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

Subscribe to Medicare Update, follow me on Twitter @MedicareUpdate, and become a fan on Facebook.

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.

Subscribe to Medicare Update, follow me on Twitter @MedicareUpdate, and become a fan on Facebook.

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 Publishes Corrections to 2010 Payment and Policy Changes for Inpatient Rehabilitation Facilities

On October 1, 2009, the Centers for Medicare & Medicaid Services published corrections to the Final Rule updating the Medicare payment rates and policies for inpatient rehabilitation facilities for fiscal year 2010. The corrections can be found here.

Subscribe to Medicare Update, follow me on Twitter @MedicareUpdate, and become a fan on Facebook.

Related Post: CMS Publishes 2010 Medicare Payment and Policy Updates for Inpatient Rehabilitation Facilities

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.

Subscribe to Medicare Update and follow me on Twitter @MedicareUpdate. 

Top Ten Medicare Update Blog Posts in August 2009

Below are the top Medicare Update posts in August 2009 (based on the number of views):

1.  CMS Releases Final Surety Bond Rule for DMEPOS Suppliers

2.  Medicare Recovery Audit Contractors: Don't Be Left in the Dark

3.  CMS Releases Final 2010 Medicare Inpatient Payment Changes for Acute Care Hospitals

4.  CMS Publishes 2010 Medicare Payment and Policy Changes for Inpatient Rehabilitation Facilities

5.  Obama Administration Releases Independent Medicare Advisory Council Act of 2009

6.  CMS Publishes Proposed Medicare Home Health Payment Changes for 2010

7.  CMS Approved Audit Issues Posted for Region D Recovery Audit Contractor

8.  Region B Recovery Audit Contractor Posts Sample Demand Letter

9.  CMS Releases Final 2010 Payment Changes for Skilled Nursing Facilities

10.CMS Approves Recovery Audit Contractor Issues for Region C

Subscribe to Medicare Update and follow me on Twitter @MedicareUpdate.

CMS Publishes 2010 Medicare Payment and Policy Updates for Inpatient Rehabilitation Facilities

On August 7, 2009, the Centers for Medicare & Medicaid Services (CMS) published a Final Rule in the Federal Register updating the Medicare payment rates and policies for inpatient rehabilitation facilities (IRF) for fiscal year (FY) 2010.

Some of the highlights of the Final Rule include: 

• Market Basket Update. CMS adopts a market basket update of 2.5 percent, which contributes to a estimated $145 million increase in total payments to IRFs for FY 2010 (compared to FY 2009).
• CMG Relative Weights. CMS updates the case mix group relative weights and average length of stay values using fiscal 2008 claims data and the most recent available IRF cost report data, which CMS believes reflects recent changes in IRF patient populations resulting from the 60 percent rule and medical review activities.
• High-Cost Outlier Threshold. In the Final Rule, CMS sets an outlier threshold of $10,652 for FY 2010, which is expected to maintain estimated outlier payments equal to 3 percent of total estimated payments for FY 2010.
• Wage Index. CMS uses the pre-classified and pre-floor hospital wage data for FY 2009 to determine FY 2010 rates.
• Facility-Level Adjustments. CMS updates the rural, low-income patient and teaching status adjustment factors using the most recent 3 years of data (FYs 2006 - 2008).
• Collection of Patient Assessment Data. CMS will require the submission of IRF patient assessment data on Medicare Part C (Medicare Advantage) patients in IRFs for use in calculating the compliance percentage.

In addition to the Medicare payment rate changes, the Final Rule revises, clarifies and adopts coverage requirements related to pre-admission screening, post-admission evaluations, and individualized treatment planning.  Such changes are scheduled to become effective on January 1, 2010.  On that date, CMS also intends to rescind its prior coverage criteria policies contained in HCFA Ruling HCFAR 85-2-1. CMS also plans to draft new coverage criteria guidance for its Medicare Benefit Policy Manual.

For more information on the Medicare payment rates and policy changes for IRFs, see the related Press Release and CMS's Fact Sheets on the payment updates and coverage changes.

Subscribe to Medicare Update and follow me on Twitter @MedicareUpdate.

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.

CMS Proposes FY 2010 Payment and Policy Updates for Inpatient Rehabilitation Facilities

On April 29, 2009, the Centers for Medicare & Medicaid Services released a display copy of a Proposed Rule that would update the Medicare payment rates and policies for inpatient rehabilitation facilities (IRF) for fiscal year (FY) 2010.  

In the Proposed Rule, CMS proposes updates to IRF payment rates for FY 2010. In brief, CMS proposes:

• A market basket update of 2.4 percent, which would increase total payments to IRFs by $140 million in FY 2010.
• To update the case mix group relative weights and average length of stay values using FY 2007 data, which CMS believes reflects recent changes in IRF patient populations resulting from the 60 percent rule and medical review activities.
• An outlier threshold of $9,976, which is expected to maintain estimated outlier payments equal to 3 percent of total estimated payments for FY 2010.
• To continue using the pre-classified and pre-floor hospital wage data to determine the proposed FY 2010 rates.  For purposes of the Proposed Rule, CMS used the final FY 2009 pre-classified and pre-floor wage data.
• To update the rural, low-income patient and teaching status adjustment factors using the most recent 3 years of data (FYs 2005 through 2007).
• To require the submission of IRF patient assessment data on Medicare Part C patients in IRFs for use in calculating the compliance percentage.

CMS estimates that the Proposed Rule would increase aggregate IRF payments by $150 million for FY 2010 (compared to FY 2009). For more information on the proposed payment updates, see the CMS Fact Sheet entitled "Proposed Payment Updates for Inpatient Rehabilitation Facilities in Fiscal Year 2010."

In addition to payment rate changes, the Proposed Rule also seeks to clarify and revise existing requirements for pre-admission screening, post-admission evaluations, and individualized treatment planning.  CMS will make conforming draft revisions to the Medicare Benefit Policy Manual (MBPM), which will be released for public comment. For more information on these proposed changes, see the CMS Fact Sheet entitled "Proposals to Clarify Inpatient Rehabilitation Facility Coverage Requirements."

CMS is expected published the Proposed Rule in the Federal Register on May 6, 2009 and reports that it will be accepting public comments until June 29, 2009.  See the Proposed Rule for instructions regarding the submission of comments. CMS reports that comments on the draft MBPM revisions should be submitted through a link that will be supplied on the CMS website.

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

UPDATE: CMS to Host Sessions for California Providers on Medicare Recovery Audit Contractor Program

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will host informational sessions for California providers/suppliers on the Medicare recovery audit contractor (RAC) program.  HealthDataInsights, Inc. (HDI), the RAC for California, will also participate.

According to CMS, 2 sessions will occur on May 4, 2009.  The first session will take place from 9:30 a.m. - 12:30 p.m. (PDT) and the second session will take place from 2:00 p.m. - 5:00 p.m. (PDT).  Each of these sessions will have a 200 participant limit.  CMS will also host a session on May 5, 2009 from 9:30 a.m. - 12:30 p.m. (PDT). This session will have a 90 participant limit.

The May 4 and 5, 2009 informational sessions will be held at the CMS San Francisco Regional Office at 90 7th Street, San Francisco, California.  During the sessions, California providers/suppliers will have an opportunity to ask CMS and HDI questions about the RAC program.  To participate in one of these informational sessions, registration is required.

CMS also reports that the California Hospital Association (CHA) will host 2 informational sessions on May 11, 2009 at the Good Samaritan Hospital at 1225 Wilshire Boulevard, Los Angeles, California.  The first session will take place from 9:30 a.m.- 12:30 p.m. (PDT) and the second session will take place from 2:00 p.m. - 5:00 p.m. (PDT).  According to CMS, CHA will handle registration and sent registration information to its members.

UPDATE: CMS reports that to register for the May 4 or 5, 2009 outreach session in the CMS San Francisco Regional Office send an email to RAC@cms.hhs.gov.  According to CMS, the online registration system may incorrectly indicate that sessions are closed.  For more information on registering my email, see the CMS announcement on the RAC overview page of the CMS website.