Medicare Update

Legislation Introduced to Avert Medicare Payment Cuts for Physicians

On March 13, 2008, Senator Debbie Stabenow introduced the Save Medicare Act of 2008 (S.2785). If enacted, S.2785 would continue the 0.5 percent Medicare payment update for physician services for the last 6 months of 2008. S.2785 would also establish a 1.8 percent Medicare payment update for physician services in 2009.

On December 29, 2007, President Bush signed the Medicare, Medicaid and SCHIP Extension Act of 2007 into law preventing a 10.1 percent reduction in Medicare physician payments that was scheduled for 2008 and giving physicians a 0.5 percent increase through June 30, 2008. The 10.1 percent reduction in Medicare physician payments was driven by the statutory sustainable growth rate (or SGR) formula, which is intended to control the growth in aggregate Medicare expenditures for physician services. 

As reflected in Transmittal 312, the Centers for Medicare & Medicaid Services will implement a 10.6 percent reduction in physician payments (i.e., the 0.5 percent update will no longer apply and a negative 10.1 percent update will take effect) for dates of services on or after July 1, 2008 unless Congressional action is taken.

CMS Enhances Hospital Compare Website

On March 28, 2008, the Department of Health and Human Services (HHS) issued a Press Release announcing that the Centers for Medicare & Medicaid Services (CMS) has posted new survey information on the Hospital Compare website. 

According to the Press Release, the patient experience of care information that CMS added to the Hospital Compare site is part of the Consumer Assessment of Healthcare Providers and Systems Hospital Survey (HCAHPS).  HCAHPS is a national, standardized survey of patient perspectives on the care they experience during a hospital stay. In addition to adding new patient hospital stay information, HHS reports that CMS has added certain pricing and volume information to the Hospital Compare site that includes the acute care hospital payments Medicare made for the treatment of certain illnesses.

HHS Secretary Michael Leavitt believes that "[b]y enhancing these resources, Medicare is strengthening its commitment to use the transparency of quality information to help give consumers more choice about the quality of their health care and how they may be able to lower their health care costs."  According to the Press Release, the enhancements also serve to implement President Bush's Executive Order 13410, which is intended to promote value drive health care by ensuring transparent quality and price information, interoperable health information technology and incentives for high-quality, efficient health care delivery.

For more information, visit the CMS website where CMS has posted a Fact Sheet on the Medicare payment and volume information for consumers and a Fact Sheet on HCAHPS.

Subcommittee on Health to Hold Hearing on Medicare Trustees' 2008 Annual Report

The House Ways and Means Subcommittee on Health recently released a Hearing Advisory announcing that it will hold a hearing on the 2008 Annual Report of the Medicare Board of Trustees (Trustees).  The hearing is scheduled to take place at 10:00 a.m. on April 1, 2008. The 2008 Annual Report was released on March 25, 2008. In the 2008 Annual Report, the Trustees indicate that the financial outlook for the Medicare program continues to raise serious concerns.  However, in the Hearing Advisory, Subcommittee on Health Chairman Pete Stark states:

"Reviewing the Trustees' Report is a core part of Congress's oversight responsibilities, and one I take seriously.  Medicare is critically important to the 44 million beneficiaries who rely on it for health care and financial peace of mind.  While the program faces demographic challenges in the future, those can be dealt with if there is a bipartisan commitment to preserve and improve the program.  We should not succumb to alarmist claims that the sky is falling.  The most important immediate step we can take to help Medicare's financial outlook is to eliminate the Medicare Advantage overpayments.  This corporate pork fattens insurance company profits while unnecessarily draining program resources.  I can't take seriously the claims of concern from those who protect these excessive payments at the expense of beneficiaries, taxpayers and the program's future."

OIG Publishes Interim Final Rule on Advisory Opinion Process

On March 26, 2008, the Department of Health and Human Services' Office of Inspector General (OIG) published an interim final rule (with comment period) in the Federal Register revising the process for submitting payments for advisory opinion costs. According to the interim final rule, the OIG will no longer require that requestors submit an initial deposit payment of $250 for each advisory opinion request.  Instead, the OIG will require that requestors make payment for advisory opinion costs via electronic funds transfer. The interim final rule is effective on April 25, 2008. However, the OIG may implement the process before that date.

Medicare Trustees Issue 2008 Annual Report and Medicare Funding Warning

On March 25, 2008, the Department of Health and Human Services issued a Press Release announcing the release of the 2008 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (Report).   

In the Report, the Board of Trustees (Trustees) indicate that the financial outlook for the Medicare program continues to raise serious concerns. According to the Report, Medicare expenditures were $432 billion in 2007 and are projected to increase in future years at a faster pace than workers' earnings or the economy overall.  In fact, under intermediate assumptions, the Report projects that Medicare expenditures will increase from 3.2 percent of gross domestic product (GDP) in 2007 to 10.8 percent of GDP by 2082. Further, the Report projects that, from the beginning of 2008 to the end of 2017, the assets of the Medicare Health Insurance (HI) Trust Fund will decrease from $326 billion to $96 billion. The Report also projects that the HI Trust Fund will be exhausted in 2019.

Under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), the Trustees are required to include a finding in their annual report whenever they project that general revenues will make up more than 45 percent of total Medicare funding within 7 years.  If the Trustees make this determination for 2 consecutive years, a Medicare funding warning is triggered requiring that the President propose policies to reduce general revenues as a share of Medicare costs.

The Medicare funding warning was first triggered by the Trustees' 2007 annual report.  Consequently, in February 2008, the Department of Health and Human Services released a legislative proposal. The legislative proposal was followed by the introduction of S.2662 and H.R.5480, which are both entitled the Medicare Funding Warning Response Act of 2008. However, to date, Congress has not taken any action on S.2662 or H.R.5480.

A Medicare funding warning is again triggered by the Report.  According to the Press Release, the triggering of the funding warning requires that the President again propose Medicare legislation, within 15 days after the release of next year's budget, to keep general revenue spending below 45 percent of total Medicare spending.

CMS Announces Single Payment Amounts for DMEPOS Competitive Bidding

On March 20, 2008, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that it completed the bid evaluation process and announced the single payment amounts for the 1st round of the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program. 

According to CMS, the amounts that Medicare will pay for the 10 product categories in the 1st round of DMEPOS competitive bidding overall average 26 percent less than Medicare's previous payment amounts. CMS also reports that savings for beneficiary out-of-pocket costs and Medicare range from 14 percent on negative pressure wound therapy (NPWT) devices and accessories up to 43 percent on mail order diabetic supplies.  The 1st round of the DMEPOS competitive bidding program begins on July 1, 2008 in Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh, Riverside and San Juan. 

CMS also reports that it is notifying all bidders of their bid results and that winning bidders will be mailed contracts.  Further, bidders whose bids were disqualified because they did not meet the requirements will receive a letter informing them of the reason(s) for disqualification. Finally, when all contracts are finalized this spring, CMS expects to make the list of contract suppliers available on the DMEPOS competitive bidding program page of the CMS website.

CMS to Host Home Health, Hospice & DME Open Door Forum

The Centers for Medicare & Medicaid Services (CMS) will hold the next Home Health, Hospice & DME Open Door Forum at 2:00 p.m. (EDT) on April 2, 2008.  There are 2 ways to participate in the Open Door Forum.   

To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 37587040.  To participate in person, one must RSVP by 2:00 p.m. (EDT) on March 31, 2008 to HOMEHEALTH_HOSPICE_DMEODF-L@cms.hhs.gov, and include your name, organization, phone number, and the words “Home Health” in the subject line.  The Open Door Forum will take place at the Hubert H. Humphrey Building, 200 Independence Avenue S.W., Washington, D.C. 

Starting 2 hours after the Open Door Forum, CMS will also make an audio recording available.  To access the audio recording, one must dial 1-800-642-1687 and enter the conference ID.  The recording will expire after 3 business days.

CMS Releases Coverage Policy for Continuous Positive Airway Pressure Therapy and Sleep Apnea

On March 13, 2008, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that it has expanded Medicare coverage for continuous positive airway pressure (CPAP) devices to include beneficiaries who have been diagnosed with obstructive sleep apnea (OSA). According to the Press Release, the expansion of coverage is the result of a March 13, 2008 final Decision Memo, which adds coverage for CPAP following a positive at-home sleep test.  Prior to CMS issuing the final Decision Memo, Medicare policy provided for CPAP coverage only for beneficiaries who had OSA diagnosed using a sleep test (called polysomnography) in an attended sleep laboratory setting.

CMS Announces Accreditation Dates for DMEPOS Competitive Bidding

The Centers for Medicare & Medicaid Services (CMS) recently announced 2 important dates associated with bidding in the second round of the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program.

According to CMS, DMEPOS suppliers must be accredited or have applied for accreditation by May 14, 2008 to submit a bid for the second round of DMEPOS competitive bidding and will need to be accredited to be awarded a contract.  CMS reports that the accreditation deadline for the second round of DMEPOS competitive bidding is October 31, 2008. 

For additional information on accreditation including CMS-approved Deemed Accreditation Organizations, visit the DMEPOS Accreditation page of the CMS website.

CMS Releases Decision Memo on Cardiac CT Scans

On March 12, 2008, the Centers for Medicare & Medicaid Services (CMS) released a final decision memorandum indicating that no national coverage determination on the use of cardiac computed tomography angiography (CTA) for coronary artery disease is appropriate at this time. According to the final decision memorandum, coverage should continue to be determined by local Medicare contractors through the local coverage determination process or case-by-case adjudication.

On July 13, 2007, CMS opened a national coverage analysis for CTA.  On December 13, 2007, CMS released a proposed decision memorandum and invited public comment.  In the proposed decision memorandum, CMS proposed adding language to Section 220.1 of the National Coverage Determination Manual indicating that evidence is inadequate to conclude that CTA is reasonable and necessary for the diagnosis of coronary artery disease (CAD).  However, under certain conditions and standards, the proposed decision memorandum would have provided for coverage with evidence development for symptomatic patients with:

• chronic stable angina at intermediate risk of CAD; or
• unstable angina at low risk of short-term death and intermediate risk of CAD.