Medicare Update

CMS Publishes Notice of Computer Matching Program to Detect Fraud, Waste & Abuse

On December 28, 2006, the Centers for Medicare & Medicaid Services (CMS) published a Notice in the Federal Register announcing a Computer Matching Program (CMP) that CMS plans to conduct with various participating states to study claims, billing and eligibility information to detect suspected instances of Medicare and Medicaid fraud, waste and abuse. 

Through the CMP, CMS and a participating state will provide a CMS contractor with Medicare and Medicaid claims, billing and eligibility records, which the CMS contractor will match in order to merge the information (as necessary) to conduct the match.  Utilizing fraud detection software, the information will then be used to identify patterns of aberrant practices and abnormal patterns requiring further investigation.

On December 20, 2006, CMS filed a report on the CMP with the House Committee on Government Reform and Oversight, Senate Committee on Homeland Security and Governmental Affairs, and Office of Management and Budget (OMB).  According to the Notice, the CMP will become effective 40 days after the report is filed with Congress and OMB, or 30 days after publication in the Federal Register, which ever is later. 

The CMP will continue for 18 months from the effective date and may be extended for an additional 12 months thereafter, if certain conditions are met.  CMS is accepting comments on the CMP, and may defer implementation if comments persuade CMS to do so.

CMS to Extend Open Enrollment Deadline for Some Medicare Drug Plan Enrollees

On December 28, 2006, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release reminding Medicare Part D drug plan enrollees of the December 31, 2006 open enrollment deadline. 

In the Press Release, CMS also recognizes that some enrollees may not have received timely information from their current drug plan (e.g., information about changes in premiums or covered medications for 2007).  To ensure that the affected enrollees have adequate time to compare the cost and coverage of their 2006 and 2007 plans and make an informed decision about what plan best meets their needs, CMS is extending the open enrollment period for the affected enrollees.

According to the Press Release, the affected enrollees will receive a letter from their current drug plan informing them that they will be able to change their plan (if they so choose) anytime between January 1, 2007 and February 15, 2007.

CMS Posts Updated Drug List for the Medicare Part B Competitive Acquisition Program

On the Centers for Medicare & Medicaid Services' (CMS) website, CMS has posted an updated list of drugs that will be available through the Medicare Part B Competitive Acquisition Program (CAP) effective January 1, 2007.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) required CMS to implement the CAP for Medicare Part B drugs and biologicals not paid on a cost or prospective payment system basis.  Under the MMA, physicians are given a choice between buying and billing these drugs under the Average Sales Price system, or obtaining these drugs from vendors selected in a competitive bidding process.  However, once a physician elects to participate in the CAP, they must obtain all drugs on the CAP drug list from an approved drug vendor.  For 2007, there is one approved drug vendor, BioScrip, Inc.

CMS: December 30, 2006 Deadline for FY 2008 New Technology Applications

The Centers for Medicare & Medicaid Services' (CMS) deadline for submitting applications and complete databases on new technologies and medical services for FY 2008 is December 30, 2006. The CMS website contains the application information for FY 2008.

Section 1886 of the Social Security Act establishes a process for identifying and ensuring that there is adequate payment for new technologies and medical services under the Medicare inpatient prospective payment system.  Additional payment may be made for cases that involve new technologies or medical services that have been approved for special add-on payments.

To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available and that, absent an add-on payment, it would be inadequately paid under the regular DRG payment.  Therefore, CMS will be conducting a New Technology Town Hall Meeting on February 22, 2007 to accept comments on the substantial clinical improvement criteria for the new technology applicants for FY 2008. The CMS website contains information on the New Technology Town Hall Meeting.

CMS Announces First Advisory Panel Meeting on APC Groups for 2007

On December 22, 2006, the Centers for Medicare & Medicaid Services (CMS) published a Notice in the Federal Register announcing the first biannual meeting of the Advisory Panel on Ambulatory Payment Classification (APC) Groups for 2007.

The Advisory Panel reviews the APC groups and provides advice to the Department of Health & Human Services and CMS concerning the clinical integrity of the APC groups and their associated weights.  According to the Notice, the first biannual meeting is scheduled for March 7-9, 2007.

CMS will consider the Advisory Panel's advice as CMS prepares the proposed and final rules that update the Medicare hospital outpatient prospective payment system (OPPS) for CY 2008.  During the March 7-9, 2007 meeting, the Advisory Panel is expected to consider:

• Reconfiguring APCs (e.g., splitting of APCs, moving HCPCS codes from one APC to another, and moving HCPCS codes from new technology APCs to clinical APCs)
• Evaluating APC weights
• Packaging device and drug costs into APCs
• Removing procedures from the inpatient list for payment under OPPS
• Using single and multiple procedure claims data
• Other APC structure and technical issues

CMS to Issue Final Rule Updating PRRB Guidelines and Procedures

On December 11, 2006, the Department of Health & Human Services (HHS) published its Semiannual Regulatory Agenda (Agenda) in the Federal Register.  The Agenda identifies rules that HHS intends to propose or finalize over the next year.

In the Agenda, HHS reveals that it intends to publish a final rule in June 2007, which redefines, clarifies and updates the guidelines and procedures for Provider Reimbursement Review Board (PRRB) appeals based on recent court decisions.  This final rule will follow a Proposed Rule that HHS published in the Federal Register in June 2004. 

Currently, the PRRB's guidelines and procedures are found in the PRRB's March 1, 2002 Instructions, and at Section 1878 of the Social Security Act and 42 C.F.R. 405.1835-1873.

CMS Posts Issues Paper for Listening Session on Hospital Value-Based Purchasing

The Centers for Medicare & Medicaid Services (CMS) has posted an Issues Paper on the CMS website, which addresses the design considerations for the development of the Medicare Hospital Value-Based Purchasing Plan.

On January 17, 2007, CMS will conduct a Listening Session on the Issues Paper from 10:00 a.m. to 5:00 p.m. in the CMS Baltimore auditorium.  There will also be a dial-in number for individuals who are unable to attend in person.  However, due to time constraints, individuals participating by telephone will not be able to make verbal comments.  Registration is required for both on-site and teleconference participation.

CMS will accept written comments on the Issues Paper until January 24, 2007.  Written comments may be sent by email to cmshospitalVBP@cms.hhs.gov.  Written comments may also be sent by facsimile to (410) 786-0330 or by mail to Robin Phillips, Medicare Feedback Group, Centers for Medicare & Medicaid Services, Mail Stop C4-13-07, 7500 Security Blvd., Baltimore, Maryland 21244-1850.

CMS Releases Medicare Part B Drug Average Sales Price Files

The Centers for Medicare & Medicaid Services (CMS) has released the files containing the Medicare Part B Drug and Biological Average Sales Price (ASP) payment amounts for the first quarter of 2007 (i.e., January 1, 2007 to March 31, 2007).

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) changed the payment methodology for Part B covered drugs, that are not paid on a cost or prospective payment basis, when it established the new ASP drug payment system.  The ASP methodology uses quarterly drug pricing data submitted to CMS by drug manufacturers.  CMS provides contractors with the ASP drug pricing files for Part B drugs on a quarterly basis.

MedPAC Tenatively Recommends 2% Payment Update for Physician Services for 2008

During a December 7, 2006 public meeting, the Medicare Payment Advisory Commission (MedPAC) discussed the adequacy of Medicare payments to home health agencies, long-term care hospitals, physicians, and skilled nursing, inpatient rehabilitation, and dialysis facilities.

According to the transcript of the meeting, MedPAC found that current indicators do not suggest that there are payment adequacy problems for physician services.  MedPAC also discussed a tentative update recommendation for physician services of 2 percent for 2008.  However, MedPAC's actual update recommendation will be sent to Congress in March 2007.

During the meeting, MedPAC also reviewed the results of a MedPAC sponsored physician survey.  The survey included 934 nonfederal office-based physicians who spent at least 10 percent of their patient time with fee-for-service Medicare patients, but excluded physicians who are not taking any new patients of any insurance type.

According to MedPAC, the survey showed that 96 percent of the physicians accept at least some new Medicare fee-for-service patients, while only 3.3 percent reported that they were not accepting any new patients.  The survey also revealed that physicians had more difficulty referring Medicare fee-for-service patients than private non-HMO patients.

President Bush Signs the Tax Relief and Health Care Act of 2006

Today, President Bush signed H.R. 6111, the Tax Relief and Health Care Act of 2006 (Act), into law.  H.R. 6111 was approved by both the U.S. House of Representatives and U.S. Senate during the flurry of legislative activity that occurred just before the 109th session of Congress adjourned.

The Act contains a number of provisions impacting the Medicare program.  The most publicized being a provision that averts the five percent cut in Medicare reimbursement for physicians services, which was to take effect on January 1, 2007.  Among other things, the Act also:

• Provides a one-year extension of the therapy cap exception process for physical, speech language pathology, and occupational therapy services.
• Provides a 1.5 percent bonus-incentive payment to physicians who report on certain quality measures in 2007.
• Provides a 1.6 percent update to end stage renal disease (ESRD) facilities for 2007.
• Expands to all states the recovery audit contractor program to identify and collect Medicare overpayments through specialized contractors.
• Provides a full update to hospital outpatient and ambulatory surgical facilities that report certain quality data starting no sooner than 2009.