1.800.456.4350 info@prgweb.com

Medical Industry Reimbursement News

Value-Based Insurance Design Model Refinements Announced

August 10th, 2016

The Centers for Medicare & Medicaid Services (CMS) has announced refinements to the design of the second year of the Medicare Advantage (MA) Value-Based Insurance Design Model (MA-VBID). The model will test whether giving Medicare Advantage (MA) plans flexibility to offer supplemental benefits or reduced cost sharing to targeted groups of enrollees with certain chronic conditions improves health outcomes and reduces costs. The model will begin in January 2017 in seven states, and in more three states in 2018. In the second year of the model, CMS will adjust the clinical categories for which participants may offer benefits and change the minimum enrollment size for some MA and prescription drug plan participants.

The news release can be found at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-08-10-2.html

Final FY 2017 Hospital IPPS and LTCH PPS Rule Issued

August 2nd, 2016

On August 2, the Center for Medicare & Medicaid Services (CMS) issued the final rule for fiscal year (FY) 2017 Hospital Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) Prospective Payment System (PPS). CMS estimates a rate increase to acute care hospital of 0.95% for hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and demonstrate meaningful use of certified electronic health record (EHR) technology. CMS projects total medical spending on inpatient hospital services will increase by about $746 million in fiscal 2017. CMS estimates that LTCH PPS payment will decrease by 7.1%

Key provisions of the 2017 IPPS Final Rule:

The Two Midnight Policy

In the final rule, CMS removed this adjustment for FY 2017, as well as its effects for FYs 2014 through 2016. CMS believes the assumptions underlying the -0.2 percent adjustment were reasonable at the time they were made; however, in light of the unique circumstances surrounding this adjustment, the agency decided to remove it.

Medicare Disproportionate Share Hospital (DSH) Payments

Medicare disproportionate share hospital (DSH) payments will be reduced by 75%, or $49.9 billion, by 2019. CMS will distribute nearly $6 billion in DSH payments in FY 2017, about $400 million less than in FY 2016.

Hospital Inpatient Quality Reporting (IQR) Program

In the final rule, CMS added four new claims-based measures (three clinical episode-based payment measures and one communication and coordination of care measure) starting with the FY 2019 Inpatient Quality Reporting Program (IQR). CMS also removed 15 measures for the FY 2019 payment determination.

Hospital Value-Based Purchasing (VBP) Program

CMS made changes to the Hospital Value-Based Purchasing (VBP) Program by adding two condition-specific payment measures (one for acute myocardial infarction and one for heart failure) beginning with the FY 2021 program year, and a 30-day mortality measure following coronary artery bypass graft surgery beginning with the FY 2022 program year. CMS said the condition-specific payment measures capture payments for all care, including readmissions and subsequent cardiac events, across multiple care settings, services, and supplies during the 30-day episode of care.

Hospital Acquired Conditions (HAC) Reduction Program
CMS made several changes to existing Hospital Acquired Conditions (HAC) Reduction Program policies in the FY 2017 final rule, including changing the program scoring methodology from current decile-based scoring to a continuous scoring methodology.

The final rule was published in the Federal Register on August 22. The rule is effective October 1.

The rule can be found by going to https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-18476.pdf

IRF, SNF and Hospice 2017 Final Rules Released

July 29th, 2016

On July 29, the Centers for Medicare & Medicaid Services (CMS) released the final rules for inpatient rehabilitation facilities (IRF), skilled nursing facilities (SNF) and hospice providers for fiscal year 2017. For IRFs, CMS implements a net payment increase of 1.9%, or $145 million, compared to FY 2016. This includes a 2.7% market basket that will be offset by cuts of 0.3% for productivity and a mandated cut of 0.75%, as well as an increase of 0.3% for high-cost outlier cases. The SNF final rule implements a net payment increase of 2.4%, or $920 million, compared to FY 2016, after accounting for a 2.7% market-basket update and a 0.3% productivity reduction mandated by the Affordable Care Act (ACA). In FY 2017, hospice payments will increase by 2.1% overall, a $350 million increase compared to FY 2016. In addition, the hospice cap for FY 2017 will be updated by 2.1%. CMS also finalized new measures and other changes to the hospice, IRF and SNF quality reporting programs, as well as the SNF value-based purchasing program. The new rules will take effect on October 1st.

The rules can be found at https://federalregister.gov/a/2016-18196, https://federalregister.gov/a/2016-18113, and https://federalregister.gov/a/2016-18221

CMS Releases Hospital Star Ratings

July 27th, 2016

On July 27, the Centers for Medicare & Medicaid Services (CMS) released its new star ratings for hospitals on the Hospital Compare website. The data provides information on the national distribution of overall hospital quality star ratings and by hospital characteristics, including bed size, teaching status, safety-net status, eligibility for Disproportionate Share Hospital (DSH) payments, and critical access hospital status.

For more information, go to https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-07-21-2.html

Bundled Payment Models for Cardiac and Hip Fracture Care Proposed

July 25th, 2016

The Centers for Medicare & Medicaid Services (CMS) has proposed a new payment model that would bundle payment to hospitals for heart attack and cardiac bypass surgery services. In addition, the proposed rule would expand the existing Comprehensive Care for Joint Replacement (CJR) model to include other surgical treatments for hip and femur fractures. Under both the new cardiac bundled payment model and the expanded CJR model, the hospital in which the initial services are provided would be held accountable for the quality and costs of care for the entire episode of care from the time of the hospital stay through 90 days after discharge. The hospital would either earn a financial reward or be required to repay Medicare for a portion of the costs based on its performance on cost and quality for the episode. The cardiac model would be mandatory for hospitals in 98 geographic areas across the country.

The proposed rule can be found https://federalregister.gov/a/2016-17733

Providers Selected to Participate in Million Hearts Payment Model

July 21st, 2016

The Centers for Medicare & Medicaid Services (CMS) has selected 516 organizations, including hospitals, to participate in the Million Hearts Cardiovascular Disease Risk Reduction Model which begins in September. The randomized controlled trial will test whether paying practices to identify and manage cardiovascular risks for Medicare patients reduces heart attacks, stroke, and Medicare costs. Participants will use an American College of Cardiology/American Heart Association calculator to measure cardiovascular risk for eligible patients and work with them to identify the best approach to reduce their risk. Half of the participants in the five-year model will serve as a control group.

For more information, visit innovation.cms.gov/initiatives/Million-Hearts-CVDRRM.

2017 Medicare Physician Fee Schedule Proposed Rule Released

July 7th, 2016

On July 7, the Centers for Medicare & Medicaid Services (CMS) issued its proposed rule for the Medicare physician fee schedule (MPFS) for calendar year (CY) 2017. After application of the 0.5% payment increase required by the Medicare Access and CHIP Reauthorization Act of 2015 and other budget neutrality cuts, CMS estimates a 0.08% decrease in physician payment rates for 2017 compared to 2016.

CMS proposes to pay for new telehealth services, including end-stage renal disease-related services for dialysis, advance care planning services, and critical care consultations, as well as expanding the Center for Medicare & Medicaid Innovation Diabetes Prevention Program model. In addition, CMS proposes a number of new codes to more accurately pay for primary care, care management and other cognitive specialties, including separate payments to primary care practices that use interprofessional care management resources to treat patients with behavioral health conditions.

The proposed rule can be found by going to https://federalregister.gov/a/2016-16097

CMS Releases 2017 HOPPS/ASC Proposed Rule

July 6th, 2016

On July 6, the Centers for Medicare and Medicaid Services (CMS) released the proposed rule updating payment rates and policy changes for the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. The proposed rule would address physicians’ and other health care providers’ concerns that patient survey questions about pain management in the Hospital Value-Based Purchasing program unduly influence prescribing practices. CMS proposes to remove the pain management dimension from the Hospital Value-Based Purchasing program to eliminate any potential financial pressure clinicians may feel to overprescribe pain medications. In addition, CMS is also currently developing and field testing alternative questions related to provider communications and pain to include in the program in future years.

CMS is also proposing policies to implement section 603 of the Bipartisan Budget Act of 2015, which provides that certain items and services provided by certain hospital off-campus outpatient departments would no longer be paid under the OPPS. Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department, rather than a physician’s office. This payment differential has encouraged hospitals to acquire physician offices in order to receive the higher rates. This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by Congress, MedPAC, and the Department of Health and Human Services Office of Inspector General. This difference in payment also increases costs for the Medicare program and raises the cost-sharing liability for beneficiaries.

The proposed rule is supporting physicians and other providers by increasing flexibility for hospitals, including critical access hospitals, which participate in the Medicare Electronic Health Records (EHR) Incentive Program. CMS proposed to streamline EHR reporting requirements, increase flexibility, and support improved patient outcomes.

In addition, new quality measures are proposed that will be added to the Hospital Outpatient Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program. These measures are focused on improving patient outcomes and experience of care. Other changes in the proposed rule would enhance the outcome requirements for organ transplant programs so that the programs may help more beneficiaries accept more grafts while maintaining compliance with Medicare standards for patient and graft survival.

CMS estimates that the updates in the proposed rule would increase OPPS payments by 1.6 percent and ASC payments by 1.2 percent in 2017.

A fact sheet on this proposed rule is available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-07-06.html.

Health Professional Shortage Areas Updated

July 1st, 2016

The Health Resources and Services Administration (HRSA) has announced its Health Professional Shortage Areas (HPSAs) for primary care, mental health, and dental care as of May 13. Qualified providers in HPSAs are eligible for increased levels of Medicare reimbursement, and entities with clinical training sites in these areas are eligible to receive priority for certain residency training program grants administered by HRSA’s Bureau of Health Workforce.

The announcement can be found by visiting https://www.gpo.gov/fdsys/pkg/FR-2016-07-01/pdf/2016-15678.pdf

HHS Releases Proposed Rule on Medicare Appeals Process

June 23rd, 2016

The Department of Health & Human Services (HHS) has released a proposed rule that would make changes to the procedures for Administrative Law Judge (ALJ) appeals of payment and coverage determinations for items and services provided to Medicare beneficiaries, in addition to other Medicare appeals. Specifically, the proposed rule would allow attorney adjudicators to hear appeals in lieu of ALJs in some cases, and allow the HHS Departmental Appeals Board to designate certain decisions as precedential.

The proposed rule can be found at https://federalregister.gov/a/2016-15192