Medicare Update

CMS Launches 2008 Medicare Provider Satisfaction Survey

On November 29, 2007, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that it has begun the 2008 Medicare Contractor Provider Satisfaction Survey (MCPSS).

The MCPSS is designed to collect data on provider satisfaction levels with 7 parts of the provider-contractor relationship.  Those parts include: provider inquiries, provider outreach and education, claims processing, appeals, provider enrollment, medical review, and provider audit and reimbursement.  CMS reports that Medicare Administrative Contractors (MACs) will be required to achieve performance targets on the MCPSS as part of their contract requirements by 2009.

The 2008 MCPSS will be sent to about 35,000 randomly selected providers. The providers selected to participate in the 2008 MCPSS will be notified by December 2007. CMS expects to make the results of the 2008 MCPSS publicly available in July 2008.

According to CMS, the 2007 MCPSS revealed that the provider inquiry function has the greatest influence on whether providers are satisfied with their Medicare contractors. In 2006, the claims processing function was the strongest predicator of provider satisfaction.  For further information on the 2007 MCPSS results, visit the MCPSS page of the CMS website.

CMS Releases List of Poor Performing Nursing Homes

On November 29, 2007, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that it has released a list of 54 poor performing nursing homes as part of the "Special Focus Facility" (SFF) initiative.

According to the Press Release, the list was prompted by the number of facilities that were consistently providing poor quality of care, yet were periodically instituting enough improvement to pass one survey only to fail the next.  Further, CMS reports that its effort to identify poor performing nursing homes is intended to "promote more rapid and substantial improvement in the quality of care" and "end the pattern of repeated cycles on non-compliance."

In recent testimony before the Senate Special Committee on Aging, the Acting CMS Administrator stated that:

"Nursing homes on the Special Focus list represent those with the worst survey findings in the country, based on the most recent three years of survey history.  The selection methodology takes into account for the severity of deficiencies and the number of deficiencies.  Deficiencies identified during complaint investigations are also included in the computation.  Each state selects its Special Focus nursing homes from a CMS candidate list of approximately 15 eligible nursing homes in their own State, using additional information available to the State regarding the nursing homes' quality of care in order to make the final selection."

Once a nursing home is selected as a SFF, CMS reports that a state survey agency will conduct twice the number of standard surveys and apply aggressive enforcement until the nursing home: significantly improves and is no longer identified as a SFF; is granted additional time due to promising developments; or is terminated from the Medicare and/or Medicaid programs.

In the Press Release, CMS indicates that nursing homes typically achieve improved survey results after being selected for the SFF initiative, with about 50 percent significantly improving their quality of care within 24-30 months.  However, CMS also reports that about 16 percent are terminated from the Medicare and Medicaid programs. 

Additional information on the SFF initiative can be found in a December 16, 2004 memorandum and November 2, 2007 memorandum to State Survey Agency Directors.

CMS Publishes Final Medicare Physician Fee Schedule Changes for 2008

On November 27, 2007, the Centers for Medicare & Medicaid Services (CMS) published the Final Rule (with comment period) in the Federal Register, which updates the Medicare physician fee schedule and other Part B payment policies for calendar year 2008.

CMS Publishes Final Hospital Outpatient Prospective Payment Rule for 2008

On November 27, 2007, the Centers for Medicare & Medicaid Services (CMS) published the Final Rule (with comment period) in the Federal Register, which updates the Medicare hospital outpatient prospective payment system (OPPS) for calendar year 2008.  In conjunction with the OPPS Final Rule, CMS also:

• issues rate changes for the Medicare hospital inpatient prospective payment system (IPPS) final rule for FY 2008, which resulted from the TMA, Abstinence Education and QI Programs Extension Act of 2007 (Act).  Specifically, the Act's provisions that reduced the documentation and coding adjustment from -1.2 percent to -0.6 percent for 2008.
• changes the IPPS final rule for FY 2008 by retroactively adopting a policy of not applying the documentation and coding adjustment to the FY 2008 hospital-specific rates for Medicare dependent, small rural hospitals and sole community hospitals.
• includes a new interim final rule (with comment period) that modifies regulations relating to graduate medical education payments made to teaching hospitals that have Medicare affiliation agreements for certain emergency situations.
• updates the payment rates and other pertinent rate information for the ambulatory surgical center payment system beginning in CY 2008.

CMS Releases Report to Congress on Medicare Hospital Value Based Purchasing

On November 21, 2007, the Centers for Medicare & Medicaid Services (CMS) released a document entitled Report to Congress: Plan to Implement a Medicare Hospital Value-Based Purchasing Program (Report). 

The Report discusses options for a plan to implement a Medicare Hospital Value-Based Purchasing (VBP) program beginning in fiscal year 2009.  The options presented in the Report would build on the current Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program, which ties a portion of the annual payment update under the inpatient prospective payment system (IPPS) to a hospital's reporting on specific inpatient quality measures. 

However, the VBP program would phase out the RHQDAPU program over a 3 year period and make a portion of a hospital's Medicare payment contingent on its performance on specific measures. In the Report, CMS suggests that such an incentive payment could be based on a percentage of the base operating diagnosis related group (DRG) payment (i.e., geographic and DRG relative weight adjustments). CMS believes that such an approach would most directly link the incentive payment to clinical services during a patient stay. 

Alternatively, CMS indicates that the incentive payment could be based on other components of the IPPS payment that are less directly linked to VBP policy objectives, including:

• capital costs;
• disproportionate share hospital payments;
• indirect medical education payments; and
• cost outliers. 

In the Report, CMS also suggests that the percentage of the base allocated to the incentive payment could be established annually, and that no additional funds may be required for the incentive payments (i.e., the incentive could be budget neutral).  The Report also addresses other key components of the VBP program, including:

• a potential Performance Assessment Model that incorporates measures from different quality "domains" to calculate a hospital's Total Performance Score;
• options to translate that score into an incentive payment;
• options for criteria to select performance measures for the financial incentive and candidate measures for fiscal year 2009 and beyond;
• a potential phased approach to transitioning from the RHQDAPU program to the VBP program;
• a redesign of current data transmission and validation infrastructure to support VBP program requirements;
• potential enhancements to the Hospital Compare website to support expanded public reporting; and
• an approach to monitoring VBP impacts.

In a related Press Release, Kerry Weems, the Acting CMS Administrator, states that "[v]alue-based purchasing would benefit Medicare beneficiaries and other health care consumers by encouraging higher quality care" and that "[u]nder the plan, additional information would be collected and publicly disseminated to patients and health care providers so that they can make better health care decisions." 

CMS to Host Listening Session on Hospital Acquired Conditions

On November 23, 2007, the Centers for Medicare & Medicaid Services (CMS) published a Notice in the Federal Register announcing a listening session on hospital acquired conditions (HAC) and the implementation of present on admission (POA) indicator reporting.  The listening session will take place from 10 a.m. to 5 p.m. (EST) on December 17, 2007.

The purpose of the listening session is to solicit informal comments in preparation for the fiscal year 2009 inpatient prospective payment system (IPPS) rulemaking process. According to the Notice, the listening session will include:

• An overview of the listening session objectives
• Presentation on HAC/POA background
• Brief overview on the implementation strategy for selecting HACs
• Review of the conditions included in the FY 2008 IPPS final rule
• Presentations on: (i) the role of providers in documentation; (ii) POA indicator reporting; and (iii) HAC/POA outreach and education.

CMS will be accepting in-person and written comments.  The Notice contains information on how to present or submit such comments.  The Notice also indicates that additional information on the listening session will be posted on the hospital acquired conditions (POA) page of the CMS website.

The listening session will be held in the main auditorium of CMS's central building at 7500 Security Boulevard, Baltimore, Maryland. To participate in the listening session (in-person or by telephone), registration is required. Registration must be completed by 5 p.m. (EST) on December 10, 2007 to participate. After the listening session, CMS will make an audio download of the listening session available on the hospital acquired conditions (POA) page of the CMS website.

Bidder's Conference Scheduled for Clinical Laboratory Demonstration Project

On November 21, 2007, the Centers for Medicare & Medicaid Services (CMS) published a Notice in the Federal Register announcing the new date for the bidder's conference for the Medicare clinical laboratory services competitive bidding demonstration project. 

The bidder's conference will now take place on December 5, 2007 in San Diego, California.  During the bidder's conference, CMS, and its subcontractor RTI International, are expected to provide details about the project design and implementation and answer questions.

On October 17, 2007, CMS announced that the first site for the demonstration project would be the San Diego-Carlsbad-San Marcos, California metropolitan statistical area, and scheduled the bidder's conference for October 31, 2007.  However, the bidder's conference was postponed due to the State of Emergency resulting from the fires in the State of California.

For additional information on the demonstration project, including how to register for the December 5, 2007 bidder's conference, visit the demonstration project page of the CMS website.

CMS Gives Survey of New Providers Lower Priority

In a November 5, 2007 memorandum to State Survey Agency Directors (Memorandum), the Centers for Medicare & Medicaid Services (CMS) recently addressed CMS's Medicare survey and certification priorities.

In the Memorandum, CMS directs states to prioritize the survey function in four tiers, and gives a lower priority (Tier 4) to the initial survey for providers and suppliers seeking to participate in the Medicare program for the first time. In fact, CMS reports that longstanding CMS policy makes complaint investigations, recertifications and core infrastructure work for existing Medicare providers a higher priority than the certification of new providers.

However, CMS points out that many provider and supplier types (e.g., hospitals, ambulatory surgery centers, hospices and home health agencies) have the option of becoming Medicare certified on the basis of accreditation by a CMS-approved accreditation organization rather than CMS or state survey.  CMS believes that such providers and suppliers have an alternative route to Medicare certification and suggests that it may be the fastest route to certification.

As part of the Memorandum, CMS also refines its policy on initial surveys to allow providers and suppliers to apply to the state survey agency for CMS consideration to grant an exception to the priority assignment of the initial survey if the lack of Medicare certification would cause "significant access-to-care problems for beneficiaries." There is no special form required to make such an exception request. However, the Memorandum indicates that a provider or supplier must provide data or other evidence that establishes the probability of serious, adverse beneficiary health care access consequences if the provider or supplier is not enrolled to participate in the Medicare program. 

In the Memorandum, CMS cites a number of reasons why the initial survey of new providers and suppliers has become more challenging, including federal budgetary constraints, the increase in the number of providers seeking to participate in the Medicare program, additional survey responsibilities, and recent anti-fraud initiatives.

CMS Reports that Medicare Claim Error Rate Declined in 2007

On November 16, 2007, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that the national error rate for Medicare fee-for-service (FFS) claims declined from 4.4 percent in 2006 to 3.9 percent in 2007.  CMS projects that the 3.9 percent error rate reflects approximately $9.8 billion in overpayments and $1.0 billion in underpayments.

To calculate the Medicare FFS error rate for 2007, CMS reports that it reviewed randomly sampled Medicare FFS claims submitted between April 1, 2006 and March 31, 2007 and included approximately 140,000 claims for Medicare FFS payments in the error rate testing.  Details regarding the national Medicare FFS error rate for 2007 and related findings (e.g., error rates by Medicare contractor and provider type) can be found in a November 2007 Report.

CMS to Host Conference Call on 2008 Physician Quality Reporting Initiative

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will host a series of national provider conference calls on the 2008 Physician Quality Reporting Initiative (PQRI).  The first call will take place from 3:00 p.m.-5:00 p.m. (EST) on November 28, 2007.

During the conference call, CMS will discuss the PQRI provisions of the Final Rule updating the Medicare physician fee schedule (MPFS) for 2008, including the 119 PQRI measures addressed in that rule.  The 2008 MPFS Final Rule is scheduled to appear in the Federal Register on November 27, 2007. However, CMS has posted a display copy of the 2008 MPFS Final Rule on the CMS website and released a summary of the 2008 PQRI provisions.

To participate in the November 28, 2007 conference call, registration is required. Registration will close at 3:00 p.m. (EST) on November 27, 2007 or when available space is filled.