Medicare

Published on: January 15, 2021

HHS Increases Fairness and Notice in Civil and Administrative Proceedings

On January 12, 2021, the Department of Health and Human Services (HHS) issued sweeping new directives regarding the procedures the Department will follow when relying on guidance documents, initiating enforcement actions, making jurisdictional determinations, and allowing prior notice and opportunity to be heard on agency determinations. These directives apply to civil and administrative enforcement proceedings and adjudications and take effect immediately.

First, HHS directed that the Department may not use guidance documents to impose binding requirements or prohibitions on persons outside of the executive branch except as authorized by law or expressly incorporated into a contract. That is, noncompliance with a standard or practice found only in a guidance document will not constitute a violation of the applicable statute or regulation. Further, the Department may refer to a guidance document in a civil enforcement action only if it has notified the public of the guidance in advance.

Second, HHS directed that the Department will only apply standards and practices, including in initiating a civil enforcement action or making an agency decision, that have been publicly stated in a way that would not cause unfair surprise. Of note, HHS defined “unfair surprise” to include when the Department initiates litigation following a lengthy period of conspicuous inaction.

Published on: January 5, 2021

CMS Releases New Measures Under Consideration Focusing on Increasing Data Innovation and Reducing Provider Burden

by Wachler & Associates, P.C.

On December 22, 2020, Centers for Medicare & Medicaid Services (CMS) released the 2020 list of Measures Under Consideration (MUC). The MUC is a list of quality and efficiency measures, based on data collected from providers, under consideration for adoption as rules under Medicare. The 2020 measures focus on reducing the administrative burden on providers, prioritizing health outcomes, and encouraging digital innovation, particularly regarding data collection and evaluation.

In accordance with the Meaningful Measures Initiative of 2017, digital innovation remains a top priority for CMS in developing quality measures. The Meaningful Measures Initiative was created to reduce the regulatory and reporting burden on providers and focuses on identifying the highest priority areas for quality improvement and measurement to improve patient outcomes. Since its launch, the Meaningful Measures Initiative has provided better quality metrics that are relevant to various providers. The 2020 MUC follow the Meaningful Measures Initiative by focusing on goals such as creating trackable and measurable outcomes, reducing healthcare disparities, cost efficiency, the modernization of reporting mechanisms, and reducing administrative obstacles for providers so they can better focus on quality care for patients, rather than paperwork. A majority of the measures utilize digital collection of data, rather than requiring providers to use traditional pen-and-paper data collection.

The 2020 MUC include:

Published on: December 18, 2020

HHS Increases Phase 3 of Provider Relief Fund and Will Begin Distribution

by Wachler & Associates, P.C.

On December 16, 2020, the Department of Health and Human Services (“HHS”) announced that it would begin Phase 3 of general distributions under the Provider Relief Fund (“PRF”) and that Phase 3 would be larger than initially planned. The PRF is a $175 billion fund created Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. The PRF is administered by HHS through the Health Resource Services Administration (“HRSA”). HHS has subdivided the PRF into various general and targeted distributions.

Earlier in 2020, HHS had made two general distributions under the PRF. The Phase 1 general distribution consisted of $50 billion in financial payments, released in two successive tranches of $30 billion and $20 billion, to healthcare providers based to providers who billed Medicare. The Phase 2 general distribution consisted of an additional $18 billion in financial payments to providers that billed Medicaid, dentists, assisted living facilities, and providers that were not eligible under the terms of Phase 1 due to a change in ownership.

On October 1, 2020, HHS announced the Phase 3 general distribution. The Phase 3 general distribution was initially planned to consist of $20 billion on financial payments to providers who were either excluded from the initial two phases, or who were eligible under the first two phases but required additional funding to cover ongoing financial losses accrued during the pandemic. The following providers are eligible for Phase 3 General Distribution funding: (1) Providers who have previously received, rejected, or accepted a General Distribution PRF payment; (2) behavioral health providers, including those that have previously received funding; and (3) healthcare providers that began practicing January 1, 2020 through March 31, 2020. All providers who receive payments must attest to receiving the payment and accept the associated Terms and Conditions.

Published on: December 16, 2020

CMS Expands Telehealth Services and Flexibility for Non-Physician Providers

by Wachler & Associates, P.C.

On Tuesday, December 1, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released the 2021 Physician Fee Schedule (PFS) final rule, confirming an expansion to telehealth coverage and the scope of non-physician providers. The use of telehealth services increased substantially during the COVID-19 public health emergency. Under the final rule, certain telehealth services will be covered when the COVID-19 public health emergency ends. In addition, the rule reduces administrative barriers to non-physician practitioners, allowing them to focus on providing quality healthcare and less on paperwork.

Prior to the COVID-19 pandemic, CMS estimates that 15,000 fee-for-service Medicare beneficiaries received a Medicare telemedicine visit each week. To address the increased need for healthcare services during the COVID-19 pandemic, CMS added 144 Medicare covered telehealth services. CMS estimates that between March and October 2020, 24.5 million beneficiaries and enrollees received a Medicare telemedicine service. Under the final rule, CMS added more than 60 telehealth services that will permanently be covered under Medicare. Although Medicare does not currently have legal authority to cover telehealth services for beneficiaries who are not located in rural areas, or permit telehealth services to be received in the home, these now permanently covered telehealth services will allow beneficiaries in rural areas, to continue to receive high quality health care and have more convenient access to care.

The final rule also seeks to reduce administrative obstacles for non-physician providers. This will increase efficiency, quality of care, and overall improve the healthcare experience for beneficiaries. The PFS final rule will make certain non-physician provider flexibilities that were established during the COVID-19 pandemic permanent so they may continue to provide care without additional Medicare restrictions. CMS finalized three main changes for non-physician practitioners:

Published on: December 9, 2020

CMS Finalizes 2021 OPPS Rule, Officially Phasing Out the Inpatient Only List

by Wachler & Associates, P.C.

On December 2, 2020, The Centers for Medicare & Medicaid Services (CMS) released the 2021 Outpatient Prospective System (OPPS) Final Rule. The main goals of the rule are to (1) provide patients more choice in where they can receive affordable, quality health care, and (2) reduce their out-of-pocket costs. The new rule furthers CMS’s recent goal to expand patient choice by increasing the locations that accept Medicare payment for newly added services.

The rule finalizes the proposal to eliminate the Inpatient Only List (IPO),—giving beneficiaries more choice in where they can receive care. The IPO designated specific surgical procedures that necessitate inpatient care due to the nature of the procedure. Therefore, the procedures on the IPO were not covered by Medicare through the OPPS. By phasing out the list, these procedures will now be eligible for Medicare reimbursement in an inpatient setting as well as a hospital outpatient environment, if appropriate, based on the determination of the provider. The phase out of the IPO will occur over three years, beginning with 300 musculoskeletal services, and complete removal of the list by CY 2024. The rule also finalizes other provisions to offer beneficiaries additional choice in their healthcare options, including adding 11 procedures to the Ambulatory Service Center (ASC) Covered Procedures List (CPL).

Furthermore, the rule continues the current 340B purchased drugs payment policy. Under Section 340B of the Public Health Service Act, participating hospitals and other providers can purchase specific outpatient covered drugs directly from the manufacturer at a lower price. The 2018 OPPS Final Rule adopted a policy that Medicare will pay an adjusted Average Sales Price (ASP) less 22.5 percent for separately payable drugs purchased through the 340B program. According to CMS, keeping this current policy will be necessary to maintain stable payment during the COVID-19 public health emergency. Rural community hospitals, children’s hospitals, and Prospective Payment System (PPS) cancer hospitals will remain exempt from the 340B payment policy. These hospitals will continue to report a modifier for drugs acquired through the 340B program and be paid the ASP plus 6 percent.

Published on: December 4, 2020

Final Rule for Medicare Physician Fee Schedule

by Wachler & Associates, P.C.

On Tuesday, December 1, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released the final rule for the 2021 Medicare physician fee schedule. As part of the updated physician fee schedule, CMS changed quality reporting requirements to the Medicare Shared Savings Program—specifically with regards to telehealth services. In the wake of the 2019 Novel Coronavirus (“COVID-19”) pandemic, telehealth has become a central form of providing healthcare. Telehealth will now be permanently allowed for Medicare recipients who receive evaluation and management (“E/M”) services at home. Telehealth will also be temporarily permitted for emergency and other visits—CMS hopes to make these permanently available one day as well.

In addition to the changes in telehealth, CMS is also giving Medicare Accountable Care Organizations (“ACOs”) an extended period of time to increase their quality performance standards from the 30^th percentile to the 40^th. In fact, they now have two more years to reach this goal because the initial goal of January 2021 was not feasible in the wake of COVID-19. Although this deadline has been extended by two years, ACOs must begin reporting quality measures through new MIPS platforms within the next year. Lastly, CMS has begun tapering the form of quality measurement from reporting 10 measures to the CMS Web Interface or reporting 3 measures under MIPS in 2021 to reporting just 6 quality measures under MIPS in 2022. ACOs are concerned with these changes being implemented during a pandemic, but CMS expects positive outcomes to result from the changes, nonetheless.

Most pertinently for physicians, is that CMS has lowered the fee schedule’s conversion factor by 10.2%. This means that instead of the conversion factor being $36.09, it is now $32.41. That change paired with many changes to E/M services and codes could lead to physicians seeing a change in their revenue. The changes in these E/M codes reflect the recent shift to prioritize value-based care. These updated E/M codes will now prioritize time spent evaluating and managing patient care, rather than quantity of interventions or procedures.

Published on: November 20, 2020

Release of CMS 2020 Improper Payment Report

by Wachler & Associates, P.C.

On November 16, 2020, the Centers for Medicare & Medicaid Services (CMS) released its 2020 Estimated Improper Payment Rates. Under the 2019 Payment Integrity Act, CMS is required to review Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid, and the Children’s Health Insurance Program (CHIP) and estimate the amount of improper payments made under each program.

The reported improper payment data for CMS FY 2020 represents claims submitted July 1, 2018 through June 30, 2019. Due the COVID-19 pandemic, CMS temporarily halted all data requests to providers and state agencies regarding incorrect payments from March to August 2020. To compile the report, CMS adjusted calculation methods for reporting improper payment rates for the 2020 Agency Financial Report (AFR), using data already available at the time of the COVID-19 pandemic or data voluntarily provided. The calculated rates still meet national precision requirements.

The FY 2020 improper payment rate for Medicare FFS, which includes Part A and Part B, was estimated to be 6.27% or $25.74 billion. This represents a notable decrease from FY 2019, for which the improper payment rate was estimated as 7.25%, or $28.91 billion. The result of this decrease is likely due to reductions in the improper payment estimates for home health and skilled nursing facilities, which saw a $5.90 billion and $1 billion decrease, respectively. These decreases are likely due to several policy clarifications by CMS.

Published on: November 9, 2020

HHS Proposes to Review Its Regulations Every Ten Years

by Wachler & Associates, P.C.

On November 4, 2020, the Department of Health and Human Services (“HHS”) proposed a new rule that would require HHS to review many of its regulations every ten years. HHS proposed the new rule pursuant to the Regulatory Flexibility Act (“RFA”), which was enacted under President Carter in 1980. Under the proposed rule, every ten years, HHS would review a regulation to determine whether it is still needed, whether it is having the appropriate impacts, and whether it ought to be revised or rescinded. Regulations that are not timely reviewed would expire.

Nearly all regulations would undergo a two-step review. HHS would first determine whether the RFA applies to a regulation by assessing whether they have a significant economic impact on a substantial number of small entities. If the RFA applies, HHS will then conduct a more detailed review of the regulation and consider: (1) the continued need for the rule, (2) complaints about it, (3) the rule’s complexity, (4) the extent to which it duplicates or conflicts with other rules, and (5) whether technological, economic, and legal changes favor amending or rescinding the rule. Public comments will be accepted as part of this review process.

The following regulations will not be subject to this review: regulations that are jointly issued with other agencies, regulations that legally cannot be rescinded, and regulations issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters. Regulations that affect the regulations of other agencies will be reviewed in conjunction with those agencies.

Published on: November 6, 2020

HHS Rewards Nursing Homes with $333 Million for Reduced COVID-19 Infections and Deaths

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) announced on Wednesday, October 28, 2020, that an additional $333 million in performance payments will be granted to nursing homes that reduced their COVID-19 death and infection rates during August and September of the COVID-19 pandemic. HHS will allocate these payments to more than 10,000 nursing homes that successfully addressed the COVID-19 pandemic and continue to incentivize infection control, training, safety improvements, and protection of the vulnerable elderly population.

These payments represent phase one of the Nursing Home Quality Incentive Program, a five phase, $2 billion incentive program, announced by HHS and the Trump Administration in September 2020. For a nursing home to qualify for payments under the incentive program, current certification as a nursing home or skilled nursing facility (SNF) is required, and the facility must receive reimbursement from CMS. Nursing facilities are also required to submit a minimum of one of three types of data sources to check eligibility and collect important provider information. These data sources include: Certification and Survey Provider Enhanced Reports (CASPER), Nursing Home Compare (NHC), and Provider of Services (POS).

The incentive program will be divided into five phases, with nursing homes receiving September payments early in November and an additional four opportunities to receive incentive payments in the following months. The five phases of the program correspond with five successive monthly periods in which nursing homes can receive incentive payments for reaching certain goals. Specific goals will vary based on local COVID-19 statistics.

Published on: November 4, 2020

Provider Relief Fund for COVID-19 Vaccine Logistics and OIG Review of HRSA

by Wachler & Associates, P.C.

In late October 2020, the Department of Health and Human Services (“HHS”) released guidance on use of Provider Relief Fund (“PRF”) payments to cover costs associated with a potential COVID-19 vaccine. Also, in late October, HHS Office of the Inspector General (“OIG”) announced a review of the Health Resource and Services Administration’s (“HRSA”) administration of the PRF. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS, through HRSA, to provide financial relief to healthcare providers during the COVID-19 pandemic.

A provider who retains a payment from the PRF must agree to certain restrictions on use of the payment. For example, the payment may only be used to prevent, prepare for or respond to coronavirus; to reimburse the recipient for health care related expenses or lost revenues that are attributable to coronavirus; and cannot be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. These restrictions led to speculation about how the payments could be used with regard to a potential COVID-19 vaccine, especially in light of both the required cold-storage and other logistical challenges of the vaccines currently under development as well as the Center for Medicare & Medicaid Services’ (“CMS”) promises to cover the cost of the vaccine.

After CMS announced that it would cover the cost of the vaccine, HHS clarified its position regarding the PRF. Because Medicare, Medicaid, and CHIP will pay for the doses and administration of the vaccine, providers cannot use the PRF payment to reimburse themselves for these expenses. However, PRF payments may be used for COVID-19 vaccine distribution and logistics, including purchase of additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine (including transportation costs not otherwise reimbursed). Moreover, funds may be used before an FDA-licensed or approved vaccine becomes available.