Medicare Update

CMS Releases Technical Report on Home Health PPS Refinements

The Centers for Medicare & Medicaid Services (CMS) recently released an Abt Associates' technical report entitled Refinement of Medicare's Home Health Prospective Payment System: Final Report (and Appendix), which describes the data analysis and simulations used by CMS in the development of the May 4, 2007 Notice of Proposed Rule Making and August 29, 2007 Final Rule (with comment period).  The August 29, 2007 Final Rule (with comment period) made the most significant refinements to the Medicare home health prospective payment system (HH-PPS) since the implementation of HH-PPS in 2000.

CMS to Hold 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 May 13, 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 41864430.  To participate in person, RSVP and security clearance is required.  Further, one must RSVP by 2:00 p.m. (EDT) on May 9, 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 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.

MedPAC Releases Medicare Payment Policy Report for 2009

On February 29, 2008, the Medicare Payment Advisory Commission (MedPAC) issued a News Release announcing the release of its Report to Congress: Medicare Payment Policy for 2009 (Report).  In the Report, MedPAC makes updates and policy recommendations for certain Medicare fee-for-service payment systems for 2009.  In brief, MedPAC recommends the following updates:

• Hospital Inpatient & Outpatient Services. MedPAC recommends that Congress increase payment rates in 2009 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.  The Centers for Medicare & Medicaid Services' (CMS) current projection of the market basket increase for fiscal year 2009 is 3.0 percent.  MedPAC also recommends that Congress reduce the indirect medical education adjustment by 1 percent to 4.5 percent per 10 percent increment in the resident-to-bed ratio. 
• Physician Services. MedPAC recommends that Congress increase the physician fee schedule conversion factor by the projected change in input prices less MedPAC's adjustment for productivity growth.  With the current estimate of input cost changes in 2009 of 2.6 percent and MedPAC's productivity adjustment of 1.5 percent, MedPAC's recommended 2009 update would be 1.1 percent.  MedPAC also recommends that Congress enact legislation requiring that CMS establish a process for measuring and reporting physician resource use on a confidential basis for a period of 2 years.
• Outpatient Dialysis Services. MedPAC recommends that Congress update the composite rate in calendar year 2009 by the projected rate of increase in the end-stage renal disease market basket index (2.5 percent) less MedPAC's adjustment for productivity growth (1.5 percent).  This would update the composite rate by 1 percent.  MedPAC also recommends that Congress implement a quality incentive program for physicians and facilities that treat dialysis patients.
  
• Skilled Nursing Facility Services. MedPAC recommends that Congress eliminate the update to payment rates for skilled nursing facility (SNF) services for fiscal year 2009 and that Congress establish a quality incentive payment policy for SNFs.  Further, to improve quality measurement for SNFs, MedPAC recommends that CMS:
  • add the risk-adjusted rates of potentially avoidable rehospitalizations and community discharge to its publicly reported post-acute care quality measures;
  • revise the pain, pressure ulcer, and delirium measures currently reported on CMS' Nursing Home Compare website; and
  • require SNFs to conduct patient assessments at admission and discharge.
• Home Health Services. MedPAC recommends that Congress eliminate the update to payment rates for home health care services for calendar year 2009. 
• Inpatient Rehabilitation Facility Services. MedPAC recommends that the update to the payment rates for inpatient rehabilitation facility services be eliminated for fiscal year 2009.
• Long-Term Care Hospital Services.  MedPAC recommends that the payment rates for long-term care hospital (LTCH) services be updated by the market basket index less MedPAC's adjustment for productivity growth (1.5 percent).  MedPAC reports that, under current market basket assumptions, this recommendation would update LTCH payment rates by 1.6 percent.

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.

MedPAC to Recommend No Home Health Payment Update for 2009

On January 10, 2008, the Medicare Payment Advisory Commission (MedPAC) approved a draft recommendation that Congress eliminate the update to Medicare payments for home health care services for 2009. In terms of spending, MedPAC reports that this recommendation would decrease spending relative to current law by $250-$750 million for 2009 and $1-$5 billion over 5 years. 

MedPAC expects for this recommendation to have no major implications for Medicare beneficiaries or home health agencies. In reaching its recommendation, MedPAC considered beneficiary access to services, improving quality indicators, the growth in the number of home health agencies, the relatively low cost growth per episode, and an estimated 11.4 percent margin for home health agencies in 2008.  For additional information, visit the MedPAC website where MedPAC has posted the transcript and presentation from the January 10, 2008 meeting.

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. (EST) on January 9, 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 18789483.  To participate in person, one must RSVP by 2:00 p.m. (EST) on January 7, 2008 to HOMEHEALTH_HOSPICE_DMEODF-L@cms.hhs.gov, and include your name, organization or representation, 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. CMS asks that attendees arrive no later than 1:30 p.m. (EST).   

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.

OIG Issues Advisory Opinion No. 07-16

On December 14, 2007, the Department of Health and Human Services' Office of Inspector General (OIG) released OIG Advisory Opinion No. 07-16 (Advisory Opinion). 

In the Advisory Opinion, a home health agency (Agency) inquired whether providing prospective orthopedic patients with free educational videos with instructions for postoperative home based convalescence (Arrangement) would constitute grounds for sanctions under the civil monetary penalty (CMP) provision prohibiting beneficiary inducements or violate the Federal anti-kickback statute and result in related sanctions.

Based on the facts presented, the OIG concluded that the Arrangement would not constitute grounds for the imposition of CMPs, and while the Arrangement could potentially generate prohibited remuneration under the Federal anti-kickback statute (if the requisite intent were present), the OIG concluded that it would not impose related sanctions.

According to the Advisory Opinion, the Agency provides home health care for postoperative total knee and hip joint replacement patients who are beneficiaries of Federal health care programs (e.g., Medicare and Medicaid programs).  Orthopedic surgeons refer patients to the Agency for post-surgical care when the surgeon's office schedules the patients' operation. The surgeons have no financial or employment interest in the Agency and receive no remuneration in connection with the referrals.

The Agency follows up each referral with an initial telephone call.  During the call, a patient is reminded of his or her right to opt for a different home health agency (HHA).  At that time, preparations are also made to send the patient educational videos prior to surgery.  The videos inform patients about the restrictions and physical limitations that post-surgical total joint replacement patients typically encounter during home based convalescence and advise patients on various issues (e.g., optimal furniture placement and sleeping and bathing arrangements).

However, the videos do not render medical advice or diagnoses. Instead, the videos advise patients to consult their individual doctors and physical therapists about the various issues addressed.  Further, the Agency does not charge patients for the videos and they become the patients' to keep on receipt.  The Agency reports that the videos have essentially no resale value and that patients are not required to view the videos in order to receive home health care services.

During the videos, viewers are invited to consider whether they may desire or need personal attendance during convalescence.  At certain points in the videos, different individuals (identified as former patients) also speak about their own home convalescence.  The videos do not contain substantive promotional claims. However, throughout the videos, small, transparent letters write out the Agency's name in the lower right hand corner of the screen.

In the Advisory Opinion, the OIG first considered whether the Arrangement would constitute grounds for imposing CMPs.  In doing so, the OIG considered whether the videos are something of value to a patient that a provider knows, or should know, is likely to influence a patient's selection of a particular provider. 

In considering whether the videos are something of value, the OIG examined whether the Agency's free educational videos constitute remuneration to a patient, and whether their value is more than nominal.  The OIG also pointed out that it has previously taken the position that "incentives that are only nominal in value are not prohibited" and that the OIG has interpreted "nominal value to be no more than $10 per item, or $50 in the aggregate on an annual basis." 

After examining the facts presented, the OIG concluded that a prospective patient is not likely to believe that he or she has received an item worth more than $10. In fact, the OIG noted that similar information is available on the Internet and from other public sources without charge. Nevertheless, the OIG found that it was not presented with firm evidence that the videos are worth no more than $10 (i.e., nominal value) to a prospective patient.

Since the OIG lacked conclusive evidence as to the value of the videos, the OIG proceeded to the next question in the CMP analysis.  That is, whether the free educational videos are likely to influence a patient to select the Agency as a provider for postoperative items and services payable by Federal health care programs.  The OIG concluded that the free videos were not likely to influence a patient's selection for a combination of reasons, including:

• patients do not receive the videos until after being referred to the Agency;
• it is probable that a surgeon's implicit endorsement of the Agency substantially informs the patient's choice;
• the videos' content is applicable to surgical patients regardless of which HHA a patient chooses, and that similar content is widely available without charge from other sources; and
• no individually personalized safety or health care recommendations accompany the videos.

Because the videos are unlikely to influence patient selection, the OIG did not consider whether the Agency knows, or should know, that the Arrangement is likely to influence patients' selection of a HHA. 

However, the OIG did distinguish the Arrangement from offers by HHAs to provide free in-person and telephone preoperative home safety assessments for patients scheduled to undergo orthopedic surgery.  The OIG considers such preoperative assessments to be more concerning than the free educational videos because such assessments are personalized, often performed by a physical therapist during a home visit or telephone call, typically give the impression that the assessment is a valuable service, and initiate a personal relationship between the patient and physical therapist. In fact, the OIG believes that such in-person and telephone assessments are likely to influence a patient's selection of a particular HHA as a service provider. See OIG Advisory Opinion No. 06-01. 

Finally, for the reasons set forth above, the OIG concluded that the Arrangement is unlikely to be a vehicle to pay unlawful kickbacks to patients and, therefore, the OIG indicated that it would not impose sanctions on the Agency in connection with the Federal anti-kickback statute.

CMS Extends Enrollment Period for Medicare Home Health P4P Demonstration

The Centers for Medicare & Medicaid Services (CMS) recently posted an announcement on the CMS website extending the enrollment period for the Medicare home health pay-for-performance (P4P) demonstration project.  According to the announcement, applications will now be accepted through December 14, 2007.

The home health P4P demonstration is scheduled to operate for a period 2 years (i.e., January 2008 through December 2009) in the states of Connecticut, Massachusetts, Alabama, Georgia, Tennessee, Illinois and California.  In October 2007, enrollment packages were sent to home health agencies (HHAs) in those states inviting them to participate, and specifying a November 30, 2007 enrollment deadline.

The purpose of the demonstration is to determine the impact of offering incentive payments to HHAs that achieve the best patient outcomes or the largest improvements in the quality of care.  The experience of HHAs that participate in the demonstration, and the beneficiaries they serve, is expected to guide the design and implementation of any future Medicare P4P programs for HHAs.

For additional information on the home health P4P demonstration, visit the Demonstration Projects & Evaluation Reports page of the CMS website.

CMS Posts New Information on Home Health Case Mix Refinements

The Centers for Medicare & Medicaid Services (CMS) recently posted new information on the home health prospective payment system (HH-PPS) case mix refinements in the downloads section of the HH-PPS Billing and Coding Information page of the CMS website.  The new information includes:

• questions and answers regarding home health episodes and the transition into the HH-PPS refinements;
• spreadsheets mapping the 1836 new health insurance prospective payment system (HIPPS) codes for the refined HH-PPS to their associated case mix weight and supply payment amount; and
• an outline describing the principle changes to home health coding and billing that result from the refined HH-PPS.

CMS to Hold Open Door Forum on Home Health P4P Demonstration Project

The Centers for Medicare & Medicaid Services (CMS) will hold a Special Open Door Forum on the Medicare home health pay-for-performance demonstration project.  The Open Door Forum will take place from 1:00 p.m. to 2:30 p.m. (EST) on November 13, 2007.

During the Open Door Forum, CMS will provide an overview of the demonstration design, define those eligible to participate and the application process, and explain the next steps for home health agencies (HHA) that are interested in participating.  CMS reports that a question and answer session will follow the presentation. Slides and other information for the Open Door Forum will be available on the CMS website.

To participate in the Open Door Forum, registration is required. The deadline for registration is 2:00 p.m. (EST) on November 9, 2007.  Beginning on November 19, 2007, CMS will also make an audio recording of the Open Door Forum available for download from the CMS website.

The Medicare home health pay-for-performance demonstration project will be conducted in the states of Connecticut, Massachusetts, Tennessee, Alabama, Georgia, Illinois and California.  CMS reported that it would begin recruiting HHAs for the demonstration project during October 2007, and that HHA enrollments would be accepted through November 30, 2007.  However, the implementation phase of the demonstration will not begin until January 1, 2008.