Medicare Update

CMS Releases Final Inpatient Rehabilitation Facility Payment Rule for 2008

On July 31, 2007, the Centers for Medicare & Medicaid Services (CMS) released a display copy of the Final Rule updating the payment rates and modifying the policies of the inpatient rehabilitation facility prospective payment system (PPS) for fiscal year (FY) 2008.

In the Final Rule, CMS increases inpatient rehabilitation facilities (IRF) payments by 3.2 percent, based on the rehabilitation, psychiatric and long-term care hospital market basket.  The Final Rule also increases the high cost outlier threshold to $7,362 (from $5,534 in FY 2007), which means that fewer cases are expected to qualify for outlier payments in 2008.  However, the Final Rule clarifies existing policy to indicate that short stay transfer cases that meet the criteria to qualify for outlier payments will be eligible to receive the additional payments.

The Final Rule also updates the IRF PPS wage index by establishing a policy in which the average wage index from all contiguous counties may be used in the future as a reasonable proxy for the rural area within a state.  However, CMS reports that the Final Rule does not revise the current policy on the 75 percent rule. The 75 percent rule is used by CMS to classify a provider as an IRF.  Currently, in addition to a patient's principal diagnosis, a patient's comorbidities may be used to determine whether a provider satisfies the 75 percent rule.  However, for cost reporting periods beginning on or after July 1, 2008, comorbidities can no longer be used.

The Final Rule is expected to be published in the Federal Register on August 7, 2007.

CMS Releases Proposed Rule Requiring Surety Bond for DMEPOS Suppliers

On July 27, 2007, the Centers for Medicare & Medicaid Services (CMS) released a display copy of a Proposed Rule that would require suppliers of Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) to obtain and furnish a surety bond to the National Supplier Clearinghouse in the amount of at least $65,000.

According to the Proposed Rule, CMS is implementing a provision of the Balanced Budget Act of 1997, which authorizes CMS to require a surety bond for DMEPOS suppliers in the amount of at least $50,000.  However, in the Proposed Rule, CMS has adjusted the $50,000 figure by the Consumer Price Index to arrive at the proposed $65,000 surety bond requirement. CMS believes that establishing a $65,000 surety bond requirement would:

• Limit the Medicare program risk to fraudulent DMEPOS suppliers
• Enhance the Medicare enrollment process to help ensure that only legitimate DMEPOS suppliers are enrolled and allowed to remain enrolled in the Medicare program
• Ensure that the Medicare program recoups erroneous payments that result from fraudulent or abusive billing practices by allowing CMS or its contractor to seek payments from a surety
• Help ensure that Medicare beneficiaries receive products and services that are considered reasonable and necessary from legitimate DMEPOS suppliers.

The Proposed Rule also solicits comments on:

• Reasons to increase the surety bond amount for higher risk DMEPOS suppliers and the appropriate period of time that higher amount should be required
• Appropriate criteria to identify whether a physician or non-physician practitioner should be given an exception to the surety bond requirement
• Establishing an exception to the surety bond requirement for licensed pharmacists and large, publicly traded chain suppliers of DMEPOS

According to the Proposed Rule, CMS will be accepting comments on the Proposed Rule during the 60 day period after the Proposed Rule appears in the Federal Register.  The Proposed Rule is expected to be published in the Federal Register on August 1, 2007.

In conjunction with CMS' release of the Proposed Rule, the Department of Health and Human Services issued a Press Release in which the Proposed Rule is described as "another HHS step in an ongoing effort to combat Medicare fraud with particular focus on DMEPOS suppliers."

CMS Extends Deadlines for DMEPOS Competitive Bidding Program

On July 27, 2007, the Centers for Medicare & Medicaid Services (CMS) announced that it has extended the bid submission, registration and accreditation deadlines for the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program.

• Bid Submission. Originally, the deadline for submitting bids was July 13, 2007.  However, in late June 2007, CMS extended the deadline to July 20, 2007.  Then, just last week, CMS extended the bid submission deadline to July 27, 2007.  With this latest announcement, CMS has now extended the deadline so that all bids are due by 9:00 p.m. prevailing Eastern Time on September 25, 2007. CMS also reports that suppliers that already submitted bids can revise and resubmit their bids until this new bid submission deadline. However, suppliers that resubmit bids must submit a new certification statement.

• Registration. To access the internet based bid submission system, suppliers must register and obtain a user ID and password.  Registration for the DMEPOS competitive bidding program opened on April 9, 2007 and closed on June 30, 2007,  However, CMS has now reopened registration and set a new registration deadline of August 27, 2007.

• Accreditation. Suppliers must be accredited or be pending accreditation to submit a bid.  However, suppliers must be accredited to be awarded a contract under the DMEPOS competitive bidding program.  For the first round of competitive bidding, the original accreditation deadline was August 31, 2007.  However, CMS has now extended that deadline to October 31, 2007.

Finally, CMS has revised the contract periods for mail order diabetic supplies and all other first round product categories.  For mail order diabetic supplies, the contract period is now July 1, 2008-March 31, 2010.  For all other first round product categories, the contract period is now July 1, 2008-June 30, 2011.  For more information on the DMEPOS competitive bidding program, visit the DMEPOS Competitive Bidding Implementation Contractor Web Site.

CMS Releases Results of Contractor-Provider Satisfaction Survey

On July 25, 2007, the Centers for Medicare & Medicaid Services (CMS) reported that the 2007 Medicare Contractor Provider Satisfaction Survey (MCPSS) has revealed that health care providers continue to be satisfied with the services of their Medicare fee-for-service contractors.

Earlier this year, the MCPSS was sent to more than 36,000 randomly selected providers that service Medicare beneficiaries.  The MCPSS focused on 7 contractor functions: provider communications; provider inquiries; claims processing; appeals; provider enrollment; medical review; and provider audit and reimbursement.  In the MCPSS, providers were asked to rate their contractors using a 6-point scale on each contractor function (with 1 being not at all satisfied and 6 being completely satisfied). CMS reports that 65 percent of the providers who were surveyed responded.  According to CMS, 85 percent of responding providers rated their contractors between 4 and 6 on the 6-point scale.

CMS to Hold 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 at 2:00 p.m. (EDT) on August 9, 2007. 

There are 2 ways to participate in the Forum. To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 3648421.  To participate in person, one must RSVP to SNF_LTCODF-L@cms.hhs.gov by 2:00 p.m. (EDT) on August 7, 2007, and include "SNF/LTC" in the subject line, and your name, organization and telephone number.

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

CMS Extends Bid Submission Deadline for DMEPOS Competitive Bidding

The Centers for Medicare & Medicaid Services (CMS) has again extended the bid submission deadline for the first round of the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program.  Originally, the deadline for submitting bids was 9:00 p.m. prevailing Eastern Time on July 13, 2007.  However, in late June 2007, CMS extended the deadline to July 20, 2007. According to a recent CMS announcement, CMS has again extended the deadline so that all bids are now due by 9:00 p.m. prevailing Eastern Time on July 27, 2007.  For more information, visit the DMEPOS Competitive Bidding Implementation Contractor website.

CMS Posts Handouts from Special Open Door Forum on Clinical Laboratory Competitive Bidding Demonstration Project

The Centers for Medicare & Medicaid Services has posted the handouts used during the July 16, 2007 Special Open Door Forum on the Medicare Clinical Laboratory Services Competitive Bidding Demonstration Project on the CMS website.

CMS Revises Payment System for Ambulatory Surgical Centers and Proposes Payment Changes for Hospital Outpatient Services

On July 16, 2007, the Centers for Medicare & Medicaid Services (CMS) released a display copy of a Final Rule revising the Medicare payment system for services furnished in ambulatory surgical centers (ASC).  In conjunction with the release of the Final Rule, CMS also released a display copy of a Proposed Rule that would update payments for services in hospital outpatient departments under the Medicare outpatient prospective payment system (OPPS), and set new payment rates for ASCs under the revised system in calendar year (CY) 2008.

The Final Rule adopts payment policies for the revised ASC payment system, which will be implemented January 1, 2008.  CMS will be accepting comments on the Proposed Rule until September 14, 2007.  CMS expects to publish the final ASC payment rates for CY 2008 in a combined final OPPS/ASC rule in November 2007.  Both the Final Rule and Proposed Rule are scheduled to appear in the Federal Register on August 2, 2007.

CMS will also host a Special Open Door Forum on the revised ASC payment system.  The Special Open Door Forum will take place at 2:00 p.m.- 3:30 p.m. (EDT) on July 31, 2007.  To participate, one must dial (800) 837-1935 and reference conference ID 6982411.  CMS will post an audio replay of this special forum on the Special Open Door Forum website, which may be downloaded beginning August 3, 2007.

CMS to Host National Roundtable on Common NPI Billing Errors

The Centers for Medicare & Medicaid Services (CMS) will host a national roundtable/Q&A session on common National Provider Identifier billing errors for Medicare fee-for-service providers.  The national roundtable will take place from 2:00 p.m.-3:30 p.m. (EDT) on August 2, 2007.  To participate in this teleconference, registration is required.  Registration will close at 2:00 p.m. (EDT) on August 1, 2007 or when available space is filled.  There will also be an audio replay of the national roundtable available starting at 5:30 p.m. (EST) on August 2, 2007.  To access the audio replay, one must dial (800) 642-1687 and use passcode 7025327.

Demonstration Project Targets Fraudulent Home Health Agency Practices

On July 17, 2007, the Department of Health and Human Services issued a News Release announcing a 2 year demonstration project to protect Medicare beneficiaries from fraudulent home health agencies (HHA).  The demonstration project will focus on preventing deceptive HHAs from operating in greater Los Angeles, California and Houston, Texas.

According to the News Release, the Centers for Medicare & Medicaid Services (CMS) will require HHAs operating in the greater Los Angeles and Houston areas to immediately resubmit applications to be considered a qualified Medicare HHA.  Those who fail to reapply within 60 days of receiving a CMS notice to reapply will have their Medicare billing privileges revoked.

Similarly, HHAs will reportedly have their billing privileges revoked if they fail to report a change in ownership or change of address, have owners, partners, directors or managing employees who have had a felony conviction within the last 10 years, or no longer meet each and every provider enrollment requirement.  The demonstration project will also require a state survey for any HHA that underwent an ownership change within the last 2 years.