Medicare Update

OIG Posts Resource for Health Care Boards of Directors

On June 26, 2007, the Department of Health and Human Services' Office of Inspector General (OIG) posted a document entitled "Corporate Responsibility and Health Care Quality: A Resource for Health Care Boards of Directors" on the OIG's website.  The document is the third in a series of co-sponsored documents by the OIG and the American Health Lawyers Association.  The document seeks to assist directors of health care organizations in carrying out oversight responsibilities and to improve the knowledge base and effectiveness of those serving on health care organization boards.

Senate Finance Committee Requests Information on Private Fee For Service Plan Marketing Suspension

On June 26, 2007, Senate Finance Committee Chairman, Max Baucus, announced in a Press Release that he is requesting more information regarding the recent voluntary suspension of Private Fee-For-Service (PFFS) plan marketing by United Healthcare, Humana, Wellcare, Universal American Financial Corporation (Pyramid), Coventry, Sterling, and Blue Cross Blue Shield of Tennessee.

In fact, on June 25, 2007, Senator Baucus wrote letters to the Acting Administrator of the Centers for Medicare & Medicaid Services (CMS), the President of America's Health Insurance Plans, and the CEOs of the 7 PFFS plans asking, among other things, what triggered the suspension of marketing, how CMS will strengthen its oversight of the PFFS plans, why the insurers agreed to temporarily cease marketing their PFFS plans, and what improvements the insurers would recommend to the PFFS program.  The Press Release contains a copy of each of those letters.

CMS to Host Special Open Door Forum on Provider Enrollment

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will host a Special Open Door Forum on provider enrollment in the Medicare program.  During the discussion, CMS is expected to provide an overview of the 2006 Medicare enrollment applications (CMS-855), and provide useful tips to facilitate enrollment in the Medicare program.  After the discussion, CMS staff will entertain comments on the Medicare provider enrollment process. The Forum will take place from 2:00-3:00 p.m. (EDT) on June 29, 2007.  To participate, registration is required.  The deadline for registration is 2:00 p.m. (EDT) on June 27, 2007.

CMS Extends Timeline for Publishing Final Rule on PRRB Procedures

On June 22, 2007, the Centers for Medicare & Medicaid Services (CMS) published a Notice in the Federal Register, which extended the timeline for publishing the final rule updating the guidelines and procedures for Provider Reimbursement Review Board (PRRB) appeals until June 25, 2008.

On June 25, 2004, CMS published a Proposed Rule in the Federal Register that would update the guidelines and procedures for PRRB appeals.  On December 11, 2006, the Department of Health and Human Services published its Semiannual Regulatory Agenda indicating that a final rule would be published in June 2007.  However, the Notice indicates that the timeline is being extended because of the public comments received, the complex policy and legal issue raised in those comments, and the need for extensive consultation and analysis.

Currently, the PRRB's guidelines and procedures are found in the PRRB's March 1, 2002 Instructions, Section 1878 of the Social Security Act, and 42 C.F.R. 405-1835-1873.

CMS Announces Pilot Program Testing Personal Health Records

On June 20, 2007, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that a new pilot program will allow Medicare beneficiaries to access and use a personal health record (PHR) provided through participating health plans, and accessible through www.mymedicare.gov.

According to CMS, the PHR will be a collection of information about a beneficiary's health or health care services (e.g., medical conditions, hospitalizations, doctor visits and medications).  The data available to beneficiaries will include registration information (e.g., name, address and policy number) and lists of their medications and medical conditions.  CMS reports that sharing this information with health care providers from the PHR will be up to each beneficiary.

CMS anticipates that it will launch this pilot program in conjunction with the following health plans: HIP USA, Humana, Kaiser Permanente, and the University of Pittsburgh Medical Center.  Each plan will have a unique PHR tool.  CMS believes that the availability of different tools will provide valuable information on the features offered, including which are the most popular and useful.

CMS expects for the pilot program to run for 18 months. During that time, CMS will collect both quantitative and qualitative data to assess the use, usefulness, usability and feature preferences of the tools.  According to CMS, the goals of the pilot program are to:

• Determine the features that are most attractive to Medicare beneficiaries;
• Identify the minimum content and functionality for the PHR tools; and
• Assess the best methods for outreach and education to encourage adoption and ongoing use.

OIG Releases New Report on Medicare Part D Plans

On June 19, 2007, the Department of Health and Human Services' Office of Inspector General (OIG) released a report entitled "Retail Pharmacy Participation in Medicare Part D Prescription Drug Plans in 2006." 

The objective of the Report was to determine the extent to which retail pharmacies participate in Medicare Part D stand-alone prescription drug plans (PDP), and how many Medicare Part D stand-alone PDPs are offered by participating retail pharmacies.

According to the Report, the OIG found that nearly all retail pharmacies participate in Medicare Part D, and that 97 percent of retail pharmacies participate in at least one PDP. Further, the OIG found that retail pharmacies in metropolitan and non-metropolitan counties participate at similarly high rates.

In the Report, the OIG indicates that 70 percent of participating retail pharmacies offer beneficiaries the choice of all available PDPs in their region, with retail pharmacies in metropolitan and non-metropolitan counties offering beneficiaries the choice of all available PDPs at similarly high rates.  The OIG also reports that almost all independent and chain retail pharmacies offer beneficiaries the choice of at least half of the available PDPs.

According to the OIG, these findings indicate that beneficiaries' access to retail pharmacies dispensing Medicare Part D covered drugs does not appear to be limited by retail pharmacies' participation in PDPs. Further, although having fewer pharmacies located in an area may limit beneficiary access to retail pharmacies, the OIG believes that its findings suggest that Medicare Part D does not further limit beneficiary access.

OIG Withdraws Proposed Rule on Charges Substantially in Excess of Usual Charges

On June 18, 2007, the Department of Health and Human Services' Office of Inspector General (OIG) published a Notice in the Federal Register announcing that it will not promulgate a final rule clarifying the OIG's permissive exclusion authority under Section 1128(b)(6)(A) of the Social Security Act.

Section 1128(b)(6)(A) and its implementing regulations allow the OIG to exclude a provider from the Medicare and Medicaid programs for submitting payment requests based on charges that are "substantially in excess" of the provider's "usual charges."  On September 15, 2003, the OIG published a Proposed Rule in the Federal Register attempting to clarify its exclusion authority by defining "substantially in excess" and "usual charges," and further clarifying the "good cause" exception. 

In the Notice, the OIG indicates that it will not be promulgating a final rule at this time because it does not have sufficient information to establish a single, fixed numerical benchmark for "substantially in excess" that can be applied equitably across health care sectors and items and services.  The OIG also indicates that it has insufficient information to assure that a final rule would not have the unintended effect of increasing health care costs across the industry.  Instead, the Notice suggests that the OIG will continue to evaluate billing patterns on a case-by-case basis to address instances where the Medicare and Medicaid programs are charged substantially more than other payers, without good cause.

The Notice also addresses concerns regarding whether discounts to uninsured and underinsured patients might skew a provider's "usual charges" and expose the provider to the OIG's exclusion authority under Section 1128(b)(6)(A).  Specifically, the Notice indicates that it will continue to be the OIG's position that, when calculating "usual charges," a provider does not need to consider free or substantially reduced charges to:

• Uninsured patients; or
• Underinsured patients who are self-pay patients for the items or services furnished.

In conjunction with the Notice, the OIG has also released an Addendum to a February 2, 2004 guidance document, entitled "Hospital Discounts to Patients Who Cannot Afford to Pay Their Hospital Bills."

CMS to Host DMEPOS Competitive Bidding Program Teleconferences

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will host 2 teleconferences on the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program. 

The first teleconference will take place on June 20, 2007 from 2:00 - 3:30 p.m. (EDT), and address small supplier provisions, including the small supplier target, selection of multiple winners, bidding in separate product categories and networks.  The second teleconference will take place on June 21, 2007 from 2:00 - 4:00 p.m. (EDT), and allow callers to ask questions about the DMEPOS Competitive Bidding Program.

To participate in the teleconferences, one must register through the Competitive Bidding Program website.  When registering, questions may be submitted in advance of the teleconferences.  CMS also intends to release an audio recording and transcript after each teleconference.

Companies Voluntarily Agree to Suspend Marketing of Private Fee For Service Plans

On June 15, 2007, the Centers for Medicare & Medicaid Services (CMS) announced that United Healthcare, Humana, Wellcare, Universal American Financial Corporation (Pyramid), Coventry, Sterling, and Blue Cross Blue Shield of Tennessee voluntarily agreed to suspend the marketing of their Private-Fee-For-Service (PFFS) plans.

The voluntary marketing suspensions follow allegations by Medicare beneficiaries that deceptive marketing practices were used to induce them into joining PFFS plans without understanding how the plans worked or the restrictions involved.   

Each agreement is effective 5 business days from June 15, 2007.  The suspensions will apply until a plan demonstrates to CMS that it has the systems and management controls in place to ensure that it can meet all of CMS' requirements. The primary provisions that the plans must meet to have the suspensions lifted (and that all PFFS plans must meet beginning October 1, 2007) include:

• All materials (including advertisements, enrollment materials, and materials used at sales presentations) will include the model disclaimer language provided by CMS in its May 25, 2007 guidance.
• All representatives selling the product to beneficiaries will pass a written test that demonstrates their thorough familiarity with the Medicare program and the product they are selling.
• A provider outreach and education program will be in place to ensure that providers have reasonable access to the plan terms and conditions of payment, and that provider relations staff are readily accessible to assist providers with questions about the plan.
• Outbound education and verification calls will be made to all beneficiaries requesting enrollment to ensure that they understand the plan rules.
• Lists of planned marketing and sales events provided to CMS will include events sponsored by delegated brokers and agents as well as those sponsored by the plan.
• When asked by CMS, plan sponsors will provide a complete list of all representatives marketing a PFFS product and authorize CMS to make the list available to state insurance departments on request.

Plans signing the agreement will be actively monitored to ensure they do not engage in marketing while the voluntary suspension is in place.  Violations will be subject to a full range of available penalties, including suspension of enrollment, suspension of payment for new enrollees, civil monetary penalties, and termination from the Medicare program.

American Academy of Actuaries Outlines Options for Improving Medicare's Financial Condition

The American Academy of Actuaries (AAA) has released a publication entitled "Medicare Reform Options."  The publication outlines various options for improving the financial condition of the Medicare program, including options for increasing Medicare revenues by increasing the payroll tax rate, general revenue funding, and beneficiary premiums.  The publication also presents options for reducing Medicare spending, such as reducing provider payments, improving health care delivery efficiencies and quality, and moving to a more defined contribution approach to benefits. However, the AAA suggests that such options are not likely to improve Medicare's financial condition alone. Instead, the AAA suggests that a combination of the options may be necessary.