December 1st was slated to be a bad day for physicians--it was the day the 23% Medicare pay cuts were going into effect. Today, Congress agreed to a one month delay in the cuts, which will go into effect on January 1, 2011.
November 2010 Archives
December 1st was slated to be a bad day for physicians--it was the day the 23% Medicare pay cuts were going into effect. Today, Congress agreed to a one month delay in the cuts, which will go into effect on January 1, 2011.
The Centers for Medicare & Medicaid Services (CMS) has officially requested comments from the physician community regarding policies and standards for accountable care organizations (ACOs) participating in the Medicare program under the Shared Savings Program or in connection with the Center for Medicare and Medicaid Innovation (CMMI).
CMS's request focuses on three areas of interest: participation of solo and small practice providers in ACOs; attribution of beneficiaries to ACOs; and the assessment of performance, quality and efficiencies of ACOs. Below is a summary of the information CMS is seeking, but the full request and directions for submitting comments can be found here: http://tinyurl.com/2a29moo. Please note that the deadline for comments to be submitted to CMS is 5:00pm on December 3rd, 2010.
Solo and small practice providers. How can solo and small practice providers be ensured equal opportunity to participate in Shared Savings Plans created by the Medicare program? How can these providers be given sufficient access to capital needed to fund their efforts? Should CMS consider other payment models besides those currently available to Medicare providers?
Attribution of beneficiaries. CMS is seeking a seamless attribution process of beneficiaries to ACOs. What is the best process and timing for this: before the start of a performance period, in order to target care coordination strategies, or at the end of a performance period to ensure accountability?
ACO Assessment. How can CMS evaluate ACOs based on the patient-centered criteria required by the Affordable Care Act? What quality measures should the secretary of the U.S. Department of Health and Human Services use to determine performance in the Shared Savings Program?
In a letter from the American Hospital Association (AHA) to CMS dated November 17, 2010, the AHA outlined principles that it would like to see guide the agency's approach to implementing ACOs. It said the goal of ACOs must be "delivery reform that improves quality, efficiency and the patient experience through accountable care," and suggested that the need for Medicare program savings should not hinder this type of delivery reform. The AHA's position is that the ACO program should be "treated as a pilot initially so that mid-course corrections can be implemented to reflect what is learned." Importantly, the association encouraged CMS to "explore opportunities to extend similar arrangements to rural providers who are interested in adopting delivery reforms." The full text of the AHA's letter to CMS can be seen here: http://tinyurl.com/299xnqo.
The Premier healthcare alliance, based in Charlotte, NC, is also among the major healthcare organizations who have already submitted a letter with recommendations to CMS regarding ACOs. Premier's letter asks that the Medicare ACO program be "flexible enough to allow innovation, but rigid enough so that the initial ACOs in the program inspire confidence in the concept." Premier also encouraged CMS to recognize physician assistants, nurse practitioners and certified nurse specialists as clinical providers that are equally eligible for Medicare Shared Savings bonuses. Like the AHA, Premier believes that such non-physician practitioners "will be central in developing a strong primary care base, particularly in rural and shortage areas." Premier's letter can be found here in its entirety: http://tinyurl.com/2vd26of.
Finally, the American Medical Association (AMA) defined a robust set of guidelines for ACOs at the organization's semi-annual policy-making meeting. These principles, which happen to coincide with CMS's request for comments and recommendations, emphasize that ACOs must be physician-led to guarantee quality patient care, be patient-centered in their focus, ensure that physician and patient participation stays voluntary and enable independent physicians to participate. The latter is of particular concern to the AMA, as significant barriers must be addressed to guarantee that physicians in all practice sizes can be successful in the new ACO models. For solo and small practice physicians, these barriers include a lack of resources, existing antitrust rules and conflicting federal policies. The AMA urges CMS to keep quality performance standards consistent with AMA policy and to allow ACOs to use different payment models. A complete list of all 13 principles of the AMA's new policy regarding accountable care organizations can be found here: http://tinyurl.com/2aamuyz.
Effective January 1, 2011, the new Stark In-Office Ancillary Services Exception (the "IOASE") provisions will require physicians or group practices relying upon the IOASE (collectively, "Physician Practices") to furnish the following notice/disclosure to patients receiving MRI, CT, and PET (as identified on the Stark CPT/HCPCS Code list):
• Written notice at the time of the referral (not the time of the service)that the Medicare patient may receive the same services from another person or other supplier.
• The written notice must include a list of at least 5 (this was reduced from the original list of 10) suppliers that provide such services and which are located within a 25-mile radius of the referring physician's office location (depending upon the various office locations, a Physician Practice may be required to have different lists) at the time of the referral. (Note that so long as the requisite number of suppliers is listed, you can now also include a list of providers on the notice (e.g., hospitals) this was previously prohibited under the proposed rule).
• The notice must be written as to be understood by all patients and should include at a minimum, for each listed supplier the supplier's name, address, and telephone number. (Note that CMS removed the requirement that the practice obtain the patient's signature on the notice and maintain a copy in the patient's medical record. Also, note that CMS is no longer requiring the practice to list the mile radius for each listed supplier.) NOTE that although Physician Practices are no longer required to obtain and maintain the patient's signature, it may be prudent to otherwise document that the disclosure requirement was met such as having a physician in the Physician Practice document in the chart that the notice was given.
The final rule is somewhat less onerous than the proposed version of the self-disclosure requirement. However, all Physician Practices nonetheless should begin working to identify the alternative list of suppliers that they will provide (including the name, address and number of each) on the notice. Physician Practices should also ensure that they have their notices ready by January 1, 2011 and have procedures established to ensure that their office staff is providing the notice to Medicare patients at the time the MR/CT/PET is ORDERED. Physician Practices should be mindful of the fact that the notice can be simple and only needs to merely provide notice. A Physician Practice is permitted to identify its own services on the notice and according to CMS, a Physician Practice can also include language on the notice which informs patients that the inclusion of the alternate suppliers is not intended to endorse or recommend those suppliers.
For the fourth time this year, the Senate approved a one-month patch that will delay a 23% cut in Medicare payments to physicians until January 1, 2011. The action, passed on Thursday, November 18, is a result of an agreement backed by chairman of the Senate Finance Committee, Max Baucus (D-Montana), and senior Republican Charles Grassley of Iowa. The short reprieve will cost $1 billion over ten years and will be paid for by cuts in outpatient physical therapy services. The patch is expected to be passed in the House after Thanksgiving recess.
Long-term solution needed. Key Democrats and Republicans plan to use the reprieve as an opportunity to draft a longer-term fix, such as the 12- or 13-month solution supported by physician groups around the country and advocate organizations for senior citizens such as the AARP. A bipartisan panel is urging such a solution to be passed before the end of the year, to protect doctors from these enormous cuts until the end of 2011.
History of the payment cuts and congressional delays. The scheduled cuts in payments to doctors participating in the Medicare program were originally designed in 1997 to be phased in over many years. Called the "Sustainable Growth Rate" formula, payments to doctors were linked to growth of the economy as measured by the gross domestic product as a way to control spending. Starting in 2003, the cuts have been repeatedly delayed by Congress, causing the amounts to accumulate and forcing lawmakers into a continuous cycle of "patches."
Concerned physicians fear instability of the program. The Sustainable Growth Rate formula has repeatedly frustrated doctors who were threatening to drop out of the Medicare program before latest cut went through on December 1, portending a Medicare crisis that could have undermined the health care program for millions of elderly and disabled along with active and retired military service members and their families. Thursday's patch will ensure access to healthcare for these groups through the holidays.
Repealing formula necessary to end the cycle. A year-long fix to this problem would give Congress the time needed to create an entirely new system for paying doctors under the Medicare program. This would involve either offsetting $300 billion in costs with other spending cuts or by increasing the deficit.
Representatives Dingell (D-Mich.), Pete Stark (D-Calif.), and other representatives have introduced legislation to extend the current physician Medicare reimbursement rates for 13 months as well as to provide a 1% update for this year and next year. We will continue to keep our readers apprised of any future developments.
In its November 3, 2010 release of the final 2011 Home Health Prospective Payment System ("2011 HHPPS"), the Centers for Medicare and Medicaid Services ("CMS") updated its hospice recertification requirement. Beginning January 1, 2011, the Affordable Care Act requires that physicians and non-physician practitioners attest to a beneficiary's recertification for hospice eligibility through a documented face-to-face encounter. This documentation is required to be signed and dated and is separate and distinct from recertification.
Many hospices and providers were concerned about the burden this new requirement would place on hospices. CMS responded, in part, by providing that "[t]he burden for completing the attestation form is estimated at 30 seconds for each recertification at 180 days or beyond."
Whereas the requirement for 2010 merely required that "the recertifying physician include a brief narrative explanation of the clinical findings...support[ing] continued hospice eligibility," the 2011 requirements expand this "to require this narrative to describe why the clinical findings of the face-to-face encounter, occurring at the 180-day recertification and all subsequent recertifications, continue to support hospice eligibility."
This final rule will be posted in the Federal Register on November 17.
On November 3, 2010, the Centers for Medicare and Medicaid Service ("CMS") posted its final 2011 Home Health Prospective Payment System ("2011 HHPPS" or the "Final Rule"). According to CMS, "this final rule reflects CMS' ongoing efforts to improve quality of care provided by home health agencies to Medicare beneficiaries. The rule is intended to promote efficiency in payments, implements various Affordable Care Act (ACA) provisions and enhances Medicare's program integrity."
In practice, however, the "enhancement" of the Final Rule, in fact, yields a material adverse effect for home health agencies ("HHAs"). Under the 2011 HHPPS, beginning January 1, 2011, HHAs will experience a 4.89% decrease in payments, translating into almost a billion dollars. This decrease is one of a series of decreases that HHAs are slated to experience in the future. CMS originally planned to decrease 2011 HHA rates by 3.79% and, again, in 2012. While CMS has instituted a 4.89% decrease for the upcoming calendar year, it has not yet formally commented on its plans for 2012.
The Final Rule also requires that physicians certifying a Medicare beneficiary's home health benefits to document that the certifying physician or a non-physician practitioner had a face-to-face encounter with the patient prior to certification that the beneficiary may receive Medicare home health benefits.
Of note in the 2011 HHPPS is the final policy regarding HHA change in ownership ("CHOW") and the 36 Month Rule. The Final Rule provides a comparatively less stringent application of the 36 Month Rule than was adopted in January 1, 2010. The Final Rule provides that the 36 Month Rule applies in a change of majority ownership. A change in majority ownership
Occurs when an individual or organization acquires more than a 50 percent direct ownership interest in an HHA during the 36 months following the HHA's initial enrollment into the Medicare program or the 36 months following the HHA's most recent change in majority ownership (including asset sale, stock transfer, merger, and consolidation). This includes an individual or organization that acquires majority ownership in an HHA through the cumulative effect of asset sales, stock transfers, consolidations, or mergers during the 36-month period after Medicare billing privileges are conveyed or the 36-month period following the HHA's most recent change in majority ownership.
It is important to recognize that the 36 Month Rule only applies to CHOWs affecting a direct ownership interest, not an indirect ownership interest.
Moreover, the Final Rule excepts the following from the requirements of the 36 Month Rule:
1. An HHA that has submitted two consecutive years of full cost reports;
2. An HHA undergoing an internal corporate restructuring;
3. An HHA in which the owners are changing the existing business structure (e.g., converting a corporation into a limited liability company, converting a partnership into a corporation, etc.); or
4. An HHA in which an individual owner dies.
The Final Rule will be published in the Federal Register on November 17, 2010. Unless otherwise stated, the provisions therein will go into effect on January 1, 2011. While CMS has not announced its definitive 2012 plans, THE HEALTH LAW PARTNERS will continue to monitor developments and provide updates in our Health Law Blog.
Following The HLP's submission of numerous written inquiries and phone calls to representatives of CMS, National Government Services, Inc. ("NGS") (the Medicare Affiliated Contractor), and CGI (the Medicare RAC for Region B), on November 8, 2010, CMS published a response to Frequently Asked Questions related to RAC reviews of Periodic Interim Payments ("PIP"). As described by CMS, PIP are "biweekly payments made to a provider enrolled in the PIP program based upon the hospital's estimate of applicable Medicare reimbursement for the current cost report period."
Confusion had arisen among hospitals with respect to the appeals process for PIP claims. Specifically, because "Review Results Letters" were being issued, but "Demand Letters" were not consistently being issued (but sometimes were issued), it was unclear what event would trigger appeal rights with respect to PIP claims.
Pursuant to the recently-posted FAQ, the "discussion period" for PIP claims is initiated by the Review Results Letter. The RA establishes appeal rights for PIP claims. Accordingly, a hospital that has received a PIP claim denial should monitor incoming RAs for the PIP-claim adjustment, as such event will trigger any appeals time frames.
On November 10, 2010, the Centers for Medicare & Medicaid Services ("CMS") published its much-anticipated Proposed Rule regarding the Medicaid Recovery Audit Contractor ("RAC") program. Section 6411 of the Patient Protection and Affordable Care Act ("Affordable Care Act") requires each State to establish a Medicaid RAC program similar to the existing Medicare RAC program. States are required to contract with Medicaid RACs by December 31, 2010 and implement Medicaid RAC programs by April 1, 2011, unless CMS grants a State an extension (which CMS anticipates granting "rarely, and only under the most compelling of circumstances").
Therefore, Medicaid providers and suppliers should begin to prepare for yet another layer of auditing activity. The Medicaid RAC program is in addition to, and will supplement, existing routine State program integrity audits, Medicaid Integrity Contractor ("MIC") audits, and audits conducted by other State and Federal agencies. According to the Proposed Rule, "Medicaid RACs are not intended to, and do not, replace any State program integrity or audit initiatives or programs." While "overlapping or multiple provider audits may be necessary, [CMS] hope[s] to minimize the likelihood of overlapping audits" by requiring Medicaid RACs to coordinate their efforts with other contractors. Accordingly, CMS proposes to require any entity wishing to become a Medicaid RAC to agree to audit coordination efforts.
Under the Proposed Rule, Medicaid RACs would be compensated on a contingency-fee basis for recovery of overpayments, similar to the payment structure under the Medicare RAC program. CMS notes that existing contingency fees under the Medicare RAC program range from 9 to 12.5 percent. CMS proposes that, in order to receive Federal financial participation, the Medicaid RACs' contingency fees should be limited to the highest level approved under the Medicare program; that is, CMS has proposed that a State only pay a Medicaid RAC contractor a contingency fee up to the highest Medicare RAC contingency rate (12.5 percent). Any additional payment from the State to the Medicaid RAC must be made using State-only funds. With respect to identifying underpayments, under the Proposed Rule Medicaid RACs will be granted flexibility to determine appropriate RAC compensation.
Other noteworthy provisions of the Proposed Rule include the following:
• Medicaid RACs will be required to employ trained medical professionals to review Medicaid claims;
• States "may consider" establishing requirements regarding the documentation of good cause to review Medicaid claims;
• Whenever a Medicaid RAC has reason to believe that fraud or criminal activity has occurred, it must report such activity to appropriate law enforcement officials.
The Affordable Care Act mandates that States have an "adequate appeals process" in place for entities to appeal unfavorable Medicaid RAC determinations. Under the Proposed Rule, CMS proposes to permit States the "flexibility to determine the appeals process that would be available to providers who seek review of adverse RAC determinations." SIgnificantly, this means that the appeals process will likely differ from State-to-State.
CMS's 2011 Final Physician Fee Schedule (the "Fee Schedule") provides for over 2000 pages of new rules and regulations pertaining to physician reimbursement under Medicare for 2011. With the passing of the Patient Protection and Affordable Care Act ("PPACA") and the Healthcare and Education Reconciliation Act (collectively referred to as the "Affordable Care Act"), physicians have found many new conditions tied to their reimbursement for rendering services to Medicare beneficiaries. Some of the notable changes are below:
• Sustainable Growth Rate ("SGR") - The SGR is an annual growth rate that applies to physicians' services paid by Medicare. According to the Fee Schedule, by January 1, 2011, the SGR for physicians will be cut by a total of 24.9%--once on December 1, 2010 and once on January 1, 2011. This SGR cut has been anticipated for physicians as it was to be in effect in June of 2010.
• Annual Wellness Visit ("AWV") - Beginning January 1, 2011, Medicare will reimburse physicians for performing an AWV. An AWV takes into account a health risk assessment and creates a personalized prevention plan for beneficiaries. Certain elements must be identified in the beneficiary's first visit that include: establishing or updating the beneficiary's family and medical history, a list of the individual's current providers and suppliers and medications prescribed, height, weight, and body-mass index, blood pressure, detection of any cognitive impairment, establishing a screening schedule for the next 5-10 years, establishing a list of risk actors and conditions for which interventions are recommended or underway, furnishing personalized health advice and referral to health education or preventive counseling services or programs.
• Elimination of Deductible and Coinsurance for most Preventive Services - Beginning January 1, 2011, the Part B deductible and 20% coinsurance will be waived for preventive services that have been either "strongly recommended" or "recommended" by the US Preventive Services Task Force.
• Incentive Payments to Primary Care Physicians - Primary care physicians are eligible for incentive payments of 10% of the primary care practitioner's allowed charges for primacy care services under Part B. According to the Fee Schedule, a primary care practitioner is defined as:
1. A physician who has a primary specialty designation of family medicine internal medicine, geriatric medicine, pediatric medicine, nurse practitioner, clinical nurse specialist, or physician assistant; and
2. For whom primary care services accounted for at least 60% of the allowed charges under Part B for the practitioner in a prior period as determined by the Secretary.
Primary care services are defined as those services identified by the HCPCS codes of 99201-99215, 99304-99340, and 99341-99350. The incentive payments will be made on a quarterly basis based on the primary care services furnished and any other physician bonus payments for services that are furnished in Health Professional Shortage Areas.
• In Office Ancillary Services - for MRI, CT, and PET scans, physicians must disclose to patients, in writing, at the time of the referral that a patient may obtain the services from another provider. At the time of the referral, the referring physician must provide the patient with a list of five alternative suppliers (who supply the same service) within a 25-mile radius of the physician's office location (please check back for a more detailed entry regarding this change).
• Modification of Multiple Procedure Payment Policy for Advanced Imaging Services - Effective January 1, 2011, CMS will reduce the payment rates for procedures associated with expensive diagnostic equipment assigning a 75% equipment utilization rate assumption to expensive diagnostic imaging equipment used in CT and MRI services.
• Maximum Period for Submitting Medicare Claims - For services furnished after January 1, 2010, the maximum period for submitting Medicare fee-for-service claims has decreased to 12-months from the date of service. However, there are four exceptions to this rule:
1. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to a CMS or CMS contractor error or misrepresentation;
2. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to the fact that a beneficiary was retroactively entitled to Medicare;
3. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to a beneficiary being retroactively entitled to Medicare, but a state Medicaid agency recovered the Medicaid payment for the furnished service 6 months after the service was furnished; or
4.CMS or one of its contractors determines that the failure to meet the 12-month deadline was because, at the time the service was furnished, the beneficiary was enrolled, and subsequently disenrolled, in a Medicare Advantage plan or a PACE provider organization and the Medicare Advantage plan or PACE provider organization recovered its payment for the furnished service 6 months or more after the service was furnished.
The final rule will appear in the November 29, 2010 Federal Register. Except as otherwise specified, the policies and payment rates adopted in the final rule will be effective for services furnished on or after January 1, 2011. As is evident from these select provisions from the Fee Schedule (oftentimes driven by the provisions in the Affordable Care Act), physicians' reimbursement for services rendered to Medicare beneficiaries is becoming increasingly more difficult for physicians to receive, especially with the significant decrease in the SGR. If the decrease in SGR is not postponed (or even eliminated), senior citizens will experience difficulty in accessing medical care--one of the evils the Affordable Care Act sought to address.
Following upon the heels of September's first-ever Advisory Opinion on sleep testing, the Office of Inspector General today issued the second and third installments of what appears to be the OIG's Sleep Opinion Trilogy.
These new opinions generally follow the facts of the first opinion - a third party management company provides all of the equipment, technology, supplies, staff and marketing services as part of a local hospital's performance of Medicare sleep tests "under arrangement."
Under Opinion 10-23, the Management Company charges the hospital on a fair-market "per-test" or "per-click" basis. This all-in fee is payment for all of the services and equipment provided to the hospital by the manager, including sporadic marketing services.
Under Opinion 10-24, the Management Company charges the hospital a three-tiered, flat rate basis: (i) one fixed, annual fee for the use of the manager's equipment, (ii) one fixed, annual fee for full-time marketing services, and (iii) one fixed, annual fee for other sleep testing services and supplies. All of these fees would be fair market value for the services and items provided, and none would take into account the value or volume of referrals or other business generated between the parties.
The OIG concluded that the first arrangement could potentially generate prohibited remuneration under the Anti-Kickback Statute and that the OIG could potentially impose administrative sanctions on the manager and hospital for operating under the arrangement.
The second arrangement, however, would pass muster, even though it too could potentially generate prohibited remuneration under the Anti-Kickback statute if the requisite intent to induce or reward referrals were present.
The difference is that the marketing services provided under the first arrangement were included in the "per-click" fee but the fees for the marketing services under the second arrangement were priced on a flat, annual basis. The OIG noted that marketing fees paid on the basis of successful orders for items or services are inherently subject to abuse. The more tests generated by the manager's marketing efforts, the more fees the manager receives.
Note that like the original opinion, the OIG discussed the lack of "suspect characteristics" in these two new arrangements. "Suspect characteristics" would include physician or hospital ownership in the Management Company or the manager's providing DME to the hospital, the hospital's patients, or to persons who obtained their sleep test at the hospital lab.
CMS published its interim final values for sleep testing yesterday, November 2, 2010, as part of Medicare's Final Part B Physician Fee Schedule for 2011. Although the sleep code values are to be effective January 1, 2011, CMS is offering the public the opportunity to comment on these new sleep medicine values by 5:00 pm on January 3, 2011.
The published values indicate a general decrease in both the physician value and the technical aspects of sleep testing in some billing scenarios, whereas reimbursement values for the technical component in some billing scenarios increase, along with all malpractice RVU's. (Please refer to the below links for specific values.) CMS reports that the AMA's Relative Value Update Committee ("RUC") identified the amounts currently payable for sleep testing to be "potentially misvalued" and reviewed changes to the values based on current practice.
CMS is waiving its usual notice and comment procedures with respect to these and other "misvalued" codes identified in the Final Rule. Instead, CMS is implementing the new values now on an interim final basis. CMS decided not to wait until next year because CMS believes that a delay in implementing revised values for these misvalued codes would not only perpetuate the known misvaluation for these services, it would also perpetuate a distortion in the payment for other services under the physician fee schedule.
CMS also said that it was impractical to solicit public comment over the summer due to the timing of the RUC's recommendations. Persons have sixty (60) days to comment on the revised interim values published for the final physician work RVU, practice expense, and malpractice RVUs (including the direct practice expense (PE) inputs and the equipment utilization rate assumption) for these new sleep code values.
New Home Testing CPT Codes. The Final Rule published yesterday includes two new CPT Codes for home testing. These codes are to be used for unattended sleep studies. Although it is difficult to tell from the truncated narrative in the Final Rule, the difference between new Code 95800 and 95801 appears to be the addition of respiratory analysis:
CPT Code 95800: Sleep study, unattended.
CPT Code 95801: Sleep study, unattended, w/ anal [presumably respiratory analysis].
Presumably each new code requires recording of heart rate and oxygen saturation, and the respiratory analysis could presumably be either by airflow or peripheral arterial tone, but an examination of the final, full narrative of these Codes will be necessary to determine if this is the case.
The Final Rule continues to include the familiar G-Codes for home testing, G0398, G0399 and G0400. The Final Rule indicates no payments for these G-Codes, and, unlike the new Codes 95800 and 95801, the values for the G-Codes are final and not subject to public comment during the comment period. However, CMS permits local Medicare Contractors to set the RVU's and payment amounts for these G-Code services based on the Contractor's review.
Chart - 2011 Fee Schedule Values for Selected Sleep Codes
2011 - Final Interim Sleep Code Values
2011 - G-Codes - Addendum B
The 2011 CMS Final Physician Fee Schedule has been released.
Please check back with us for entries regarding specific provisions relevant to our readers!