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Archive for July, 2015

Final FY 2016 IPPS and LTCH PPS Rule Issued

Friday, July 31st, 2015

On July 31, the Centers for Medicare & Medicaid Services (CMS) issued its hospital inpatient prospective payment system (IPPS) and Long Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule for fiscal year (FY) 2016 which increases rates to acute care hospitals by 0.9% after accounting for inflation and other adjustments. Specifically, the final rule includes an initial market-basket update of 2.4% for those hospitals that were meaningful users of electronic health records in FY 2014 and that submit data on quality measures, less a productivity cut of 0.5 percentage point and an additional market-basket cut of 0.2 percentage point. The rule also finalizes a 0.8 percentage point cut that fulfills, in part, the requirement of the American Taxpayer Relief Act of 2012. In addition, the rule includes ACA-mandated Medicare Disproportionate Share Hospital (DSH) reductions, reducing the overall Medicare DSH payments by $1.2 billion in FY 2016. CMS also finalized its proposal to require hospitals to submit certain clinical quality measures electronically in calendar year 2016 for payment in the FY 2018 Inpatient Quality Reporting program. The agency, however, will only require the submission of four electronic clinical quality measures rather than the 16 it had proposed. CMS also expands the patient population of the pneumonia readmission measure used in the Hospital Readmissions Reduction Program beginning in FY 2017. However, it will exclude certain patients from the expanded population. Regarding the two-midnight policy, CMS did not extend the partial enforcement delay that expires on September 30.

The final rule was published in the Federal Register on August 17. Comments are due by September 29. The rule is effective October 1.

The final rule can be found at https://federalregister.gov/a/2015-19049

FY 2016 SNF Final Rule Published

Thursday, July 30th, 2015

On July 30, the Centers for Medicare & Medicaid Services (CMS) published a final rule updating Medicare fee-for-service payments for skilled nursing facilities (SNF) for fiscal year 2016. The rule provides an overall 1.2% update compared to FY 2015 payments, which includes a 2.3% market-basket update, a 0.6 percentage point forecast error reduction that accounts for the difference between the FY 2014 market-basket update and the actual market change for that year, and the statutorily mandated 0.5 percentage point productivity cut. The net update for rural hospital-based SNFs is estimated to be 0.6%, while the net update for urban hospital-based SNFs is 1.4%.

The final rule was published in the Federal Register on August 4. The final rule can be found at https://federalregister.gov/a/2015-18950

Over 55 Million Americans Covered by Medicare

Tuesday, July 28th, 2015

As Medicare and Medicaid celebrate their 50th anniversary, the Centers for Medicare & Medicaid Services (CMS) released updated Medicare state-by-state enrollment numbers, showing that more than 55 million Americans are covered by Medicare.


In 1966, approximately 19.1 million Americans were covered by Medicare; in 2012, there were nearly 52 million beneficiaries. Today’s enrollment numbers represent a three million person increase during the last three years. According to a statement by Andy Slavitt, CMS acting administrator, “Over the last 50 years, Medicare has become part of the fabric of our communities, protecting the well-being and financial security of millions of American families as they age or if they become disabled. In doing so, Medicare has kept up with dramatic demographic changes and led the charge toward improving health care delivery

The press release can be found at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-07-28.html

Anthem and Cigna Merger Agreement Announced

Friday, July 24th, 2015

Anthem Inc. announced plans to acquire Cigna Corporation for $54.2 billion in cash and stock. The combined company would have about 53 million medical members, merging Anthem’s Blue Cross and Blue Shield presence in 14 states and Medicaid Amerigroup brand in 19 states with Cigna’s U.S. and global services. They expect the transaction to close in the second half of 2016, pending regulatory and shareholder approvals. Anthem President and CEO Joseph Swedish would serve as chairman and CEO of the combined company.

For more information, visit http://betterhealthcaretogether.com

CMS Identifies and Prevents $820 Million in Improper Medicare Payments

Thursday, July 16th, 2015

After three years of operations, the Centers for Medicare & Medicaid Services (CMS) reported that the agency’s advanced analytics system, called the Fraud Prevention System, identified or prevented $820 million in inappropriate payments in the program’s first three years. The Fraud Prevention System uses predictive analytics to identify troublesome billing patterns and outlier claims for action.  The Fraud Prevention System identified or prevented $454 million in 2014 alone.

In future years, CMS plans to expand the Fraud Prevention System and its algorithms to identify lower levels of non-compliant health care providers who would be better served by education or data transparency interventions.

For more information, please see the Report under “Guidance and Reports” at: http://www.cms.gov/About-CMS/Components/CPI/Center-for-program-integrity.html


President to Nominate Slavitt for CMS Administrator

Friday, July 10th, 2015

President Obama has announced his intent to nominate Andy Slavitt for Centers for Medicare & Medicaid Services (CMS) administrator. Mr. Slavitt has served as acting administrator since Marilyn Tavenner stepped down in March. The nomination will require Senate confirmation.

For more information, go to https://www.whitehouse.gov/the-press-office/2015/07/09/president-obama-announces-more-key-administration-posts

2016 Medicare Physician Fee Schedule Proposed Rule Issued

Wednesday, July 8th, 2015

The Centers for Medicare & Medicaid Services (CMS) has issued its proposed rule for the physician fee schedule for calendar year 2016. Under the proposal, physicians would have a payment increase of 0.5%, as required by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. CMS also proposes to pay for advanced care planning services, which include explanation and discussion of advance directives by a physician or other qualified health professional, and requests comment on certain provisions of the Merit-based Incentive Payment System to be implemented in 2019 under MACRA. Other provisions in the proposed rule include a proposal to expand required reporting of the Consumer Assessment of Healthcare Providers and Systems survey to group practices of 25 or more eligible professionals; the use of star ratings on Physician Compare; and the proposed application of the value-based payment modifier to groups consisting of only non-physician EPs, such as physician assistants.

The proposed rule was published in the July 15 Federal Register, and comments are due September 8.

The proposed rule can be found at https://federalregister.gov/a/2015-16875

CMS Releases Guidance on ICD-10

Tuesday, July 7th, 2015

The Centers for Medicare & Medicaid Services (CMS) has released guidance related to its July 6th announcement that Medicare audit contractors will not deny certain Part B physician fee schedule claims based solely on the specificity of the ICD-10 code for 12 months after ICD-10 implementation. The guidance answers frequently asked questions about the announcement, which also dealt with related quality reporting flexibility.

The guidance can be found at https://www.cms.gov/Medicare/Coding/ICD10/Clarifying-Questions-and-Answers-Related-to-the-July-6-2015-CMS-AMA-Joint-Announcement.pdf

CY 2016 OPPS and ASC Medicare Proposed Rule Released

Thursday, July 2nd, 2015

On July 1, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule for calendar year (CY) 2016 for the hospital outpatient prospective payment (OPPS) and ambulatory surgical center (ASC) payment systems. Under the rule, there would be a net decrease in OPPS payments of –0.1% in CY 2016. The reduction is based on the projected hospital inpatient market basket increase of 2.7% for services paid under the hospital inpatient PPS minus both a 0.6 % adjustment for multi-factor productivity and a 0.2% adjustment to the market basket. There would also be an additional proposed 2.0% adjustment to the payment update to account for excess packaged payment for laboratory tests.

In addition, CMS proposes to alter its two-midnight policy so that certain hospital inpatient services that do not cross two midnights may be appropriate for payment under Medicare Part A if a physician determines and documents in the patient’s medical record that the patient requires reasonable and necessary admission to the hospital as an inpatient.

CMS conducted a comprehensive review of the entire outpatient PPS clinical APCs and proposes to restructure, reorganize and consolidate many APCs. This would result in fewer APCs overall for nine clinical APC families. In addition, the agency is proposing nine new C-APCs including some surgical APCs and a new C-APC for comprehensive observation services that will include all primary procedures found on the observation claim.

The agency also proposes changes to the related enforcement requirements, proposing to use Quality Improvement Organizations (QIO) to conduct first-line medical reviews of the majority of patient status claims rather than Medicare Administrative Contractors (MAC) or Recovery Audit Contractors (RAC).

The proposed rule was published in the July 8 Federal Register. CMS will accept comments until August 31, 2015.

The Federal Register can found at https://federalregister.gov/a/2015-16577