backOMB Is Reviewing MACRA Final Rule – On September 14, 2016, the White House Office of Management and Budget (OMB) received CMS’s final rule implementing the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models established in MACRA. CMS had previously announced options for physicians to comply with the rapidly approaching effective date of January 1, 2017, in an effort to provide physicians with some flexibility. These options announced on September 8, 2016, should be in the final rule, which is expected to be published on November 1, 2016. Information regarding the OMB’s review of the final rule is available on OMB’s website. Our prior Health Headlines article describing the options for physicians to “pick their pace of participation” is available here.
Reporter, Kate Stern, Atlanta, +1 404 572 4661, kstern@kslaw.com.
Republican Lawmakers Voice Concern About Medicare Fraud Prevention – On September 12, 2016, Republican leaders of the House Ways and Means Committee, Energy and Commerce Committee, and Committee on Finance wrote a letter to the acting CMS administrator requesting information regarding CMS’s Fraud Prevention System (FPS) results and stressing the importance of preventing payment of improper Medicare claims. The Letter expresses concern that the FPS is used to recover payments already improperly made in a “pay and chase” model rather than prevent payment of improper claims, noting a 12.1 percent payment error rate in 2015 for the Medicare Fee-for-Service Program and a return on investment for the FPS of $2.84 to $1 in 2014.
The Letter is the latest in a series of inquiries from lawmakers regarding the FPS. Last summer, bipartisan leaders of the Energy and Commerce and Ways and Means Committees asked the Government Accountability Office to review the types of fraudulent behavior identified by the FPS, so as to report on how many administrative actions against providers were the result of the FPS. The request was followed by an inquiry from Republican leaders to CMS in October 2015 regarding the spending needed to update the system.
The Letter follows the annual report from CMS to Congress in July regarding the Medicare and Medicaid Integrity Programs, which covered FY 2013 and 2014. According to the Report, Medicare program integrity activities saved Medicare $21.1 billion in FY 2013 and $18.1 billion in FY 2014, for a two-year return on investment of $12.4 to $1. The Report attributed 68.4 percent of the savings to prevention of improper payments. The Report also indicates that the FPS systematic edits, which use predictive analytics to identify claims and providers that present a high risk of fraud, resulted in $454 million in fraudulent payments being stopped, prevented or identified in 2014. Other preventive methods mentioned in the Report include other systematic edits (e.g., Zone Program Integrity Contractors (ZPIC), National Correct Coding Initiative, and Field Office), provider revocations, prepayment reviews, and payment suspensions.
While the authors of the Letter “remain supportive” of the FPS, they requested more information to better understand CMS’s “work implementing” the system, including:
- The percentage of FPS referred and assisted ZPIC investigations, including a breakdown of the types of schemes identified and the Medicare programs they impact and the actions taken by CMS, including dollar amounts, for the past 3 years;
- The types of edits and filters put into place as a result of the FPS and how many improper claims have been stopped as a result, including dollar amounts, over the past 3 years;
- The projected savings and recovery by Medicare from the FPS for 2015;
- The total amount obligated for the FPS and ZPICs for the past 3 years; and
- The processes in place to monitor the effectiveness of the FPS models.
Reporter, Lara Compton, Los Angeles, +1 213 443 4369, lcompton@kslaw.com.
OIG Releases Series of Reports Focusing on Improper Medicaid EHR Incentive Payments – In August 2016, OIG released a series of reports focusing on the Medicaid electronic health record (EHR) incentive program for hospitals in West Virginia, Ohio, and Oklahoma. This continues a recent trend of reports focusing on Medicaid EHR incentive payments to hospitals. As noted in these OIG reports, the Congressional Budget Office estimates that, from 2011 through 2019, spending on the Medicare and Medicaid EHR incentive programs will total $30 billion. The Medicaid EHR incentive program is expected to account for more than a third of the $30 billion EHR payment estimate (about $12.4 billion). Accordingly, OIG explained that these reviews were designed to determine whether the State agencies made Medicaid EHR incentive program payments to eligible hospitals in accordance with Federal and State requirements.
OIG Report: West Virginia Made Incorrect Medicaid Electronic Health Record Incentive Payments to Hospitals (August 2016)
According to the OIG report available here, the West Virginia Department of Health and Human Resources, Department of Medical Assistance Services (the WV State Agency) made approximately $70.6 million in Medicaid EHR incentive program payments to providers between July 1, 2011 and December 31, 2013. OIG reviewed hospitals that received an incentive payment totaling $1 million or more. There were five hospitals included in OIG’s review.
According to OIG, the WV State Agency did not make EHR incentive payments in accordance with Federal and State requirements for three of the five hospitals included in the review. Specifically, OIG concluded that the WV State Agency overpaid three hospitals $295,962. Because the hospital EHR incentive calculation is computed once and then paid out over 3 years, payments after December 31, 2013, will also be incorrect, according to OIG. OIG concluded that these errors occurred because the WV State Agency calculated the EHR payment using hospital-provided data that was not validated.
OIG recommended, among other things, that the WV State Agency refund the overpayment to CMS and review the additional hospitals not included as part of OIG’s review.
OIG Report: Ohio Made Incorrect Medicaid Electronic Health Record Incentive Payments (August 2016)
Using the same review structure described above, according to the OIG report available here, from January 1, 2011, through December 31, 2012, the Ohio Department of Medicaid (the Ohio State Agency) made incorrect Medicaid EHR incentive payments totaling $526,000 to 10 hospitals. The OIG’s review identified both underpayments and overpayments and resulted in a net overpayment of $524,000.
OIG concluded that these errors occurred because the Ohio State Agency did not ensure that the hospitals had removed all bad debt/write-offs from charity care when calculating the EHR incentive payments. OIG also recommended, among other things, that the Ohio State Agency refund the overpayment and review the remaining hospitals not included in OIG’s review.
OIG Report: Oklahoma Made Incorrect Medicaid Electronic Health Record Incentive Payments to Hospitals (August 2016)
According to the OIG report available here, the Oklahoma Health Care Authority (the OK State Agency) did not always pay EHR incentive program payments to eligible hospitals in accordance with Federal and State requirements for program years 2011 and 2012. The OIG report concluded that the OK State Agency overpaid seven hospitals out of the twenty-five hospitals reviewed a total of $1.1 million. Additionally, OIG’s review concluded that the OK State Agency underpaid four hospitals a total of $402,000, which resulted in a net overpayment of $680,000.
OIG determined that while the OK State Agency reviewed certain supporting documentation submitted by the hospitals and made corrections, the errors identified during the review occurred because it did not review all of the supporting documentation. Again, OIG recommended, among other things, that the OK State Agency refund the overpayment and review the additional hospitals not included as part of OIG’s review.
All Medicaid meaningful users nationwide should be mindful of potential recoupment efforts by State Medicaid agencies for prior Medicaid EHR incentives payments.
Reporter, Stephanie F. Johnson, Atlanta, +1 404 572 4629, sfjohnson@kslaw.com.
ALSO IN THE NEWS
CMS Rejects Ohio’s Section 1115 Medicaid Demonstration Waiver Application – On September 9, 2016, CMS denied Ohio’s application for a new demonstration section 1115 Medicaid waiver, citing concerns over the State’s request to charge certain of its Medicaid beneficiary population premiums, regardless of income. CMS was concerned that the premiums would undermine access to coverage and the affordability of care. Under Ohio’s proposed waiver application, previously reported here, individuals would be excluded from coverage indefinitely until they pay all amounts owed in arrears. CMS noted that this policy could lead to a substantial population without access to affordable healthcare coverage. CMS stated in its denial letter available here, that it has not approved this type of policy in any state because it does not support the objectives of the Medicaid program.
Almost Every State Seeing Hospital Readmission Rates Falling – In a blog post, CMS announced that 49 states, plus Washington, D.C., saw hospital readmission rates fall between 2010 and 2015. CMS calculated the number of readmissions occurring within 30 days of a patient’s discharge and found that 11 states saw a decline in over 10 percent and 43 over 5 percent. On average, readmission rates dropped by 8 percent nationally. Only Vermont saw an increase in readmissions, but only at 0.70 percent (or an additional 21 readmissions). CMS estimated that this national reduction in readmissions means that approximately 100,000 inappropriate readmissions were avoided in 2015. CMS credited the reduction to its Hospital Readmissions Reduction Program, as well as other initiatives including Accountable Care Organizations, Quality Improvement Organizations and Hospital Engagement Networks. The blog post is available here.
King & Spalding Medical Device Summit 2016 – King & Spalding will host its Medical Device Summit 2016 on October 5, 2016, at the Park Hyatt Washington, D.C. The event will be held from 8:00 a.m. until 5:00 p.m. and will be followed by a networking reception. This year features a new one-day format with two tracks of presentations to suit attendees’ needs. Click here for more information and to register for the program.
King & Spalding’s FDA & Life Science’s practice group will also host a dinner on October 4, 2016, at 6:00 p.m. to kick off the Medical Device Summit and welcome you to meet our new partners and counsel in the practice group. It will be located on the rooftop terrace of our Washington, D.C. office. We hope that you can join us! Please click here for more information and to RSVP.