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 40379384. To participate in person, RSVP and security clearance is required.  One must RSVP by 2:00 p.m. (ET) on November 27, 2009 to HOMEHEALTH_HOSPICE_DMEODF-L@cms.hhs.gov, and include your name, organization, telephone number, and "Home Health" in the subject line.  The Open Door Forum will take place at the Hubert H. Humphrey Building, 200 Independence Avenue S.W., Washington, D.C.

Beginning 2 hours after the Open Door Forum, CMS will also make an audio recording of the Open Door Forum available.  To access the audio recording, one must dial 1-800-642-1687 and enter the conference ID.  The recording will expire after 3 business days.

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CBO Releases Cost Estimate for Medicare Physician Payment Reform Act

The Congressional Budget Office (CBO) recently released a cost estimate for the Medicare Physician Payment Reform Act of 2009 (H.R.3961), which would repeal the now 21.2 percent Medicare payment rate reduction for physician services in 2010 and restructure the sustainable growth rate (SGR).

According to the CBO, H.R.3961 would increase direct spending by about $210 billion over the 2010-2019 period. The CBO estimates that the $210 billion increase would include an additional $195 billion in Medicare payments to physicians and $64 billion in new spending for Medicare Advantage plans and TRICARE. However, the CBO estimates that such costs would be offset by $49 billion in Part B premiums.

On October 13, 2009, Senator Debbie Stabenow introduced the Medicare Physicians Fairness Act of 2009 (S.1776), which would eliminate the now 21.2 percent Medicare payment rate reduction for physician services in 2010 and sunset the SGR formula. Subsequently, the CBO released a brief letter estimating the effects of S.1776.  According to that letter, the CBO believes that S.1776 would increase direct spending by $247 billion over the 2010-2019 period. The U.S. Senate voted 47-53 on a cloture motion for S.1776, which appears to have halted any immediate Senate initiatives to address the SGR formula.  

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Region D Medicare Recovery Audit Contractor Adds New CMS Approved Audit Issue

HealthDataInsights, Inc. (HDI), the Medicare recovery audit contractor (RAC) for Region D, recently posted a new CMS approved audit issue for RAC review on its website. 

The new CMS approved audit issue is titled "Infusion Pump Denied/Accessories & Drug Codes should be denied" and applies to all states within Region D.  See the HDI website for more details regarding the new CMS approved audit issue.

Region D includes Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, Wyoming, Guam, American Samoa, and Northern Marianas. 

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House Democrats Release Amendment to Affordable Health Care for America Act

On November 3, 2009, House Democrats released a 42 page manager's amendment to the Affordable Health Care for America Act (H.R.3962).  The amendment can be found here.

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Comment Period Extended for Rule Proposing New ESRD Prospective Payment System

On September 29, 2009, the Centers for Medicare & Medicaid Services (CMS) published a Proposed Rule that would implement a case-mix adjusted bundled prospective payment system for Medicare outpatient end stage renal disease (ESRD) dialysis facilities beginning January 1, 2011.

Today, CMS published a Notice extending the comment period for the Proposed Rule. CMS will now be accepting comments until 5:00 p.m. on December 16, 2009. The original comment period would have ended on November 16, 2009.

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CMS Releases Final Medicare Physician Fee Schedule Changes for 2010

On October 30, 2009, the Centers for Medicare & Medicaid Services (CMS) released a display copy of the Final Rule (with comment period), which updates the payment policies and rates for the Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2010.

2010 MPFS Update

In the Final Rule, CMS adopts an update of -21.2 percent for CY 2010 after applying more recent data on spending for physicians' services. 

Since the enactment of the Balanced Budget Act of 1997, MPFS rates have been updated annually based on a formula that includes the sustainable growth rate (SGR).  The formula has resulted in negative updates since CY 2002. However, CMS has taken action or Congress has enacted legislation each year to avoid the negative updates.

Currently, there is Congressional legislation pending to repeal and/or replace the SGR formula. The Obama Administration appears committed to repealing the SGR formula.  In fact, in a Press Release, CMS states "[t]he Administration tried to avert the pending fee schedule cut in the FY 2010 budget proposal that it submitted to Congress, and it remains committed to repealing the SGR."

Other Changes

In the Final Rule, CMS finalizes a proposal to remove physician administered drugs from the definition of "physician services" for purposes of computing the MPFS update. According to CMS, this change will not affect the -21.2 percent update for CY 2010. However, CMS believes that it will have a positive effect on future payment updates.

CMS also makes refinements to improve payment rates for primary care services. In the Final Rule, CMS finalizes its proposal to include data about physicians' practice costs from the Physician Practice Information Survey (PPIS).  This will be phased in over a 4 year period. However, CMS will continue to use specialty supplemental survey data (not PPIS data) to determine practice expenses for medical oncology.

In addition, CMS finalizes a proposal to increase the equipment use rate from 50 to 90 percent for equipment priced over $1 million. However, CMS will phase this change in over a 4 year period.

In brief, the Final Rule also implements a number of provisions from the Medicare Improvements for Patients and Providers Act of 2008 including:

• Adding new benefit categories for cardiac and pulmonary rehabilitation services and chronic kidney disease beginning January 1, 2010;
• Increasing the Medicare share of payment for outpatient mental health services to 55 percent (from 50 percent); and
• Implementing a requirement that suppliers of the technical component of advanced imaging services be accredited beginning January 1, 2012.

Moreover, the Final Rule clarifies an aspect of the "stands in the shoes" provisions of the Stark self-referral regulations.

The Final Rule also includes changes for the Physician Quality Reporting Initiative and E-Prescribing Incentive Program. CMS has outlined those changes in a Fact Sheet.

The Final Rule is scheduled to appear in the Federal Register on November 25, 2009. CMS reports that it will be accepting comments on designated provisions of the Final Rule until December 29, 2009.

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Top Ten Medicare Update Blog Posts in October 2009

Below are the top ten Medicare Update posts during October 2009 (based on the number of views):

1)   CMS Announces 2010 Medicare Premiums and Deductibles

2)   OIG Work Plan Reveals Possible Risk Areas for Medicare Providers and Suppliers

3)   Senator Stabenow Introduces Medicare Physician Fairness Act of 2009

4)   OIG Work Plan Identifies Possible Areas of Concern for Home Health Agencies and DMEPOS Suppliers

5)   CMS Directs Medicare Contractors to Take Action on OIG Reports

6)   CMS Posts FAQ on Code 432 and Medicare Recovery Audit Contractors

7)   The Changing Dynamics of Medicare Fraud Schemes?

8)   Medicare Fraud and Recovery Audit Contractor Program

9)   CMS to Shelve Medicare Medical Home Demonstration

10) Region D Recovery Audit Contractor Updates CMS Approved Audit Issues

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CMS Releases 2010 Final Rule for Hospital Outpatient Departments and Ambulatory Surgical Centers

On October 30, 2009, the Centers for Medicare & Medicaid Services (CMS) released a display copy of a Final Rule (with comment period) that updates the Medicare payment policies and rates for both hospital outpatient departments and ambulatory surgical centers (ASC) for calendar year (CY) 2010.

In brief, some highlights of the Final Rule include:

Hospital Outpatient Prospective Payment System. CMS estimates that the aggregate Medicare payments to providers under the hospital outpatient prospective payment system (OPPS) in CY 2010 will be $32.2 billion, which is an $1.9 billion increase over CY 2009.

• Inflation Update. Hospitals will receive an annual inflation update of 2.1 percent for CY 2010.
• Payment Reduction/Quality Data Reporting. The 2.1 percent update will be reduced by 2 percentage points for most services furnished by hospitals that failed to meet the CY 2009 reporting requirements of the Hospital Outpatient Quality Data Reporting Program (HOP-QDRP).
• Quality Measures. CMS will continue to require hospitals subject to HOP-QDRP to provide quality data for the current 7 chart-abstracted emergency department and surgical care measures and 4 claims-based imaging efficiency measures for CY 2011 payment determinations.
• Quality Reporting Validation. CMS will implement an HOP-QDRP validation requirement to ensure that hospitals are accurately reporting measures using chart-abstracted data. According to CMS, the validation results will not affect a hospital's CY 2011 OPPS payment.
• Public Quality Data Reporting. CMS is establishing procedures to make HOP-QDRP quality measure data publicly available as early as June 2010.
• Supervision of Outpatient Services. In CY 2010, CMS will allow certain nonphysician practitioners (i.e., physician assistants, nurse practitioners, clinical nurse specialists, certified nurse-midwives, and licensed clinical social workers) to provide direct supervision for all hospital outpatient therapeutic services that they are authorized to personally perform according to state scope of practice rules and hospital granted privileges. In the Final Rule, CMS addresses "direct supervision" in the context of on-campus hospital outpatient therapeutic services and services furnished in an off-campus provider based department.

Ambulatory Surgical Centers. According to CMS, aggregate Medicare payments to ASCs is expected to total $3.4 billion in CY 2010.

• Inflation Update. ASCs will receive a 1.2 percent inflation update in CY 2010.
• ASC Covered Procedures/Services. CMS will add 26 surgical procedures to the list of procedures that the Medicare program will pay for when performed in an ASC. CMS also newly designates 6 procedures as office based procedures and temporarily designates an additional 16 procedures as office based procedures based on coding changes for CY 2010.

The Final Rule is scheduled to appear in the Federal Register on November 20, 2009.  CMS reports that comments on designated provisions will be due by 5:00 p.m. (ET) on December 29, 2009.

For more information on the Final Rule, see the following CMS documents:

• Press Release: CMS Adopts Policy, Payment Rate Changes for Services in Hospital Outpatient Departments
• Fact Sheet: Final 2010 Policy, Payment Changes for Hospital Outpatient Departments and Ambulatory Surgical Centers

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