CMS has issued a display copy of its 2011 Inpatient Prospective Payment System Proposed Rule. CMS proposes to update payment rates to general acute care hospital by 2.4% to adjust for inflation, but apply a -2.9% Documentation and Coding Adjustment (DCA). The DCA would continue CMS’s efforts to adjust payments to account for changes in documentation and coding practices after the adoption of the MS-DRG system. Such changes in coding practices resulted in higher aggregate payments that did not reflect an actual increase in patient severity of illness. CMS is phasing in the DCA adjustments over time. Overall, CMS estimates that after these proposed changes to the payment rates and other factors, the Proposed Rule would cause a 0.1% drop in total payments made to general acute care hospitals for operating expenses. A few other highlights from the Proposed Rule include:
- Proposed additional quality measures for hospitals to report under the Reporting Hospital Quality Data for Annual Payment Update program.
- Proposed changes to Medicare’s hospital conditions of participation regarding the types of practitioners who may provide rehabilitation services and respiratory care services.
- Proposed changes concerning effective dates for provider agreements and supplier approvals.
- Proposed clarifications concerning whether certain taxes are considered allowable costs.
CMS also proposes to update long-term care hospital (LTCH) rates by 2.4% for inflation, but apply a -2.5% DCA. Overall, CMS expects that after these proposed changes and others, total payments to LTCHs to increase by 0.8%.
CMS notes that it did not have time to address provisions in the Patient Protection and Affordable Care Act enacted on March 23, 2010. CMS, however, will issue separate proposed rules relating to provisions of the Act. Comments to the Proposed Rule are due by June 18, 2010. You can review CMS’s display copy here and summaries from CMS here and here.
On April 15, 2010, the President signed the Continuing Extension Act of 2010 (H.R. 4851). The Act, among other actions, delays the 21% cut in Medicare physician reimbursement through May 31, 2010. The cut was originally set to take effect on January 1, 2010, but Congress already delayed the cut several times this year. The latest delay expired April 1, 2010, but CMS instructed contractors to withhold processing claims for ten business days in April in anticipation that Congress would take further action to prevent the cut. The delay once again buys Congress time to fix the sustainable growth rate formula that is responsible for the reimbursement cut. You may access the Act here.
Although Congress has not yet delayed the 21% reimbursement cut set to take effect April 1, 2010 for services paid under the Medicare Physician Fee Schedule, CMS believes Congress will take action. Accordingly, CMS has instructed its contractors to hold claims for services paid under the MPFS for the first ten business days of April. The hold will apply to claims with April 1 or later dates of service. The hold will give Congress some time to act on the payment cut after it returns April 12 from a recess. You may view an email from CMS announcing the ten business day hold here.
The OIG’s Compendium lists the ”significant,” but not yet implemented, recommendations that the OIG has provided to the Department of Health & Human Services (”DHHS”). The OIG believes these recommendations have the potential for cost savings and greater program efficiency. A number of the recommendations are aimed at the Medicare and Medicaid programs. Among its “priority” recommendations, the OIG includes:
- Modifying policies to eliminate Medicare payments for hospital bad debts.
- Ensuring the processing of Medicare denial of payment remedies for noncompliant nursing homes.
- Ensuring that hospice claims for beneficiaries in nursing facilities comply with Medicare coverage requirements.
- Adjusting the eye global surger fees to reflect the number of E&M services actually being provided.
- Ensuring that medical equipment suppliers comply with Medicare enrollment standards.
- Modifying payments to Medicare Advantage organizations.
- Placing a ceiling on adminsitrative costs included in the bid proposals of Medicare Advantage organizations.
You may view the entire 194-page Compendium for 2010 here.
On March 2, the President signed the Temporary Extension Act of 2010 (H.R. 4691). Among other actions, the Act delays the impending 21% cut in Medicare physician reimbursement through March 31, 2010. The delay buys Congress time to create a more permanent fix to the sustainable growth rate formula that would cause the 21% reduction in physician reimbursement. You may access the Act here.
The OIG has issued an updated Special Fraud Alert on telemarketing by DME suppliers. The updated Alert was apparently issued in light of information that some DME suppliers continue to use marketing firms to place unsolicited telephone calls to Medicare beneficiaries. The original alert was published in March 2003.
The Alert reminds DME suppliers that federal law generally prohibits DME suppliers from making unsolicited telephone calls to Medicare beneficiaries regarding the furnishing of DME, except in some limited circumstances. The rule applies even if another firm contacts the beneficiary on the DME supplier’s behalf. The Alert also reminds DME suppliers that claims for items or services generated from a prohibited solicitation could expose the DME supplier and the telemarketer to criminal, civil and administrative penalties. You can review the OIG’s Alert here.
The President has recently signed the Department of Defense Appropriations Act of 2010. The Act provides for a 0% update to the 2010 Medicare Physician Fee Schedule (MPFS) through February 28, 2010, a change from the 21% reduction that was set to take effect January 1, 2010. In light of the change, Medicare contractors will hold claims with 2010 dates of services to allow time for the contractors to receive the new payment files and to perform testing. CMS has instructed contractors to begin processing claims under the new MPFS rates no later than January 19, 2010. CMS expects little effect on provider cash flow because, even without the hold, contractors may not pay an electronic claim sooner than 14 calendar days from its date of receipt. More information is available here at CMS’s website.
The Act, titled the Medicare Physician Payment Reform Act of 2009 (H.R. 3961), passed the House of Representatives by a vote of 243-183. The Act will repeal the 21.2% cut in Medicare reimbursement for physician services in 2010. The Act will also create a new sustainable growth rate formula. The Act, available here, still faces a vote in the Senate.
The Center for Medicare and Medicaid Services (“CMS”) recently published its 2010 Outpatient Prospective Payment System Final Rule (“Final Rule”). As part of its Final Rule, CMS changed and clarified the direct supervision requirements for hospital outpatient therapeutic services and procedures. The result of these changes is a relaxation of the direct supervision requirements for outpatient therapeutic services and procedures and added flexibility. Nevertheless, the Final Rule still presents challenges for hospitals in meeting the supervision standard. Read more…
On November 7, 2009, the House of Representatives approved the Affordable Health Care for America Act by a vote of 220 to 215. You can access the Act here. A bill has not yet been introduced for a vote in the Senate.
