Articles Posted in Medicare

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Important deadlines for hospitals to report cardiac medical device-related overpayments are fast approaching. Based on an audit by the Office of Inspector General (OIG), the Centers for Medicare & Medicaid Services (CMS), required hospitals to investigate and report any overpayments from the last six years related to manufacturing credits for replaced cardiac medical device implants. CMS’s deadlines to file these reports begin in August 2021.

Generally, where the manufacturer of a cardiac medical device implant, such as a pacemaker or defibrillator, replaces a recalls or defective device that is still under warranty, it will provide a replacement to the hospital without charge or issue a full or credit to the hospital for the cost of the device. Where the service involves a Medicare beneficiary and a hospital receives a discount or credit that is 50% or more of the cost, Medicare regulations generally require the hospital to report the credit to Medicare and accept reduced payment.

In November 2020, OIG issued a report regarding a review it conducted of 6,558 Medicare claims dated between January 1, 2015 and June 30, 2017. In its review, OIG obtained data on reportable warranty credits from the top three cardiac device manufacturers and compared this data to Medicare billing records to see whether the hospital had reported the credit to Medicare. As a result of its review, OIG alleged that over 900 hospitals had not properly reported manufacturing credits for recalled or defective cardiac medical device implants. OIG alleged that these hospitals had received approximately $33 million in Medicare overpayments and recommended that CMS recover these overpayments.

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Many of the Medicare requirements surrounding telemedicine have been greatly relaxed or waived entirely during the COVID-19 public health emergency. Providers and patients wondered if these changes would end or if some might become permanent. In May 2021, Congress introduced H.R.3447, a bill to amend the Social Security Act to expand accessibility to certain telehealth services under the Medicare program, which was an encouraging sign that at least some of the telemedicine waivers may become permanent. Now, the Centers for Medicaid and Medicare Services (CMS) seeks to preserve telehealth access with the proposed 2022 Medicare Physician Fee Schedule (MPFS). If finalized, the rule would codify some of the recent flexibilities CMS has granted regarding telehealth use for the diagnosis, evaluation, and treatment of mental health disorders.

CMS plans to allow Medicare providers to continue offering certain telehealth services until the end of 2023 while the agency decides whether to add those services to the telehealth list permanently. CMS will permit all Medicare patients to access telehealth services from their homes, as called for in the Consolidated Appropriations Act Congress passed in December 2020. Additionally, the agency seeks to enable Medicare to pay for mental health visits via telehealth services provided through community health centers. CMS plans to allow providers to deliver audio-only behavioral and mental health services, including opioid addiction treatment. The proposed rule would also pay physicians for mental health visits, via interactive telecommunications technology, furnished to rural and vulnerable populations in rural health clinics and federal qualified health centers.

The rule also proposes notable changes to the Quality Payment Program (QPP), including the Merit-based Incentive Payment System (MIPS). Specifically, the agency seeks to make it more difficult for clinicians to earn bonuses under its QPP by raising the eligibility threshold. Furthermore, CMS unveiled its first seven MIPS Value Pathways, including: rheumatology; stroke care and prevention; heart disease; chronic disease management; emergency medicine; anesthesia; and lower-extremity joint repairs. CMS, as part of these initiatives, would evaluate clinicians using measures that are meaningful to their practices and their specialties or are relevant to public health priorities. The proposed fee schedule is open for public comment until September 13, 2021.

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The U.S. Supreme Court recently declined to hear an appeal challenging the Department of Health and Human Services’ (HHS) site-neutral payment policy, allowing the regulation to move forward. Hospitals originally sued to prevent the rule from taking effect, but were ultimately unsuccessful when the U.S. Court of Appeals for the District of Columbia ruled against them in favor of the rule’s legality.

The site-neutral pay rule, specifically Section 603 of the Bipartisan Budget Act of 2015, brings significant changes to Medicare hospital payment policy. The rule extends the concept of site-neutral payment policy by requiring that newly created off-campus hospital outpatient departments no longer be paid under the Outpatient Prospective Payment System (OPPS). Rather, such departments will be paid under an alternative, less remunerative payment system – the Medicare Physician Fee Schedule (MPFS). The goal of the rule is to reduce a perceived disparity in Medicare payments where hospital-affiliated clinics get paid more than physician offices for the same services.

Specifically, the rule amends Section 1833(t) of the Social Security Act, which governs Medicare payments for hospital outpatient department services, by adding a new clause that prospectively excludes from the definition of covered services most items and services furnished by an “off-campus outpatient department of a provider,” which the statute defines as a department of a provider that is not located on the provider’s campus or within a 250-yard radius from a remote location of a hospital. While CMS guidance on the rule is still unfolding, it has provided some insight into its interpretation of the 250-yard measurement. CMS explains that a hospital may measure 250 yards from “any point of the physical facility that serves as the site of services of the remote location to any point in the PBD.”

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A healthcare practice or other provider or supplier receives a letter from their Medicare Administrative Contractor (MAC). The letter notifies the provider that they have been selected for a Targeted Probe and Educate (TPE) review. This initial letter, the Notice of Review, likely does not include any specific records requests but indicates that the MAC will request records at a later date. The letter may briefly describe the TPE process as including three rounds of claims review with education after each round. This letter will likely warn that, if a provider/supplier fails to improve the accuracy of its claims after three rounds, the MAC will refer the provider/supplier to CMS for additional action, such as prepayment review, extrapolation of overpayments, referral to a RAC, or other disciplinary action.

A provider or supplier navigating a TPE review should take care to comply with the program’s requirements and timelines and should be aware of the potential consequences of a review. A TPE review can take months or years to resolve and can have devastating impacts on a provider’s business, up to and including revocation of Medicare billing privileges and placement on the CMS Preclusion List.

After the Notice of Review, the MAC will send Additional Documentation Requests (ADR) for 20-40 claims. However, these ADRs may be indistinguishable from any other, with no indication of the added importance of being pursuant to a TPE audit. The ADRs will require a response within 45 days. After the provider submits the documentation, the MAC is required to provide direct one-on-one education to the provider. The MAC will then issue a letter that outlines its findings. If a high number of claims are denied, the MAC will proceed to a second round of review of 20-40 claims and education. If a high number of claims are denied again, the MAC will proceed to a third round.

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The Centers for Medicare & Medicaid Services (CMS) contracts with a Supplemental Medical Review Contractor (SMRC) who provides support for a variety of tasks aimed at lowering improper payment rates and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs. Noridian Healthcare Solutions was selected as the SMRC in 2018. The SMRC conducts nationwide medical reviews of Medicare Parts A and B, DMEPOS, and Medicaid claims to determine whether claims follow coverage, coding, payment, and billing requirements. The focus of the medical reviews may include areas identified by CMS data analysis, the Comprehensive Error Rate Testing (CERT) program, professional organizations, and federal oversight agencies. At the request of CMS, the SMRC may also carry out other special projects to protect the Medicare Trust Fund.

SMRC audits are referred to as projects and there are three categories of SMRC project reviews:

  • Healthcare Fraud Prevention Partnership (HFPP) Review: Based on fraud, waste, and abuse trends identified by the HFPP.
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Two similar and inter-related, but sometimes misunderstood, terms in healthcare law are “in office ancillary” and “incident to.” While both may apply to the same circumstances, they are distinct concepts and should be understood separately.

“In Office Ancillary” services are an exception to the Physician Self-Referral Law, often referred to as the Stark Law. The Stark Law prohibits “physicians” (generally including MDs, DOs, dentists, optometrists, and chiropractors) from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Generally, under the “in office ancillary” exception, the Stark law does not apply to services that (1) are performed by the referring physician, another physician in the same group practice, or an individual supervised by the referring physicians or another physician in the same group practice; (2) are performed in the same building as the referring physician or their group practice offers services or in another centralized location; and (3) are billed by the performing physician, the supervising physician, or their group practice.

On the other hand, “incident to” is a billing term. Services and supplies billed “incident to” a physician’s professional services are furnished by auxiliary personnel as an integral, although incidental, part of the physician’s personal professional services. Generally, services and supplies commonly furnished in physicians’ offices are covered under the “incident to” provisions. However, to bill services provided by auxiliary personal as “incident to” the physician’s services, among other requirements, the physician must directly supervise the auxiliary personnel. That is, the physician must be present in the same office suite and immediately available to provide assistance and direction while the auxiliary personnel is performing services.

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Effective June 8, 2021, Medicare will pay an additional $35 per dose for administering the COVID-19 vaccine in the home for certain Medicare patients that have difficulties leaving their homes or are hard-to-reach. This $35 dollar payment is in addition to the standard payment for vaccine administration, which varies based on location but is approximately $40 per dose. The additional payment also applies to each dose of a two-dose vaccine if both doses are administered in the home. To be eligible for the at-home additional payment, both the location and the beneficiaries must be certain criteria.

Private residences, temporary lodging, apartments, most units in an assisted living facility (ALF) or group home, and the homes of Medicare beneficiaries have been made provider-based to a hospital during the COVID-19 public health emergency generally qualify as location eligible for the at-home additional payment. However, hospitals, skilled nursing facilities (SNFs), some ALFs, and the communal spaces of apartment buildings or group homes do not qualify for the at-home additional payment.

In addition, to an eligible location, the Medicare beneficiaries must also meet certain criteria. Specifically:

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During the COVID-19 pandemic, many of the Medicare requirements surrounding telemedicine have been greatly relaxed or waived entirely. These temporary waivers, including allowing Medicare coverage of certain audio-only services, have been welcome changes for many providers and patients. With the end of the pandemic in sight, many are wondering if these changes will end or if some of the temporary waivers will become permanent.

The COVID-19 telemedicine waivers were authorized under Section 1135 of the Social Security Act, which allows the Secretary of Health and Human Services to temporarily waive or modify certain Medicare requirements for the duration of a declared public health emergency. The telemedicine waivers include: allowing telehealth services to be provided nationwide, rather than only in certain locations; allowing beneficiaries to receive, and providers to furnish, telehealth services from any setting, including beneficiaries’ and providers’ homes; allowing additional types of providers, such as physical and occupational therapists, to furnish telehealth services; temporarily adding over 146 new telehealth services; and allowing certain services to be furnished using audio-only technology such as telephones, instead of interactive systems involving video technology. As the authority to issue waivers is based on the declaration of a public health emergency, these waivers will end when the declared public health emergency ends.

Likely in response to calls from both providers and patients to make the telemedicine waivers permanent, Congress recently introduced H.R.3447, a bill to amend the Social Security Act to expand accessibility to certain telehealth services under the Medicare program. While the bill in the early stages of the legislative process and will likely be subject to much debate and many changes, it is an encouraging sign that at least some of the telemedicine waivers may become permanent.

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Recently, the Centers for Medicare & Medicaid Services (CMS) announced another delay of the implementation of the new rule for Medicare Coverage of Innovative Technology (MCIT) and discussed several concerns it had with the new rule, raising doubts that CMS would ever implement the new rule without significant changes.

The new rule, as currently written, provides for four years of national Medicare coverage of innovative medical devices starting on the date of FDA market authorization or a manufacturer chosen date within two years thereafter. The rule was initially published by CMS on January 14, 2021 and was set to take effect in March 2021. However, shortly after the transition to the Biden Administration, CMS delayed the effective date until May 2021 as part of its general freeze of new regulations pending review. On May 14, 2021, CMS announced it would further delay the implementation of the new rule until December 15, 2021.

In the May 2021 announcement of the delay, CMS expressed its concerns with the new rule. Specially, CMS expressed concern that the rule establishes a four-year commitment to Medicare coverage for all breakthrough devices that have a benefit category without a specific requirement that the device demonstrates a health benefit in the Medicare population or that the benefits outweigh harms. CMS expressed a desire for more evidence of benefits to Medicare beneficiaries prior to Medicare coverage of a device.

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In May 2021, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) added several new items to its work plan. The OIG work plan sets forth various projects including OIG audits and evaluations that are underway or that OIG plans to address during the fiscal year and beyond. These are some of the highlights of the new additions to the work plan of which providers and suppliers should be aware.

First, OIG will audit payments made to healthcare providers under the general distributions of the Provider Relief Fund. This includes approximately $92 billion across all three phases of the general distributions. Provider who received these funds were required to meet certain requirements, such as submitting revenue information and supporting documentation to the Health Resources and Services Administration (HRSA), which used this information to determine eligibility and payments. OIG will perform a series of audits of funds related to the three phases of the General Distribution to determine whether payments were: (1) correctly calculated for providers that applied for these payments, (2) supported by appropriate and reasonable documentation, and (3) made to eligible providers.

Second, OIG will conduct a nationwide, three-part study of the effects of the COVID-19 pandemic on nursing homes. The first part will analyze the extent to which Medicare beneficiaries residing in nursing homes were diagnosed with COVID-19 and describe the characteristics of those who were at greater risk. The second part will describe the characteristics of the nursing homes that were hardest hit by the pandemic (i.e., homes with high numbers of beneficiaries who had COVID-19). The third part will describe the strategies nursing homes used to mitigate the unprecedented challenges of COVID-19.

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