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Monday, June 28, 2010

CCH® Reimbursement Integrated Library
The Reimbursement Integrated Library delivers the key performance indicators for maximizing reimbursement. The Library includes three invaluable titles:
  • Dennis Barry's Reimbursement Advisor - This monthly newsletter provides all the facts about reimbursement strategies to minimize the adverse effects of DRGs, RBRVs, APCs and capitation to optimize hospital reimbursement.
  • Receivables Report - This monthly newsletter includes actual profit-improvement examples from facilities nationwide, secrets for successfully challenging denials, tips for using automation to increase cash flow, and strategies your colleagues are using now to prepare for health care reform.
  • Hospital Accounts Receivable Analysis - This quarterly journal is a synopsis of statistical data related to hospital receivables.

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Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

June 2010, Vol. 25, No. 10

In the June 2010 issue of Dennis Barry’s Reimbursement Advisor, authors examine an aspect of health care reform that has significant implications due to revisions to the law regarding Medicare and Medicaid overpayments, Medicare signature guidelines, and a recent Medicare Appeals Council decision with Condition Code 44 implications.
  • New law sets 60-day “overpayment“ window:
    What the law says. The recently enacted health care reform legislation requires recipients of a Medicare or Medicaid overpayment to disclose the overpayment and refund the overpayment within 60 days. Enforcement of this law is through the False Claims Act, meaning that violation could expose a provider to treble damages and penalties of up to $11,000 per claim. The most significant change under the new law is establishing a 60-day time period within which disclosure and repayment must occur. The law also, however, raises questions about the meaning of “overpayments.” In this article, the author examines the new law and its implications for health care provider organizations.

    Read IRN » (ip access user) » Read IntelliConnect »

    • July 2010 highlights --- Among the articles coming in the July 2010 issue:

    • disproportionate share hospital (DSH) controversies continue to swirl as CMS issues new ruling that offsets gains realized through the Baystate Medical Center v. Leavitt court decision;
    • results and recommendations in the final wage index report , and
    • a closer look at the interim rule on ordering physician enrollment requirements.

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Receivables Report

Receivables Report

June 2010, Volume 25, No. 6

  • HITECH Brings New Rules
    The Health Information Technology for Economic and Clinical Health Act (HITECH Act) was passed as part of the Stimulus Act, bringing the most significant change to the health care privacy and security environment in several years. For the first time, under HITECH, the government issued new security breach notification rules covering not only health care entities but also their business associates. This puts the onus on hospitals to review contracts with any vendors—collection agencies, software vendors, revenue cycle consultants—to make sure they are adhering to the new regulations. Read more about what is required in this month’s issue of Receivables Report.

    Read IRN » (ip access user) » Read IntelliConnect »

    • Read this month's Advisor on IRN. Subscribers only

    Read this month's Advisor on IntelliConnect. Subscribers only

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    HARA

    Hospital Accounts Receivable Analysis

    3rd Quarter 2009, vol. 23, no. 4
    • Cost-to-Collect Up.
      The cost to collect a dollar climbed up over two cents from the third to the fourth quarter of 2009—from 1.98 cents to 2.19 cents. By hospital bed size, the facilities with 200 to 399 beds reported spending the smallest amount to collect at 1.93 cents. Review these survey figures and see how your numbers compare. Benchmarking against other facilities as well as against your own performance can be a great way to keep performance levels high.
      Read IRN » (ip access user) » Read IntelliConnect »

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    Headlines
    from Medicare and Medicaid Guide

    Physicians get 2.2 percent increase through November

    President Obama on June 25 signed into law legislation that will provide physicians participating in Medicare and TRICARE with a 2.2 percent increase in payments through the end of November 2010. The “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” (H.R. 3962) also provides single and multiple employer pension plan sponsors with relief from pension funding requirements.

    Since 1999, physician payments under Medicare have been determined by use of the Sustainable Growth Rate (SGR) formula. The practical effect of the SGR in recent years is that physicians have faced increasing cuts in reimbursement each year, with Congress stepping in to pass a series of temporary extensions that either delayed the payment decrease or, in some instances, increased physician payments temporarily. Physicians faced a 21 percent decrease in payments at the beginning of 2010, but the deadline for the decrease to start was extended twice, with the last deadline June 1.

    CMS delayed processing claims reflecting the 21 percent decrease until June 18. The legislation, which passed the Senate on June 18 and the House on June 24, reverses that payment cut and provides a 2.2. percent update to payment rates retroactive to June 1, 2010. According to a blog post issued by Nancy DeParle, director of the White House Office of Health Reform, “the President also signed a directive to the Department of Health and Human Services instructing them to cut through the bureaucratic red tape and implement these changes immediately.”

    Details of legislation

    The new law amends Section 1848(d) of the Social Security Act (42 U.S.C. 1395w–4(d)) by adding a new paragraph (11):

    UPDATE FOR JUNE THROUGH NOVEMBER OF 2010

    (A) IN GENERAL.—Subject to paragraphs (7)(B), (8)(B), (9)(B), and (10)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2010 for the period beginning on June 1, 2010, and ending on November 30, 2010, the update to the single conversion factor shall be 2.2 percent.(B) NO EFFECT ON COMPUTATION OF CONVERSION FACTOR FOR REMAINING PORTION OF 2010 AND SUBSEQUENT YEARS.—The conversion factor under this subsection shall be computed under paragraph (1)(A) for the period beginning on December 1, 2010, and ending on December 31, 2010, and for 2011 and subsequent years as if subparagraph (A) had never applied.

    If Congress takes no further action on changing the law regarding the SGR this year, then physicians would face the 21 percent decrease in payments starting December 1, 2010.

    Other changes

    The legislation also closes a loophole that allowed Medicare payments for some outpatient services provided within three days before an inpatient admission and related to the inpatient admission to be unbundled and reimbursed separately from the payment for the inpatient stay. In addition, the legislation authorizes CMS to collaborate with the IRS to determine whether providers applying to enroll or re-enroll in Medicare have failed to file federal tax returns or have delinquent tax debts.

    H.R. 3962 and Baucus, Grassley Press Release, June 24, 2010.

    "Do Not Pay List" created to ensure payment accuracy

    The Obama Administration recently announced the creation of a “Do Not Pay List,” a list of databases that federal agencies must review before issuing any payment or award to any recipient. Agencies specifically are required to review current pre-payment and pre-award procedures, and ensure a thorough review of the databases in the “Do Not Pay List” to identify ineligible recipients and prevent certain improper payments from being made in the first place. President Obama emphasized, “While identifying and recapturing improper payments is important, prevention of payment errors before they occur should be the first priority in protecting taxpayer resources from waste, fraud, and abuse.”

    Before issuing any payment or award, agencies must, at a minimum, check the following databases from the “Do Not Pay List”: the Social Security Administration’s Death Master File; the General Services Administration’s Excluded Parties List System; the Department of the Treasury’s Debt Check Database; the Department of Housing and Urban Development’s Credit Alert System or Credit Alert Interactive Voice Response System; HHS’ Office of Inspector General’s List of Excluded Individuals/Entities; and any additional databases designated by the Director of the Office of Management and Budget (OMB) in consultation with agencies.

    Plans and guidance

    The Obama Administration began coordination of the databases in April 2010 by launching the Federal Awardee Performance and Integrity Information System, which integrates various sources of information on the eligibility of government contractors for awards. The Director of the OMB is required to provide President Obama with a plan for completing integration for the remaining databases, to the extent permitted by law, to enable agencies to access them through a single entry point. Each agency is required to submit to the OMB: (1) a plan that includes information on its current pre-payment and pre-award procedures, and (2) a list of databases that the agency checks pursuant to those procedures.

    The Director of the OMB is then required to issue guidance on actions agencies must take to carry out the Administration’s initiatives on payment accuracy. This guidance must: (1) clarify that the head of each agency is responsible for ensuring an efficient and accurate process for determining whether the information provided on the “Do Not Pay List” is sufficient to stop a payment, and, if so, whether a payment should be stopped under the circumstances; and (2) identify best practices and databases that agencies should utilize to conduct pre-payment checks to ensure that only eligible recipients receive government benefits or payments.

    Memorandum for the Heads of Executive Departments and Agencies, June 18, 2010, ¶60,084.

    MedPAC recommends changes for Medicare delivery system

    The June 2010 Medicare Payment Advisory Commission (MedPAC) report to Congress focuses on the implementation of reform in various areas of health care that will bring about a better quality of care while removing the current payment structure that rewards providers for providing a higher volume of care. To achieve these goals MedPAC discussed changes to cost-sharing policies, graduate medical education (GME), ancillary services offered in physicians’ offices, technical assistance, quality improvement, shared decision-making, coordination of care for dual-eligibles, inpatient psychiatric care, and the legal ability of CMS to institute policy innovations.

    Cost-sharing redesign

    Since the current fee-for-service (FFS) benefit design contains no upper limit on a beneficiary’s cost-sharing expenses, over 90 percent of beneficiaries obtain supplemental coverage, which results in more utilization and cost to the Medicare program, according to MedPAC. When elderly beneficiaries are insured against Medicare cost-sharing requirements, they use more care and Medicare spends more on these beneficiaries. To reduce this utilization, MedPAC investigated adding a cap on out-of pocket costs while requiring fixed-dollar copayments on supplemental policies for specific services. Exceptions may be implemented that waive cost-sharing for services in particular circumstances, and cost-sharing protections could be provided to low-income beneficiaries to ensure they receive necessary care. Longer term changes may include the development of the evidence base in a carefully targeted attempt to recognize the value of various treatments. CMS would have to be willing to both lower the cost-sharing for highly valued treatments and increase the cost-sharing for more lowly valued services.

    Graduate medical education and ancillary services

    The FFS payment system, which rewards volume over quality, affects physician career choices and the availability of various residency programs, resulting in poor workforce diversity and a lack of training in the skills necessary to improve the quality of the health care delivery system. MedPAC recommends making a large portion of Medicare GME payments contingent on meeting specific educational objectives, and issuing public information to encourage greater accountability for the activities of GME institutions. The GME system could be better aligned with the delivery system reforms by separating Medicare GME payments from Medicare FFS payment systems and by providing the public with information about Medicare’s payments and teaching costs.

    The provision of ancillary services in physicians’ offices has rapidly grown and raises concerns about the equity and accuracy of physician payments. Of particular concern, are the findings that many ancillary services are self-referred by the physician and are not usually provided during a patient’s office visit. There is also evidence that some of the ancillary services are not clinically appropriate, and that the allowance of self-referral may skew clinical decisions and creates an incentive to increase volume under Medicare’s current FFS payments systems, which rewards higher volume. To address the problems, MedPAC suggests the development of payment systems that reward providers for improving the quality of care while hindering volume growth.

    Shared decision making and coordination of care

    Medicare beneficiaries are more likely to be less educated and less health literate than other consumers, which increases their difficulty in making medical decisions, according to MedPAC. Shared decision making, which encourages a high level of communication between the provider and the patient about outcomes, probabilities, and values of a particular treatment option facilitates patient participation in the evaluation of those treatment options that addresse both the medical problem and the patient’s personal preferences. Shared decision making can be promoted by providing incentives to patients and providers, implementing a demonstration project, or requiring the use of shared decision making in certain situations.

    Dual-eligible beneficiaries have differing care needs and spending patterns, and conflicting program incentives result in poor coordination of care amongst providers and increased federal spending. More fully integrated care and the combination of funding streams will decrease incentives that currently undermine the coordination of care. Numerous challenges to integrated programs exist, but several states have been successful in the implementation of such programs.

    Technical assistance and quality improvement

    CMS can motivate quality improvement by offering technical assistance to providers and by reforming conditions of participation in the Medicare program, according to MedPAC. Technical assistance is valuable in situations where treatment requires coordination amongst providers, in management of highly complex organizations, or in the service of rural and low-income populations. In addition to participation in Medicare’s Quality Improvement Organization (QIO) program, low-performing providers may benefit from an option to choose another entity, such as a high-performing provider, professional association, or consulting organization, to provide them with Medicare-supported technical assistance.

    MedPAC Report, June 15, 2010, ¶60,083.

    Mandatory managed care challenge continues

    A Hawaii federal court has ruled that aged, blind and disabled Medicaid beneficiaries who challenged the state’s QUEST Expanded Access (QExA) demonstration did not prove that the managed care networks were inadequate under Medicaid law. Hawaii’s QExA requires aged, blind and disabled Medicaid beneficiaries to enroll in one of two managed care plans. Ordinarily, beneficiaries in this category are exempt from mandatory managed care, but CMS granted the state a waiver under Soc. Sec. Act §1115. In earlier stages of this litigation, the court has upheld: (1) CMS’ and the Secretary’s approval of the demonstration (¶303,258) and of the state’s contracts with the managed care organizations (MCOs) (¶303,161); (2) the state’s contract with one of the MCOs that was not licensed specifically as a health maintenance organization (HMO) under state law (¶303,259); and (3) the state’s acceptance of the MCOs’ documentation and assurances that their networks were adequate to meet the beneficiaries’ needs at the time of contracting (¶303,322).

    The current ruling

    This hearing involved the beneficiaries’ claims that the provider networks did not meet the requirements of Soc. Sec. Act §1932(b)(5) to have providers in the appropriate number, specialties and geographic locations to meet the needs of the members in the service area. The beneficiaries contended that the MCOs must document the adequacy of the networks at the time of contracting and maintain adequate networks thereafter. In another case involving the same issue, the Ninth Circuit held that the state’s failure to obtain adequate assurances did not violate beneficiaries’ rights because the statute and regulations govern the requirements of the Request for Proposals (RFP) and the contracts, and those requirements were satisfied. (see ¶303,297). The district court followed that ruling.

    The court then considered whether the MCOs failed to provide adequate assurances after the QExA demonstration became effective. 42 C.F.R. §438.207 states that MCOs must provide assurances of network adequacy at the time of contracting and when there has been a significant change in its operations that would affect capacity, including a change in benefits offered, geographic service area or payments. Because the beneficiaries did not contend that there had been a significant change that triggered the requirement, there was no violation of the regulation.

    The beneficiaries presented evidence of multiple complaints about their access to services. The court rejected much of that evidence, noting that the beneficiaries’ complaints largely concerned coverage rather than access to providers, and that the grievance procedure had been effective in resolving some of the complaints. It also found that the MCOs’ ratio of beneficiaries to primary care providers met the requirements of the RFP. Further, the court did not allow the report of the beneficiaries’ expert witness to be admitted into evidence because: (1) her survey was not conducted according to accepted scientific principles; (2) she did not consider that the of beneficiaries who were dual eligibles could continue to see their providers through Medicare; (3) she set her own standard requiring all primary care providers to be internists; and (4) it was hearsay.

    The court also determined that the beneficiaries did not raise any factual issue to support their claim that the state’s choice to contract with two MCOs rather than all three who responded to the RFP substantially impaired access to services in violation of Soc. Sec. Act §1932(a)(1)(A)(ii). It rejected the contentions that the state officials did not consider the question when they made the decision and that the state’s administration of the QUEST program, in which it contracted with all bidders, should be followed with QExA.

    Remaining issues

    The beneficiaries claim that the MCOs violate Soc. Sec. Act §1903(m)(1)(A)(i), which requires that they make services available to their members to the same extent that they are available to Medicaid beneficiaries who are not members. The court noted that this requirement cannot be satisfied simply by including appropriate provisions in the contracts. The beneficiaries’ evidence that QUEST members have easier and quicker access to services than QExA members was sufficient to raise a factual issue. Therefore, the court ruled that the state and the MCOs were not entitled to judgment as a matter of law on that issue.

    In addition, other issues that remain to be tried include: (1) whether the MCOs’ practices concerning access discriminate against individuals with disabilities in violation of the Americans with Disabilities Act (ADA) and the Rehabilitation Act (RA); (2) whether the MCOs failed to meet two of the solvency requirements for Medicaid MCOs; and (3) whether they violated the rights of an individual beneficiary under the ADA and RA by failing to provide services in the most integrated setting practicable.

    G. v. Hawaii Department of Human Services, D. Haw., June 14, 2010, ¶303,470.

    Beneficiaries must repay erroneous Part D refund

    Medicare Part D prescription drug participants who received erroneous premium refunds from the Social Security Administration (SSA) may not obtain a waiver from recovery under the Social Security statute, according to the U.S. District Court for the District of Columbia.

    A senior citizen organization argued that its members were entitled to a waiver from repayment of refunds of Medicare Part D premiums that were issued mistakenly through the SSA. The seniors had paid their Part D premiums by having monthly deductions taken from their Social Security benefits. In 2006, CMS determined that the SSA had collected excessive Part D premium amounts from approximately 230,000 participants through the monthly deductions. Consequently, SSA issued refunds to affected participants via checks and direct deposit. Weeks later, CMS determined that it had made a mistake in its calculations, and that the refunds were made in error. CMS sent letters to beneficiaries who had received the refunds, requesting them to return the funds, and instructing them on how to do so. Recognizing that the return of the funds could cause a hardship for some recipients, CMS allowed for installment payments to be made.

    The senior citizens organization argued that since the refunds were paid by the SSA the recipients were entitled to the waiver process under section 404(b) of the Social Security Act which permits the granting of waivers from recovery of overpaid Social Security benefits. The court determined that the statute is specific that a waiver can only be made for recovery of erroneous funds paid “under this subchapter.” Therefore, §404(b) only grants a right of waiver from recovery of overpayments covered under §404(a), which exclusively refers to Social Security benefits. This provision does not apply to any type of government overpayment that happens to be processed through the SSA, such as mistaken Part D refunds.

    Action Alliance of Senior Citizens v. Sebelius, D. D.C, June 18, 2010, ¶303,473.

    GAO identifies strategies to prevent improper payments

    Several key strategies for CMS to prevent fraud, waste, and abuse in Medicare have been identified by the Government Accountability Office (GAO). While CMS has made progress in implementing some of the strategies, there is still room for improvement.

    Key strategies

    One strategy was strengthening the provider enrollment process and standards to reduce the risk of enrolling providers intent on abusing the program. For instance, CMS should perform background checks on providers at the time they apply to become Medicare providers. The GAO further recommended stricter scrutiny of enrollment processes of providers whose services and items are especially vulnerable to improper payments, including home health agencies (HHAs) and suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

    CMS did not implement the GAO’s previous recommendation to assess the feasibility of a criminal history verification of all key officials’ names on an HHA enrollment application. The GAO also discovered persistent weaknesses with respect to DMEPOS supplier enrollment when it created two fictional medical equipment companies that were enrolled by CMS’ contractor and given permission to begin billing Medicare.

    CMS, however, had taken steps to ensure that only legitimate DMEPOS suppliers can bill Medicare, for example, by requiring DMEPOS suppliers to post a surety bond to ensure that the Medicare program recoups erroneous payments that result from fraudulent or abusive billing practices.

    In addition, provisions under the Patient Protection and Affordable Care Act (PubLNo 111-148) and the Health Care and Education Reconciliation Act (PubLNo 111-152) may assist with strengthening provider enrollment by allowing HHS to, among other things, add criminal and background checks to its enrollment screening process and impose a temporary moratorium on enrollment of providers if HHS deems it necessary to prevent fraud and abuse.

    A second strategy identified by the GAO was to improve prepayment review of claims by having automated payment controls, called “edits,” in place that can deny or flag inappropriate claims. The GAO discovered that, despite its prior recommendation to CMS, CMS did not require its contractors to develop thresholds for unexplained increases in billing and use them to develop automated prepayment controls. However, CMS added edits to flag claims for services that were unlikely to be provided in the normal course of medical care.

    The GAO’s third strategy was to focus postpayment claims review on the most vulnerable areas, which include HHAs and DMEPOS suppliers. The GAO discovered that CMS did not routinely provide physicians responsible for authorizing home health care with information that would enable them to determine whether an HHA was billing for unauthorized care. It was recommended that CMS direct its recover audit contractors (RACs) to focus on items and services where contractors were not expected to focus their reviews, and where improper payments were known to be high.

    A fourth strategy to combat overpayments was improving oversight of CMS’ contractors. The OIG observed that, while limited, CMS’ oversight of its programs has been expanding. For example, CMS was beginning to, among other things, revise its audit protocol and pilot on-site audits.

    Finally, the GAO recommended that CMS develop a robust process for addressing identified vulnerabilities. Specifically, CMS should develop and implement a process to ensure that it promptly: (1) evaluates the findings of RACs, (2) decides on the appropriate response and a time frame for taking action, and (3) acts to correct the vulnerabilities identified.

    GAO Report, No. GAO-10-844T, June 15, 2010, ¶60,081.

    Home infusion coverage under Medicare FFS has limits

    Infusion therapy is drug treatment that is generally administered intravenously and provided in hospitals, but because of recent clinical developments and efforts to contain costs, other sites are now available, including the patient's home. Home infusion therapy requires coordination between the different providers of drugs, equipment, and skilled nursing care.

    The Government Accountability Office (GAO) undertook this study to review the home infusion therapy coverage of private insurers and to provide information about Medicare policy. The GAO report described: (1) coverage of home infusion therapy components under Medicare fee-for-service (FFS); (2) coverage and payment for home infusion therapy by other health insurers, including commercial plans and Medicare Advantage (MA) plans, as private alternatives to Medicare FFS; and (3) the utilization and quality management practices that health insurers use for home infusion therapy.

    Key differences

    Medicare FFS coverage of home infusion therapy depends on whether the beneficiary is homebound, and other factors related to the beneficiary’s condition and treatment needs. Some Medicare FFS beneficiaries who are homebound have comprehensive coverage of home infusion therapy, including drugs, equipment and supplies, and skilled nursing services when necessary. For some beneficiaries who are not homebound with particular conditions that need certain drugs and equipment, Medicare FFS coverage of home infusion may be limited to the necessary drugs, equipment, and supplies, but would exclude nursing services. For the other beneficiaries who are not homebound, Medicare FFS coverage was further limited by having only infusion drugs covered for those enrolled in a prescription drug plan, but not having coverage for equipment, supplies, and nursing services. The beneficiaries would also have to obtain infusion therapy in a hospital, nursing home, or physician’s office to have all therapy components covered.

    The health insurers provided comprehensive coverage of home infusion therapy under all of their commercial plans. Some insurers also provide comprehensive coverage under their network-based MA plans that may provide more benefits than what is required under Medicare FFS. Nationally, almost one out of every five MA beneficiaries had comprehensive coverage through an MA plan, that was chosen to cover home infusion therapy as a supplemental benefit. Providers of home infusion therapy are paid in a combination of payment mechanisms including: (1) a fee schedule for infusion drugs; (2) a fee schedule for nursing services; and (3) and a bundled payment per day of therapy for all other services and supplies.

    Most health insurers use standard industry practices to manage utilization of home infusion therapy and ensure quality of care by requiring infusion providers to submit patient information in advance to support a request for coverage and receive payment authorization. Also, health insurers may review samples of claims postpayment to determine if claims were billed and paid appropriately. The insurers stated they did not have significant problems with improper payments or quality for home infusion therapy services. They also reported they ensured quality services were delivered in the home by: (1) developing a limited provider network of infusion pharmacies and home health agencies; (2) requiring provider accreditation; (3) coordinating care among providers; and (4) monitoring patient complaints.

    GAO Report, No. GAO-10-426, June 7, 2010, ¶60,082.

    Medicare Advantage 2010 enrollment patterns analyzed

    An analysis of 2010 Medicare Advantage (MA) plans by Mathematical Policy Research, Inc. and the Kaiser Family Foundation found (1) a trend toward growth in enrollment despite a decline in the total number MA plans available, and (2) domination of the market by a small number of firms. The analysis, entitled “Medicare Advantage 2010 Data Spotlight: Plan Enrollment Patterns and Trends,” examines MA enrollment in health maintenance organizations (HMOs), preferred provider organizations (PPOs), and private fee-for-service (PFFS) plans. The key findings of this data spotlight are summarized below:

    Nationwide enrollment trends. MA enrollment increased 5.7 percent from 2009 to 2010, with 11.1 million beneficiaries in MA plans, or 24 percent of all Medicare beneficiaries. Eighty-three percent of MA beneficiaries are enrolled in individual plans, with 17 percent enrolled through employer group plans. The 2010 enrollment increased even though the total number of MA plans declined by 18 percent from 2009 levels.

    Plan type shift. While PFFS enrollment declined by 0.7 million in 2010, it was offset by a 43 percent increase in PPO enrollment. HMOs continue to dominate enrollment, with nearly 65 percent of all enrollees in 2010, while 12 percent of MA enrollees were in local PPOs and seven percent in regional PPOs.

    Urban v. rural enrollment. HMOs account for 69 percent of enrollment in urban counties, while PFFS plans account for a 37 percent share in rural counties.

    Geographic concentration. In 10 states (Arkansas, Delaware, Illinois, Maryland, Mississippi, North Dakota, New Hampshire, South Dakota, Vermont, and Wyoming) less than 10 percent of all beneficiaries are in a MA plan. In Oregon alone, however, 41 percent of beneficiaries are enrolled in a MA plan. In 12 other states, 30 percent or more of beneficiaries are in a MA plan.

    Key firms. In 2010, one third of all MA enrollees are in plans affiliated with either UnitedHealthcare (18 percent) and Humana (15 percent), while Blue Cross/Blue Shield (BCBS) affiliates account for 15 percent, Kaiser Permanente nine percent, and Aetna four percent. Kaiser Permanente is almost exclusively focused on HMOs (93 percent), with HMOs also making up 69 percent of UnitedHealthcare enrollees. While HMO enrollment also makes up 50 percent of BCBS affiliates, Humana relies much more on PFFS plans (28 percent).

    Special needs plans. Special needs plan (SNP) enrollment did not change from 2009 to 2010, with 1.3 million enrollees each year. UnitedHealthcare has the largest share (21 percent), while Kaiser Permanente, the next largest firm, has only five percent of the market.

    Premiums. The average enrollee in an individual MA plan with Part D coverage (MA-PD) paid a premium of $44 per month in 2010, an increase of 22 percent from 2009. Average monthly premiums, in 2010, weighted by enrollment, are lower for MA-PD HMOs ($37) than local PPOs ($63). The average HMO premium paid by a MA-PD enrollee increased 19 percent from 2009, as compared to little to no increase for local PPOs, a 54 percent increase for regional PPOs, and a 22 percent increase for PFFS plans. Forty-six percent of all MA-PD enrollees pay no additional premium for coverage.

    The spotlight opines that although MA has traditionally been a favorite of moderate income individuals who do not have access to employer-sponsored retiree plans, PPOs may be positioning themselves to compete for these higher income individuals as Medigap premiums rise and availability of employer-sponsored retiree coverage decreases. In addition, despite the fact that the Patient Protection and Affordable Care Act (PubLNo 111-148) reduces MA plan payments over time, the spotlight concludes that MA plans are likely to remain a key option for beneficiaries and should continue to be monitored to determine beneficiary access and out-of-pocket costs.

    Mathematical Policy Research, Inc. and Kaiser Family Foundation Data Spotlight, June 2010.

    HHS invests $250 million to strengthen primary care workforce

    The HHS Secretary announced $250 million worth of investments that will be made under the Patient Protection and Affordable Care Act (PPACA) (PubLNo 111-148) to increase the number of health care providers and strengthen the primary care workforce. Over the next five years, the investments will support the training and development of over 16,000 new primary care providers by (1) creating 500 more primary care residency slots, (2) supporting physician assistant primary care training, (3) encouraging the pursuit of full-time nursing careers, (4) establishing nurse practitioner-led clinics, and (5) encouraging states to plan for health care workforce needs. Experts anticipate that the aging population and a decline in the number of medical students choosing to enter primary care will cause a shortage of nearly 21,000 primary care physicians by 2015. The funding is allocated from the new PPACA-created Prevention and Public Health Fund for fiscal year 2010.

    The Prevention and Public Health Fund

    The Prevention and Public Health Fund is a $500 million fund designed to assist in the creation of the necessary infrastructure for prevention of disease, early detection, and management of medical conditions before they reach a severe level. Half of this fund will be used to provide the necessary resources for strengthening the primary care workforce. Additionally, the funding will support the development of over 600 new physician assistants, who can be trained in a short period of time and are permitted to practice medicine as part of a physician-supervised team. An investment will be made in nursing education to encourage students to be trained full-time and go on to become nurse practitioners, who provide comprehensive primary care services. More funding will go to ten nurse-managed health clinics, which will be staffed by nurse practitioners who provide primary care services to medically underserved populations. Finally, resources will be provided to states to assist the implementation of innovative strategies to expand their primary care workforce by 10-25 percent over ten years.

    In addition to investments made by the Prevention and Public Health Fund, the government is implementing additional strategies to increase the numbers of physicians, physician assistants, and nurse practitioners in the primary care field. PPACA will provide over $1.5 billion to the National Health Service Corps (NHSC) over five years, which will grant scholarships and assist with the repayment of educational loans for primary care providers who practice in underserved areas. PPACA will also provide tax breaks to certain student loans of primary care providers. The Department of Labor is promoting health care careers by making grants available and expanding career pathway programs. Medicare and Medicaid programs will offer financial incentives to build primary care capacity in underserved areas by providing higher payments and bonus payments.

    HHS News Release, June 16, 2010.

    Decisions and Developments
    CMS Manuals

    Changes to HCPCS codes and Medicare Physician Fee Schedule Designations Will Be Used to Revise CWF Edits to Allow Fiscal Intermediaries to Make Appropriate Payments in Accordance With Policy for SNF Consolidated Billing

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1989, June 18, 2010, ¶159,148.

    October 2010 Quarterly Average Sales Price Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1990, June 18, 2010, ¶159,149.

    Durable Medical Equipment Medicare Administrative Contractors and Shared System Maintainer for the ViPS Medicare System (VMS) should Establish Programming to Allow Payment for Grandfathered Items Furnished by Non-contract Medicare Advantage Suppliers under DMEPOS Competitive Bidding Program

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 721, June 18, 2010, ¶159,150.

    Review and Payment of Home Health Claims when Provider Fails to Submit an Outcome Assessment Information Set and Requirements Governing Absence of Plan of Care for Home Health Part A/B Services, Inpatient Rehabilitation And Hospice Services

    Medicare Program Integrity Manual, Pub. 100-08, Transmittal No. 343, June 18, 2010, ¶159,151.

    Requirement for Submission of Shared Systems Data to the Integrated Data Repository Including Changes to Attachment B: Proposed File Header and Trailer Layouts

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 722, June 18, 2010, ¶159,152.

    Chapter 10 Reorganized into More Manageable Content Units; Information Moved to Chapter 15 and New Definitions Added

    Medicare Program Integrity Manual, Pub. 100-08, Transmittal No. 344, June 18, 2010, ¶159,153.
    DAB Decisions

    FFP for consultant services

    CMS properly disallowed New Jersey’s claims for federal financial participation (FFP) in contingent fees paid to consultants to maximize the FFP received for Medicaid expenditures because the state failed to meet the requirements of Office and Management and Budget (OMB) Circular A-87 and 45 C.F.R. Part 74, incorporated in 42 C.F.R. §430.2(b). Specifically, the state failed to show that the fees were reasonable in relation to the services rendered because: (1) it performed no analysis of the tasks to be performed, the cost of performance, or the allowability or allocation of the costs; and (2) it did not require the contractors to document their work or time spent. In addition, the fees were contingent on the amount recovered from the federal government, not from liable third parties, in violation of Attachment B to Circular A-87. CMS did not establish any grace period or exception to the disallowance of these fees in letters or memoranda issued in May 2002; the statement that the agency “did not plan to” review claims submitted before May 2002 did not create any rights or obligations; and the state could not have relied upon those documents when it submitted its claims.

    New Jersey Department of Human Services, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-10-019, Dec. No. 2318, June 3, 2010, ¶122,218.
    Medicaid: State News

    In-home nursing care

    A Medicaid beneficiary with developmental disabilities and multiple, extensive medical problems did not establish a sufficient possibility of success to support a temporary restraining order (TRO) requiring the Arizona Medicaid agency to provide 24-hour nursing care in his home. The beneficiary received home and community-based services through a demonstration project under which services must be cost-effective and may not exceed the cost of institutional care. Under the demonstration, the agency provided more than eight hours of nursing care and more than 12 hours of attendant care each day. Alternatively, the Medicaid agency offered 24-hour care in a group home for individuals with developmental disabilities. Soc. Sec. Act §1902(a)(19) gives states substantial discretion to limit the amount, scope, type and duration of care that is in the best interests of recipients, but it does not require that each beneficiary receive all the services that might be medically necessary. The agency may limit coverage to services eligible for federal reimbursement. The beneficiary did not contend that any specific Medicaid statute or regulation required the agency to provide 24-hour in-home care.

    Lundergan v. State of Arizona, D.Ariz., June 11, 2010, ¶303,469.
    Medicare

    Fraud conviction appeal

    The manager of a physical therapy group who falsely represented she was a physical or occupational therapist was unsuccessful in overturning her conviction for fraud, but had the terms of restitution as a condition of her supervised release clarified. The manager argued that during her trial the district court erred when it instructed the jury on deliberate ignorance, which is an appropriate instruction when the evidence shows a subjective awareness of a high probability of the existence of illegal conduct, and purposeful behavior to avoid learning of the illegal conduct. However, the evidence was clear that she misrepresented being a licensed therapist; instructed her employees to falsify patient records; and chose to bill based on body parts rather than time because her manual indicated it might be proper, even after a Medicare seminar instructor told her that was improper. The manager argued that she was simply mistaken about billing regulations and had no intent to defraud Medicare, however, she advocated improper billing practices even after learning they were incorrect. If the manager cannot make the restitution payment of $2,500 a month because she does not have the economic resources to make the payments, she should not be sent to prison due to her inability to pay.

    U.S. v. Crawley, 5th Cir., June 17, 2010, ¶303,472.

    HIT policy workgroup meetings

    The Health Information Technology (HIT) Policy Committee Workgroups will hold the following additional public meetings during June 2010: June 22nd–Privacy & Security Tiger Team, 10 a.m. to 1 p.m./ET; June 25th–Enrollment Workgroup, 9 a.m. to 10 a.m./ET; June 28th–Enrollment Workgroup, 10 a.m. to 1 p.m./ET and Privacy & Security Tiger Team, 2 p.m. to 4 p.m./ET. In addition, the June 28th Privacy & Security Policy Workgroup, 2 p.m. to 4 p.m./ET, has been cancelled. All workgroup meetings will be available via webcast; for instructions on how to listen via telephone or Web visit http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://healthit.hhs.gov. Please check the ONC Web site for additional information as it becomes available.

    Notice, 75 FR 34141, June 16, 2010.

    Kickbacks and false claims

    There was sufficient evidence to sustain the conviction of the owner of a durable medical equipment (DME) supply company and a physician for conspiracy to violate, and violation of the Medicare Anti-kickback statute at Soc. Sec. Act §1128B, and health care fraud under 18 U.S.C. §1347. The evidence showed the DME supplier and the physician conspired to have the physician evaluate Medicare patients and fill out prescriptions for wheelchairs for a fee of $250 per prescription written. The physician delivered certificates of medical necessity (CMN) to the DME owner, who took the CMNs and billed Medicare for the cost of expensive power wheelchairs, but then only provided beneficiaries with low-cost power scooters. The DME supplier and physician split the difference in cost, $3,500, and pocketed the money. The record was not complete enough to consider the DME supplier’s argument that he had ineffective assistance of counsel. There is a difference between a complete denial of counsel verses simply shoddy representation. Finally, there was no error when the court determined there was a only single conspiracy in the indictment. Accordingly, the defendants’ convictions for violations of the Anti-Kickback statute and health care fraud were affirmed.

    United States of America v. Job, 5th Cir., June 16, 2010, ¶303,471.

    PPS changes

    CMS published corrections to both the supplemental Proposed rule regarding the inpatient hospital prospective payment system (IPPS) and long-term care hospital (LTCH) PPS for fiscal year 2011 (75 FR 30918, June 2, 2010; see ¶220,760), and the Notice for IPPS and LTCH PPS for fiscal year 2010 (75 FR 31118, June 2, 2010; see ¶262,560).

    Proposed rule, 75 FR 34612, June 17, 2010; ¶220,801; Notice, 75 FR 34614, June 17, 2010; ¶262,863.

    RAC demonstration

    Since the Recovery Audit Contractors (RAC) demonstration began until March 9, 2010, providers appealed 12.7 percent or 76,073 RAC determinations. The data indicated that of all the RAC overpayments determinations (598,238), approximately 8.2 percent (48,993) were overturned on appeal. In this report several data differences appear between this update and the January 2009 report (see ¶52,643). First, the number of claims with overpayment determinations increased from 525,133 to 598,238, because of additional claims that were manually included due to their not being entered in the RAC data warehouse prior to the end of the demonstration. Second, the number of claims providers appealed decreased from the 118,051 to 76,073, because of several factors including: (1) the previous method counted claims that were appealed to multiple levels at each level of appeal compared to the revised method that counts an appealed claim only once, regardless of the number of levels of appeal; (2) appeals reversed by a claims processing contractor when additional documentation was submitted known as clerical reopenings, or appeals withdrawn by the provider, are no longer included; and (3) duplicate claims that were identified in the previous data have been removed. Finally, the number of claims with overpayment determinations by one specific RAC decreased from 175,293 to 171,006, because duplicate claims included in the previous total had been removed.

    CMS Report, June 1, 2010, ¶53,557.

    Skilled nursing facilities

    The former owners of a skilled nursing facility (SNF) have no right to appeal the assessment of an $80,000 civil money penalty (CMP) because the new owners of the SNF satisfied the assessment. The former owners lacked standing to bring the appeal at the time it was filed because CMPs for noncompliance are imposed on the facility and they follow the provider agreement. When the SNF was transferred to a new owner, the new operator became solely responsible for the penalty. An appeal becomes moot when the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome, which is the case here. In this case, the court cannot issue a judgment for the former owners on this appeal to indemnify them against a future suit by the new owners. A federal court lacks the power to render advisory opinions and any decision on the merits of the CMP would be strictly advisory. The penalty was already paid, and the owners who had paid it have not challenged it. Accordingly, the former owner’s possible liability to the new owners does not serve as a basis for the court to exercise jurisdiction, and the petition for review was moot.

    Jennifer Matthew Nursing and Rehabilitation Center v. HHS, 2nd Cir., June 18, 2010, ¶303,474.
    Medicare and Medicaid

    Personal care attendants

    The signed charter for the Personal Care Attendants Workforce Advisory Panel has been filed pursuant to §8002 of the Patient Protection and Affordable Care Act (PubLNo 111-148). The Panel is to provide advice and guidance on issues related to the adequacy of the number of personal care attendant workers; their salaries, wages, and benefits; and access to the services provided by personal care attendant workers. In addition, the Panel will provide advice, guidance, and assistance on personal care attendant workforce issues related to the Community Living Assistance Services and Supports (CLASS) program, and will advise HHS on related policy as it pertains to both public and private sectors. The CLASS Office will be responsible for oversight and management of support services, and all Executive Office entities shall assist in the execution of the Panel’s functions. Nominations for a two-year membership on the 15-member Panel are being solicited from members of the general public who are distinguished in the field. Submission of nominations should be made to the HHS Office of the Assistant Secretary for Planning and Evaluation, no later than June 18, 2010. A copy of the charter may be obtained from the designated contacts or from the Federal Advisory Committee Act (FACA) database at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cg.

    Notice, 75 FR 34140, June 16, 2010, ¶262,862.

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