Since 1973, the Social Security Act has mandated that states provide retroactive Medicaid benefits for three months prior to the individual’s application.  SSA § 1902(a)(34).  Congress enacted this provision to provide coverage to those lacking knowledge about their Medicaid eligibility and to those whose sudden illness prevented them from applying.  Senate Report No. 92-1230, at 209 (Sept. 26, 1972).  Providers benefit from retroactive eligibility through the ability to enroll uninsured patients in Medicaid retroactively, including after discharge, to avoid uncompensated care costs.

Seeking to trim Medicaid expenditures, Iowa’s Governor this year signed a law requiring the State to seek a CMS waiver from the retroactive eligibility requirement.  When the State agency asked the public for comments on its waiver proposal, only one commenter expressed support.  The vast majority expressed concern that many patients—especially trauma patients who might lack the ability to promptly file Medicaid applications—would face new coverage gaps.  The State itself projected that the waiver would shed 3,000 members (monthly) and would slash Medicaid expenditures by $36.8 million (annually).  Providers unsurprisingly voiced concern that the waiver would increase uncompensated care costs. Continue reading…

Word spread quickly Monday (December 20, 2016) about CMS’ issuance of final regulations (to be published in the Federal Register on January 3, 2017) rolling out new mandatory bundled payments models for Acute Miocardial Infarction (AMI), Coronary Artery Bypass Graft (CABG), Surgical Hip and Fracture Treatment (SHFFT), a Cardiac Rehabilitation (CR) incentive model and Track 1+ Accountable Care Organizations. Speculation that President-elect Donald Trump’s nominee for HHS secretary, Rep. Tom Price, would move to roll the regulations back spread just as quickly.

The new regulations mandate bundled payment models (covering the period from admission to ninety days post-discharge) for AMI and CABG in 98 geographies covering 1,120 hospitals; for SHFFT in the 67 geographies where the Comprehensive Joint Replacement (CJR) has already been mandated covering 850 hospitals and for CR in 90 geographies covering 1,320 hospitals. CMS’ chart of geographies covered by each program is set forth here. The AMI, CABG and SHFFT programs give participant clinicians the opportunity to be excluded from Medicare and CHIP Reauthorization Act of 2015’s (MACRA) Medicare Incentive Payment System (MIPS) and to qualify under MACRA’s Advanced Alternative Payment Model (AAPM). Continue reading…

On September 8, 2016, CMS announced in its blog that it will allow physicians to select their level of participation for the first performance year of the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) Quality Payment Program, which begins January 1, 2017. Importantly, during the first performance year (2017), “[c]hoosing one of these options would ensure [physicians] do not receive a negative payment adjustment” under MACRA in 2019.

Under the Quality Payment Program physicians will fall under the Merit-Based Incentive Payment System (“MIPS”) if they do not qualify under the Advanced Alternative Payment Model (“Advanced APM”) option.  In 2019, physicians who are in the MIPS default option could face Medicare rate adjustments of up to 5% based on their performance under four weighted performance categories: quality (50%); resource use (10%); advancing care information (25%); and clinical practice improvement (15%). Advanced APMs include, for example, Track 2 and 3 MSSP ACOs; next generation ACOs; and bundled payment models, and physicians who qualify under the Advanced APM option earn a 5% incentive, are excluded from MIPS adjustments and receive higher fee schedule updates after 2024.

Recognizing that many physicians may face negative payment adjustments under MIPS as a result of participating under the Quality Payment Program, CMS is going to allow eligible physicians to “pick their pace of participation” and ensure they do not receive such negative payment adjustments in 2019 by choosing one of four options for the first performance year:

1. Test the Quality Payment Program;
2. Participate for part of the calendar year;
3. Participate for the full calendar year; or
4. Participate in an Advanced APM in 2017.

The first three options fall under MIPS, while the fourth option falls under the Advanced APM. In the first option, physicians could “submit some data to the Quality Payment Program”, avoid negative payment adjustments and test the waters before broader participation in subsequent years. Under option two, the performance year could begin later than January 1, 2017, a physician practice “could qualify for a small positive payment adjustment”, and a physician would submit Quality Payment Program information for fewer days. The third option is ideal for those physician practices that are ready to participate beginning January 1, 2017 and who are able to submit a full year of quality data. Additionally, physicians “could qualify for a modest positive payment adjustment.” The fourth option would be viable for those physicians or physicians groups who treat enough Medicare beneficiaries and who receive enough of their Medicare payments through an Advanced APM (e.g., MSSP ACOs). Through the Advanced APM option, physicians/physician groups would “qualify for a 5 percent payment in 2019.” It remains unclear what the difference is between a “small” and “modest” payment adjustment. However, CMS may address this in the final rule along with how it will implement MIPS and the Advanced APM. CMS will release the final rule by November 1, 2016.

For more information about MACRA, contact Chris Raphaely, Nicole Martin or a member of Cozen O’Connor’s Health Law team.

On July 7, 2015, U.S. Reps. Mike Thompson, Gregg Harper, Diane Black, and Peter Welch announced the introduction of a new version of the July 2014 telehealth legislation (H.R. 5380) called the Medicare Telehealth Parity Act of 2015 (H.R. 2948) (the “Act”). The Act has already been referred to each of the House Energy and Commerce Committee and the House Committee on Ways and Means.

According to Congressman Thompson’s press release, this Act would phase in and expand upon existing telehealth services under Medicare, by, among other changes:

• Removing the geographic barriers under current law and allowing the provision of telehealth services in rural, underserved, and metropolitan areas;

• Expanding the list of providers and related covered service that are eligible to provide telehealth services to include respiratory therapists, physical therapists, occupational therapists, speech language pathologists, and audiologists;

• Allowing remote patient monitoring for patients with chronic conditions such as heart failure, chronic obstructive pulmonary disease, and diabetes; and

• Allowing the beneficiary’s home to serve as a site of care for home dialysis, hospice care, eligible outpatient mental health services, and home health services.

For quite some time reimbursement barriers prevented the expanded use of telehealth/telemedicine under Medicare beyond reimbursement for limited services, limited modes of telehealth, and the “originating site” restriction. Over the last few years, legislation expanding access and reimbursement under Medicare for telemedicine/telehealth services has been introduced, but never passed. This time could be different as the legislation has not only bipartisan support, but also the support of industry groups, including among others, the American Telemedicine Association and the American Heart Association. Stay tuned for additional updates regarding the Act. For further information, contact J. Nicole Martin or any member of Cozen O’Connor’s healthcare law team.

Tomorrow, the Centers for Medicare and Medicaid Services (“CMS”) will publish final regulations (“Final Rule”)  for its flagship pay-for-performance program, the Medicare Shared Savings Program, in the Federal Register. The Final Rule generally applies to performance years 2016 and beyond and the second three year “agreement period” for the over 400 accountable care organizations (“ACO”) currently in the program.

Stakeholders watched very closely the development of the Final Rule, so they can now begin sizing up future opportunities with some certainty and determine the longer term complexion of the program itself. The regulations contained in the Final Rule were published in proposed form in December 2014, and, the Final Rule adopts most, but not all, of what CMS initially proposed.  It continues the pattern of easing CMS’ ultimate push towards the two-sided risk model for most, if not all, ACOs and contains adjustments that many will consider to be favorable to ACOs.

Among the most significant developments is one in which, as proposed, ACOs that are currently in their first three year agreement period with CMS for participation in the program’s “upside only” risk model, Track 1, will be permitted to remain under the same model for another three years. This covers the majority of ACOs currently in the program. Significantly, however, CMS declined to institute the 10% cut (from 50% to 40%) to the Maximum Savings Rate for the second term Track 1 ACOs that it proposed last December.  The Final Rule comes none too soon for the first set of Track 1 ACOs who will have to make a decision whether or not to re-up for another three years in the program before the end of 2015.

In the other major structural change to the program, CMS, as it proposed to do, created a third double-sided risk, Track 3, for more highly developed ACOs desiring to trade greater upside opportunity (up to a 75% share of savings generated) for greater risk (up to 75% of losses) with both savings and losses being subject to a cap of 15% and 20% of benchmark, respectively. The new track includes a prospective beneficiary assignment model as opposed to the retrospective model that will continue to be used in Tracks 1 and 2. CMS also gives ACOs who choose the new track the option to waive Medicare’s three day hospital stay requirement for reimbursement of skilled nursing services. CMS stated that it will be considering additional waivers in areas like tele-health for Track 3 ACOs in the future.

CMS also included many technical adjustments to the program, some of which will have a significant impact on how the program and ACOs operate. Among the more significant are the following:

• Adjusting the savings benchmark calculation so second term ACOs that generated savings in their first term are not “penalized” by tougher savings targets in the second term as a result;
• Track 2 and Track 3 ACOs will be given new options for setting Minimum Savings and Loss Rates;
• Greater emphasis on primary care services provided by non-physician practitioners such as licensed nurse practitioners in the beneficiary assignment process;
• Enhanced information in the aggregate data reports supplied to ACOs and the inclusion of patients who had one primary care visit with an ACO in the assignment period even if they were not
  preliminarily assigned to the ACO in the aggregate reports supplied to Track 1 and 2 ACOs; and
• A streamlined data opt-out process in which (i) beneficiaries opt out of data sharing only by notifying CMS directly; and (ii) ACOs no longer have to wait thirty days after notifying beneficiaries of their opt-out rights before requesting detailed claims data on such beneficiaries.

The balance of 2015 and 2016 will be critical to the future of the Medicare Shared Savings Program as ACOs who currently participate in the program and others who are considering participation now have definitive guidance as to what the program will look like at least through 2018.

On January 26, 2015, the Secretary of the United States Department of Health and Human Services (“HHS”), Sylvia Mathews Burwell, announced two important goals for the Department:

1. Increase the percentage of Medicare provider payments that are made through alternative payment models based on how well the providers care for patients, rather than the amount of care provided. The percentage goals for these alternative payment models are 30% by 2016 and 50% by 2018.
2. Tie virtually all Medicare fee-for-service payments (85% in 2016 and 90% in 2018) to quality and value.

This announcement puts hard numbers on the goal to move away from traditional fee-for-service Medicare payments that has been stated generally since at least 2010 when the Affordable Care Act was enacted. By clearly delineating specific figures for alternative payment models, such as accountable care organizations and bundled payment arrangements, from those figures for payment methods, HHS has made it clear that providers should be thinking not just about different forms of payment but different forms of organizations and relationships with other providers. Alternative payment models generally require coordination among different types of providers who may not otherwise be related to each other.

While the announced goals focus on the Medicare fee-for-service system, it is clear that HHS intends the impact of these goals to be far broader. Ms. Burwell also announced the creation of a Health Care Payment Learning and Action Network to facilitate a public-private sector partnership to “continue to build on our work with state Medicaid agencies, private payers, employers, consumers and other partners,” while welcoming the fact that “our partners in the private sector have the opportunity to be even more aggressive” in establishing alternative payment models and pay-for-value compensation systems. On the same day as Ms. Burwell’s announcement, the Centers for Medicare and Medicaid Services released a fact sheet stating that it is taking action with a goal to spend “our health dollars” more wisely, citing the importance of the goal for patients, families, providers, tax payers, employers, states and insurance companies, and making it clear that HHS and CMS fully intend to have their efforts to transform health care delivery and payment systems to reverberate well beyond the Medicare program.

December has been a busy month for CMS with respect to the Medicare Shared Savings Program (“MSSP”). Last week CMS announced that eighty-nine (89) more ACOs would begin participating in the MSSP starting in 2015, bringing the total number of ACOs in the program to four-hundred and five (405). Continue reading…

On October 31, 2014, The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its Work Plan for fiscal year (FY) 2015.  The Work Plan summarizes “new and ongoing reviews of activities that OIG plans to pursue with respect to HHS programs and operations during the current fiscal year and beyond.”  In the Work Plan OIG identified several areas related to HIPAA and/or information technology that it will examine and address during FY 2015.

As a new addition to the Work Plan, OIG will determine the extent to which hospitals comply with the contingency requirements of HIPAA.  HIPAA’s Security Rule requires covered entities and their business associates to have in place a contingency plan that establishes policies and procedures for responding to an emergency or other event (such as, for example, natural disasters, system failures, terrorism) that damages systems containing electronic protected health information (ePHI).  These policies and procedures must, at a minimum, include data backup plans, data recovery plans and plans to continue to protect the security of ePHI while operating in emergency operations mode.  In the Work Plan OIG advises that it will compare contingency plans used by hospitals with government and industry recommended practices. 

As part of the Work Plan, OIG will continue to examine whether the Centers for Medicare & Medicaid Services’ (CMS) oversight of hospitals’ security controls over networked medical devices is sufficient to protect ePHI.   The OIG noted that computerized medical devices such as dialysis machines, radiology systems and medication dispensing systems that use hardware, software and networks to monitor a patient’s condition and transmit and/or receive data using wired or wireless communications pose a growing threat to the security and privacy of personal health information. 

OIG also plans to continue to perform audits of covered entities receiving incentive payments for the use of electronic health records (EHRs) and their business associates (including cloud providers) to determine whether they are adequately protecting ePHI created or maintained by certified EHR technology.  In addition, OIG will review the adequacy of CMS’ oversight of states’ Medicaid system and information controls.  Prior OIG audits found that states often fail to have in place adequate security features, potentially exposing Medicaid beneficiary information to unauthorized access.

As to future endeavors, the Work Plan stated that other areas under consideration for new work include the security of electronic data, the use and exchange of health information technology, and emergency preparedness and response efforts.  In addition, OIG advises that in FY 2015 and beyond, it will continue to focus on IT systems security vulnerabilities in health care reform programs such as health insurance marketplaces. 

The Centers for Medicare and Medicaid Services (“CMS”) released proposed  regulations for the Medicare Shared Savings Program (“MSSP”) on Monday December 1, 2014.  The proposed regulations are scheduled to be published in the Federal Register on December 8, 2014, and those wishing to submit comments to the agency will have sixty days after their publication in the Federal Register to do so. CMS stated that the regulations will generally be effective sixty days after they are published in final form.

CMS’ discussion and the proposed regulations span over 400 pages and cover many   operational details of the MSSP.  Some selected highlights are noted below:

• CMS proposes to permit ACOs currently enrolled in the MSSP’s “upside risk only” model to continue to participate in the “upside risk only” model for a second “agreement period” with a reduced shared savings rate.

• CMS proposes to create a new “track 3” “upside/downside” risk model with higher rates of savings and the prospective attribution of beneficiaries.

• CMS proposes to place a “greater emphasis on primary care services delivered by nurse practitioners, physician assistants and clinical nurse specialists in the beneficiary assignment process, and to eliminate the exclusivity requirement for certain specialists that were previously required to be exclusive to one ACO on the basis that they render some services that are considered primary care services.

• CMS proposes to eliminate the requirement that ACOs send out data sharing “opt out” letters to beneficiaries and would require beneficiaries to opt out of data sharing exclusively by contacting CMS as opposed having the option to opt out by contacting the ACOs directly.

The health care industry will be digesting CMS’ voluminous and in some cases highly technical proposed changes to the MSSP over the next 60 days and the Health Law Informer will continue to provide more details regarding these regulations and the industry’s reaction to them.

To read the complete text of the proposed regulations click here.

On October 8, 2014, the Centers for Medicare & Medicaid Services (“CMS”) withdrew its Notice of Proposed Rule Making (“NPRM”) from the Office of Management and Budget that was to address how Medicare’s future interests should be protected pursuant to the Medicare Secondary Payer (“MSP”) Act (42 U.S.C. § 1395y(b)(2)) in workers’ compensation, liability (including self-insurance), automobile and no-fault insurance cases (see Notice).  While it is expected that CMS will submit another proposed rule, it does not seem likely that an ultimate final rule will be forthcoming anytime soon.

Although CMS has published guidelines for how to address claims in workers’ compensation cases where future medical expenses are claimed or released in a settlement judgment or other award, it has not released much guidance on addressing future medical expenses in liability, self-insurance, automobile and no-fault insurance cases.  The resulting lack of any clear guidance has resulted in many settlements being prolonged or even coming to a grinding halt as the parties differed over how—or whether— to address Medicare’s interest in future medical expenses.  It was hoped this would change after CMS released an Advance Notice of Proposed Rulemaking in June of 2012 addressing the issue of protecting Medicare’s interest in future medical expenses.  Yet, the recent notice that CMS has withdrawn its proposed rule is disappointing to the stakeholders, including claimants, insurers and attorneys looking for clarity and guidance from CMS on this issue.  Even without guidance addressing future medicals, parties to a settlement must still fulfill their MSP obligations, which include addressing Medicare’s interests in future medical expenses.