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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CMS to Host Hospital & Hospital Quality Open Door Forum

The Centers for Medicare & Medicaid Services (CMS) will hold the next Hospital & Hospital Quality Open Door Forum at 2:00 p.m. (ET) on November 19, 2009.

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 34708559.  To participate in person, one must RSVP to HOSPITALODF-L@cms.hhs.gov by 2:00 p.m. (EDT) on November 16, 2009 and include "Hospital/Hospital Quality" in the subject line, your name, organization/representation, and telephone number.  The Open Door Forum will be held at the Hubert H. Humphrey Building, 200 Independence Avenue S.W., Washington, DC.

Beginning November 23, 2009, CMS will also make an audio recording of the Open Door Forum available.  To access the audio recording, one must dial 1-800-642-1687 and enter the conference ID.  The audio recording will be available for 3 business days.

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CMS Announces 2010 Medicare Premiums and Deductibles

On October 16, 2009, the Centers for Medicare & Medicaid Services (CMS) released display copies of Notices announcing Medicare Part A and Part B premiums and deductibles for calendar year 2010.

Medicare Part A

The deductible for a beneficiary admitted as a hospital inpatient will be $1,100 in 2010, which is an increase of $32 from 2009.  The Notices also indicate that a beneficiary will have to pay an additional $275 per day for days 61-90 in 2010, and $550 for lifetime reserve days. Further, the Notices indicate that the daily coinsurance for days 21-100 in a skilled nursing facility will increase to $137.50 in 2010.

According to CMS, 99 percent of Medicare beneficiaries do not have to pay a premium for Part A services.  However, some seniors and certain other individuals under age 65 with disabilities, who have fewer than 30 quarters of coverage, may obtain Part A coverage by paying a monthly premium.  That premium will be $461 per month in 2010. However, a reduced premium applies for individuals with 30-39 quarters of coverage, which will be $254 in 2010.

Medicare Part B

The Medicare Part B deductible for 2010 will be $155. 

The 2010 Part B monthly premium rates for beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are:

Beneficiaries who file an individual tax return with income:	Beneficiaries who file a joint tax return with income:	Income-related monthly adjustment amount	Total monthly premium amount
Less than  or equal to $85,000	Less than or equal to $170,000	$0.00	$110.50
Greater than $85,000 and less than or equal to $107,000	Greater than $170,000 and less than or equal to $214,000	$44.20	$154.70
Greater than $107,000 and less than or equal to $160,000	Greater than $214,000 and less than or equal to $320,000	$110.50	$221.00
Greater than $160,000 and less than or equal to $214,000	Greater than $320,000 and less than or equal to $428,000	$176.80	$287.30
Greater than $214,000	Greater than $428,000	$243.10	$353.60

In addition, the monthly premium rates for beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at any time during the taxable year are:

Beneficiaries who are married but file a separate tax return from their spouse:	Income-related monthly adjustment amount	Total monthly premium amount
Less than or equal to $85,000	$0.00	$110.50
Greater than $85,000 and less than or equal to $129,000	$176.80	$287.30
Greater than $129,000	$243.10	$353.60

The Notices are scheduled to appear in the Federal Register on October 22, 2009.  Display copies of the Notices can be found at the links set forth below.

• Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts for Calendar Year 2010
• Part A Premium for Calendar Year 2010 for the Uninsured Aged and Certain Disabled Individuals Who Have Exhausted Other Entitlement
• Medicare Part B Monthly Actuarial Rates, Premium Rate and Annual Deductible Beginning January 1, 2010  

CMS has also published a Fact Sheet on the Notices which can be found here.

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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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CMS Releases Corrections to Medicare IPPS Changes for FY2010

On October 2, 2009, the Centers for Medicare & Medicaid Services released a display copy of corrections to the Final Rule and Interim Final Rule with comment period that updated:

• Hospital Inpatient Prospective Payment System for Acute Care Hospitals and FY 2010 Rates; and
• Long-Term Care Hospital Prospective Payment System and Rate Year 2010 Rates.

The display copy of the corrections can be found here. The corrections are effective October 2, 2009 and applicable to discharges occurring on or after October 1, 2009.

The corrections are scheduled to appear in the Federal Register on October 7, 2009.

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Related Post: CMS Releases Final 2010 Medicare Inpatient Payment Changes for Acute Care Hospitals

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.

CMS to Host Hospital & Hospital Quality Open Door Forum

The Centers for Medicare & Medicaid Services (CMS) will hold the next Hospital/Hospital Quality Open Door Forum at 2:00 p.m. (ET) on October 8, 2009.

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 22148926.  To participate in person, one must RSVP to HOSPITALODF-L@cms.hhs.gov by 2:00 p.m. (EDT) on October 6, 2009 and include "Hospital/Hospital Quality" in the subject line, your name, organization/representation, and telephone number.  The Open Door Forum will be held at the Hubert H. Humphrey Building, 200 Independence Avenue S.W., Washington, DC.

Beginning October 13, 2009, CMS will also make an audio recording of the Open Door Forum available.  To access the audio recording, one must dial 1-800-642-1687 and enter the conference ID.  The audio recording will be available for 3 business days.

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Senate Finance Committee Releases Framework for Comprehensive Health Reform

On September 9, 2009, the Chairman of the Senate Finance Committee, Max Baucus, released a document titled Framework for Comprehensive Health Reform.

The document constitutes a framework of a plan for consideration by the so-called "Gang of Six." The document includes policies discussed with Committee members and outlined in the Committee's previous option papers.  Some of those policies have payment implications for the fee-for-service Medicare program. For instance, some highlights include:

• Hospital Value-Based Purchasing. The proposal would establish a value-based purchasing program for hospitals starting 2011. Under the program, a percentage of hospital payment would be tied to hospital performance on quality measures related to common and high-cost conditions, such as cardiac, surgical and pneumonia care.
• Physician Value-Based Purchasing. The proposal would make improvements to the Physician Quality Reporting Initiative program, including requiring all eligible health professionals to participate by 2011, establishing payment incentives for physicians to appropriately order high-cost imaging services, expanding the Medicare physician feedback program, and penalizing physicians who utilize significantly more resources than their peers.
• Medicare Home Health Agency and Skilled Nursing Facility Value-Based Purchasing. The proposal would build on the current testing of value-based purchasing models for these providers. The proposal would also direct the Secretary of the Department of Health and Human Services (Secretary) to submit a plan to Congress by 2011 outlining how to effectively move these providers into a value-based purchasing payment system. 
• Reducing Hospital Acquired Infections.  Starting 2011, hospitals in the top 25th percentile of rates of hospital acquired conditions for certain high cost and common conditions would be subject to a payment penalty under Medicare.
• Reducing Avoidable Hospital Readmissions. Starting 2011, hospitals with readmission rates above a certain threshold would have payments for the original hospitalization reduced by 20 percent if a patient with a selected condition is rehospitalized with a preventable readmission within 7 days or by 10 percent if a patient with a selected condition is rehospitalized with a preventable readmission within 15 days.
• Primary Care and General Surgery Bonuses.  Primary care practitioners and general surgeons practicing in a health professional shortage area would receive a 10 percent Medicare payment bonus for 5 years.
• Sustainable Growth Rate. The scheduled 21 percent reduction in Medicare physician payment rates in 2010 would be replaced with a 0.5 percent increase.
• Home Health Payment Reform. The Secretary would be directed to improve payment accuracy through rebasing home health payments in 2013 based on an analysis of the current mix of services and intensity of care provided to home health patients. The proposal would also set a 10 percent cap on the amount of reimbursement a home health provider could receive from outlier payments and reinstate an add-on payment for rural home health providers from 2010-2015.
• Hospice Reform.  Based on Medicare Payment Advisory Commission recommendations, the Secretary would update Medicare hospice claim forms and cost reports for 2011. Based on this information, the Secretary would be required to implement hospice payment system changes to improve payment accuracy. 
• Oxygen Payment Improvements.  The proposal would repeal the 36 month rental cap, reduce the current rental amount paid through the fee schedule for stationary equipment and contents, and increase the rental amount paid through the fee schedule for portable oxygen contents.
• Revisions to Annual Market Basket Adjustments for Part A Providers. The proposal would reduce annual market basket updates for hospitals, home health providers, nursing homes, hospice providers, long-term care hospitals and inpatient rehabilitation facilities, including adjustments to reflect expected gains in productivity.
• Part B Productivity Adjustments.  The proposal would reduce payment updates for Part B providers by an estimate of increased productivity.
• Medicare Commission. The proposal would establish an independent Medicare Commission that would submit proposals to Congress to extend Medicare solvency and improve quality in the Medicare program.  Congress would have an opportunity to amend the proposal or pass an alternative proposal with an equivalent amount of budgetary savings. Should Congress not pass an alternative measure, the Secretary would be required to implement the provisions included in the original Commission proposal.

For more information, see the Framework for Comprehensive Health Reform.

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Study Suggests Hospital Acquired Conditions Savings May Be Small

On September 9, 2009, the Wall Street Journal published an article titled Study Estimates Hospital Penalties Generate Few Savings for Medicare, which reports on a new study suggesting that the payment reductions/savings associated with Medicare's hospital acquired conditions policy may be small.

The new study also appears in an article published in the journal Health Affairs and includes a companion article by officials of the Centers for Medicare & Medicaid Services(CMS), which responds to the new study.  In the response, CMS officials acknowledge that the projected savings is not large and suggest that small payment penalties have been effective in changing behavior and improving hospital care.

As reported in the Wall Street Journal article, CMS officials also suggest that the new study may be "limited and speculative."

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