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Medical Industry Reimbursement News

Limited Restart of RAC Reviews Announced

August 6th, 2014

The Centers for Medicare & Medicaid Services has announced that they will allow current Recovery Audit Contractors (RACs) to restart a limited number of claim reviews. CMS stated that most reviews will be done on an automated basis. However, a limited number will be complex reviews on certain claims, including spinal fusions, outpatient therapy services, durable medical equipment, prosthetics, orthotics and supplies, and cosmetic procedures. RACs will not review claims to determine whether the care was delivered in the appropriate setting during the restart.

For more information, go to http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Recent_Updates.html

Medicare Releases 2015 IPPS and LTCH Final PPS Rule

August 4th, 2014

On August 4, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating the fiscal year (FY 2015) Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals (LTCH). CMS announced that the payment rate update to general acute care hospitals will be 1.4% in FY 2015. The rate update for long-term care hospitals will be 0.9%. The difference in the updating is accounted for by different statutory and regulatory provisions that apply to each system.

Some key provisions included in the 2015 Inpatient Prospective Payment System (IPPS) final rule are:

  • For FY 2015, CMS is increasing the applicable percentage reduction to the Hospital Value-Based Purchasing (VBP) Program adjusting to 1.5% of the base operating MS-DRG payment amounts to all participating hospitals. CMS estimates that the total amount available for the value-based incentive payment will be approximately $1.4 billion.
  • Hospital Readmissions Reduction Program will see a maximum reduction increase from 2 to 3 percent. For FY 2015, CMS will assess hospitals’ readmissions measures endorsed by the National Quality Forum. CMS estimates that hospital readmissions for Medicare declined by a total of 150,000 from January 2012 through December 2013.
  • CMS is implementing the Affordable Care Act’s (ACA) Hospital Acquired Condition (HAC) Reduction Program. Beginning in FY 2015, hospitals scoring in the top quartile for the rate of HACs will have their Medicare inpatient payments reduced by one percent. This new program builds on the progress in this area achieved through the existing HAC program, which is currently saving $30 million annually.
  • CMS is revising the labor market areas used for the wage index based on the most recent Office of Management and Budget (OMB) Core-Based Statistical Area delineations that are based on 2010 Census data. In order to mitigate potential negative payment impacts, CMS is adopting a one-year transitional during FY 2015 that would be based on a 50/50 blend of the former wage index and the new wage index. The new wage index will take effect in full in FY 2016.

The display copy can be found by going to https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-18545.pdf

FY 2015 SNF and IRF Final Rules Released

July 31st, 2014

On July 31, the Centers for Medicare & Medicaid Services (CMS) released the final rules updating Medicare fee-for-service payments for skilled nursing facilities (SNF) and inpatient rehabilitation facilities (IRF) for fiscal year (FY) 2015. The SNF final rule provides an overall 2.0% update, with a 2.1% update for hospital-based SNFs, for FY 2015 compared to FY 2014. The IRF final rule increases FY 2015 payments by 2.4% overall compared to FY 2014 payments. In the IRF rule, CMS finalized two new health care-associated infection measures for the FY 2017 IRF quality reporting program. These measures assess the rates of Methicillin-resistant Staphylococcus aureus and Clostridium Difficile infections.

The SNF rule is available at http://www.ofr.gov/OFRUpload/OFRData/2014-18335_PI.pdf and the IRF rule at  http://www.ofr.gov/OFRUpload/OFRData/2014-18447_PI.pdf

ICD-10 Compliance Date Final Rule Issued

July 31st, 2014

The U.S. Department of Health and Human Services (HHS) has issued a rule finalizing October 1, 2015 as the new compliance date for health care providers, health plans, and health care clearinghouses to transition to ICD-10, the tenth revision of the International Classification of Diseases. This deadline allows providers, insurance companies and others in the health care industry time to ramp up their operations to ensure their systems and business processes are ready to go on that day. According to Marilyn Tavenner, CMS Administrator, “ICD-10 codes will provide better support for patient care, and improve disease management, quality measurement, and analytics,”.”

ICD-10 represents a significant change that impacts the entire health care community. As such, much of the industry has already invested resources toward the implementation of ICD-10. CMS has implemented a comprehensive testing approach, including end-to-end testing in 2015, to help ensure providers are ready. While many providers, including physicians, hospitals, and health plans, have completed the necessary system changes to transition to ICD-10, the time offered by Congress and this rule ensures that all providers will be ready.

The final rule can be found at http://www.ofr.gov/OFRUpload/OFRData/2014-18347_PI.

PCORI Awards $54.8 Million for Research Projects

July 30th, 2014

The Patient-Centered Outcomes Research Institute(PCORI) has awarded $54.8 million to support 33 new comparative clinical effectiveness studies. The research project will include studies of ways to improve outcomes for people with cardiovascular disease, diabetes, chronic pain, mental health conditions, nervous system disorders, kidney disease, multiple chronic conditions, and cancer. The projects will also compare different approaches to delivering care, improving patients’ access to care, and strengthening methods to conduct more rigorous patient-centered research.

For more information on the studies, visit www.pcori.org/pfaawards.

CMS Launches Next Phase of Quality Improvement Program

July 18th, 2014

The Centers for Medicare & Medicaid Services (CMS) has awarded additional contracts as part of a restructuring of the Quality Improvement Organizations (QIO) Program to create a new approach to improve care for beneficiaries, family, and caregivers. The new contracts, being awarded to fourteen organizations, represent the second phase of QIO restructuring. The initial phase was announced on May 9. The awardees will work with providers and communities across the country on data-driven quality initiatives. These QIOs will be know as Quality Innovation Network (QIN)-QIOs

For more information, go to http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2014-Press-releases-items/2014-07-18.html

Health Care Innovation Grants Announced

July 10th, 2014

Health and Human Services Secretary Sylvia Mathews Burwell has announced new prospective awardees to test innovative care models, bringing the total amount of funding to as much as $360 million for 39 recipients spanning 27 states and the District of Columbia. These models are designed to deliver better health care and lower costs under the Health Care Innovation Awards program.

The prospective awards range from an expected $2 million to $23.8 million over a three year period. These awards are made possible by the Affordable Care Act and round out the anticipated recipients for round two of the Health Care Innovation Awards program.  Examples include projects that promote better care for persons living with HIV/AIDS, reduce unnecessary use of emergency departments, improve pediatric dental care, promote prevention and management of cardiovascular disorders, and improve care coordination in rural areas of the country.  Earlier this year, HHS announced 12 prospective round two recipients receiving as much as $110 million in combined funding and testing models in 13 states.  Prospective recipients will receive their final Notice of Award later this summer.

The press release can be found at http://www.hhs.gov/news/press/2014pres/07/20140709b.html

2015 Medicare Physician Fee Schedule Proposed Rule Published

July 3rd, 2014

On July 3, the Centers for Medicare & Medicaid Services (CMS) released its proposed rule for the Medicare Physician Fee Schedule for calendar year (CY) 2015. Based on the propose rule, physicians will see no change in payment for the first 3 months of 2015 due to  the Protecting Access to Medicare Act of 2014. However, the sustainable growth rate (SGR) will take effect April 1, 2015, unless Congress intervenes. At that time physician would face a mandated 20.9% reduction.

Other provisions in the proposed rule include transitioning all 10- and 90-day global period codes to 0-day global periods staring in CY 2017, applying the value-based payment modifier to all physicians and physician eligible professionals, as well expanding public reporting of clinical quality measures. The agency also proposes to create a new code to report non-face-to–face chronic care management. In addition, CMS seeks a review of 65 services with Medicare allowed charges of $10 million or more as a prioritized subset of codes under the newly established statutory category of codes that account for the majority of spending under the fee schedule. The list includes SPECT, MPI, and transthoracic and stress echocardiography.

The proposed physician rule can be viewed at http://www.gpo.gov/fdsys/pkg/FR-2014-07-11/pdf/2014-15948.pdf

CY 2015 OPPS and ASC Medicare Proposed Rule Released

July 3rd, 2014

On July 3, the Centers for Medicare & Medicaid Services released the Calendar Year (CY) 2015 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Policy Changes and Payment Rates proposed rule. CMS proposes to update the OPPS market basket by 2.1 percent for CY 2015. The increase is based on the projected hospital market basket increase of 2.7 percent minus both a 0.4 percentage point adjustment for multi-factor productivity and a 0.2 percentage point adjustment required by law.

The key proposals contained in the rule are:

  • Implementation of 28 Comprehensive Ambulatory Payment Classifications (APCs) after delaying them in 2014. Services assigned to the comprehensive APCs will be defined as primary services, with payment for all other services packaged under the primary service.
  • Requirements for physician certification of inpatient admissions would be revised to apply only for long-stay cases and costly outlier cases. CMS believe that in most cases, the admission order, medical record and notes contain sufficient information to support the medical necessity of an inpatient admission.
  • Hospitals and physicians would be required to report a modifier with each procedure code billed under the physician fee schedule and in the OPPS when services are provided in an off-campus provider-based department.

The proposed rule can be viewed at http://www.gpo.gov/fdsys/pkg/FR-2014-07-14/pdf/2014-15939.pdf

Joint Commission Authority Renewed

July 1st, 2014

The Centers for Medicare & Medicaid Services (CMS) has renewed for six years The Joint Commission as a national accrediting organization for hospitals that wish to participate in the Medicare or Medicaid program. As part of the approval, The Joint Commission made changes to some of its requirements effective July 1. CMS deems organizations accredited by an approved accrediting organization to be in compliance with all Medicare conditions of participation.

The Federal Register notice can be found at http://www.gpo.gov/fdsys/pkg/FR-2014-06-27/pdf/2014-15103.pdf