Medicare Update

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

The Centers for Medicare & Medicaid Services (CMS) will hold the next Skilled Nursing Facility/Long-Term Care Open Door Forum on February 15, 2007 at 2:00 p.m. (EST).

There are two ways to participate in the Forum.  To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 9399803.  To participate in person, one must RSVP to SNF_LTCODF-L@cms.hhs.gov by 2:00 p.m. (EST) on February 13, 2007, and include your name, and organization or association. 

The Form will be held at the Hubert H. Humphrey Building, 200 Independence Avenue S.W., Washington, D.C.  CMS asks that attendees arrive no later than 1:30 p.m. (EST).

CMS Reports That Nearly 24 Million Enrolled In Medicare Part D

Today, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release announcing that, since June 2006, more than 1.4 million beneficiaries have enrolled in Medicare Part D.  CMS also reports that nearly 24 million beneficiaries are currently enrolled in Medicare Part D. 

In the Press Release, CMS reveals that, during the 45 day open enrollment period that ended December 31, 2006, there were about 900,000 enrollments, including 350,000 enrollments done online.  CMS also reports that about 2.4 million Medicare Part D enrollees changed plans.  Of those who changed plans, CMS indicates that about 1.1 million were Medicare beneficiaries receiving the low-income subsidy who changed plans to avoid increased premiums. 

According to the Press Release, Medicare Advantage plan enrollment has also increased by over 900,000, bringing the total number of beneficiaries in Medicare Advantage plans to 8.3 million.  The open enrollment for Medicare Advantage continues through March 31, 2007.

CMS Releases New Instruction for DMEPOS Suppliers on Quality Standards and Accreditation

On January 26, 2007, the Centers for Medicare & Medicaid Services (CMS) released CMS Transmittal 188 (Transmittal) adding a new instruction to Chapter 10 of the Medicare Program Integrity Manual for suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).

According to the Transmittal, the new instruction serves to inform DMEPOS suppliers that they must comply with the DMEPOS quality standards to receive accreditation as a DMEPOS supplier.  The Transmittal also indicates that DMEPOS suppliers must comply with the DMEPOS quality standards and be accredited by a CMS approved accreditation organization to obtain and retain a supplier billing number and receive Medicare Part B payments.

The Transmittal is effective April 1, 2007.  However, an Important Message recently posted on the CMS website states that "CMS has not set a deadline for DMEPOS suppliers to become accredited in order to retain/obtain a supplier enrollment number..." 

CMS Reports That Medicare Pay-For-Performance Demonstration Improves Hospital Patient Care

On January 26, 2007, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release announcing that its Premier Hospital Quality Improvement Demonstration (Demonstration) resulted in a substantial improvement for patient care.  The Demonstration involves over 250 hospitals and is designed to determine if financial incentives are effective at improving the quality of inpatient hospital care. 

As part of the Demonstration, participating hospitals report on outcome measures in 5 clinical areas: acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement.  Hospitals that rank in the top 20 percent in each of the 5 clinical areas receive an incentive payment, with the top 10 percent receiving a 2 percent incentive payment and the second decile receiving a 1 percent incentive payment.

In the Press Release, CMS reports that the average composite quality scores improved significantly in all 5 clinical areas between the Demonstration's inception and the end of the Demonstration's second year.  CMS also reports that, in the second year of the Demonstration, incentive payments will total $8.7 million for 115 top-performing hospitals.  According to CMS Acting Administrator, Leslie V. Norwalk, "[t]hese latest results provide one more piece of solid evidence that pay-for-performance works."

CMS to Host First Home Health, Hospice and DME Open Door Forum for 2007

The Centers for Medicare & Medicaid Services (CMS) will host the first Home Health, Hospice and DME Open Door Forum for 2007 on January 30, 2007 at 2:00 p.m. (EST).

There are two ways to participate in the Forum.  To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 9398570.  To participate in person, one must RSVP to HOMEHEALTH_HOSPICE_DMEODF-L@cms.hhs.gov by 2:00 p.m. (EST) on January 26, 2007, and include the words "Home Health" in the subject line of the message, your name, organization or representation, and phone number. 

The Forum will be held at the Hubert H. Humphrey Building, 200 Independence Avenue S.W., Washington, D.C.  CMS asks that attendees arrive no later than 1:30 p.m. (EST).

OIG Issues Advisory Opinion on Free Dialysis Treatment Services

On January 25, 2007, the Department of Health and Human Services' Office of Inspector General (OIG) released OIG Advisory Opinion No. 07-01 (Opinion).

In the Opinion, a public health system hospital inquired whether providing free acute dialysis treatment services to chronic dialysis patients, unable to obtain dialysis services in their community, would subject the hospital to administrative sanctions for violations of the beneficiary inducement prohibition or Federal anti-kickback statute.

Based on the facts presented, the OIG concluded that, if the requisite intent were present to induce or reward referrals of Federal health care program business, the proposed arrangement could potentially generate prohibited remuneration with respect to the beneficiary inducement prohibition or Federal anti-kickback statute.  However, the OIG indicated that it would not impose administrative sanctions in connection with the arrangement.

In brief, the OIG found that the proposed arrangement's free dialysis treatments would be unlikely to influence patients to select the hospital as their provider of items or services payable by the Medicare or Medicaid programs.  The OIG also found that the proposed arrangement presented a minimal risk of Federal health care program or patient fraud or abuse.

CMS Proposes Payment Changes for Long-Term Care Hospitals for Rate Year 2008

Today, the Centers for Medicare & Medicaid Services (CMS) released an advance copy of a Proposed Rule that would make Medicare payment changes for long-term acute care hospitals (LTCH) for rate year (RY) 2008.

In the Proposed Rule, CMS proposes to update the LTCH prospective payment system federal rate by 0.71 percent to $38,356.45 for RY 2008.  CMS also proposes to set the outlier fixed-loss amount for RY 2008 at $18,477, which is $3,590 more than RY 2007.  Among other things, the Proposed Rule would also modify the so-called "25 percent rule." 

CMS will also be using the Proposed Rule to propose changes to Medicare's policies for graduate medical education (GME) payments when residents are being trained in non-hospital settings.  For instance, the Proposed Rule would require a teaching hospital to pay at least 90 percent of the total costs of training residents in non-hospital settings.  This proposed GME change would be effective July 1, 2007.

The Proposed Rule is scheduled to be published in the Federal Register on February 1, 2007.  CMS will be accepting comments on the Proposed Rule for 60 days, and expects to publish a final rule later this spring.  According to CMS, the final rule would be effective for discharges occurring on or after July 1, 2007 through June 30, 2008.

CBO Releases the Budget and Economic Outlook for FY 2008-2017

Today, the Congressional Budget Office (CBO) released The Budget and Economic Outlook: Fiscal Years 2008 to 2017 (Outlook).  In the Outlook, the CBO reports that an aging population and increasing health care costs are expected to put considerable pressure on the budget in coming decades.  According to the CBO, economic growth alone is unlikely to alleviate that pressure as Medicare, Medicaid and Social Security require ever greater resources under current law.  The CBO suggests that either a substantial reduction in the growth of spending, a significant increase in tax revenues relative to the size of the economy, or some combination of spending and revenue changes will be needed to promote the nation's long-term fiscal stability.

CMS Releases Audio Download of Listening Session on Medicare Hospital Value-Based Purchasing

The Centers for Medicare & Medicaid Services (CMS) recently posted an audio download of its January 17, 2007 Listening Session, addressing the Medicare Hospital Value-Based Purchasing Plan, on the CMS website's Hospital Center, under Spotlights.   

During the Listening Session, CMS considered an Issues Paper that addresses the design considerations for the development of the Medicare Hospital Value-Based Purchasing Plan.

Senators Domenici and Feinstein Introduce the Social Security and Medicare Solvency Commission Act

On January 22, 2007, U.S. Senators Pete Domenici and Dianne Feinstein issued a Press Release announcing the introduction of the Social Security and Medicare Solvency Commission Act (Act).

The Act would establish a permanent, independent 15 member commission known as the National Commission on Entitlement Solvency (Commission), which would be charged with ensuring the long-term financial security of Social Security and the Medicare program. 

Under the Act, the Commission would hold town hall style public hearings, direct and implement a periodic, comprehensive review of Social Security and Medicare, and make legislative recommendations. Congress would have mandatory timelines to introduce the Commission's recommended legislation, take committee action, and schedule debate.

The introduction of the Act follows the January 18, 2007 testimony of Federal Reserve Chairman, Ben Bernanke, before the U.S. Senate, Committee on the Budget.  In that testimony, the Chairman cited the long-term cost projections of Social Security and Medicare, and warned that the U.S. economy could be seriously weakened, with future generations bearing the cost, if early and meaningful action is not taken.