Medicare Update

Region B Recovery Audit Contractor Expands CMS Approved Audit Issues

2009-11-25T15:29:10-06:00

CGI, the Medicare recovery audit contractor (RAC) for Region B, recently updated its CMS approved audit issues for RAC review. Specifically, CGI has expanded the following CMS approved audit issues to all states within Region B:

In addition, it appears that CGI has added Wheelchair Bundling to the list of CMS approved audit issues.

See the CMS approved audit issues and CGI's RAC website for more information.

Region B includes the states of Minnesota, Wisconsin, Michigan, Illinois, Indiana, Ohio and Kentucky.

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CMS Posts FAQs on New Medicare Home Health Outlier Policy

2009-11-25T10:39:51-06:00

The Centers for Medicare & Medicaid Services (CMS) recently posted 2 Frequently Asked Questions (FAQ) concerning its new outlier policy. The new FAQs address the following questions:

Follow the above links to see CMS's answers.

On November 10, 2009, CMS published the Final Rule updating the policies and rates for the Medicare home health prospective payment system (HH-PPS) for calendar year (CY) 2010. The Final Rule makes significant changes to the policies on outlier payments.

Outlier payments are made for episodes for which the estimated cost exceeds a threshold amount. The Social Security Act requires that the estimated total outlier payments be no more than 5 percent of total estimated HH-PPS payments in a given year.

In the Final Rule, CMS reduced the fixed dollar loss (FDL) ratio to 0.67 for CY 2010. Further, to combat perceived abuses, CMS adopted a 10 percent cap on outlier payments at the agency level and lowered the targeted total aggregate outlier payments to 2.5 percent of HH-PPS payments.

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CMS to Host Pharmacy, Pharmaceutical & Device Manufacturers Open Door Forum

2009-11-24T11:16:13-06:00

The Centers for Medicare & Medicaid Services (CMS) will host the next Pharmacy, Pharmaceutical & Device Manufacturers Open Door Forum at 2:00 p.m. (ET) on December 16, 2009.

CMS reports that this Open Door Forum will focus on preparing for Medicare Part D in 2010.

To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 41275946. To participate in person, RSVP and security clearance is required. One must RSVP by 2:00 p.m. (ET) on December 11, 2009 to PharmacyODF-L@cms.hhs.gov, and include your name, organization, telephone number, and "Pharmacy" 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 2 hours after the Open Door Forum, 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.

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UPDATE: CMS Prepares to Implement Medicare Therapy Caps Without Exceptions Process

2009-11-23T14:20:24-06:00

The Centers for Medicare & Medicaid Services (CMS) recently issued Transmittal 1851 (Change Request 6660) instructing Medicare contractors concerning the therapy cap dollar limitations for 2010 and preparing Medicare contractors to possibly impose the caps without an exceptions process.

Note: Shortly after CMS issued Transmittal 1851, it was rescinded and replaced by Transmittal 1860 (Change Request 6660).

According to Transmittal 1860 (and the Final Rule updating the Medicare Physician Fee Schedule for calendar year 2010), CMS has established a combined therapy cap of $1,860 per beneficiary for outpatient physical therapy and speech language pathology services, and a separate cap of $1,860 for outpatient occupational therapy services.

The therapy caps were imposed by the Balanced Budget Act of 1997. However, the Deficit Reduction Act of 2005 directed CMS to create a clinically-based exception process to the therapy caps for expenses incurred during calendar year (CY) 2006. Since 2006, Congress has repeatedly extended the exception process.

In fact, the Tax Relief and Health Care Act of 2006 extended the exception process through CY 2007. This was followed by the Medicare, Medicaid and SCHIP Extension Act of 2007 extending the exception process through June 30, 2008. Most recently, the Medicare Improvements for Patients and Providers Act of 2008 extended the exception process through December 31, 2009.

Unless Congress repeals the therapy caps or further extends the exception process, the therapy caps (without the exception process) will take effect on January 1, 2010.

However, as introduced, the Senate health care reform bill, titled the Patient Protection and Affordable Care Act, would apparently extend the exceptions process through December 31, 2010. In contrast, the House health care reform bill, titled the Affordable Health Care for America Act (H.R.3962), appears that it would extend the exceptions process through December 31, 2011.

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Homecare Association Raises Concern about Impact of CMS Verification Process

2009-11-23T11:42:35-06:00

On November 20, 2009, the American Association for Homecare (AAHomecare) sent a letter to the Centers for Medicare & Medicaid Services (CMS) requesting that CMS delay the implementation of rules/instructions providing for the rejection of claims for DMEPOS based on ordering/referring physician enrollment in the Provider Enrollment, Chain and Ownership System (PECOS).

According to the AAHomecare letter, the Association is concerned about the slow pace of physician enrollment in PECOS and how claim rejections may affect patient access to care and provider payments. For information about the facts and circumstances surrounding AAHomecare's concerns, see the letter.

On April 24, 2009, CMS issued Transmittal 480 (Change Request 6421). Transmittal 480 is intended to address concerns about DMEPOS ordered/referred by physician and non-physician practitioners (ordering/referring provider) that may not be permitted by the Medicare program to do so.

As a first step, CMS is verifying that the ordering/referring provider on a DMEPOS claim:

Has a current enrollment record in Medicare (i.e., the ordering/referring provider enrolled or updated his/her enrollment record within the past 5 years and the NPI is in the record); and
Is of a specialty that is eligible to order and refer.

CMS intends to implement this verification in 2 phases:

Phase 1 (October 5, 2009 - January 3, 2010) - DMEPOS suppliers that report ordering/referring providers who do not pass both edits will receive an informational message on their remittance. CMS reports that paper billers will not receive an informational message.
Phase 2 (January 4, 2010 and thereafter) - DMEPOS suppliers that report ordering/referring providers who do not pass both edits will have their claims rejected.

For more information on this verification process, see:

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Senate Vote Advances Patient Protection and Affordable Care Act

2009-11-22T10:07:38-06:00

On November 21, 2009, the U.S. Senate voted 60-39 on a cloture motion and to formally consider and debate the Patient Protection and Affordable Care Act (H.R.3590). All Senate Democrats (including independents) voted for the motion. The Senate is expected to consider H.R.3590 after the Thanksgiving holiday.

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Senate Health Care Reform Bill Provides for Recovery Audit Contractor Expansion

2009-11-20T11:56:09-06:00

In Section 6411 of the Patient Protection and Affordable Care Act (H.R.3590), the Senate Democratic health care reform bill provides for the expansion of the Recovery Audit Contractor (RAC) program.

Specifically, Section 6411 provides for the Medicare RAC program to be expanded to Medicare Parts C and D by no later than December 31, 2010. Section 6411 also contains some special rules. For instance, Section 6411 would require the Secretary of the Department of Health and Human Services (Secretary) to ensure that Medicare RAC contracts require RACs to:

Ensure that each Medicare Advantage plan has an anti-fraud plan in effect and review the effectiveness of the plan;
Ensure that each Medicare Part D prescription drug plan has an anti-fraud plan and review the effectiveness of the plan;
Examine claims for reinsurance payments to determine whether prescription drug plans incurred costs in excess of the allowable reinsurance costs permitted; and
Review estimates submitted by prescription drug plans (by private plans) with respect to the enrollment of high cost beneficiaries and compare such estimates with the numbers of such beneficiaries actually enrolled in the plans.

Interestingly, Section 6411 would also establish a RAC program for the Medicaid program. Based on Section 6411, it appears that a Medicaid RAC program would be similar to the current Medicare RAC program. That is, Medicaid RACs would be charged with looking for overpayments (and underpayments) and recovering the overpayments. In addition, Medicaid RACs would be paid on a contingent basis from the overpayment amounts recovered.

For more information, see Section 6411 of the Patient Protection and Affordable Care Act.

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House Passes Medicare Physician Payment Reform Act of 2009

2009-11-20T08:12:14-06:00

On November 19, 2009, the U.S. House of Representatives passed (by a vote of 243-183) the Medicare Physician Payment the Medicare Physician Payment Reform Act of 2009 (H.R.3961).

As previously reported, H.R.3961 would repeal the now 21.2 percent Medicare payment rate reduction for physician services in 2010 and restructure the sustainable growth rate (or SGR) formula.

The Congressional Budget Office recently released a cost estimate for H.R.3961 indicating that it would increase direct spending by about $210 billion over the 2010-2019 period.

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Senate Health Reform Bill Includes Significant Medicare Payment Reductions

2009-11-19T14:36:40-06:00

On November 18, 2009, the Congressional Budget Office (CBO) releases its cost estimate associated with the Senate Democrat's Patient Protection and Affordable Care Act (H.R.3590).

According to the CBO, the provisions of H.R.3590 would cost $848 billion over 10 years (2010 - 2019), yield a net reduction to the Federal deficit of $130 billion over that time period, and extend insurance coverage to approximately 31 million eligible Americans.

However, such projections include provisions that would make changes to payment rates and rules for Medicare, Medicaid and other Federal programs. In fact, the CBO estimates that such changes would reduce direct spending by about $491 billion over the 2010 - 2019 period.

With respect to the Medicare program, the CBO reports that the H.R. 3590 provisions that would result in the largest estimated budget savings include:

Permanent reductions in the annual Medicare payment rate updates for most services in the fee-for-service sector (other than physicians' services), yielding savings of $192 billion over 10 years.
Setting payment rates in the Medicare Advantage (MA) program on the basis of the average of bids submitted by MA plans in each market, yielding savings of $118 billion over 10 years.
Reducing Medicare payments to hospitals that serve a large number of low-income patients (known as disproportionate share hospitals) by approximately $21 billion.
Establishing an independent Medicare advisory board to recommend changes to limit Medicare's spending growth rate, which would reduce Medicare spending by $23 billion over 10 years.

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CMS to Host Ambulance Open Door Forum

2009-11-19T13:26:25-06:00

The Centers for Medicare & Medicaid Services (CMS) recently announced that it will hold the next Ambulance Open Door Forum at 2:00 p.m. (ET) on December 9, 2009.

To participate by telephone, one must dial 1-800-837-1935 and reference conference ID 40386943. To participate in person, RSVP and security clearance is required. One must RSVP by 2:00 p.m. (ET) on December 4, 2009 to AmbulanceODF-L@cms.hhs.gov, and include your name, organization, telephone number, and "Ambulance" 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 2 hours after the Open Door Forum ends, 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.

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