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CMS Announces Comprehensive Primary Care Plus, a Multi-Payer Initiative to Improve Primary Care – On April 11, 2016, CMS announced its launch of the “largest-ever multi-payer initiative to improve primary care in America.” The effort is titled the Comprehensive Primary Care Plus (CPC+) model, and will build on the Comprehensive Primary Care initiative launched in 2012. Under CPC+, physicians will be assigned to one of two tracks. Practices in both tracks will receive a monthly care management fee. In addition, practices in Track 1 will receive fee-for-service payments under the Medicare Physician Fee Schedule, whereas practices in Track 2 will receive a hybrid of reduced Medicare fee-for-service payments and up-front comprehensive primary care payments for Evaluation & Management services.
According to CMS, the CPC+ model will help practices transition from the fee-for-service payment model, and will help practices (1) support patients with serious or chronic diseases, (2) give patients 24-hour access to care and their health information, (3) deliver preventive care, (4) engage patients and families in the patients’ care, and (5) work with providers to provide coordinated care.
All physician practices participating in CPC+ will receive up-front incentive payments. However, only practices that meet certain quality and utilization metrics would keep these payments. Physicians will also receive data on cost and utilization to assist in the use of data for patient care.
Within CPC+, Track 1 is designed for practices that prefer to rely primarily on fee-for-service payments, but would be eligible for a performance-based incentive payment. Track 2 is designed for practices that use enhanced health IT, provide care for patients with complex needs, and prefer to be paid through a hybrid of fee-for-service and a percentage of expected Evaluation & Management reimbursements. Practices in Track 2 would receive a higher performance-based incentive payment per beneficiary.
CMS’s announcement is available here. The corresponding fact sheet, including application instructions is available here.
Reporter, Igor Gorlach, Houston, +1 713 276 7326, igorlach@kslaw.com.
Ninth Circuit Denies Medicare Payments in Assets-Only Purchase Without Assignment of Provider Agreement– On April 11, 2016, the Ninth Circuit Court of Appeals ruled that a hospital was not entitled to Medicare payments in an assets-only purchase until the Buyer enrolled in the Medicare program because it did not accept the purchased hospital’s Medicare provider agreement. In Mission Hospital Regional Medical Ctr. v. Burwell, Case No. 13-56264, 2016 WL 1399335 (9th Cir. Apr. 11, 2016), Mission Hospital Regional Medical Center (“Mission”) sought judicial review after the Departmental Appeals Board (“DAB”) of HHS upheld an administrative law judge’s ruling that because Mission only purchased the assets of a new campus, and not the Medicare overpayment liabilities, Mission’s new campus was not accredited and thus not entitled to collect Medicare payments until it was enrolled in the program – creating a gap in Medicare reimbursement.
In June 2009, Mission, a Medicare-approved acute care hospital in Mission Viejo, California, purchased the assets of South Coast Medical Center, another Medicare-approved facility in Laguna Beach, California. Burwell, 2016 WL 1399335 at *1. Mission purchased only the assets and presumably refused assignment of the Medicare provider agrieement “to avoid South Coast’s potential liabilities under [its] Medicare provider agreement,” which included potential mandated reimbursement to Medicare for previous overpayments. Id. Accordingly, HHS determined that Mission could not bill Medicare for services at its new campus until that new entity had a separate provider agreement – an amount totaling roughly $8.4 million dollars that accrued before Mission’s enrollment application was approved by Medicare in 2010. Id. Mission unsuccessfully appealed HHS’s decision, first to an administrative law judge, then to the DAB, and then to the district court. Id. The Ninth Circuit affirmed the district court’s decision that Mission was not entitled to the payments, holding that Medicare regulations give CMS discretion about when to grant retroactive coverage, id. at *4, and that because Mission voluntarily refused to assume South Coast’s contractual liability to return the overpayments to Medicare, Mission did not (and could not) take an assignment of South Coast’s provider agreement. Id. at *3. As such, until Mission’s new campus became accredited with its own provider agreement, it was not enrolled in Medicare and therefore could not bill for services provided to Medicare beneficiaries during that time period. Id.
For the full Ninth Circuit Opinion, click here.
Reporter, Katy Lucas, Atlanta, +1 404 572 2822, klucas@kslaw.com.
GAO Recommends Additional Site-Neutral Medicare Payment Policies– On April 13, 2016, the Government Accountability Office (GAO) released another report once again recommending that Congress equalize payment rates for Medicare services across practice settings (e.g., hospital outpatient setting and a physician office).
GAO claims that certain healthcare services can be performed in multiple settings but have shifted from the physician office setting to more costly hospital settings, particularly Evaluation & Management services. GAO does not attempt to analyze why costs are higher in hospital outpatient departments, which CMS has long acknowledged are the result of increased quality, staffing and coordination that hospitals provide and independent physician practices do not. GAO attributes some of this change to “vertical consolidation” where hospitals acquire physician practices or hire physicians directly. As a result, many services that were once reimbursed at a lower payment rate when performed in the physician office setting are now classified as hospital outpatient department services and thus reimbursed at a higher rate.
Accordingly, GAO recommends that Medicare equalize such payments. GAO made the same recommendation in a December 2015 GAO Report.
The April 2016 GAO Report is available here.
Reporter, Lauren S. Gennett, Atlanta, + 1 404 572 3592, lgennett@kslaw.com.
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