backFEATURED ARTICLES
CMS Finalizes Rule Concerning ACOs and the Medicare Shared Savings Program – On June 4, 2015, CMS issued final regulations revising the Medicare Shared Savings Program, including changes to provisions relating to the payment of Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program. The final rule reflects CMS’s consideration of comments received in response to its December 8, 2014 proposed rule. Among other things, the final rule creates a new “Track 3” option for shared savings that would permit participants to share greater financial risk and reward (up to 75%).
Under the Medicare Shared Savings Program, providers of services and suppliers that participate in ACOs continue to receive traditional Medicare fee-for-service payments under Parts A and B, but the ACOs may be eligible to receive a shared savings payment if they meet specified quality and savings requirements. The program is voluntary and accepts applications on an annual basis. Applicant organizations agree to participate in the program for three years. There currently are more than 400 ACOs serving in excess of 7 million Medicare beneficiaries.
In the final rule, CMS:
- Creates a new Track 3 based on some of the successful features of the Pioneer ACO Model, including higher rates (up to 75%) of shared savings, the prospective assignment of beneficiaries, and the opportunity to use new care coordination tools;
- Streamlines data sharing between CMS and ACOs, helping ACOs more easily access patient data securely for quality improvement and care coordination to drive critical improvements in beneficiaries’ care;
- Establishes a waiver of the 3-day stay skilled nursing facility (SNF) rule for beneficiaries who are prospectively assigned to ACOs under Track 3; and
- Refines policies for resetting ACO benchmarks to help ensure that the program continues to provide strong incentives for ACOs to improve patient care and generate cost savings.
The final rule also announces CMS’s intent to propose further improvements to the benchmarking methodology later this year.
A copy of CMS’s final rule, which will be published in the Federal Register on June 9, is available here. CMS’s press release announcing the final rule is available here.
Reporter, Ramsey Prather, Atlanta, + 1 404 572 4624, rprather@kslaw.com.
Senate Finance Committee Advances Medicare Audit and Appeals Bill – On June 3, 2015, the Senate Finance Committee approved by voice vote the Audit & Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act of 2015. Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) were joined by Committee members in commending the bill as a good balance between rooting out waste and eliminating “bureaucratic water torture” for responsible providers. Several Senators, on both sides of the aisle, voiced strong support for reforming the Medicare audit program in order to reduce burdens on providers.
The AFIRM Act includes several provisions designed to reduce audit burdens for Medicare providers, including:
- Making the audit practices and review methodologies of Medicare contractors more transparent, and requiring the Secretary’s approval of contractor audit review guidelines before their use by Medicare contractors;
- Directing CMS to publish specific statistics by contractor and provider type that reveal the success rate for providers who appeal Medicare contractor denials;
- Creating an Ombudsman for Medicare Reviews and Appeals who would be tasked with identifying, investigating, and assisting in the resolution of complaints and inquiries involving the Medicare review or appeals process;
- Establishing a “secure internet based system” to determine the status of claims under review by any Medicare audit or oversight contractor or in process as an appeal;
- Creating an alternative dispute resolution process for voluntary resolution of large volumes of pending appeals involving similar issues of law or fact; and
- Directing the Secretary of HHS, within six months of enactment, to report to Congress on recommendations to change the payment structure for Recovery Audit Contractors (RACs) from incentive-based to non-incentive based without additional financial burdens to providers.
Others provisions of the AFIRM Act are designed to reform the Medicare administrative appeal system in order to lower the number of pending appeals, including raising the amount in controversy for review by an Administrative Law Judge (ALJ).
The next step in the legislative process is to convert this Chairman’s Mark of conceptual language to legislative language, at which point it is anticipated that a bill would be introduced in the Senate. The Chairman’s Mark and related amendments and materials are available on the Senate Finance Committee’s website by clicking here.
The King & Spalding RAC Coalition continues to press for fundamental and lasting RAC reform. The Coalition is an ad-hoc group of hospital clients created in April 2013 in an effort to communicate jointly to CMS and Congress the need for meaningful and common-sense reforms to the RAC program.
Reporters, Mark Polston, Washington D.C., + 1 202 626 5540, mpolston@kslaw.com; Allison Kassir, Washington D.C., + 1 202 626 5600, akassir@kslaw.com.
CMS Increases Medicaid Enrollment Screening Requirements – According to a new Government Accountability Office (GAO) report, state Medicaid programs are not properly screening beneficiaries and providers for fraudulent activity and ineligibility. The GAO found that states were concurrently paying for beneficiaries, and paying for deceased or incarcerated beneficiaries. Further, hundreds of providers received improper payments due to problems like suspended licenses or exclusion from federal healthcare programs. Soon after the GAO report, CMS announced that states must, within one year, implement fingerprint-based criminal background checks (FCBC) for “high-risk” newly enrolling providers or those subject to revalidation.
Examining FY 2011 data from Arizona, Florida, Michigan, and New Jersey, the GAO found that approximately 8,600 beneficiaries had services paid for concurrently by two or more of those states in violation of federal regulations, totaling over $18.3 million. Furthermore, around 200 deceased beneficiaries corresponded with $9.6 million in benefits after their date of death. Lastly, approximately 3,600 incarcerated beneficiaries received $4.2 million in benefits, which the GAO labeled as indicating identity theft. The GAO also found inconsistencies with Social Security numbers and mailing addresses, which likewise implicated millions of dollars in payments of Medicaid benefits.
Additionally, the GAO examined provider payments and found that approximately 90 providers, working with suspended or revoked licenses, received $2.8 million in Medicaid payments. Another approximately $600,000 in payments were given to deceased providers, excluded providers, or providers with “virtual” (that is, a P.O. Box) mailing addresses. The GAO also found a number of providers with foreign addresses, or addresses that did not appear in United States Postal Service records.
The report also highlighted steps CMS has already taken to enhance Medicaid enrollment verification and data screening. Because some of these measures occurred subsequent to FY 2011, GAO noted that some of the problems addressed in its report may now be less of an issue. Nonetheless, gaps remain, including concerns about data sharing among state Medicaid programs.
Just after the release of the GAO report, on June 1, 2015, CMS sent a letter to all state Medicaid directors directing implementation of FCBCs for “high-risk” provider enrollees. Under regulations adopted in February 2011, States are required to establish categorical risk levels for types Medicaid providers who pose an increased financial risk of fraud, waste, or abuse, and States must screen initial Medicaid applications and re-enrollment and revalidation applications based on each provider’s categorical risk level. FCBCs are required for all “high-risk” providers, including any individual with a 5 percent or greater direct or indirect ownership interest in the provider. CMS’s letter advises that States have 60 days from the date of the letter to begin implementation of the FCBC requirement, and must complete implementation within 1 year.
If a provider fails to submit to the FCBC, or is determined to have been convicted of a criminal offense related to the person’s involvement with a federal healthcare program within the last 10 years, the state must terminate or deny enrollment. Although states have some flexibility in categorizing risk, they must at minimum apply Medicare designations of “high” risk. All home health agencies and durable medical equipment suppliers are “high” risk, as are providers who have had payment suspended or billing privileges revoked within the last 10 years.
If a “high-risk” provider is enrolled in, and therefore presumably already screened by Medicare, state Medicaid agencies are not required to conduct additional FCBCs. States may also rely on other state Medicaid agency FCBC screening if the provider is enrolled in that other state program and has met certain revalidation requirements.
The GAO report was released May 29, 2015, and is available here. The CMS guidance was released June 1, 2015, and may be found here.
Reporter, Elizabeth N. Swayne, Washington, D.C., + 1 202 383 8932, eswayne@kslaw.com.
CMS Considers Whether to Eliminate Certificate of Medical Necessity/DME Information Forms – CMS recently hosted a special open door forum soliciting reactions on whether to eliminate Certificate of Medical Necessity (CMN) and Durable Medical Equipment Information forms as required documents to determine medical necessity. Comments are due June 12, 2015.
CMS noted that the forms often conflict with the medical record, which CMS reviewers ultimately will look to in determining medical necessity. Although CMS is considering no longer requiring suppliers to collect the information on CMS-developed forms, CMS still would require the necessary data elements be submitted on the 837 claim form. Comments on the topic may be sent to CMS at ReducingProviderBurden@cms.hhs.gov through June 12, 2015. Additional information may be found here.
Reporter, Christina A. Gonzalez, +1 713 276 7340, cagonzalez@kslaw.com.
Also in the News
New Agency Policy Permits Entrepreneurs to Access CMS Data – On June 2, 2015, CMS announced that it will soon allow innovators and entrepreneurs to access CMS data that was previously off-limits to researchers who intended to use the data to develop products and tools for sale. For more information, click here.
King & Spalding Roundtable on Navigating the New “Expedited Access Pathway” Program for Medical Devices – On Thursday, June 18, 2015, King & Spalding will host a webinar focused on the new FDA “Expedited Access Pathway” (EAP) program. For more information and to register, click here.
King & Spalding Hosts Reception at AHLA – King & Spalding cordially invites you to a reception in conjunction with the American Health Lawyers Association (AHLA) Annual Meeting. The reception will be held on June 30, 2015 from 5:00 – 7:00 p.m. on the rooftop deck of King & Spalding’s Washington office. For more information and to RSVP, please click here.
The content of this publication and any attachments are not intended to be and should not be relied upon as legal advice.