Medicare Update

CMS Encourages Medicare Beneficiaries to Review Coverage During Open Enrollment Period

On November 12, 2009, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release reminding beneficiaries that the annual open enrollment period for Medicare prescription drug and health plan coverage begins on November 15, 2009 and runs through December 31, 2009.

In the Press Release, CMS also encourages Medicare beneficiaries to take advantage of the annual open enrollment period to make sure they have the best coverage available to meet their needs in 2010.  In addition, CMS cites some resources for beneficiaries to get additional information and assistance.

Interestingly, the Press Release also offers tips for Medicare beneficiaries to protect themselves from fraud and identity theft during the open enrollment period. 

In October 2009, the Department of Health and Human Services released a Medical Identity Theft & Medicare Fraud brochure for beneficiaries, which highlights some tips for deterring, detecting and defending against medical identity theft and Medicare fraud.

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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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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 Proposed Rule Intended to Improve Protections for Medicare Advantage Enrollees

The Centers for Medicare & Medicaid Services (CMS) recently issued a Press Release and released a display copy of a Proposed Rule that is intended to improve the performance of Medicare Advantage and Medicare Part D Prescription Drug Plans by strengthening Medicare participation standards.

Among other things, CMS reports that the Proposed Rule would:

• Strengthen CMS's ability to identify and approve qualified drug and health plans;
• Improve beneficiary protections from discriminatory cost sharing by clarifying health plan requirements related to out-of-pocket costs and cost sharing; and
• Eliminate duplication in drug and health plan bids submitted by the same organization by requiring a meaningful difference between an organization's product offerings with regard to premiums, beneficiary out-of-pocket costs, plan types, and formulary offerings.

The comment period on the Proposed Rule will close on December 8, 2009.  The Proposed Rule is scheduled to appear in the Federal Register on October 22, 2009.

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Top Ten Medicare Update Blog Posts in September 2009

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

1.  Senate Finance Committee Releases Framework for Comprehensive Health Reform

2.  CMS Proposes New Prospective Payment System for Renal Dialysis Facilities

3.  CMS Publishes Final Rule on Overpayments and Recoupment Limitations

4.  OIG Reports on Medicare Coverage and Hospice Care for Nursing Facility Residents

5.  CMS Investigates Humana Regarding Health Care Reform Mailings

6.  Region C Recovery Audit Contractor Adds States to CMS Approved Audit Issues

7.  OIG Releases Report on Power Wheelchair Acquisition Costs and Services

8.  CMS Approved Audit Issues Posted for Region A Recovery Audit Contractor

9.  CMS Announces Additional Recovery Audit Contractor Outreach Sessions

10. Region C Recovery Audit Contractor Adds New State to CMS Approved Audit Issues

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CMS Expects a Wide Range of Medicare Advantage Options in 2010

Today, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release announcing that beneficiaries in Medicare Advantage (MA) and Part D plans will have a wide range of options in 2010.

According to the Press Release, the same percentage of beneficiaries who currently have access to an MA plan (i.e., 99.9 percent) will have access to an MA plan in 2010.  CMS also reports that only 1.5 percent of all beneficiaries (and about 7 percent in MA plans) will have to choose a new plan or original Medicare in 2010 because their current plan would not renew in 2010.

In addition to highlighting CMS efforts to strengthen its oversight of plan marketing activities, the Press Release provides other facts associated with MA and Part D plans in 2010 including:

• Beneficiaries in MA plans can expect an average premium of about $39/month (a $7 difference from 2009)
• Almost 87 of beneficiaries will have access to an MA plan that does not require a premium
• Part D plan premiums will average $30 (a $2 difference from 2009)

The Press Release also encourages beneficiaries enrolled in MA and Part D plans to review their current coverage for any changes in 2010 before the annual enrollment period begins on November 15, 2009. See the Press Release for more details.

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UPDATE: CMS Investigates Humana Regarding Health Care Reform Mailings

A number of news organizations (including a Modern Healthcare article) report that the Centers for Medicare & Medicaid Services (CMS) is investigating Humana regarding letters it has sent to Medicare beneficiaries about health care reform legislation.

According to CMS, the letters state (among other things) that "millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable."  CMS also reports that the letters were mailed in envelopes that state that they contain "important information about your Medicare Advantage plan - open today!"

In a letter to Humana, CMS expresses its concern that the Humana letters contain information that is "misleading and confusing to beneficiaries, represents information to beneficiaries as official communications about the Medicare Advantage program, and is potentially contrary to federal regulations and guidance for the MA and Part D programs and other federal law, including HIPAA." CMS also instructs Humana to end all such mailings and to remove any related materials from its website.

Reportedly, CMS' action was taken at the urging of Senate Finance Committee Chairman, Max Baucus.

Senator Baucus' Press Release can be found here. CMS' letter to Humana can be found here.

UPDATE: See New York Times article: White House to Let Insurers Warn Medicare Recipients about Pending Health Bills

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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). 

CMS Releases 2010 Medicare Advantage Capitated Rate Information

On April 6, 2009, the Centers for Medicare & Medicaid Services (CMS) released the Announcement of Calendar Year 2010 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies (Announcement). 

In the Announcement, the final estimate of the 2010 national per capita Medicare Advantage growth percentage (NPCMAGP) for aged and disabled enrollees is .81 percent.  The NPCMAGP for 2010 is higher than the NPCMAGP in CMS's February 2009 Advance Notice, but much lower than the NPCMAGPs for 2008 and 2009.

CMS updates the Medicare Advantage (MA) capitated rates annually by the NPCMAGP.  The NPCMAGP reflects growth in all Medicare expenditures, including expenditures under Medicare Part A and B payment rules (e.g., the estimated 21 percent Medicare physician fee reduction for 2010).

However, CMS reports that the 2010 rates also reflect a multi-year phase out of indirect medical education costs in MA rates.  The maximum phase out reduction is approximately .60 percent per year. In addition, CMS makes a "coding pattern differences adjustment" in 2010 to MA risk scores, reducing MA payments to account for differences in disease coding patterns between MA organizations and the original Medicare program (Parts A and B).  According to CMS, this adjustment will be applied as a uniform 3.41 percent reduction to all MA plans' risk scores in 2010.

With respect to Medicare prescription drug program enrollees, the Announcement includes information about the Medicare Part D deductible, initial coverage limit, out-of-pocket threshold, and related parameters for the standard benefit. Further, CMS reports that the annual percentage increase in average per capita Part D spending, which is used to update the deductible, initial coverage limit, and out-of-pocket threshold for the 2010 standard benefit, is 4.66 percent.

In addition to the Announcement, CMS has posted a related Press Release and Fact Sheet on the CMS website.

CMS Reports Projected 2008 Medicare Improper Payment Rate

On November 17, 2008, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release reporting that the projected Medicare fee-for-service (FFS) improper payment rate for fiscal year (FY) 2008 is 3.6 percent (or $10.4 billion). 

The Medicare FFS improper payment rate declined from 14.2 percent in FY 1996 (when the Medicare improper payment rate was first reported) to 3.9 percent in FY 2007. In the Press Release, CMS stresses that the Medicare FFS improper payment rate includes payments that may have been incorrectly paid and does not necessarily reflect fraud.  Further, CMS reports that most of the improper payments are due to claims for services that were medically unnecessary or incorrectly coded. 

According to the Press Release, CMS intends to conduct an in-depth evaluation of the FY 2008 Medicare FFS error rate to strengthen the confidence in the accuracy of reported error rates. Presumably, this evaluation is in response to an August 22, 2008 Office of Inspector General report, which questioned the accuracy of CMS's FY 2006 claim error rate for suppliers of durable medical equipment, prosthetics, orthotics and supplies.

In the Press Release, CMS reports a Medicare Advantage improper payment rate of 10.6 percent (or $6.8 billion) for calendar year 2006.  For FY 2007, CMS also reports a Medicaid composite error rate of 10.5 percent (or $32.7 billion) and a SCHIP error rate of 14.7 percent (or $1.2 billion).  CMS expects for the Medicare Advantage, Medicaid and SCHIP error rates to decline like the Medicare FFS improper payment rate through program maturation and CMS's use of tools, such as statistical sampling, medical reviews, and error rate reduction plans.