Medicare Update

Top Ten Medicare Update Blog Posts in October 2009

Below are the top ten Medicare Update posts during October 2009 (based on the number of views):

1)   CMS Announces 2010 Medicare Premiums and Deductibles

2)   OIG Work Plan Reveals Possible Risk Areas for Medicare Providers and Suppliers

3)   Senator Stabenow Introduces Medicare Physician Fairness Act of 2009

4)   OIG Work Plan Identifies Possible Areas of Concern for Home Health Agencies and DMEPOS Suppliers

5)   CMS Directs Medicare Contractors to Take Action on OIG Reports

6)   CMS Posts FAQ on Code 432 and Medicare Recovery Audit Contractors

7)   The Changing Dynamics of Medicare Fraud Schemes?

8)   Medicare Fraud and Recovery Audit Contractor Program

9)   CMS to Shelve Medicare Medical Home Demonstration

10) Region D Recovery Audit Contractor Updates CMS Approved Audit Issues

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CMS Releases 2010 Final Rule for Hospital Outpatient Departments and Ambulatory Surgical Centers

On October 30, 2009, the Centers for Medicare & Medicaid Services (CMS) released a display copy of a Final Rule (with comment period) that updates the Medicare payment policies and rates for both hospital outpatient departments and ambulatory surgical centers (ASC) for calendar year (CY) 2010.

In brief, some highlights of the Final Rule include:

Hospital Outpatient Prospective Payment System. CMS estimates that the aggregate Medicare payments to providers under the hospital outpatient prospective payment system (OPPS) in CY 2010 will be $32.2 billion, which is an $1.9 billion increase over CY 2009.

• Inflation Update. Hospitals will receive an annual inflation update of 2.1 percent for CY 2010.
• Payment Reduction/Quality Data Reporting. The 2.1 percent update will be reduced by 2 percentage points for most services furnished by hospitals that failed to meet the CY 2009 reporting requirements of the Hospital Outpatient Quality Data Reporting Program (HOP-QDRP).
• Quality Measures. CMS will continue to require hospitals subject to HOP-QDRP to provide quality data for the current 7 chart-abstracted emergency department and surgical care measures and 4 claims-based imaging efficiency measures for CY 2011 payment determinations.
• Quality Reporting Validation. CMS will implement an HOP-QDRP validation requirement to ensure that hospitals are accurately reporting measures using chart-abstracted data. According to CMS, the validation results will not affect a hospital's CY 2011 OPPS payment.
• Public Quality Data Reporting. CMS is establishing procedures to make HOP-QDRP quality measure data publicly available as early as June 2010.
• Supervision of Outpatient Services. In CY 2010, CMS will allow certain nonphysician practitioners (i.e., physician assistants, nurse practitioners, clinical nurse specialists, certified nurse-midwives, and licensed clinical social workers) to provide direct supervision for all hospital outpatient therapeutic services that they are authorized to personally perform according to state scope of practice rules and hospital granted privileges. In the Final Rule, CMS addresses "direct supervision" in the context of on-campus hospital outpatient therapeutic services and services furnished in an off-campus provider based department.

Ambulatory Surgical Centers. According to CMS, aggregate Medicare payments to ASCs is expected to total $3.4 billion in CY 2010.

• Inflation Update. ASCs will receive a 1.2 percent inflation update in CY 2010.
• ASC Covered Procedures/Services. CMS will add 26 surgical procedures to the list of procedures that the Medicare program will pay for when performed in an ASC. CMS also newly designates 6 procedures as office based procedures and temporarily designates an additional 16 procedures as office based procedures based on coding changes for CY 2010.

The Final Rule is scheduled to appear in the Federal Register on November 20, 2009.  CMS reports that comments on designated provisions will be due by 5:00 p.m. (ET) on December 29, 2009.

For more information on the Final Rule, see the following CMS documents:

• Press Release: CMS Adopts Policy, Payment Rate Changes for Services in Hospital Outpatient Departments
• Fact Sheet: Final 2010 Policy, Payment Changes for Hospital Outpatient Departments and Ambulatory Surgical Centers

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MedPAC Releases Updated Medicare Payment Basics Documents

On October 14, 2009, the Medicare Payment Advisory Commission (MedPAC) released updated documents for its Medicare Payment Basics series, which provide an overview of 18 Medicare payment systems. 

To view the updated documents, visit the Medicare Payment Basics page of the MedPAC website or click on any of the following links:

• Oxygen and oxygen equipment payment system
• Skilled nursing facility services payment system
• Physician services payment system
• Psychiatric hospital services payment system
• Rehabilitation facilities (inpatient) payment system
• Part D payment system
• Outpatient therapy services payment system
• Medicare Advantage program payment system
• Outpatient dialysis services payment system
• Outpatient hospital services payment system
• Home health care services payment system
• Hospice services payment system
• Hospital acute inpatient services payment system
• Long-term care hospitals payment system
• Clinical laboratory services payment system
• Critical access hospitals payment system
• Durable medical equipment payment system
• Ambulatory surgical centers payment system

MedPAC is an independent Federal body established by the Balanced Budget Act of 1997 to advise Congress on issues affecting the Medicare program.

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OIG Work Plan Reveals Possible Risk Areas for Medicare Providers and Suppliers

On October 1, 2009, the Department of Health and Human Services' Office of Inspector General (OIG) released its Work Plan for fiscal year 2010 (Work Plan).

The Work Plan addresses the areas and issues the OIG intends to audit, evaluate and inspect during fiscal year 2010.  The Work Plan also provides some insight into the areas and issues that may evolve into future OIG enforcement activities. Therefore, health care providers and suppliers should consider the Work Plan in relation to their operations.

This post briefly highlights some of the Work Plan priorities for hospitals, physicians and other health care providers with respect to Medicare Parts A and B. Work Plan priorities for Medicare provider and supplier types not addressed in this post (e.g., home health agencies) will be covered in subsequent posts.

UPDATE: CMS Requests the Resubmission of Public Comments for Two Proposed Rules

On August 21, 2009, the Centers for Medicare & Medicaid Services (CMS) released a display copy of a Request for Resubmission of Comments (Notice) for 2 proposed rules if comments were originally submitted via www.regulations.gov during the July 26, 2009 through July 30, 2009 time period. 

The 2 proposed rules at issue are:

• CY 2010 Physician Fee Schedule Proposed Rule; and
• CY 2010 Hospital Outpatient Prospective Payment System/Ambulatory Surgical Center Payment System Proposed Rule.

According to CMS, a minor software problem resulted in the non-transmittal of some public comments from July 26, 2009 through July 30, 2009, including comments on the above proposed rules. Therefore, CMS requests that persons, who transmitted comments on either of the proposed rules during that time period, resubmit their comments by no later than 5:00 p.m. on August 31, 2009.

See the display copy of the Notice for instructions regarding the resubmission of comments.  The Notice is scheduled to appear in the Federal Register on August 26, 2009.

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UPDATE: The Notice as it appears in the Federal Register can be found here.

Related Posts:

• UPDATE: CMS Releases Proposed Medicare Physician Fee Schedule Changes for 2010
• UPDATE: CMS Releases Proposed Medicare Hospital Outpatient Payment Changes for 2010

UPDATE: House Democrats Introduce America's Affordable Health Choices Act

Yesterday, a number of news organizations (including a Wall Street Journal article) reported that House Democrats would introduce health care reform legislation on July 14, 2009.  The legislation was introduced later that day and it is entitled America's Health Choices Act of 2009 (H.R. 3200).

In addition to addressing private health insurance reforms (and a public health insurance option), H.R. 3200 would make a number of changes to the Medicare program. In fact, as introduced, the changes to Medicare's Part A and B fee-for-service (FFS) program appear to be significant. Some of the highlights (as reflected in the House Ways and Means section-by-section analysis) are briefly outlined below.

UPDATE: CMS Releases Proposed Medicare Hospital Outpatient Payment Changes for 2010

On July 1, 2009, the Centers for Medicare & Medicaid Services (CMS) released a display copy of the Proposed Rule that would update payment policies and rates for hospital outpatient departments (HOPD) and ambulatory surgical centers (ASC) for calendar year (CY) 2010.

In brief, some of the highlights include:

Hospital Outpatient Prospective Payment System

CMS projects a market basket update of 2.1 percent for CY 2010 and estimates total payments of $31.5 billion under the hospital outpatient prospective payments system (OPPS).

However, hospitals that did not participate in the Hospital Outpatient Department Quality Reporting Program (HOP-QDRP) or did not successfully report the quality measures will receive an update in CY 2010 equal to the annual payment update factor minus 2 percentage points (or 0.1 percent).

With respect to the HOP-QDRP, CMS proposes to continue to require hospitals to report the existing 7 chart-abstracted emergency department and perioperative measures and 4 existing claims-based imaging efficiency measures for the CY 2011 payment determination. 

CMS is also seeking public comment on possible future quality measures, including measures related to cancer care, emergency department throughput, diabetes, stroke and rehabilitation, osteoporosis, medication reconciliation, respiratory, immunization, health information technology, cataract surgery, overuse/appropriate use, imaging efficiency and surgical care. 

Further, CMS proposes a new HOP-QDRP validation requirement to ensure that hospitals are accurately reporting measures using chart-abstracted data and proposes procedures to make HOP-QDRP quality data (beginning with the third quarter of CY 2008) publicly available.

In the Proposed Rule, CMS also proposes several changes to the physician supervision requirements associated with outpatient services. 

First, CMS proposes that nonphysician practitioners (such as physician assistants, nurse practitioners, certified nurse specialists and certified nurse-midwives) be able to directly supervise hospital outpatient therapeutic services that they are able to personally perform within their state scope of practice and hospital granted privileges.  

Second, CMS proposes to define "direct supervision" for on-campus hospital outpatient services to mean that the physician or nonphysician practitioner must be present in the hospital or on-campus provider based department of the hospital and immediately available to furnish assistance and direction throughout the performance of the procedure. However, for services furnished in an off-campus provider based department, "direct supervision" would continue to mean that the physician or nonphysician practitioner must be present in the off-campus provider based department and immediately available to furnish assistance and direction throughout the performance of the procedure.

For the highlights of other changes, see CMS's related Fact Sheet.

Ambulatory Surgical Centers

CMS projects that the percentage increase in CPI for All Urban Consumers (that would update the ASC conversion factor) to be 0.6 percent and that total payments to ASCs will be $3.4 billion in CY 2010. 

In the Proposed Rule, CMS proposes to add 28 surgical procedures to the list of procedures that the Medicare program would pay for when performed in an ASC. CMS also proposes to newly designate 6 procedures as office based procedures and update the list of device-intensive procedures and covered ancillary services (and their rates), consistent with proposals in the OPPS update.

CMS reports that it will be accepting comments on the Proposed Rule until August 31, 2009.  The Proposed Rule is scheduled to appear in the Federal Register on July 20, 2009.  See the Proposed Rule for instructions regarding the submission of comments.

For more information, see CMS's related Press Release and Fact Sheet.

UPDATE:  The Proposed Rule (as it appeared in the Federal Register) can be found here.

OIG Releases Compendium of Unimplemented Recommendations

On May 29, 2009, the Department of Health and Human Services' (HHS) Office of Inspector General (OIG) released its Compendium of Unimplemented Office of Inspector General Recommendations (May 2009).

The Compendium includes information about OIG recommendations that had not been fully implemented as of December 31, 2008.  The Compendium also includes a list of "priority recommendations," which the OIG believes represent the most significant opportunities to positively impact HHS programs.

The list of "priority recommendations" includes a number of recommendations for the Medicare program. In brief, those recommendations (and any estimated savings) include:

• Ensure accurate Medicare Part D sponsors bids and prospective payments
• Implement safeguards to prevent and detect fraud and abuse in Medicare prescription drug plans
• Ensure durable medical equipment suppliers' compliance with Medicare standards
• Modify payment policy for Medicare hospital bad debts (estimated savings $340 million)
• Reduce the rental period for Medicare home oxygen equipment (estimated savings $3.2 billion)
• Modify payments to managed care organizations (estimated savings $1.97 billion)
• Place a ceiling on administration costs included in managed care organizations' rate proposals
• Improve Centers for Medicare & Medicaid Services performance evaluation process for program safeguard contractors
• Ensure the appropriate processing of denial of Medicare payment remedies for noncompliant nursing homes
• Improve oversight of Medicare hospices

The Compendium also includes other unimplemented OIG recommendations pertaining to the Medicare program, including (but not limited to):

• Identify duplicate Medicaid and Medicare home health payments
• Require physician examination before ordering home health services
• Revise graduate medical education payment methodology
• Reduce Medicare end stage renal disease payment rates
• Improve quality oversight of ambulatory surgical centers in the Medicare program

See the Compendium for more detailed information (including background information, OIG findings, recommendations, status and any estimated savings). 

Ways and Means Health Subcommittee Schedules Hearing on MedPAC Report to Congress

The House Ways and Means Health Subcommittee has scheduled a hearing on the Medicare Payment Advisory Commission's (MedPAC) annual March 2009 Report to Congress on Medicare payment policy.  The hearing will take place at 10:00 a.m. on March 17, 2009.

MedPAC is an independent Congressional agency established by the Balanced Budget Act of 1997 to advise Congress on issues affecting the Medicare program.  The March 2009 Report to Congress contains a number of Medicare payment recommendations for 2010 that could impact providers and suppliers, including hospitals, physicians, ambulatory surgical centers, skilled nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term care hospitals.

According to an Advisory issued by the Health Subcommittee, the Health Subcommittee will be accepting written comments for the hearing record. The Advisory contains instructions and the deadline for submitting written comments.

Related Post: MedPAC Makes Medicare Payment Recommendations for 2010

MedPAC Makes Medicare Payment Recommendations for 2010

The Medicare Payment Advisory Commission (MedPAC) recently released its Report To The Congress: Medicare Payment Policy (March 2009) in which MedPAC makes certain Medicare payment recommendations for 2010.  In brief, the MedPAC payment recommendations include the following:

Hospital Inpatient and Outpatient Services

• Congress should increase payment rates for the acute inpatient and outpatient prospective payment systems in 2010 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.
• Congress should reduce the indirect medical education (IME) adjustment in 2010 by 1 percentage point to 4.5 percent per 10 percent increment in the resident-to- bed ratio. The funds obtained by reducing the IME adjustment should be used to fund a quality incentive payment program.

Physician Services and Ambulatory Surgical Centers

• Congress should update payments for physician services in 2010 by 1.1 percent.
• Congress should establish a budget neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary care focused practitioners. Primary care focused practitioners are those whose specialty designation is defined as primary care and/or those whose pattern of claims meets a minimum threshold of furnishing primary care services. The Secretary of the Department of Health and Human Services (Secretary) would use rulemaking to establish criteria for determining a primary care focused practitioner.
• Congress should direct the Secretary to increase the equipment use standard for expensive imaging machines from 25 hours to 45 hours per week.  This change should redistribute relative value units from expensive imagining to other physician services.
• Congress should increase payments for ambulatory surgical centers (ASC) services in calendar year 2010 by 0.6 percent. In addition, Congress should require ASCs to submit to the Secretary cost and quality data that will allow for an effective evaluation of the adequacy of ASC payment rates.

Outpatient Dialysis Services

• Congress should maintain current law and update the composite rate in calendar year 2010 by 1 percent.

Skilled Nursing Facility Services

• Congress should eliminate the update to payment rates for skilled nursing facility services for fiscal year 2010.

Home Health Services

• Congress should eliminate the market basket increase for 2010 and advance the planned reductions for coding adjustments in 2011 to 2010, so that payments in 2010 are reduced by 5.5 percent from 2009 levels.
• Congress should direct the Secretary to rebase rates for home health care services in 2011 to reflect the average cost of providing care.
• Congress should direct the Secretary to assess measures that protect the quality of care and ensure incentives for the efficient delivery of home health care. The study should include alternative payment strategies such as blended payments, risk corridors and outcome based quality incentives.

Inpatient Rehabilitation Facility Services

• The update to the payment rates for inpatient rehabilitation facility services should be eliminated for fiscal year 2010.

Long-Term Care Hospital Services

• The Secretary should update payment rates for long term care hospitals for fiscal year 2010 by the projected rate of increase in the rehabilitation, psychiatric, and long term care hospital market basket index less the Commissioner's adjustment for productivity growth.

MedPAC is an independent Congressional agency established by the Balanced Budget Act of 1997 to advise Congress on issues affecting the Medicare program.  MedPAC meets publicly to discuss policy issues and formulate its recommendations to Congress.  Two reports, issued in March and June each year, are the primary outlets for MedPAC's recommendations.