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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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 Includes Medicare Issues for Skilled Nursing Facilities

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

In previous posts, OIG Work Plan priorities were highlighted for various Medicare provider and supplier types (including hospitals, physicians and home health agencies).  This post focuses on skilled nursing facilities (SNF) and briefly highlights some of the OIG Work Plan priorities for SNFs.

• Part B Services in Nursing Homes: Mental Health Needs and Psychotherapy Services.  The OIG will review Medicare Part B payments for psychotherapy services provided to nursing home residents during noncovered Medicare Part A SNF stays and determine the medical necessity of services, appropriateness of coding, and adequacy of nursing home documentation.
• Medicare Requirements for Quality of Care in SNFs.  The OIG will assess how SNFs have addressed certain Federal requirements related to quality of care. Specifically, the OIG will determine the extent to which SNFs: (i) developed plans of care based on assessments of beneficiaries; (ii) provided services to beneficiaries in accordance with plans of care; and (iii) planned for beneficiaries' discharges.  The OIG will also review SNFs' use of the standardized Resident Assessment Instrument to develop nursing home residents' plans of care.
• Accuracy of SNF Resource Utilization Groups Coding.  The OIG will review SNF claims for Medicare reimbursement to determine the accuracy of Resource Utilization Groups (RUG) coding. The OIG will also explore other opportunities to improve the accuracy of payments to SNFs.
• Nursing Home Emergency Preparedness and Evacuations During Selected Natural Disasters. The OIG will review nursing homes' emergency plans and preparedness deficiencies cited by State surveyors to determine the sufficiency of the nursing homes' plans and implementation of the plans. The OIG will also describe the experiences of selected nursing homes including the challenges, successes, and lessons learned when they implemented their plans during recent disasters.
• Criminal Background Checks for Nursing Facility Employees.  The OIG will determine whether and the extent to which nursing facilities have employed individuals with criminal convictions.  The OIG will also categorize the types of crimes (if any are found) for which nursing facilities' employees have been convicted.
• Oversight of Poorly Performing Nursing Homes.  The OIG will review the Centers for Medicare & Medicaid Services' (CMS) and States' use of enforcement measures to determine their impact on improving the quality of care in poorly performing nursing homes and the performance of such homes.  As part of this review, the OIG will examine enforcement measures (e.g., survey and certification reviews and actions take by CMS and States) and determine the extent to which CMS and States follow up to ensure that poorly performing homes implement plans of correction.
• Part B Services in Nursing Homes: Overview.  The OIG will review the extent of Part B services provided to nursing home residents whose stays are not paid for under Medicare's Part A SNF benefit and assess patterns of billing among nursing homes and providers.
• Nursing Home Residents Aged 65 or Older Who Received Antipsychotic Drugs. The OIG will review the extent to which nursing home residents aged 65 or older received selected antipsychotic drugs in the absence of conditions approved by the Food and Drug Administration.  The OIG will also examine Medicare Part D and Part B program reimbursements for selected antipsychotic drugs received by elderly nursing home residents and the extent to which these drugs were prescribed and paid for in accordance with Federal regulations.

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

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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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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.

GAO Examines CMS's Nursing Home/Special Focus Facility Methodology

The U.S. Government Accountability Office (GAO) recently released a report titled CMS's Special Focus Facility Methodology Should Better Target the Most Poorly Performing Homes, Which Tended to be Chain Affiliated and For-Profit (Report).

As part of the Report, the GAO assessed the Centers for Medicare & Medicaid Services' (CMS) Special Focus Facility (SFF) Program methodology, applied it on a nationwide basis (using statistical scoring thresholds), and adopted several refinements to the methodology. Using this approach, the GAO determined:

• The number of most poorly performing nursing homes nationwide;
• How their performance compared to that of homes identified using the SFF methodology; and 
• The characteristics of such homes.

The GAO found that 580 (or 4 percent) of the estimated 16,000 nursing homes could be considered the most poorly performing.  A number that is approximately 4 times the 136 nursing homes that receive enhanced scrutiny under the SFF Program.

CMS uses the SFF methodology to score nursing homes and identify the 15 poorest performing homes in each state as candidates for the SFF Program.  From the list of candidates, state officials select (with CMS concurrence) nursing homes they think should participate in the SFF Program. However, the SFF Program is limited to 136 nursing homes at any point in time because of resource constraints.

In the Report, the GAO also reveals that the nursing homes selected for the SFF Program are not necessarily the most poorly performing homes in the nation but rather are among the poorest performers in each state. In fact, the GAO reports that the 580 nursing homes had more deficiencies at the potential for more than minimal harm level or higher and more revisits on average than the 755 homes identified as SFF candidates. The GAO also reports that the most poorly performing homes tend to be chain affiliated and for-profit and have more beds and residents.

In the Report, the GAO recommends that CMS consider an alternative approach to allocating the 136 SFFs across states, by placing more emphasis on the relative performance of home nationally rather than on a state-by-state basis. 

Further, to improve the SFF methodology to identify the most poorly performing nursing homes, the GAO recommends that CMS:

• Consider using a common set of numeric points for identifying poorly performing nursing homes by determining the effect of adopting those associated with the Five-Star System for the SFF methodology;
• Assign points to G-level deficiencies in substandard quality of care (SQC) areas equivalent to those assigned to H- and I-level deficiencies in SQC areas; and
• Account for a nursing home's full compliance history regardless of technical status changes.

Finally, to ensure consistency with the SFF methodology, the GAO recommends that CMS consider making 2 of the above modifications (i.e., SQC and full compliance history changes) to its Five-Star System.

According to the GAO, CMS generally agreed in principle with the GAO's recommendations and said that it would evaluate the effects of adopting them.

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CMS Publishes Corrections to 2010 Final Payment Rule for Skilled Nursing Facilities

On September 24, 2009, the Centers for Medicare & Medicaid Services (CMS) released a display copy of corrections to the Final Rule updating the Skilled Nursing Facility Prospective Payment System for fiscal year 2010.  The corrections can be found here.

The corrections are scheduled to appear in the Federal Register on September 25, 2009.

UPDATE: The corrections as they appear in the Federal Register can be found here.

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Related Post: CMS Releases Final 2010 Payment Changes for Skilled Nursing Facilities

UPDATE: CMS to Host Skilled Nursing Facility/Long-Term Care Open Door Forum

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will hold the next Skilled Nursing Facility/Long-Term Care Open Door Forum at 2:00 p.m. (ET) on October 15, 2009.

To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 22150065.  To participate in person, RSVP and security clearance is required.  One must RSVP by 2:00 p.m. (ET) on October 13, 2009 to SNF_LTCODF-L@cms.hhs.gov, and include your name, organization, telephone number, and "SNF/LTC" 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.

Beginning October 19, 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 recording will expire after 3 business days.

UPDATE: This Open Door Forum is now conference call only.

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

On September 8, 2009, the Department of Health and Human Services' Office of Inspector General (OIG) released a report titled Medicare Hospice Care for Beneficiaries in Nursing Facilities: Compliance with Medicare Coverage Requirements (Report).

The objective of the Report was to determine the extent to which hospice claims for beneficiaries in nursing facilities in 2006 met Medicare coverage requirements.  In brief, the OIG found that:

• 82 percent of hospice claims for beneficiaries in nursing facilities did not meet at least 1 Medicare coverage requirement.
• 33 percent of claims did not meet election requirements.
• 63 percent of claims did not meet plan of care requirements.
• For 31 percent of claims, hospices provided fewer services than outlined in beneficiaries' plans of care.
• 4 percent of claims did not meet certification of terminal illness requirements.

In the Report, the OIG recommends that the Centers for Medicare & Medicaid Services (CMS):

• Educate hospices about the coverage requirements and their importance in ensuring quality of care.
• Provide tools and guidance to hospices to help them meet the coverage requirements.
• Strengthen its monitoring practices regarding hospice claims.

CMS concurred with the OIG's recommendations.  The Report also reveals that CMS intends to share the Report and relevant claim information with the Medicare recovery audit contractors.

For more information, see the Report.

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