Posted by Chris Raphaely
on October 16, 2014
Accountable Care Organizations
The Centers for Medicare & Medicaid Services (“CMS”) announced a new initiative, the ACO Investment Model, on October 15, 2014. Under the model, ACOs which are made up of “providers [who] lack adequate access to … capital” may receive additional funding from the CMS “to invest in infrastructure necessary to successfully implement population care management.” The eligibility criteria are as follows:
- The ACO must be accepted into and participate in the Medicare Shared Savings Program. The ACO’s first performance period in the Medicare Shared Savings Program must have started in either 2012, 2013 or 2014 or will start in 2016.
- The ACO has completely and accurately reported quality measures to the Medicare Shared Savings Program in the most recent performance year, if the ACO started in the Medicare Shared Savings Program in 2012, 2013 or 2014, excluding ACOs that will start in 2016. The ACO has a preliminary prospective beneficiary assignment of 10,000 or fewer beneficiaries for the most recent quarter, as determined in accordance with the Shared Savings Program regulations.
- The ACO does not include a hospital as an ACO participant or an ACO provider/supplier (as defined by the Shared Savings Program regulations), unless the hospital is a critical access hospital (CAH) or inpatient prospective payment system (IPPS) hospital with 100 or fewer beds.
- The ACO is not owned or operated in whole or in part by a health plan.
- The ACO did not participate in the Advance Payment Model.
Year #2 Report on Medicare Fraud Prevention System
On June 25, 2014, the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services Office of Inspector General (OIG) issued and certified, as required by the Small Business Jobs Act of 2010 (SBJA) their second implementation year report for the Fraud Prevention System (FPS) along with a press release. By way of background, CMS is under pressure from Congress and the United States Government Accountability Office (GAO) to enhance their health care fraud, abuse and waste prevention and detection success through the use of predictive analytics technologies while at the same time monitoring the expenditures and costs by government contractors and auditors such as ZPICs to prevent fraud. Last October, GAO published a Report concerning CMS’s Medicare Program Integrity titled, “Contractors Reported Generating Savings but CMS Could Improve Its Oversight.”
CMS and OIG’s Report to Congress on the FPS responds to many, but not all, of GAO’s criticisms. Here are a few of the noteworthy findings and observations in the Report:
- CMS reports that they “identified or prevented” $210.7 million in Medicare payments attributed to FPS. This is a return on investment of $5 to $1 for the second implementation year and an increase ROI from Year 1.
- OIG disagrees with CMS’s use of “identified savings” to calculate the success of the FPS and instead recommends using “adjusted savings” as a measure of savings and return on investment related to the Department’s use of FPS.
- Under OIG’s adjusted savings analysis, OIG only certified $54.2 million of the $210.7 million as attributed to the Department’s use of FPS.
- OIG found that the “Department’s use of its predictive analytics technologies resulted in a return on investment of $1.34 (not $5) for every dollar spent on the FPS.
- Based on criticism received by OIG and GAO, CMS reported that they changed the methodology to require ZPICs (Zone Program Integrity Contractors) to submit provider-specific outcome data to be able to conduct more quality control reviews prior to reporting savings.
- OIG disagreed with CMS and stated, “[A]lthough the Department has made significant progress in addressing the challenges of measuring actual and projected savings, its procedures were not always sufficient to ensure that its contractors provided and maintained reliable data to always support FPS savings.” Interestingly, OIG initially included a much stronger statement but revised the final statement based on CMS’s objections. The original statement was “[T]he Department could not ensure that its contractors always provided and maintained reliable data to support FPS savings.”
- CMS expects that future activities of the FPS will substantially increase savings by expanding the use of predictive analytics and modeling beyond identifying FRAUD and into areas of WASTE and ABUSE. This will require more refined predictive models and modifications from insights from field investigators, policy experts, clinicians, and data analysts. In Year 3, CMS will convene workgroups with federal agency, states, and private partners to develop and expand FPS’s capabilities.
- In Year 3, CMS also will explore the cost-effectiveness and feasibility of expanding predictive analytics technology to Medicaid and the Children’s Health Insurance Program (CHIP). CMS anticipates working with State Medicaid Agencies to train and explore opportunities for expanding predictive analytics.
Practice Tip: CMS’s FPS is more fully integrated into the Medicare FPS payment system and allows CMS to monitor and deny individual claims in the prepayment stage. ZPICs and other government contractors will continue to be the government’s “boots on the ground” but they will be armed with better information and real time data to investigate. Providers need to take any and all inquiries by ZPICs seriously. Anticipate more coordinated investigations by the FBI, ZPICs, States AGs, State Medicaid Fraud Agencies, and Federal agencies and faster freezing or rejections of provider claims. Anticipate the expansion of FPS’s predictive analytics to the areas of waste and abuse.
Please check back with the Health Law Informer Blog and Cozen O’Connor for additional analysis of CMS’s Second Implementation Year Report in the coming weeks.
Posted by Gregory M. Fliszar
on December 19, 2013
On December 11, 2013 the Centers for Medicare & Medicaid Services (CMS) published an advance notice of proposed rulemaking concerning the circumstances under which civil money penalties may be imposed for failure to comply with Medicare Secondary Payer Act (the “MSP Act”) Section 111 reporting requirements. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 amended the MSP Act by establishing mandatory reporting requirements for certain group health plans (GHPs) and for liability insurance (including self-insurance) no fault insurance and workers compensation (collectively NGHPs) arrangements. The Section 111 amendments require GHPs and NGHPs to notify CMS when they pay a claim on behalf of a Medicare beneficiary. Failure to comply with the reporting requirements resulted in a civil monetary penalty of $1,000 for each day of noncompliance.
The Strengthening Medicare and Repaying Taxpayers Act of 2012 (the “SMART Act”) amended the penalty provision of the Section 111 reporting requirements by stating that applicable plans that fail to comply with the reporting requirements may be subject to a civil monetary penalty of up to $1,000 per day of non-compliance. Thus, the SMART Act made the penalty discretionary instead of mandatory and allowed for penalties below $1,000. As a result, CMS is soliciting public comments and proposals on the practices for which civil monetary penalties may or may not be imposed. Specifically, CMS is seeking comments on how to define “noncompliance” with reporting requirements; what mechanisms and criteria should be used to evaluate whether a civil money penalty can be imposed; what methods should be used to determine the dollar amount of such a penalty; and what actions on the part of a primary payer would constitute a “good faith effort” to identify a Medicare beneficiary for purposes of reporting under the MSP Act. Comments can be submitted to CMS until February 10, 2014.
Posted by Judy Mayer
on August 22, 2013
On July 29, 2013, the OIG released a memorandum report finding that Medicare paid more on average for short inpatient stays than for observation stays in 2012. The report, Hospitals’ Use of Observation Stays and Short Inpatient Stays for Medicare Beneficiaries, OEI-02-12-00040, touches on observation versus inpatient status, which has been and continues to be a hot button issue.
Medicare beneficiaries receiving care at a hospital are classified as either inpatients or observation patients. Observation patients are outpatients who receive treatments and assessments to determine whether they require further treatment as inpatients or can be discharged. CMS policy provides that observation services are usually needed for 24 hours or less. Continue reading…
Posted by Gregory M. Fliszar
on October 16, 2012
Since the Health Insurance Portability and Accountability Act (“HIPAA”) privacy rules became effective in April 2003, there has been minimal enforcement activity by the U.S. Department of Health and Human Services (“HHS”) Office of Civil Rights (“OCR”). However, this has changed dramatically over the last two years, as evidenced by some recent high-profile and high-penalty enforcement actions taken by OCR. In addition to being concerned about OCR investigations, moreover, covered entities and business associates must also be on the alert for enforcement actions by state Attorney Generals, potential class action lawsuits, and OCR’s HIPAA audit program. Continue reading…