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.

CMS Reports Results of 2008 Medicare Physician Quality Reporting Initiative

On November 13, 2009, the Centers for Medicare & Medicaid Services (CMS) announced that, as part of the 2008 Physician Quality Reporting Initiative (PQRI), it paid more than $92 million in incentive payments to physicians and other eligible professionals who successfully reported quality data.

According to CMS, the number of eligible professionals who earned an incentive payment in 2008 increased by one-third from 2007.  For the 2007 PQRI, CMS paid approximately $36 million in incentives. 

Among other things, CMS also reports in a Press Release and Fact Sheet that for the 2008 PQRI:

• The average incentive amount for individual professionals is over $1,000 with the largest payment to an eligible professional totaling over $98,000.
• More than 162,800 professionals participated and over 85,000 physicians and other eligible professionals met statutory requirements for satisfactory reporting.
• Nearly 8 percent of the PQRI participants attempted to send their data to CMS through a medical registry.  Of those eligible professionals, nearly 96 percent met the statutory requirements for satisfactory reporting and qualified for an incentive payment.

In addition, CMS reports that it has re-run the data used to make its initial 2007 PQRI incentive payment determinations due to several data issues. Based on the re-run data, CMS has identified over 3,900 additional eligible professionals that will receive 2007 PQRI incentive payments.  According to CMS, the payments average over $860 per eligible professional and will be made in November 2009.

Finally, CMS points out that providers can access their confidential feedback reports at the Tax Identification Number level by visiting a secure PQRI portal at http://www.qualitynet.org/pqri

Fore more information, see the Press Release and Fact Sheet.

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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 "DMEPOS while patient is in a Covered Part A Inpatient Hospital Stay" 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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CMS Encourages Medicare Beneficiaries to Review Coverage During Open Enrollment Period

On November 12, 2009, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release reminding beneficiaries that the annual open enrollment period for Medicare prescription drug and health plan coverage begins on November 15, 2009 and runs through December 31, 2009.

In the Press Release, CMS also encourages Medicare beneficiaries to take advantage of the annual open enrollment period to make sure they have the best coverage available to meet their needs in 2010.  In addition, CMS cites some resources for beneficiaries to get additional information and assistance.

Interestingly, the Press Release also offers tips for Medicare beneficiaries to protect themselves from fraud and identity theft during the open enrollment period. 

In October 2009, the Department of Health and Human Services released a Medical Identity Theft & Medicare Fraud brochure for beneficiaries, which highlights some tips for deterring, detecting and defending against medical identity theft and Medicare fraud.

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CMS to Host Skilled Nursing Facility/Long-Term Care Open Door Forum

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will hold the next Skilled Nursing Facility/Long-Term Care Open Door Forum at 2:00 p.m. (ET) on December 3, 2009.

To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 40384200.  To participate in person, RSVP and security clearance is required.  One must RSVP by 2:00 p.m. (ET) on November 30, 2009 to SNF_LTCODF-L@cms.hhs.gov, and include your name, organization, telephone number, and "SNF/LTC" 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 December 7, 2009, 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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CMS to Instruct Medicare Contractors on Home Health Outliers in December 2009

On November 10, 2009, the Centers for Medicare & Medicaid Services (CMS) published the Final Rule in the Federal Register updating the policies and rates for the Medicare home health prospective payment system (HH-PPS) for calendar year (CY) 2010. 

As previously reported, the Final Rule makes significant changes to the policies on outlier payments.

Outlier payments are made for episodes for which the estimated cost exceeds a threshold amount.  The Social Security Act requires that the estimated total outlier payments be no more than 5 percent of total estimated HH-PPS payments in a given year. The wage adjusted fixed dollar loss (FDL) amount represents the amount of loss that a HHA must bear before an episode becomes eligible for outlier payments.  Annually, CMS reviews the percentage of outlier payments and adjusts the FDL ratio as appropriate. 

For CY 2009, CMS adopted a FDL ratio of 0.89. However, in the Final Rule, CMS reduced the FDL ratio to 0.67 for CY 2010. Further, to combat perceived abuses, CMS adopted a 10 percent cap on outlier payments at the agency level and lowered the targeted total aggregate outlier payments to 2.5 percent of HH-PPS payments.

In response to comments in the Final Rule, CMS briefly outlines how it may implement the 10 percent cap on outlier payments at the agency level.  In part, CMS states the following:

"Under our planned implementation approach, for each home health provider, the claims processing system will maintain a running tally of the year-to-date (YTD) total home health payments. The claims processing system will ensure that each time an outlier claim for an agency is processed, actual outlier payments will never exceed 10 percent of the agency's YTD total payments. While an agency will always receive its base episode payment timely, the outlier portion of the claim will be paid on a rolling basis, as the agency's YTD payments support payment of the outlier.  We plan to have a periodic reconciliation process under which outlier payments that were withheld are subsequently paid if the HHA's total payment have increased to the point that their outlier payments can be made..."

Today, CMS posted an announcement on its website stating that the "[f]inal instructions (Change Request/Transmittal) describing the changes that will be made by Medicare contractors to implement this new outlier policy are currently being developed and are expected to be released sometime in early December." 

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Senator Kaufman Introduces Health Care Fraud Enforcement Act

On October 28, 2009, Senator Ted Kaufman (along with co-sponsoring Senators Patrick Leahy, Arlen Specter, Herb Kohl, Chuck Schumer, and Amy Klobuchar) introduced the Health Care Fraud Enforcement Act of 2009 (S.1959).

As drafted, S.1959 aims to strengthen the U.S. government's capacity to investigate and prosecute waste, fraud and abuse in government health care programs and private health insurance.  In brief, S.1959 would (among other things):

• Amend the Federal Sentencing Guidelines to provide a two-level increase in the offense for a defendant convicted of a federal health care offense relating to a government health care program that involves a loss of $1 million or more, a three-level increase if the loss is $7 million or more, and a four-level increase if the loss is $20 million on more.
• Specify that, for purposes of the Federal Anti-Kickback Statute and health care fraud statute (18 U.S.C. 1347), "willful conduct" does not require proof that a defendant had actual knowledge of the law in question or specific intent to violate the law.
• Amend the Federal Anti-Kickback Statute to ensure that all claims resulting from illegal kickbacks are false, even if the claims are not submitted directly by the wrongdoers themselves.
• Expand the definition of a "health care fraud offense."
• Authorize the Department of Justice to issue subpoenas for access to any institution that is the subject of an investigation related to a violation of the Civil Rights for Institutionalized Persons Act (and for any documents, records, materials, files, reports, memoranda, policies, procedures, investigations, video or audio recordings, and quality assurance reports).
• Authorize the appropriation of $20 million per year from 2011 through 2016 for investigations, prosecutions and civil or other proceedings related to fraud and abuse.

According to Senator Kaufman's Press Release, "[f]raud perpetuated against both public and private health plans costs between $72 and $220 billion annually, increasing the cost of medical care and health insurance and undermining public trust in our health care system."

S.1959 has been referred to the Judiciary Committee.

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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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