Medicare

Published on: August 5, 2021

CMS FY 2022 Budget Justification Requests Increased Funding for Medical Review

The Centers for Medicare and Medicaid Services’ (CMS) FY 2022 Budget Justification request to Congress indicates a greater focus on audit activities, including a doubling of CMS’ medical review budget, and an effort to decrease the number of claim denials overturned through the Medicare appeals process. While still in the proposal phase, the budget justification provides a glimpse into CMS’ priorities for the coming fiscal year. Specifically, CMS requests $96.7 million to be used as discretionary funding for medical review activities, which represents an increase of $50.5 million above the FY 2021 Enacted level. Medical review activities can be conducted pre-payment or post-payment and concentrate on areas identified through a variety of means, including targeted data analysis, Comprehensive Error Rate Testing (CERT) results, and oversight agency findings that indicate allegedly questionable billing patterns.

CMS contracts with Medicare Administrative Contractors (MACs) to perform analysis of claims data to identify atypical billing patterns and perform claims review, including medical reviews. The FY 2022 request supports ongoing medical review operations, including Targeted Probe and Educate (TPE) reviews, which CMS temporarily suspended for a portion of 2020 in response to the Public Health Emergency (PHE). CMS recently announced in June 2021 that MACs are authorized to begin conducting post-payment medical reviews for dates of service during and after March 2020. CMS states that the FY 2022 Budget Justification “proposes to significantly increase funding to allow MACs to conduct additional review in FY 2022.” MAC medical reviews were previously limited to dates of service prior to March 2020, which means we can expect to see MACs begin audits of claims submitted during the PHE.

The FY 2022 Budget Justification also would allocate $19 million to the Supplemental Medical Review Contactor (SMRC) to conduct SMRC audits, which provide support for a variety of tasks meant to lower the improper payment rates and increase efficiencies of the medical review function of Medicare. SMRC audits were similarly paused for a period of time during 2020 in response to the PHE. In FY 2020, the SMRC reviewed approximately 80,197 claims, whereas CMS expects the SMRC to review 792,800 claims in FY 2022. So, providers may also anticipate increased SMRC medical reviews.

Published on: July 26, 2021

CMS Proposes to Keep Medicare Coverage for Some Audio-Only Services

by Wachler & Associates, P.C.

During the COVID-19 public health emergency, the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) waived many of the restrictions that limited Medicare coverage for healthcare services for telemedicine and allowed for much greater use of these services. Among these was the introduction of Medicare coverage for several audio-only services, whereas Medicare coverage had previously only extended to telemedicine services provided by interactive two-way audio/video communication. However, these actions were only temporary and will end when the declaration of a public health emergency ends.

Due to the tremendous value that audio-only telemedicine has provided to the healthcare system, providers, and Medicare beneficiaries, there have been calls for the temporary expansion of telemedicine to be made permanent. While CMS has asserted that large-scale changes to the Medicare program must come from Congress, CMS recently released the proposed 2022 Physician Fee Schedule which, among many other proposals, would retain Medicare coverage for some audio-only services.

Specifically, CMS would permit the use of audio-only communications technology for mental health telehealth services under certain conditions when the services are provided to beneficiaries located in their home. Under the CMS proposal, coverage would be limited to the diagnosis, evaluation, or treatment of mental health disorders in established patients where the originating site is the patient’s home. CMS would retain the requirement that an in-person item or service must be furnished within six months of such a mental health telehealth service. Further, CMS would require that the provider has the technical capability at the time of the service to use an interactive telecommunications system that includes video, but conducts the visit via audio-only because the beneficiary is unable to use, does not wish to use, or does not have access to two-way, audio/video technology. CMS states its goal is to allow audio-only services only where no service would otherwise occur.

Published on: July 20, 2021

Deadlines Approaching to Report Cardiac Device Overpayments

by Wachler & Associates, P.C.

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.

Published on: July 15, 2021

CMS Proposes to Keep Some Medicare Telehealth Access in 2022 Physician Fee Schedule

by Wachler & Associates, P.C.

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.

Published on: July 8, 2021

HHS Site-Neutral Pay Rule to Remain in Effect

by Wachler & Associates, P.C.

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.”

Published on: July 6, 2021

Responding to a Targeted Probe and Educate Review

by Wachler & Associates, P.C.

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.

Published on: June 30, 2021

A Primer on SMRC Audits

by Wachler & Associates, P.C.

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.

Published on: June 21, 2021

What’s the Difference Between “In Office Ancillary” and “Incident To”?

by Wachler & Associates, P.C.

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.

Published on: June 14, 2021

Medicare Creates Additional Payment for At-Home COVID-19 Vaccine Administration

by Wachler & Associates, P.C.

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:

Published on: June 9, 2021

New Bill to Make Telemedicine Waivers Permanent as GAO Urges Caution

by Wachler & Associates, P.C.

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.