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Medicare Update Brian S. Werfel, Esq. Werfel & Werfel, PLLC

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Presentation on theme: "Medicare Update Brian S. Werfel, Esq. Werfel & Werfel, PLLC"— Presentation transcript:

1 Medicare Update Brian S. Werfel, Esq. Werfel & Werfel, PLLC

2 2012 Medicare Rates 2.4% Increase for 2012
Ambulance Inflation Factor CPI Update: 3.56% Change from July 2010 – June 2011 MFP: 1.2% 2.4% Increase for 2012

3 GPCIs 2010 – Revision to formula used to calculate GPCIs
Resulted in overall movement of all GPCIs closer to 1.0 “Hold Harmless” for GPCIs over 1.0 Expired in 2011

4 Productivity Adjustment
MFP = 10-year moving average of the Private Nonfarm Business Multi-Factor Productivity Index Bureau of Labor Statistics metric For 2011 and beyond, annual update to Medicare Ambulance Fee Schedule will be equal to: AIF = CPI-U – MFP

5 Effect on Future Updates

6 Temporary Adjustments
Current temporary adjustments: 2% urban 3% rural 22.6% super-rural “hold harmless” for air ambulance Initially scheduled to expire on December 31, 2011

7 Temporary Adjustments
December 23, 2011 Adjustments extended through February 29, 2011 Temporary “payroll tax” holiday Middle Class Tax Relief and Job Creation Act February 23, 2012 Adjustments extended through December 31, 2012

8 Debt Limit Compromise Budget Control Act of 2011 8/2/11
Raised the debt ceiling Congressional “Super Committee” 12-member panel Tasked with finding $1.2 Trillion in budget cuts Must make recommendations by 11/23/11 If Congress does not act on recommendations by 12/23/11, 2% across the board reductions in spending result This would include a 2% reduction in Medicare reimbursement

9 Sequestration Joint Select Committee on Deficit Reduction
“Super Committee” Tasked with finding $1.2 trillion in savings over 10 years Fails to reach agreement 2% “sequestration” of Medicare payments Starting January 1, 2013 Issue unlikely to be resolved prior to Presidential election

10 Permanent Ambulance Relief
Medicare Ambulance Access Preservation Act (MAAPA) 6% increase for urban and rural transports 22.6% increase for super-rural 2012 – 2016 On July 6, 2011, the A.A.A. sent a letter to President Obama and Congressional leaders from both parties Asking for support of MAAPA

11 H.R. 1005 House Sponsors Jason Altmire ( D – PA) Tim Murphy (R – PA)
Dan Boren (D – OK) Richard Neal (D – MA) Charles Boustany (R – LA) Devin Nunes (R – CA) Charles Dent (R – PA) Collin Peterson (D – MN) Michael Fitzpatrick (D – PA) Nick Rahall (D - WV) Jim Gerlach (R – PA) Mike Ross (D – AR) Charles Gonzalez (D – Tx) Aaron Schock (R – IL) Martin Heinrich (D – NM) John Tierney (D – MA) Maurice Hinchey (D – NY) Paul Tonko (D – NY) Michael Michaud (D – ME) Peter Welch (D – VT) Christopher Murphy ( D – CT)

12 S. 424 Senate Sponsors Robert Casey (D – PA) Patrick Leahy (D-VT)
Susan Collins (R-ME) Pat Roberts (R-KS) Kent Conrad (D-ND) Bernard Sanders (I-VT) John Kerry (D-MA) Charles Schumer (D-NY) Mary Landrieu (D – LA) Debbie Stabenow (D – MI) Frank Lautenberg (D-NJ)

13 GAO Report Middle Class Tax Relief and Job Creation Act
Updated GAO Report on Medicare payments for ambulance A.A.A. had call with GAO to discuss structure of survey Survey expected to go out 2Q 2012 2007 GAO Report Medicare pays an average of 6% below cost 17% below cost in super-rural areas

14 MedPAC Middle Class Tax Relief and Job Creation Act
MedPAC to study ambulance reimbursement Appropriateness of temporary adjustments Need to reform current payment structure Inclusion of temporary adjustments in payment for base rates Report due June 15, 2013

15 2010 Medicare Payment Data

16 FY 2010

17 FY 2010 v. FY 2009

18 FY 2010 v. FY 2009

19 Dialysis

20 Dialysis

21 ANSI 5010 Initial Implementation Date: January 1, 2012
Enforcement Delays: Through March 30, 2012 Through June 30, 2012 Medicare compliance: 70% of Part A claims 90% of Part B claims

22 ANSI 5010 Problems: Clearinghouses Medicaid Programs Commercial payers
Zirmed – 27% of payers (~ 1000 payers) still sent claims in 4010 format Gateway – 20 pages of non-compliant payers Medicaid Programs Commercial payers

23 Medicare Contracting Reform

24 Medicare Contracting Reform
15 Existing MAC Jurisdictions being reduced to 10 “Super MACs” Transition period: 2010 – 2014

25 Current MAC Jurisdictions

26 Consolidated MAC Jurisdictions

27 Jurisdiction F Awarded to Noridian Administrative Services
AL, AZ, ID, MT, ND, OR, SD, UT, WA, WY Transition completed February 2012

28 Jurisdiction H Awarded to Highmark Medicare Services
November 8, 2011 AR, CO, LA, MI, NM, OK, TX Protest has been denied, transition moving forward Highmark Medicare sold to Diversified Service Options Renamed “Novitas Solutions, Inc.”

29 1099 Repeal On April 5, 2011, Congress passed a bipartisan repeal of the provision of ACA requiring companies to report payments of more than $600 to any particular vendor President Obama signed it into law on April 14, 2011 First repeal of any provision of ACA

30 CLASS ACT Community Living Assistance Services and Support Act
Long-term care insurance regime Part of ACA February 8, 2012 House of Representatives votes to repeal Secretary Sebelius previously suspended implementation Acknowledgement that it could not be adequately funded

31 IPAB Independent Payment Advisory Board
Board would oversee Medicare costs Will have authority to recommend policy If Congress does not act on their recommendations, the IPAB recommendations become policy March 22, 2012 House votes (223 – 181) to repeal IPAB Unlikely Senate will vote before election

32 2012 House Budget March 29, 2012 228 – 191 vote
Split basically along party lines 10 Republicans voted “no” Medicare Would raise Medicare eligibility age to 67 Those 55 and under would get a “premium support” payment To be used to purchase private insurance

33 Proposed Rule On Return of Overpayments

34 Background Section 6402(a) of the Affordable Care Act
New 60 day requirement to report and return overpayments False Claims Act liability Proposed Rule (Feb. 16, 2012)

35 Contents of Proposed Rule
Overpayment must be returned: 60 days after it has been “identified” By next cost report An overpayment is “identified”: Provider has “actual knowledge”, or Acts in “reckless disregard or deliberate ignorance” of overpayment

36 “In some cases, a provider or supplier may receive information concerning a potential overpayment that creates an obligation to make a reasonable inquiry to determine whether an overpayment exists… failure to make a reasonable inquiry, including failure to conduct such inquiry with all deliberate speed after obtaining the information, could result in the provider knowingly retaining an overpayment because it acted in reckless disregard or deliberate ignorance of whether it received such an overpayment.”

37 Examples of Identified Overpayment
Incorrect coding of claims Services provided by an unlicensed or excluded individual Results of an audit by a Medicare contractor Significant increase in Medicare reimbursement, without any obvious explanation

38 A.A.A. Comment Letter A.A.A. submitted a comment letter asking CMS to clarify when an overpayment has been “identified” in the context of a post-payment audit What if you agree only in part with the auditor’s findings? Do you return portion you agree with? A.A.A. is asking that the overpayment not be “identified” until the later of: Exhaustion of appeal rights Expiration of time to appeal to next level A.A.A. submitted second comment letter on issue of “scienter”

39 Patient Signature Requirement

40 Authorized Representative
CMS Claims Processing Manual (Pub ), Chapter 1, Section When a person signs on patient’s behalf, Manual seems to imply that you must list the address of the person that signs WPS announced that it will enforce this requirement CMS is aware of requirement, but not focused on its enforcement at this time CMS looking into changing Manual requirement

41 Common Problems

42 42

43 Lifetime Signature

44 Contractor Interpretation
Contractors that currently do not accept lifetime signature WPS Palmetto GBA Railroad Medicare Q2 Administrators QIC for Southern half of country

45 Q2A Decision

46 The Catch-22 The current regulation clearly indicates that ambulance services can use a lifetime signature CMS says the signature proves a trip was done But how can a signature you get today prove that you did a trip a year from now?

47 Solution for Repetitive Patients
Contractors are interpreting regulation to state that a signature cannot be used for future trips No prohibition on using signature for past trips A possible approach: Make sure your signature language includes a reference to past claims Hold claims for patient until you get actual patient’s signature


49 Medicare Revalidation
CMS has indicated that it will require all existing Medicare providers and suppliers to “revalidate” their Medicare enrollment information Original target date: March 2013 Extension: March 2015 Medicare contractors given discretion on when to revalidate various provider groups

50 PECOS Provider Enrollment, Chain and Ownership System
Medicare’s electronic enrollment database CMS has indicated that it wants all providers and suppliers enrolled in PECOS by the end of this year Medicare contractors implementing this policy by requiring providers/suppliers to “revalidate” 50

51 PECOS Process: Establish a web user account Complete questions to verify that person completing process is an authorized person Download and return Security Consent Form CMS has indicated that the PECOS enrollment process can take several weeks!! 51

52 The Nightmare Scenario
Medicare contractor sends you a request to revalidate You have 60 days to respond Failure to respond can result in termination of your billing privileges 1 year ban on “re-enrollment” 60 days to: Complete PECOS enrollment Get web user account Gather information to revalidate Complete revalidation process 52

53 Air Ambulance Enrollment
Transmittal 400 (November 2011) added new enrollment requirements for air ambulance providers Included providing a valid FAA 135 Certificate Problem was FAA Certificate holder might be an “air services vendor” Transmittal 408 February 22, 2012 Amends earlier transmittal to permit submission of valid FAA Certificate held by air services vendor

54 “3 Day Payment Window” Transmittal 2373 Ambulance not bundled
December 21, 2011 Clarifies CMS policy regarding diagnostic and related non-diagnostic services provided by physician groups affiliated with a hospital during the 3 days immediately preceding an inpatient hospital admission Confirms these services are bundled Ambulance not bundled No change in policy

55 IRS Withholding Tax Increase Prevention and Reconciliation Act of 2005
Required 3% withholding of all payments to federal contractors Including health care providers Scheduled to take effect on January 1, 2011 2010 Stimulus Bill Delayed implementation until 2012

56 IRS Withholding Vow to Hire Heroes Act of 2011 November 21, 2011
Repealed 3% withholding requirement

57 Veterans Administration
Vow to Hire Heroes Act of 2011 Incentives for employers to hire veterans Provision revised payments to non-contracted ambulance providers Lesser of: Actual Charges, or Medicare allowable

58 ICD-10 Codes October 1, 2013 Scheduled implementation date CMS has issued a proposed rule to delay enforcement to October 1, 2014 ICD-9 Codes: ~ 17,000 ICD-10 Codes: ~ 150,000 If you want to laugh:

59 Fraud and Abuse The Post-Health Care Reform Landscape

60 The Scope of the Problem
CMS estimates that Medicare lost more than $24 billion on fraud and abuse in FY 2009 Roughly 7.5% of total payments Other experts place the number at as high as $70 billion per year!!

61 A Bipartisan Consensus
Both political parties agree that reducing fraud and abuse should be a top priority of CMS Polls well It allows each side to claim “savings” without actually having to reduce benefits to Medicare beneficiaries or payments to providers

62 Funding for Anti-Fraud Measures
ACA allocated an additional $250 million to fund additional audits New provisions that allow Medicare contractors to use recoupments to fund further anti-fraud activities Allow process to become self-sustaining!!

63 ACA Anti-Fraud Provisions
Prepayment: Enhanced enrollment screenings Moratoriums on new enrollments Power to suspend payment Termination of billing privileges Mandatory compliance programs Shorter time limits for submitting claims Postpayment: Requirement to report overpayments New RACs for Medicare Advantage and Medicaid Increased penalties for fraud and abuse

64 Provider Enrollment Effective March 23, 2011
All ambulance providers assigned to “moderate risk” category License Checks Site Visit Application Fee $523 in 2012 Increased annually by CPI-U Applies to all enrollment filings Not to simple updates to your existing information e.g., adding a new vehicle to your fleet 64

65 Probationary Period CMS and the OIG are required to establish procedures for the creation of a probationary period following initial enrollment in Medicare, Medicaid and SCHIP programs Not less than 30 days nor more than 1 year Providers/Suppliers would be subject to increased oversight during this period Prepayment reviews Manual review of claims (vs. electronic processing) 65

66 Power to Suspend Payments
Expanded rights to suspend payments to a provider based upon a “credible allegation of fraud” February 2, 2011 Final Rule “Credible Allegation” includes an allegation from any source that has an “indicia of reliability” Fraud Hotline Complaints Claims Data Analysis Provider Audits Whistleblower Suits State Medicaid Agencies are required to investigate allegation before CMS can act to suspend payments 66

67 Termination of Billing Privileges
CMS has the right to terminate a provider’s Medicare billing privileges to the extent their Medicaid billing privileges have been revoked for “cause” Reciprocal right to revoke Medicaid billing privileges upon revocation of Medicare billing privileges 67

68 New Time Limits Effective January 1, 2010
Time limit for submitting claims reduced to 1 year from date of service Exceptions Administrative error Retroactive Medicare eligibility Retroactive Medicare eligibility & Medicaid recoupment Medicare Advantage recoupment 68

69 Exceptions to Time Limit
Transmittal 2140 January 21, 2011 Time limit can be extended for: Administrative Error Retroactive Medicare eligibility Recoupment by Medicaid following retroactive Medicare eligibility Recoupment by Medicare HMO or PACE organization following retroactive Medicare eligibility 69

70 Moratoria on New Enrollments
Under certain circumstances, CMS can temporarily prevent new providers from enrolling in Medicare, Medicaid or SCHIP Based on evidence of “systemic” fraud and abuse IG considering a freeze on enrollment of new ambulance providers in Los Angeles County, CA 70

71 Harris County, Texas Rep. Kevin Brady (R – TX 8th) is calling for hearings on Medicare ambulance fraud in Houston Fallout from Houston Chronicle articles 2009 Medicare Payment Data $62 million spent on ambulance in Houston $7 million spent on ambulance in NYC 71

72 Harris County, Texas Sen. Orrin Hatch (R – UT)
Sen. Charles Grassley (R – IA) February 2, 2012 letter to HHS Secretary Sebelius Asking for steps CMS is taking to curb ambulance abuses in Houston Focus on dialysis Asking specifically why CMS has not imposed a temporary moratorium on new enrollments 72

73 Changing Audit Landscape
The shift to targeted prepayment reviews represents a fundamental shift in the relationship between our industry and the Medicare Administrative Contractor From a simple “conduit for payment” to a true “gatekeeper” 73

74 Dialysis in Texas “In 2007, Medicare paid $38 million per year to Texas ambulance suppliers related to excess services per beneficiary, compared to services per beneficiary in the remainder of the U.S. Audit findings…show that much of the excess is not justifiable based on the patients’ conditions.” 74

75 TrailBlazer’s Response
Initial Response: Pre-pay Review A0428 RJ & JR After 12th transport in a year 90+ % denial rate!!! Revised Response Effective July 1, 2011 Edits expanded to include transports originating from SNFs and ALFs Claims will now be denied!! 75

76 Texas Dialysis 76

77 Texas Dialysis 77

78 Texas Dialysis 78

79 Puerto Rico – Dialysis 2008 Medicare Payment Data Puerto Rico:
620,497 beneficiaries Allowed dialysis transports – 407,409 CA, FL, NY Combined: ~ 10.5 million beneficiaries Allowed dialysis transports – 356,572 i.e., 50,000 FEWER dialysis transports 79

80 First Coast’s Response
100% Prepayment Review for dialysis transports in PR and USVI Selected prepayment reviews in South Florida e.g., Miami-Dade County 80

81 Puerto Rico – Dialysis 81

82 First Coast – Florida Hospital discharges to nursing homes
“HN” High error rate Prepayment review December 14, 2011 Denial rates: 12-15% statewide Higher for some providers 82

83 NGS – New York Statewide sample of hospital discharges
124 claims reviewed 107 denied As of now, nothing further Could be prelude to a statewide prepayment review, similar to Florida 83

84 Palmetto – NC, SC & VA Prepayment reviews for: ALS Emergency (A0427)
BLS Non-emergency (A0428) Mileage (Ao425) 84

85 Palmetto – Railroad Prepayment reviews for: Dialysis
Prepayment review also creates the potential for problems with patient signature Railroad does not accept lifetime signature Hospital discharges Air ambulance 85

86 Comparative Billing Report

87 Comparative Billing Report

88 Comparative Billing Report

89 A Flawed Report The “peer group” against which you are measured includes not only private ambulance services, but also fire departments and volunteers that only do emergency transports Skews the comparison between you and your “peers”

90 However… Confirmation that CMS and its auditors are focused on the non-emergency side of our industry Dialysis in particular!! Auditors use similar methodologies to select providers for audit!!

91 “All ALS” Billing City of Dallas
$2.5 million settlement Allegations of improperly billing “all ALS” Debate as to whether overbilling was fault of City or its billing agent 12 neighboring cities paid $1.2 million to settle similar charges Same billing agent

92 “All ALS” Billing Further Fallout:
U.S. Attorneys in Midwest are doing audits of large municipal providers to see if they have similar issues related to “all ALS” billing TrailBlazer doing selected prepayment reviews of providers with relatively high percentages of ALS emergencies Percentage of ALS-E runs vs. BLS-E runs


94 Brian Werfel, Esq. Werfel & Werfel, PLLC 631-582-3283

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