Medical Industry Reimbursement News

Using his authority to make interim appointments while Congress is in recess, President Obama  has appointed Donald Berwick, M.D., as administrator of the Centers for Medicare & Medicaid Services (CMS).  Dr. Berwick was the President and Chief Executive Officer of the Institute for Healthcare Improvement, Clinical Professor of Pediatrics and Health Care Policy at the Harvard Medical School and Professor of Health Policy and Management at the Harvard School of Public Health. He is also a pediatrician, adjunct staff in the Department of Medicine at Boston’s Children’s Hospital and a consultant in pediatrics at Massachusetts General Hospital

For more information is available at http://www.whitehouse.gov/the-press-office/president-obama-announces-recess-appointments-key-administration-positions-0.

The Centers for Medicare & Medicaid Services (CMS) announced awards in the first round of Medicare’s Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies. The Medicare Improvements for Patients and Providers Act of 2008 required CMS to rebid the contracts originally awarded in the first round of the program in May 2008. The program will begin January 1 in nine areas: Cincinnati-Middletown (OH, KY and IN); Cleveland-Elyria-Mentor (OH); Charlotte-Gastonia-Concord (NC and SC); Dallas-Fort Worth-Arlington (TX); Kansas City (MO and KS); Miami-Fort Lauderdale-Pompano Beach (FL); Orlando (FL); Pittsburgh (PA); and Riverside-San Bernardino-Ontario (CA). CMS estimates that beneficiaries in those areas will see an average savings on applicable DMEPOS of 32%. Under an interim final rule issued last year, hospitals that furnish certain types of competitively bid equipment and supplies to patients are exempt from the program.

Additional information can be viewed under “Press Releases” here.

On July 2, the Centers for Medicare & Medicaid Services (CMS) issued the 2011 hospital outpatient prospective payment system (HOPPS) and the ambulatory surgery center services proposed rules rule on their website. CMS projects that proposed payment rates under the outpatient prospective payment system would result in a 2.15% increase in Medicare payment. CMS estimates the total increase in expenditures from proposed changes in this proposed rule, as well as enrollment, utilization, and case-mix changes under the OPPS for CY 2011 compared to CY 2010, to be approximately $3.9 billion. The final rule will be published in November of this year and will be implemented on January 1, 2011.

Key provisions of the proposed rule include:

• Modifying the supervision requirements for outpatient therapeutic services to require direct supervision of the initiation of a service followed by general supervision for a limited set of non-surgical extended duration services, including observation services. 
• Establishing separate APCs for partial hospitalization programs in community mental health centers (CMHCs) and for hospital-based programs. 
• Paying for the acquisition and pharmacy overhead costs of separately payable drugs and biologics without pass-through status furnished in HOPDs at 10% of the manufacturers’ average sales price. 
• Expanding the set of measures that must be reported by hospital outpatient departments to qualify for the full payment update in the succeeding year.

In addition, CMS also released two related documents, one with corrections to the CY 2010 outpatient and ambulatory surgery center services payments and a second document containing the final payment rates and addenda for the CY 2010 Medicare hospital outpatient and ASC payment system.

The 60-day comment period ends on August 31, 2010.

The proposed rule can be accessed at http://www.ofr.gov/OFRUpload/OFRData/2010-16448_PI.pdf.

On June 25, 2010, President Obama signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.”  Among other provisions, this law clarifies Medicare’s policy for payment of services provided in hospital outpatient departments on either the day of or during the three days prior to an inpatient admission (known as the 3-day payment window). 

The new law clarifies Medicare’s policy to be consistent with how hospitals have largely been billing the program as far back as 1991.  Under this policy, a hospital (or an entity wholly owned or operated by the hospital) includes in its charges for the inpatient hospital stay charges for all diagnostic services and non-diagnostic services “related” to the inpatient stay that are provided during the 3 day payment window. 

In the very near future, CMS expects to provide instructions to the hospital community through its contractors advising them how to bill for related therapeutic services provided during the 3- or 1-day payment window.  Until the instruction is issued, hospitals should include charges for all diagnostic services and all non-diagnostic services that it believes meet the requirements of this provision.  If a hospital believes that a non-diagnostic service is truly distinct from and unrelated to the inpatient stay, the hospital may separately bill for the service provided that it has documentation to support that the service is unrelated to the admission, consistent with the new provision.  

For further details, go to this link.

The Centers for Medicare & Medicaid Services (CMS) released MLN Matters Special Edition Article #SE1019 which provides updated information about the implementation of the International Classification of Diseases, 10th Edition, Clinical Modification and Procedure Coding System (ICD-10-CM/ICD-10-PCS) code.  The first ICD-10-related compliance date is January 1, 2012. At that time, the standards for electronic health transactions changes from Version 4010/4010A1 to Version 5010. 

The MLN article can be found by going to http://www.cms.gov/MLNMattersArticles/downloads/SE1019.pdf on the CMS website.

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule requiring hospitals and critical access hospitals (CAH) that participate in the Medicare and Medicaid programs to have written policies and procedures regarding the visitation rights of patients. Under the proposed rule, hospitals must inform patients or their representatives of their visitation rights, any clinical restrictions on those rights and their right to receive any visitors they designate. CMS will accept comments on the proposed rule through August 27.

More information is available at http://www.hhs.gov/news/press/2010pres/06/20100622d.html.

The Office of the National Coordinator for Health Information Technology released its final rule establishing a temporary federal process to certify electronic health records (EHR). Hospitals and physicians must use certified EHRs to receive Medicare and Medicaid incentive payments. Additional requirements to demonstrate “meaningful use” of EHRs and to qualify for the incentives have not yet been finalized but are expected to be issued shortly by the Centers for Medicare & Medicaid Services (CMS).

The final rue can be accessed at http://www.federalregister.gov/OFRUpload/OFRData/2010-14999_PI.pdf.

The American Medical Association (AMA) has named as its president-elect Peter Carmel, M.D., a pediatric neurosurgeon who serves as chairman of the Department of Neurological Surgery at the New Jersey Medical School and co-medical director of the Neurological Institute of New Jersey. Carmel will become AMA president in June 2011. He was first elected to the AMA Board of Trustees in 2002.

For further details, go to http://www.ama-assn.org/ama/pub/news/news/president-elect-carmel.shtml

The Medicare Payment Advisory Commission (MedPAC) has released its annual June report to Congress. The report reviews the Centers for Medicare & Medicare Services (CMS) role in reforming the health care delivery system, including recommendations for changing Medicare financing of graduate medical education. The Commission recommends giving CMS greater flexibility to implement certain payment reforms because, at present, the agency lacks clear legal authority to implement policies. The report also discusses the commission’s deliberations, including payment accuracy, the need to move away from volume incentives in fee-for-service Medicare, and systemic changes to better align provider incentives with a reformed delivery system.

The report is available at http://medpac.gov/documents/Jun10_EntireReport.pdf.

The Department of Health and Human Services (HHS) and Institute of Medicine (IOM) have launched an initiative to provide community health data to the public through web-based and other tools. Users will be able to download HHS data for free and integrate it into their own websites and applications. HHS has posted the initial data sets on the Centers for Disease Control and Prevention (CDC) website. The new website will include national and local data on rates of smoking, obesity, diabetes, access to healthy food and health care services utilization.

For further details, go to http://www.hhs.gov/open/datasets/communityhealthdata.html