News & Insights


November 11, 2019

Health Headlines – November 11, 2019

CMS Publishes Final Rule for CY 2020 Hospital Outpatient Prospective Payment System –On November 1, 2019, CMS posted the final rule establishing the payment rates for the Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgery Center (ASC) Payment System for calendar year (CY) 2020 (the Final Rule).  The Final Rule announces that OPPS and ASC rates will increase by 2.6 percent in CY 2020.  The Final Rule also addresses several contentious topics, including CMS’s decision to continue the rate cuts for excepted off-campus provider-based departments and 340B-acquired drugs, despite recent federal court decisions invalidating both of those policies.  Other highlights include CMS’s decision not to adopt its proposed price-transparency regulations (yet), changes to the conditions for coverage for organ acquisition costs, and a new requirement that providers obtain prior authorization for certain outpatient department services.

Continuation of Controversial Site Neutrality Payment Reductions for Excepted Off-Campus Provider-Based Departments

The Final Rule implements CMS’s controversial plan to further reduce payment on OPPS Medicare payment rates for so-called “excepted” off-campus provider-based departments (PBDs). CMS implemented initial reductions in PBD rates in CY 2019 as part of a planned two-year phased reduction. However, King & Spalding represented a group of more than 40 hospitals challenging these reductions and won a summary judgment ruling in September 2019 in the U.S. District Court for the District of Columbia vacating the portion of the CY 2019 final rule implementing the reductions. CMS nevertheless announced in the Final Rule that it plans to continue with the second year of its planned two-year phase-in by paying off-campus PBDs approximately 40 percent of the OPPS rate. For CY 2020, CMS estimates that affected hospitals will see a total decrease of $800 million (comprising $640 million of OPPS payments and $160 million of beneficiary copayments) as a result of the reduction.

As background, under Section 603 of the Bipartisan Budget Act of 2015, CMS reimburses hospitals for outpatient services provided at certain off-campus PBDs under the Medicare Physician Fee Schedule (PFS), commonly referred to as a “site neutral” payment policy. Certain off-campus PBDs furnishing services to Medicare beneficiaries prior to November 2, 2015 were excepted by Congress from these reductions and continued to be paid the applicable (and higher) OPPS rate. CMS nevertheless finalized a policy in the CY 2019 OPPS final rule to pay the lower site-neutral PFS payment rate for clinic visit services for all off-campus PBDs, even when provided in an excepted off-campus PBD. CMS planned to phase these payment reductions in over a two-year period.

In overturning the reductions implemented in the CY 2019 OPPS Final Rule, the District Court held that the reductions were outside of the scope of CMS’s authority because the agency had tried to circumvent a requirement in the OPPS statute that payment adjustments be conducted in a budget-neutral manner. CMS acknowledges the District Court’s decision in the Final Rule, but states that the agency “do[es] not believe it is appropriate at this time” to change the policy and is still considering whether to appeal.

Proposed Price-Transparency Regulations Not Yet Adopted

The Final Rule does not adopt the price-transparency regulations that CMS discussed adopting (at 45 C.F.R. Part 180) in the proposed rule issued by CMS in July 2019 for the CY 2020 OPPS. CMS indicated in the proposed rule that the proposed regulations were intended to implement a statutory requirement that hospitals make available a list of their current standard charges and a recent Executive Order instructing the agency to propose a price-transparency regulation. In the Final Rule, CMS stated that it received over 1,400 comments on the proposed regulations and that a final rule is still forthcoming.

Details regarding the initial proposed regulations are available here. Among other things, the proposed regulations would expand the “standard charges” that hospitals are required to publicize to include payer-specific negotiated charges. The proposed regulations also include requirements for hospitals to publish (1) all standard charges in a prescribed machine-readable format (e.g., .XML or .CSC) with certain standardized data elements and (2) standard charges for certain “shoppable” services in a consumer-friendly format. The Final Rule does not address whether CMS intends to modify these requirements, but CMS previously requested comments in the proposed rule regarding possible alternatives to publicizing payer-specific charges (e.g., volume-driven negotiated charges; minimum, median, and maximum negotiated charges; all allowed charges; discounted cash prices; and median cash prices).

Rural Health Wage Index

The Final Rule implements CMS’s proposal to use the Inpatient Prospective Payment System (IPPS) wage index for urban and rural areas as the wage index for purposes of determining the OPPS payment rate and copayment standardized amount for CY 2020. Notably, the IPPS final rule for CY 2020 includes an increase in the wage index for hospitals below the 25th percentile. CMS previously considered offsetting this increase by decreasing the wage index for hospitals above the 75th percentile but opted instead to implement a budget-neutrality adjustment to the national standardized amount.

Continuation of Payment Cuts for 340B-Acquired Drugs

CMS announced in the CY 2020 Final Rule that it will continue to reimburse providers for 340B-acquired drugs at the lower rate adopted in the CY 2018 OPPS final rule.  Prior to CY 2018, CMS paid providers the average sales price (ASP) plus six percent for 340B-acquired drugs.  In the CY 2018 OPPS final rule, CMS dramatically cut the rate to ASP minus 22.5 percent, which the agency believes is closer to hospitals’ actual costs for 340B-acquired drugs.  In the CY 2019 OPPS final rule, CMS expanded this policy to apply to 340B-acquired drugs administered to patients in nonexcepted off-campus provider-based departments, which are paid under the physician fee schedule instead of OPPS.

The 340B rate cut is the subject of ongoing litigation.  In late 2017, soon after the rate cut was first adopted, the American Hospital Association and several affected hospitals filed suit to challenge the new rate in the United States District Court of the District of Columbia.  On December 27, 2018, Judge Rudolph Contreras ruled that the rate cut exceeded CMS’s authority under the statute.  Am. Hosp. Ass’n. v. Azar, 348 F.Supp.3d 62 (D.D.C. 2018).  CMS has appealed that decision to the United States Court of Appeals for the District of Columbia, which just heard oral argument on the appeal last Friday, November 8, 2019.  The agency believes it is appropriate to continue the rate cut in CY 2020 pending the outcome of its appeal. 

CMS has a back-up plan in the event its appeal is unsuccessful.  CMS believes that certain language from Judge Contreras’s decision left an opening for the agency to set reimbursement rates at levels consistent with hospitals’ acquisition costs.  Therefore, on September 30, 2019, CMS published in the Federal Register a notice of intent to conduct a survey to collect drug acquisition cost data from 340B hospitals.  If CMS loses on appeal, it will use the data collected from this survey to establish new rates for 340B-acquired drugs.  CMS intimates that a rate based on this survey data would be lower than the current rate of ASP minus 22.5 percent. 

CMS also used the CY 2020 rulemaking to solicit comments on the appropriate remedy for hospitals affected by the rate cuts in CYs 2018 and 2019.  If the agency loses its appeal, it plans to propose specific remedies for CYs 2018 and 2019 in the CY 2021 proposed rulemaking.  Those proposals will be informed by the comments that CMS received to the CY 2020 rule.  CMS floated several ideas for the appropriate remedy, such as ASP plus three percent.  Alternatively, the agency is considering using the drug acquisition cost data that will be collected in its upcoming survey to determine the appropriate rate for CYs 2018 and 2019.  Commenters roundly opposed any remedy that was less than the difference between the old rate (ASP plus six percent) and the current rate (ASP minus 22.5 percent). 

CMS also asked for comments regarding the structure of the remedy for CYs 2019 and 2020.  In particular, the agency asked whether affected hospitals should be compensated retrospectively on a claim-by-claim basis or prospectively with an upward adjustment to rates in later years.  Commenters were split on this question.  Some commenters favored a retrospective remedy, noting that CMS could identify affected claims with minimal effort using the JG modifier.  Other commenters were concerned that a prospective remedy would be too complex and administratively burdensome, and instead supported an aggregate payment for each affected 340B hospital. 

CMS also asked commenters to address the issue of budget neutrality.  Commenters roundly rejected the notion that a remedy for Medicare underpayments has to be budget neutral.   Although the Medicare statute requires CMS to set prospective payment rates in a budget neutral manner, commenters argued that CMS cannot revisit those estimates ex post if its predictions turn out to be incorrect. 

Changes for Organ Procurement Organizations

The Final Rule modifies the conditions for coverage (CfCs) that Organ Procurement Organizations (OPO) must meet in order to receive payment from Medicare for the costs associated with organ procurement.  OPOs are not-for-profit entities that are responsible for procuring, preserving and transporting transplantable organs from deceased donors to eligible recipients.  If the OPO meets the CfCs, Medicare will cover the OPO’s costs for procuring, preserving and transporting an organ to a Medicare beneficiary.

The existing CfC regulations require OPOs to meet two of three outcome measures.  One of those measures is whether the observed donation rate is significantly lower than the “expected donation rate” as calculated by the Scientific Registry of Transplant Recipients (SRTR).  The regulations currently define “expected donation rate” as the rate expected for an OPO based on the national experience for OPOs serving similar hospitals and donation services, subject to adjustments for hospital characteristics.  42 C.F.R. § 486.302.  But this definition is not in sync with the definition that SRTR currently employs.  Since 2009, the SRTR has defined “expected donation rate” as the rate expected for an OPO based on the national experience for OPOs serving similar eligible donor populations subject to adjustments for patient characteristics such as age, sex, race and cause of death.  In the CY 2020 Final Rule, CMS is changing the existing regulatory definition of “expected donation rate” to conform to SRTR’s definition. 

OPOs are required to certify compliance with the CfCs every four years.  To determine whether an OPO has met the outcome performance measures, CMS looks at data from the 36 months following the start of the re-certification cycle.  Because the current re-certification cycle for all OPOs ends in 2022, and the new definition of “expected donation rate” will not take effect until January 1, 2020, CMS is making a one-time modification to the lookback period.  To determine if an OPO has met the “expected donation rate” for the 2022 re-certification cycle, CMS will use 12 of the 24 months of data between January 1, 2020 through December 31, 2021. 

In addition to changing the existing CfCs, CMS also solicited comments about two new outcome measures currently under consideration.  One proposed measure would be the actual decreased donors as a percentage of inpatient deaths among patients 75 years of age or younger with a cause of death consistent with organ donation.  The data for this measure would be derived from the CDC’s detailed mortality file.  Another potential measure under consideration is the actual organs transplanted as a percentage of inpatient deaths among patients 75 years of age or younger with a cause of death consistent with organ donation.  Most commenters supported these measures, though offered varying modifications.  CMS said that it would consider adopting these measures in future rulemakings.

Prior Authorization Process and Requirements for Certain Outpatient Department Services

Starting in CY 2020, providers will be required to submit a request for authorization prior to performing certain hospital outpatient department (OPD) services in order to receive Medicare payment for those services.  The OPD services that will require prior authorization include botulinum toxin injections, panniculectomy, vein ablation, rhinoplasty, and blepharoplasty.  CMS has observed a recent surge in these services and believes that many of them may be cosmetic services masquerading as therapeutic services.  Commenters questioned whether CMS has authority to implement preapproval requirements.  The agency responded that it has discretion under the statute to implement appropriate methods to control unnecessary increases in the volume of OPD services.  The prior approval process will not apply to ambulatory surgical centers (ASCs) and other provider types.  CMS explained that its statutory authority to implement measures to control unnecessary costs is specific to OPPS.  Therefore, the agency does not believe it has statutory authority to implement prior approval procedures requirements for other provider types. 

Pass-Through Payments for Devices: Alternative Qualification Criterion for Transformative New Devices

When a new medical device first enters the market, it can take two to three years for CMS to collect the necessary data to incorporate the cost of that device into the OPPS rates.  In the interim, the Medicare statute authorizes CMS to pay for qualifying new devices at cost (i.e., pass-through payments).  This ensures that providers receive adequate reimbursement for these devices at the outset, thereby improving the likelihood that these new devices will be immediately accessible to Medicare beneficiaries.

CMS has adopted regulations at 42 C.F.R. § 419.66 for determining whether a new medical device qualifies for pass-through status.  One criterion is that the device must substantially improve clinical outcomes. 

In the CY 2020 Final Rule, CMS modified the eligibility criteria for pass-through status.  Starting with applications for pass-through payment received on or after January 1, 2020, devices that are part of the FDA’s Breakthrough Devices Program will be treated as meeting the substantial clinical improvement criterion.  The rationale behind this change is that there is a lot of overlap between the criteria CMS uses to evaluate substantial clinical improvement and the criteria that the FDA uses to determine whether a device qualifies for the Breakthrough Devices Program. 

Changes to the Inpatient Only (IPO) List

CMS maintains a list of procedures that the agency believes should only be administered in the inpatient setting.  Any procedure on that list cannot be paid under the OPPS.  Each year, CMS considers whether a procedure can be removed from the IPO list so that it can be paid for by OPPS if performed in an outpatient setting.  In the CY 2020 Final Rule, CMS determined that Total Hip Arthroplasty (THA) (CPT code 27130) could be removed from the IPO list because the simplest THA procedure can be performed in most outpatient departments, and THA is related to other procedures that have already been removed from the IPO list.  Additionally, CMS also removed CPT codes 22633, 22634, 63265, 63266, 63267, and 63268 (pertaining to arthrodesis and laminectomy procedures) from the IPO list because these procedures are related to other procedures that have already been removed from the list.  

Other Updates

  • New Surgical Procedures to be Covered Under the Ambulatory Surgical Center (ASC) Payment System: CMS is finalizing its proposal to add Total Knee Arthroplasty (TKA) (CPT Code 27447), Knee Mosaicplasty (CPT Code 29867), and several coronary intervention procedures (CPT Codes 92920, 92921, 92928, 92929) to the list of surgical procedures covered under the ASC.
  • Hospital Outpatient Quality Reporting Program (OQR) and Ambulatory Surgical Center Quality Reporting Program (ASCQR): CMS has adopted a new claims-based measure for the ASCQR, ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at Ambulatory Surgical Centers (NQF #3357).  This measure will be used for CY 2024 payment determinations and subsequent years. 

A copy of the CY 2020 OPPS Final Rule is available here.  The CMS Fact sheet is available here

Reporters, J. Gardner Armsby, Atlanta, +1 404 572 2760,, and Alek Pivec, Washington D.C., +1 202 626 2914,

CMS Finalizes CY 2020 Physician Fee Schedule — On November 1, 2019, CMS released the Calendar Year (CY) 2020 Physician Fee Schedule (PFS) final rule (the Final Rule).  The Final Rule updated payment policies, payment rates, and quality provisions for services furnished under the PFS.  A display copy of the Final Rule is available here and the CMS fact sheet is available here.  The Final Rule is scheduled to be published in the Federal Register by November 15, 2019.

Payment Updates

CMS finalized a CY 2020 conversion factor of $36.09, a slight increase from the CY 2019 conversion factor of $36.04.  PFS payments are based on the relative resources—Relative Value Units (RVUs)—required to furnish services, with the conversion factor applied.  CMS also finalized technical improvements related to practice expenses and refinements to standard rates to reflect premium data involving malpractice expense and geographic practices cost indices.

The Final Rule also made a number of coding changes.

  • First, the agency focused on opioids.  It expanded physicians’ ability to utilize telehealth to treat opioid use disorders, with CMS adding three new HCPCS codes (G2086, G2087, and G2088).  CMS also finalized a new Medicare Part B benefit, including new coding and payment requirements for bundled episodes of care, for the management and counseling for opioid use disorder (OUD) by Opioid Treatment Programs (OTPs) pursuant to Section 2005 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).  OUD services include medications, administration of medications, substance use counseling, therapy, toxicology testing, intake activities, and periodic assessments.  OTPs must meet accreditation and certification standards, and enroll in Medicare, in order to receive Medicare payment. 
  • Second, it revised (effective 2021) office/outpatient Evaluation and Management (E/M) visit coding depending on site of service.  For established patients (CPT codes 99211-99215), CMS will pay on five different levels.  For new patients (CPT codes 99202-99205), CMS will pay on four different levels.  In the CY 2019 PFS final rule, CMS planned to make blended payments (consolidating levels two through four) as of 2021.  The agency has reversed course on that policy following stakeholder objection.  CMS also revised E/M coding definitions, including time/medical decision-making requirements and removing the use of history and/or physical exam in setting the code level.  Patient history and exams are required only where medically appropriate.  CMS also increased payment for office/outpatient E/M visits based on recommendations by the American Medical Association Specialty Society Relative Value Scale Update Committee.
  • Third, CMS increased payments for transitional care management (CPT 99495, 99496) and now allows concurrent billing of transitional management codes with care management codes (prolonged services without direct patient contact, home and outpatient international normalized ratio monitoring, ESRD services, interpretation of physiological data, complex chronic care management services, and care plan oversight services).  CMS also finalized a policy to use a new G-code (G2058) for chronic care management services reflecting increments of clinical staff time.
  • Fourth, CMS revised outpatient occupational therapy (OT), physical therapy (PT) and speech-language pathology (SLP) regulations (42 C.F.R. §§ 410.59, 410.60) to reflect changes required under the Balance Budget Act of 2018, clarifying that, as a condition of payment, practitioners must use the “KX” modifier confirming medical necessity if the annual per-beneficiary incurred expense is over a threshold amount (currently $3,000 for OT and $3,000 for PT and SLP combined).  Claims exceeding the threshold but lacking the modifier will be denied.  The agency also elaborated on modifiers CQ and CO used to identify therapy services furnished in whole or in part by therapy assistants.  “In whole or in part” has proven complicated to implement, even in defining it as more than 10% of the therapeutic minutes as compared to therapist, excluding time when therapist and assistant are working on the same patient for the same service.  CMS “intend[s] to provide further detail regarding examples of clinical scenarios to illustrate [its] final policies” through information posted to

CMS also revised the Open Payments Program, (which publishes annual data on financial relationships between physicians/teaching hospitals and applicable manufacturers and group purchasing organizations), CMS expanded the definition of “covered recipient” at 42 C.F.R. § 403.902, modifying payment categories at 42 C.F.R. § 403.904(e)(2), and standardizing data on reported medical devices.  The agency made a number of refinements to measures within the Medicare Shared Savings Program, including establishing ACO 43 (Ambulatory Sensitive Condition Acute Composite Prevention Quality Indicator) as pay-for-reporting, rather than performance, for CY 2020 and 2021 due to changes in the measure.  It proposed, but did not finalize, the removal of ACO 14 (Preventative Care and Screening:  Influenza Immunization).

Lastly, CMS made a number of revisions to the Quality Payment Program (QPP).  For the CY 2020 Merit-Based Incentive Payment System (MIPS) 2020 performance period (affecting 2022 payments), CMS set the performance threshold at 45 points (exceptional performance at 85 points).  The same as 2019, the quality performance category is weighted at 45% of the total, cost at 15%, promoting interoperability at 25%, and improvement activities at 15%.  Each category’s data and performance requirements were also revised.  Key changes included strengthening the Qualified Clinical Data Registry measure standards to require measure testing, harmonization, and clinician feedback.  CMS also finalized its proposed episode-based measures in the cost category to more accurately reflect costs for specialists, as well as proposed per capita cost and Medicare Spending Per Beneficiary measures.  CMS finalized a performance threshold of 60 points (85 for exceptional) for the 2021 performance period.  The agency did not announce the category weights for 2021.  The CY 2020 QPP FAQs are available here.  CMS’s QPP fact sheet is available here, which includes a summary table of how the measures have changed.  Finally, CMS announced that it is continuing to move from the MIPS program to the MIPS Value Pathways (MVPs) program, which it says will reduce physician burden, but did not finalize specifics. 

Reporter, Elizabeth Swayne, Washington, D.C., +1 202 383 8932,

Eighth Circuit Upholds Rule Limiting Medicaid DSH Reimbursement Based on Payments from Medicare and Private Insurers  -- On Monday, November 4, 2019, the U.S. Court of Appeals for the Eighth Circuit upheld an HHS rule requiring the reduction of Medicaid disproportionate share payments for hospitals based on payments they receive from Medicare and private insurers.  The Eighth Circuit reversed and remanded Missouri Hosp. Ass’n v. Azar, specifically holding that (1) the Secretary of HHS acted within the scope of express delegation under the applicable Medicaid statute when he promulgated the rule at issue in the case, and (2) the rule was reasonable in light of the Medicaid statute’s purpose and design.  Missouri Hosp. Ass’n v. Azar, 2019 WL 5688793 (8th Cir. Nov. 4, 2019).  This decision is in agreement with the D.C. Circuit’s decision earlier this year in Children’s Hosp. Ass’n of Tex. v. Azar, 933 F.3d 764, 770 (D.C. Cir. 2019), to which the Eighth Circuit cites.  This makes the Eighth Circuit the second court of appeals to validate the Secretary’s regulation, which had previously been vacated by the lower court in D.C.

 “Disproportionate share hospitals” or “DSHs” are hospitals that serve a disproportionate number of indigent patients.  These hospitals receive supplemental Medicaid payments (DSH payments) to help ensure their financial viability.  Medicaid DSH payments may not exceed a hospital’s “costs incurred” in furnishing hospital services to eligible individuals “as determined by the Secretary and net of [Medicaid] payments.”  In a final rule promulgated in 2017 after notice and comment rulemaking (the 2017 Rule), the Secretary of HHS defined “costs incurred” as “costs net of third-party payments, including, but not limited to, payments by Medicare and private insurance.” 

The Missouri Hospital Association (MHA), whose members include many hospitals that receive Medicaid DSH payments, commenced this action against the Secretary of HHS, CMS, and the CMS Administrator (collectively, the “Secretary”), seeking a declaration and injunctive relief invalidating a portion of the 2017 Rule.  The district court granted summary judgment in favor of the MHA, concluding that the 2017 Rule was contrary to “unambiguous language of the statute explain[ing that] the only payments that offset a hospital’s Medicaid costs are non-DSH Medicaid payments.”  The Secretary appealed, and the Eighth Circuit concluded that the 2017 Rule was a reasonable exercise of the Secretary’s expressly delegated discretion to interpret this provision in the statute.

At issue is the hospital-specific limit on DSH payments.  In 2003, Congress directed the Secretary of HHS to perform an annual audit of each DSH hospital to verify that “[o]nly the uncompensated care costs of providing” services (known as the Medicaid shortfall) “are included in the calculation of the hospital-specific limit.”  The statute at issue, 42 U.S.C. § 1396r-4(g)(1)(A), implements this mandate.

The court stated, in pertinent part, “[w]e conclude the Secretary’s interpretation of ‘costs incurred’ is reasonable in light of the statute’s purpose and design.  When Medicaid-eligible patients have third party coverage such as Medicare or private insurance, the third party insurer pays the hospital first, because Medicaid serves as the ‘payer of last resort.’  Congress has directed the Secretary to ensure that only ‘uncompensated care costs’ are reimbursed.”   The court further stated that it was “not arbitrary for the Secretary to construe ‘uncompensated costs’ as ‘costs’ net of third party reimbursements, even reimbursements that are called ‘payments.’”

Hospitals that receive DSH payments will likely be impacted by the decision and should expect a reduction in Medicaid reimbursements.  The amount of any such reduction will depend on the amount of payments a hospital receives from Medicare and private insurers.

The decision is available here.

Reporter, Elizabeth Han, Houston, +1 713 276 7319,

Georgia Officials Announce Section 1115 Waiver Application to Expand Medicaid Eligibility – On November 4, 2019, Georgia officials announced a proposed Section 1115 demonstration waiver, referred to as the “Georgia Pathways Health Waiver,” to expand Georgia’s Medicaid program eligibility for non-disabled adults.  If approved by HHS, Georgia’s Medicaid coverage under the Georgia Pathways Health Waiver would be expanded from its current threshold of 35 percent of the federal poverty line to 100 percent of the federal poverty line.  The waiver would fall short of the full expansion to 138 percent of the federal poverty line established by the Affordable Care Act.  The Georgia Pathways Health Waiver would require non-disabled, non-pregnant adult beneficiaries to work, volunteer in the community, or pursue education or training for at least 80 hours per month to qualify for coverage.  Beneficiaries must also pay premiums ranging from $7 to $11 per month, with an additional surcharge of $3 to $5 per month for tobacco users.

Although HHS has approved Section 1115 waiver applications with work requirements similar to those included in Georgia Pathways Health Waiver, the U.S. District Court for the District of Columbia has blocked enforcement of the work requirements in Arkansas, Kentucky, and New Hampshire, and those decisions, available here, here, and here, are pending appeal at the U.S. Court of Appeals for the District of Columbia Circuit.  Other states have suspended their work requirements because of the pending litigation.   A decision from the D.C. Circuit is expected soon for the pending Kentucky and Arkansas appeals.

Reporter, Kristin Roshelli, Houston, +1 713 751 3263,

CMS Releases Medicaid and CHIP T-MSIS Analytic Files – CMS has been working with the states to improve Medicaid and CHIP data collection regarding beneficiaries, providers, fee-for-service claims, managed care claims and liable third parties. To improve the monitoring of these programs, CMS is changing the program’s data analytic infrastructure by transitioning state reporting from the legacy Medicaid Statistical Information System (MSIS) to the Transformed Medicaid Information System (T-MSIS).

CMS believes that T-MSIS will improve the methods by which CMS collects operational data by utilizing standardized definitions, adding data quality enhancements, and utilizing monthly, rather than quarterly, data submissions.  Furthermore, T-MSIS includes a more comprehensive set of data files, which includes: (1) enhanced information regarding CHIP and Medicaid beneficiary eligibility and enrollment, and (2) fee-for-service claims and managed care service use and spending data. A future release will include managed care plan and provider information.

Due to the size and nature of the T-MSIS files, in addition to the frequency of updates, T-MSIS data are problematic to use directly for research and analytics purposes.  To alleviate these problems, CMS has created a series of data sets which are optimal for analytics.  These data sets are known as T-MSIS Analytic Files (TAF) and consist of research identifiable files (RIFs). There is a total of five TAF RIF file types that are being released for the calendar years 2014 through 2016.  These file types include: Annual Demographics and Eligibility; Inpatient Hospital Claims; Long-Term Care Claims; Pharmacy Claims; and Other Services Claims.

As part of the 2019 fall release of the Medicaid and CHIP Scorecard, CMS additionally published de-identified, state-level per capita expenditures for the calendar year 2017.  CMS will further publish de-identified average annual Medicaid expenditures per enrollee for the calendar year 2017 for certain eligibility groups including children, adults ages 65 and older, individuals with disabilities, and Medicaid expansion adults. These estimates will only be available for the states in which data quality assessments made the calculation possible.

Additional TAF RIFs with data ranging from 2017 to 2018, are expected to be released in 2020. This future release will include annual files containing information pertaining to providers and managed care plans. 

CMS’s fact sheet about the Medicaid and CHIP T-MSIS files release is available here

Reporter, Jennifer Siegel, Los Angeles, +1(213) 443-4389,

Also In The News

King & Spalding Roundtable – Recalculating: Are the Major Stark, Anti-Kickback and CMP Proposed Rule Changes Taking Us in a New Direction?

PART 1:                                                PART 2:

Thursday, November 7, 2019               Wednesday, November 20, 2019
1:00 P.M. – 2:30 P.M. ET                      1:00 P.M. – 2:30 P.M. ET

CMS and OIG recently proposed the most significant changes to the Stark Law rules, the Anti-Kickback Statute (AKS) safe harbors, and the Beneficiary Inducements CMP regulations that the agencies have offered in recent years.  The proposed rules address value-based arrangements, introduce major changes to other key Stark Law concepts and definitions, address the donation of cybersecurity technology and services, and create flexibility to provide patient incentives in value-based arrangements and with respect to telehealth.  Click here to read King & Spalding’s Client Alert highlighting the key proposals.

We are hosting a two-part webinar series to discuss these proposals in greater detail, described below.  We will cover the opportunities raised by these proposals, as well as how they may impact enterprise risk and future enforcement actions.  Our goal is to stimulate thinking about the submission to CMS and OIG of comments on these proposed rules, which are due on December 31, 2019. 

  • In Part One, we discussed proposed changes other than those relating to value-based arrangements and patient incentives.  The topics included the proposed changes to fundamental Stark Law concepts such as taking into account the volume or value of referrals or other business generated, fair market value, commercial reasonableness, and the definition of indirect compensation arrangements.  We also addressed proposed changes to the writing requirements, proposed changes to several commonly used compensation exceptions, and proposals related to cybersecurity technology and related services. 
  • In Part Two, we will discuss proposals related to value-based arrangements and patient incentives.  This will include the newly proposed AKS safe harbors and Stark Law exception for value-based arrangements, modifications to existing AKS safe harbors and Stark Law exceptions to address value-based arrangements, newly proposed AKS safe harbors for patient incentives, revisions to the local transportation safe harbor, and a proposed telehealth exception to the Beneficiary Inducements CMP.

You do not have to be a client to attend, and there is no charge.  To register, please click here.  Your registration will allow you to attend Part One and Part Two.

General Counsel's Decision Tree for Healthcare Related Internal Investigations – Healthcare systems, hospital networks, and other healthcare providers regularly face challenges that may require an internal investigation to determine the root cause of an issue in order to evaluate how best to remediate and guard against future occurrences of a potentially harmful event.  From industry-specific concerns, such as those related to federal and state healthcare program billing, False Claims Act matters, HIPAA protections, payor reimbursement, prescription drug compliance, or more general corporate concerns equally applicable to the healthcare industry such as data breaches, environmental catastrophes, or human resource issues, there are more than enough landmines in today’s legal and regulatory environment to keep any general counsel up at night.  While not all issues may be avoided, having a playbook in place for conducting an internal investigation that facilitates the identification and remediation of issues is an important step in feeling prepared for whatever may come.  Click here to view the full checklist from Special Matters and Government Investigations partners Dixie Johnson and Aaron Lipson.

CMS Announces Approval of Demonstration to Expand Access to Behavioral Health Treatment – On November 6, 2019, CMS announced the approval of a Medicaid demonstration project that increases available services to Medicaid beneficiaries living in Washington D.C. diagnosed with serious mental illness (SMI) and/or serious emotional disturbance (SED).  CMS is approving D.C.’s request to begin providing new services for beneficiaries diagnosed with substance use disorder (SUD).  Long-standing federal law has prohibited states from receiving federal matching funds for providing services to Medicaid beneficiaries while residing in institutions for mental disease.  In 2018, a new Medicaid demonstration was created to allow states to receive federal matching funds for these purposes.  D.C. is first in the nation to receive federal approval for the new Medicaid demonstration opportunity.  D.C.’s demonstration project is available here