CMS ADOPTS PAYMENT POLICY & RATE CHANGES FOR SERVICES IN HOSPITAL OUTPATIENT DEPARTMENTS AND AMBULATORY SURGICAL CENTERS FOR 2010

The Centers for Medicare & Medicaid Services (“CMS”) has announced that most hospitals will receive an inflation update of 2.1 percent in their payment rates for services provided to Medicare beneficiaries in outpatient departments.  Due to a Medicare requirement, CMS will reduce the update by 2.0 percentage points for hospitals that did not participate in quality data reporting for outpatient services or that did not report the quality data successfully, resulting in only a 0.1 percent update for those hospitals. 

CMS also announced that ambulatory surgical centers (“ASCs”) will receive a 1.2 percent inflation update starting January 1, 2010.  CMS projects that the aggregate Medicare payments to more than 4,000 hospitals and community mental health centers in calendar year (“CY”) 2010 will be approximately $32.2 billion, while aggregate Medicare payments to approximately 5,000 ASCs will total $3.4 billion.

The payment updates are included in a final rule with comment period that revises payment policies and updates the payment rates for services provided to beneficiaries during CY 2010 in hospital outpatient departments under the Outpatient Prospective Payment System (“OPPS”) and in ASCs under a revised rate-setting methodology that was established January 1, 2008.

The updated payment rates are meant to ensure that Medicare beneficiaries continue to receive high quality and efficient care in the most appropriate setting.

The CY 2010 OPPS/ASC final rule with comment period will be included in the November 20, 2009 Federal Register.  Comments on designated provisions are due by 5:00 p.m. EST on December 29, 2009.  CMS will respond to comments in the CY 2011 OPPS/ASC final rule.

© 2009 Parsonage Vandenack Williams LLC

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REMINDER: NOVEMBER 15, 2009 DEADLINE FOR MEDICARE PART D CREDITABLE COVERAGE NOTICES

Employers with group health plans need to provide Medicare Part D notices of creditable or non-creditable coverage to Medicare-eligible individuals by November 15, 2009.  Employers can satisfy this requirement by including the notice in enrollment materials or in separate mailing during the fall. When preparing materials for distribution this fall, employers should be aware of revised model notices provided by the Centers for Medicare & Medicaid Services (“CMS)”.

Background

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires group health plans that provide prescription drug coverage to disclose to individuals eligible for Medicare Part D whether their coverage is “creditable.”  Basically, prescription drug coverage is considered “creditable” if it is at least actuarially equivalent to (i.e., at least as good as) the Medicare Part D coverage. This disclosure is very important because individuals who do not enroll in Medicare Part D when first eligible and who have gone more than 63 days without creditable coverage generally will have to pay higher premiums permanently when they finally enroll. Thus, individuals need to know the status of their group health plan coverage in order to make an informed decision about enrolling in Part D.

Notices regarding whether prescription drug coverage is creditable or non-creditable must be provided –

• prior to the start of the annual Part D enrollment period (November 15 through December 31 of each year);
• prior to an individual’s initial enrollment period for Part D;
• prior to the effective date of coverage for a Part D-eligible individual who joins an employer plan;
• when an employer’s prescription drug coverage ends or changes status as creditable coverage; and
• upon a beneficiary’s request.

The deadline for providing annual creditable coverage notices this year is November 15.

Revised Notices Posted

Earlier this year, CMS posted revised model notices and updated guidance regarding creditable coverage disclosures. The changes to the model notices and guidance are minimal.  CMS recommends, but does not require, that personalized notices be provided upon request to enable individuals to show proof of prior creditable coverage when enrolling in a Part D plan.

What Information is Required in the Creditable Coverage Notification?

The information must explain whether the plan sponsor’s prescription drug coverage is creditable. If the coverage is not creditable, this information must also explain that there are limitations on the periods during the year in which the individual may enroll in a Medicare drug plan and that the individual may be subject to a late enrollment penalty.

What Should Employers Do to Comply with the CMS Rules?

It is important for employers to review their current notices and determine whether any changes or updates need to be made so that they are in compliance with the CMS requirements.  If you have any questions in regard to determining whether your group health plan is creditable or non-credible, or in regard to the notice process in general, you should consult your attorney.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

CMS Proposes Medicare Payment Increase for ASCs in 2010

CMS recently issued a notice of proposed rulemaking that includes proposals for policy changes and payment rates for services in ambulatory surgical centers (“ASCs”), which would continue the expansion of surgical procedures that Medicare would cover for services performed in ASCs. The proposed rule seeks to make sure that beneficiaries have access to outpatient services in all appropriate settings, while improving the quality and efficiency of service delivery.

Since January 1, 2008, ASCs have been paid under a revised payment system that aligns ASC payment rates with the rates paid for similar services when provided in hospital outpatient departments. The revised system also increases the number and types of surgical services that are covered by Medicare when performed in ASCs.  Calendar year 2010 is the third year of a four-year phase-in of the ASC payment rates calculated under the standard rate-setting methodology and the first year in which CMS is authorized to apply an update to the conversion factor.  CMS is projecting the percentage increase in the Consumer Price Index for All Urban Consumers that would update the ASC conversion factor to be 0.6 percent. Total 2010 payments to ASCs are estimated to be $3.4 billion.

CMS will accept comments on the proposed rule until August 31, 2009, and will respond to comments in a final rule to be issued by November 1, 2009.

To review the proposed rule and for instructions about how to submit comments, go to: http://edocket.access.gpo.gov/2009/E9-15882.htm

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

CMS Updates Medicare Conditions for Coverage for ASCs

The long-awaited Final Rule updating Medicare Conditions for Coverage (CFCs) for Ambulatory Surgery Centers (ASCs) has finally been published by the Centers for Medicare and Medicaid Service (CMS).   The Final Rule represents the first major non-payment related update to the ASC CfCs since they were originally published in 1982.  The requirements of the Final Rule are effective for ASCs as of May 18, 2009.

The Final Rule generally focuses on patient rights and patient outcomes.  Among other things, it:

• Bolsters patient rights to disclosure of physician financial interest in the ASC
• Refines the obligations to assess patient pre-operative condition and post-operative condition
• Requires certain ASC governing body actions regarding quality assessment and performance improvement
• Imposes certain infection control requirements
• Requires preparation of a disaster preparedness plan coordinated with state and local authorities

In the Final Rule, CMS ended up backing away from some of the more controversial changes that it had placed in its Proposed Rule.  Among the proposals that drew the most criticism from the ASC community and that CMS either removed or modified in the Final Rule were the following:

• CMS backed away from its proposal to require the surgeon to conduct a “thorough assessment” of all bodily systems on each patient prior to discharge.   The Final Rule requires that a physician or other qualified practitioner, which includes a registered nurse with post-operative care experience, assess the patient in a manner appropriate the the procedure performed and the patient’s individual condition.
• CMS backed away from its proposed “safe transition to home” language, which seemed to burden the ASC with responsibility for ensuring each patient not only have adequate transportation home but actually make it home safely.  The Final Rule generally requires that patients be discharged in the company of a responsible adult. 
• CMS backed away from its proposal to require ASCs providing radiological services to meet the more burdensome coverage conditions applicable to suppliers of portable x-ray services.  The Final Rule requires that the less burdensome hospital conditions for radiology be met.
• CMS backed away from its proposal to redefine ASCs to exclude facilities that keep patients past 11:59 p.m.  Instead, the Final Rule excludes facilities where the expected duration of services exceeds 24 hours.   

© 2009 Parsonage Vandenack Williams LLC

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CMS “ANTI-MARKUP” RULE AFFECTS DIAGNOSTIC TESTS

 

 

On January 1, 2009, the Centers for Medicare & Medicaid Services (“CMS”) enacted a new rule, called the anti-markup rule, that applies to certain diagnostic tests ordered and billed by physicians or their group practices.  Any physician group that orders and bills for diagnostic tests must comply with the new anti-markup rule.  CMS published the Final Medicare Physician Fee Schedule for 2009 in the Federal register on November 19, 2009. Among other things addressed in the Fee Schedule regulations are clarifications of the diagnostic testing anti-markup rule.

 

Prior to the 2009 Fee Schedule changes, the anti-markup rule provided that if a physician or other supplier bills for the technical component (“TC”) or professional component (“PC”) of a diagnostic test that was ordered by the physician or other supplier and the diagnostic test was either purchased from an outside supplier or performed at a site other than the office of the billing physician or other supplier, the payment to the billing physician or other supplier (less the applicable deductibles and coinsurance paid by the beneficiary or on behalf of the beneficiary) for the TC or PC of the diagnostic test may not exceed the lowest of the following amounts:

 

• The performing supplier’s net charge to the billing physician or other supplier;
• The billing physician or other supplier’s actual charge; or
• The fee schedule amount for the test that would be allowed if the performing supplier billed directly.

 

In the 2009 Fee Schedule, CMS has now clarified that the anti-markup provisions will not apply to the TC or PC of a diagnostic test where the performing physician shares a practice with the billing physician or other supplier. With respect to a TC or PC of a diagnostic testing service, the performing physician is considered to share a practice with the billing physician or other supplier if either of the following is met:

 

• Alternative 1: He or she furnishes substantially all (at least 75 percent) of his or her professional services through the billing physician or other supplier; or
• Alternative 2: The TC is conducted and supervised, or the PC is performed, in the office of the billing physician or other supplier. For purposes of this alternative, the “office of the billing physician or other supplier” is defined as the same building where the ordering physician performs substantially the full range of patient care services that the ordering physician generally provides.

 

 © 2009 Parsonage Vandenack Williams LLC 

 

For more information, contact info@pvwlaw.com

 

CMS Withdraws its Medicare Advantage and Part D Call Letter

On January 23, 2009, CMS announced that it is withdrawing the draft 2010 Medicare Advantage (MA) and Part D call letter, which was released January 8, 2009, “pending an opportunity for further review of the document.”  CMS said the document will be reposted on its Web site after the letter has been reviewed and any revisions are made.

 

In a prepared statement, CMS said that “[w]e recognize that MA organizations and PDP [i.e., stand-alone Prescription Drug Plan] sponsors need to have 2010 guidance available in order to prepare their bids by the statutory deadline, and therefore will post a draft reflecting any changes resulting from a review of the current draft as soon as possible.”

 

The call letter, which gives instructions to the private insurance companies that want to contract with Medicare to provide drug and health coverage in 2010, was released two weeks earlier than last year and two months earlier than the previous year.  Some groups criticized the early release. For instance, the Center for Medicare Advocacy (CMA) called the call letter “an attempt by CMS to assure continued leniency in the oversight of private plans for at least another year as a last-ditch effort to promote private MA plans.”

 

CMS will likely be reviewing the Medicare Advantage and Part D cal letter for an opportunity to increase beneficiary protections, transparency, reporting requirements, and other areas in need of oversight.

 

© 2009 Parsonage Vandenack Williams LLC

 For more information, contact info@pvwlaw.com

Alleged Medicare Fraud and Abuse: How to Deal with Surprise Visits from Government Agents

 

There are a variety of Medicare compliance issues that health care providers are forced to deal with on a very regular basis.  These include false claims, overpayments, compliance programs, and billing errors.  Health care providers should implement an action plan to guide them in the event that a government agent shows up to inquire about a particular issue, or has a subpoena or a search warrant authorizing the seizure of documents.

 When developing an appropriate policy, there are several things that the organization should consider:

 1.      Determine what agency or agencies the government official or officials are from.  Is it OIG, DOJ, the state Medicaid fraud control unit, etc.?  Be sure to obtain copies of their cards and to verify their credentials.

2.      Call your attorney and report the presence of the agents and the names of their agencies. Ask the agents for a main contact so you do not need to duplicate medical and other records for each agency.

3.      Do not take a confrontational approach with government agents.  They are just doing their jobs.

4.      Do not attempt to interrupt or interfere with their investigation.

5.      Try to cooperate and collaborate – this is essential to resolving whatever issue brought the agents to your workplace.  For instance, try to explain what records are relevant and dissuade officials from seizing records that are irrelevant to the investigation.

6.      Do not assume that your organization will be accused of a crime.

7.      If the records being seized are electronic, provide them in CD or other unalterable formats.

 

By taking the above suggestions and creating a policy tailored to your workplace, you will be better able to handle unexpected government visits in the even that they do occur.  Preparation in advance is the key to dealing with Medicare compliance issues and claims.

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com

 

New Medicare Law Enacts Changes that Affect Providers, Insurers, Pharmacies, and Beneficiaries.

 

            On July 15, 2008 Congress voted to override President Bush’s veto, thus enacting the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).  The new law implements several changes affecting matters ranging from patient coinsurance rates for mental health services to the reimbursement fees paid to physicians under Medicare. Below is a summary of the wide range of changes made to Medicare by MIPPA. 

 

            Coverage for “Preventive Services” Improved and Expanded:

 

The Secretary of Health and Human Services (“HHS”) is now authorized to cover beneficiaries’ costs for “additional preventive services.”  So long as the services are deemed to be reasonable and necessary for the prevention or early detection of an illness or disability, preventative services are now covered by Medicare.  In addition, physicians can now measure a beneficiary’s body mass index and discuss “end-of-life planning” with the beneficiary in an initial preventive physical examination.  End-of-life planning can be either verbal or written information about what the patient wishes to happen if he or she is unable to make health care decisions and whether the physician is willing to follow the patient’s wishes.  The Act also waives the deductible for the “Welcome to Medicare” initial preventive examination during an individual’s first year of Medicare eligibility.

 

Mental Health Services:

 

The Act harmonizes patient coinsurance rates for outpatient psychiatric services with the levels for all other outpatient medical care. Prior to MIPPA, outpatient mental health services impose a 50% coinsurance rate, as compared to 20% for most other services. MIPPA phases in a lower coinsurance rates for mental health services to provide a 20% rate by 2014.

 

New Limits on “Medicare Advantage” and prescription drug plans:

 

Certain sales and marketing activities by firms offering Medicare Advantage or Plan D prescription drug plans are now prohibited by law.  Such prohibited acts include any direct, unsolicited contact with a potential enrollee, such as door-to-door or outbound telemarketing and requires limitations on commissions and gifts, effective for the 2010 plan year.  Companies cannot provide meals to prospective enrollees, no matter what the value of the meal.  Further, companies may not engage in “cross selling,” which means the company cannot sell any non-health related products during any marketing activity or presentation conducted with respect to a Medicare Advantage Plan.

 

 

Coverage for “Qualified Individuals” Extended Through 2009: 

 

For individuals and families who would otherwise qualify for Medicare but for the fact that their income is otherwise too high for coverage under state law,  Federal law offers coverage to those individuals or families so long as their income is between 120% and 135% of the poverty line.  This is known as the “Qualifying Individual” program and was scheduled to expire at the end of June of 2008.  The Act extends the program until December 31, 2009.

 

The Commissioner of Social Security is Required to Provide Aid to Individuals Applying for Low Income Subsidies:

 

The Act requires the Commissioner of Social Security (the “Commissioner”) to eliminate barriers to enrollment by requiring the Commissioner to provide information and applications to individuals applying for either the Low-Income Subsidy program or Medicare Savings Program.  Individuals wishing to apply or otherwise identified as potentially eligible under those programs must be assisted with the application process.

 

States can no longer go after the Estates of Deceased Beneficiaries:

 

MIPPA removes the requirement that States collect from the estates of deceased former Medicaid beneficiaries the Medicare cost sharing benefits that were paid while the deceased was enrolled in the Medicare Savings Programs..

 

Pending Cuts in Physician Fees are Blocked:

 

Former law required a 10.6% cut in physician fees under a “Sustainable Growth Program.”  One of MIPPA’s primary goals was to block the scheduled reduction in physician fees. Congress feared that such a drastic cut would lead to an exodus of physicians from the Medicare program. The Act further requires the secretary to submit a plan to Congress for transition to a “value-based” purchasing program for physicians other providers.

 

New Incentives for Electronic Prescriptions; Future holds Penalties:

 

The Act provides incentives for physicians to adopt technology that will allow them to prescribe medication to their patients electronically.  To qualify for the incentive, the provider must be a “successful electronic prescriber.”  A successful electronic provider is one who either reports at least 50% of any electronic prescribing quality measures if such a measure is in place or, if the Secretary elects, submitted a sufficient number of electronic prescriptions under part D during the applicable period.  In 2009 and 2010, providers who qualify for the incentive will receive a 2.0% bonus on top of all the charges allowed for furnished services.  That incentive decreases to 1.0% in 2011 and 2012, and 0.5% in 2013. However, beginning in 2011, providers are required to use electronic prescriptions.  Failure to “e-prescribe” will result in a 1% cut in payments in 2012, 1.5% in 2013, and 2.0% for 2014 and all subsequent years.

 

Accreditation Now Required for Certain Imaging Services:

 

MIPPA requires a supplier of the “technical component of advanced diagnostic imaging services” to be accredited in order to be eligible for payment by Medicare.     This includes MRIs, computed tomography and nuclear medicine such as positron emission tomography.

 

Pharmacists must be paid within 14 days of Submitting Electronic Claims:

 

            Prescription drug plans must remit payment to pharmacies submitting “clean claims” within 14 days, if the claim is submitted electronically, and 30 days for claims submitted otherwise.  The Act prescribes the procedure prescription drug plans must implement if they determine a claim is not “clean,” meaning a claim with no defect, impropriety, or circumstance preventing timely payment).  If the prescription drug plan fails to notify the claimant that it has deemed the claim “not clean” within ten days of receipt of electronic claims or within 15 days of receipt of all other types of claims, the drug plan cannot subsequently deny payment based on any defect of the claim.

           

            Pharmacies contracting with long-term care facilities are given a statutory window for submitting claims to Medicare.  The pharmacies must have “no less than 30 days but no more than 90 days” to submit their claim for re-imbursement.

 

            New Drug Coverage:

 

            Beginning January 1, 2012, Medicare Part D drug coverage is expanded to include coverage for barbiturates if the barbiturates are used to treat epilepsy, cancer, or a chronic mental health disorder.  This means that popular anti-depressants will now be covered by Medicare Part D prescription drug plans.

 

Raises the Allowed Asset Levels in the Medicare Savings Program:

 

            Current law limits the asset level allowed in the Medicare Savings Program held by beneficiaries to $4,000 for individuals and $6,000 for couples. These limits have not been changed since 1989. The MIPPA, however, raises these asset levels to $6,000 for individuals and $9,000 for couples in 2008.

 

 

 

© 2008 Parsonage Vandenack Williams LLC

 

For more information, contact info@pvwlaw.com