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1 The FY 2014 Medicare Annual Update Larry Goldberg Larry Goldberg Consulting Larry A Oday Esq, PLLC October 16, 2013.

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Presentation on theme: "1 The FY 2014 Medicare Annual Update Larry Goldberg Larry Goldberg Consulting Larry A Oday Esq, PLLC October 16, 2013."— Presentation transcript:

1 1 The FY 2014 Medicare Annual Update Larry Goldberg Larry Goldberg Consulting Larry A Oday Esq, PLLC October 16, 2013

2 2 Agenda  Congressional Activity  President’s Budget  Sequester  FY 2014 Final PPS Updates  IPPS  SNF  IRF  IPF  Hospice

3 3 Agenda  CY 2014 Proposed PPS Updates  OPPS  ESRD  Physician  Home Health  Proposed FQHC PPS

4 4 Congress  Politics have made it difficult if not impossible to enact all legislation  FY 2014 Budget seems unlikely  Government shut down  Republicans in House have tried 42 times to repeal the ACA  Nice but it “ain’t” going to happen unless they get veto proof margins in both chambers  Trying to stop by defunding – hasn’t worked so far???  Debt ceiling limits

5 5 President’s Budget

6 6 President’s FY 2014 Budget  2 months late  Would avoid sequestration  Comment  Going nowhere  But do not ignore specifics  Does NOT fix the physician payment problem  Does suggest where Medicare is heading

7 7 President’s FY 2014 Budget  Includes a package of Medicare legislative proposals that will “save” $371.0 billion over 10 years  Reduce Medicare Coverage of Bad Debts: Starting in 2014, this proposal would reduce bad debt payments to 25 percent over 3 years for all providers who receive bad debt payments [$25.5 billion in savings over 10 years]  Better Align Graduate Medical Education (GME) Payments with Patient Care Costs: Would reduce GME payments by 10 percent, beginning in 2014 [$11.0 billion in savings over 10 years]

8 8 President’s FY 2014 Budget  Reduce Critical Access Hospital (CAHs) Reimbursements to 100% of Costs: Would reduce rate to 100 percent beginning in [$1.4 billion in savings over 10 years]  Prohibit Critical Access Hospital Designation for Facilities that are Less Than 10 Miles from the Nearest Hospital : Beginning in [$690 million in savings over 10 years]

9 9 President’s FY 2014 Budget  Adjust Payment Updates for Certain Post-Acute Care Providers: Would gradually realign payments with costs by reducing the market basket updates for Inpatient Rehabilitation Facilities (IRFs), Long-Term Care Hospitals (LTCHs), SNFs and Home Health agencies, by 1.1 percentage points beginning in 2014 through Payment updates for these providers would not drop below zero under this provision. [$79.0 billion in savings over 10 years]  “Encourage” Appropriate Use of Inpatient Rehabilitation Facilities (IRFs): Beginning in 2014, this proposal would reinstitute the 75 percent standard. [$2.5 billion in savings over 10 years]

10 10 President’s FY 2014 Budget  Equalize Payments for Certain Conditions Treated in Inpatient Rehabilitation Facilities and Skilled Nursing Facilities: Would adjust payments for three conditions involving hips, knees, and pulmonary conditions, as well as other conditions selected by the Secretary. Beginning in 2014, would reduce the disparity in Medicare payments between the settings. [$2.0 billion in savings over 10 years]  Adjust Skilled Nursing Facilities Payments to Reduce Hospital Readmissions : Would reduce payments by up to three percent for SNFs with high rates of care-sensitive, preventable hospital readmissions, beginning in [$2.2 billion in savings over 10 years]

11 11 President’s FY 2014 Budget  Implement Bundled Payment for Post-Acute Care Providers: Beginning in 2018, this proposal would implement bundled payment for post-acute care providers, including LTCHs, IRFs, SNFs, and home health providers. [$8.2 billion in savings over 10 years]  Reduce Overpayment of Part B Drugs: Lowers reimbursement to 103 percent of ASP. [$4.5 billion in savings over 10 years]  Modernize Payments for Clinical Laboratory Services: Would lower the payment rates under the Clinical Laboratory Fee Schedule (CLFS) by percent every year from 2016 through 2023 [$9.5 billion in savings over 10 years]

12 12 President’s FY 2014 Budget  Introduce Home Health Copayments for New Beneficiaries: Would create a co-payment for new beneficiaries of $100 per home health episode, starting in [$730 million in savings over 10 years]  Align Medicare Drug Payments with Medicaid Policies for Low-Income Beneficiaries : Would require manufacturers to pay the difference between rebate levels they already provide Part D plans and the Medicaid rebate levels. [$123.2 billion in savings over 10 years]

13 13 President’s FY 2014 Budget  Increase Income-Related Premiums under Medicare Part B and Part D: Would restructure income-related premiums under Medicare Parts B and D by increasing the lowest income-related premium five percentage points, from 35 percent to 40 percent, and also increasing other income brackets until capping the highest tier at 90 percent. The proposal maintains the income thresholds associated with these premiums until 25 percent of beneficiaries under Parts B and D are subject to these premiums. [$50.0 billion in savings over 10 years]

14 14 Final FY 2014 PPS Updates  IPPS  SNF  IRF  IPF  Hospice

15 15 IPPS Update for FY 2014

16 16 FY 2014 IPPS  Personal Comments  Reg is simply too long  Display copy is 2,225 pages  Original law was only 138 pages  Too much history  Too much redundancy Supposedly for lawyers and to ward off law suits  Hard to find changes being proposed  Does not have clear final decision making summaries

17 17 FY 2014 IPPS  Posted on 8/2/2013  Published in 8/19/13 Federal Register  Tables on CMS website  Copy at:  pdf  Tables at: Service-Payment/AcuteInpatientPPS/index.htmlhttp://www.cms.hhs.gov/Medicare/medicare-Fee-for- Service-Payment/AcuteInpatientPPS/index.html  Effective 10/1/13  Correction Notice published 10/3/13

18 18 IPPS Update  MB is 2.5 percent (0.5 percent for “non-quality” providers)( same as proposed)  Offsets:  (0.5%) for productivity [up from proposed amount of 0.4]  (0.3%) for ACA mandate  (0.8%) for documentation & coding (per ATRA)  (0.2%) for new policy proposal on I/P criteria  CMS says net Increase is 0.7% (-1.3% for non-quality providers)  Increase in total payments ??????

19 19 IPPS Update  There are more offsets:  Budget neutrality items Readmissions (reductions increase to 2.0%) DSH Value-Based Purchasing (increases to 1.25%)  ACA law said updates could be less than current may now become “real”  Impact of sequester

20 20 IPPS Update  Revising the MB  Using 2010 data in lieu of 2004  Results in new labor-related share values  “Large” Urban areas – those with wage index greater than – from 68.8 to 69.6 percent  “Other” areas with wage index values equal to or less than will remain at 62.0 percent by law If no law, would be 63.2 percent

21 21 IPPS Budget Neutrality  Budget neutrality adjustments for:  DRG recalibration  Wage index changes  Geographic reclassification  Rural community hospital demonstration program  Removing the FY 2013 outlier offset  Documentation and coding to date  Offsetting the cost of the policy proposal on admission and medical review criteria

22 22 National Adjusted Operating Standardized Amounts 69.6 Percent Labor Share/30.4 Percent Nonlabor Wage Index Is Greater Than FY 2014 Full Update 1.7 percent Reduced Update minus 0.3 percent Labor- related Non-labor- related Labor- related Non-labor- related $3,737.71$1,632.57$3,664.21$1, Full UpdateReduced Update Labor-related Non-labor- related Labor-related Non-labor- related $3,679.95$1,668.81$3,607.65$1, Rates Currently in Effect

23 23 National Adjusted Operating Standardized Amounts 62 Percent Labor Share/38 Percent Nonlabor Wage Index Equal to or Less Than FY 2014 Full Update 1.7 percent Reduced Update minus 0.2 percent Labor- related Non-labor- related Labor- related Non-labor- related $3,329.57$2,040.71$3,264.10$2, Full UpdateReduced Update Labor-related Non-labor- related Labor-related Non-labor- related $3,316.23$2,032.53$3,251.08$1, Rates Currently in Effect

24 24 IPPS Rate Comparison (w/Quality)  FY 2013 FY 2014Difference  Large $3, $3, , , $5, $5, $21.52/ 0.4%  Other $3, $3, , , $5, $5,370.28$21.52/ 0.4% Proposed was an increase of $27.28

25 25 IPPS Documentation & Coding  American Taxpayers Relief Act changes the game  Requires CMS recoup $11 billion over 4 years starting in FY 2014  CMS will reduce payments by 0.8 percent reduction  This amount will recover about $1 billion in FY 2014  How do you get the remaining $10+ billion?  Will this item ever be settled?

26 26 Documentation & Coding  Compound the reductions;  % = $1 billion = =0.992  2015$2 billion.992 X.992=  2016$3 billion.984 X.992=  2017$4 billion.976 X.992=  Total $10 billion

27 27 Documentation & Coding  CMS’ Addendum table Full Update 1.7 Percent Wage Index is greater than ; Labor/Non- Labor Share Percentage (69.6/30.4) Full Update 1.7 Percent Wage index is less than or equal to ; Labor/Non -Labor Share Percentage (62/38) Reduced Update (-0.3 percent) Wage index is greater than ; Labor/Non- Labor Share Percentage (69.6/30.4) Reduced Update (-0.3 percent) Wage index is less than or equal to ; Labor/Non -Labor Share Percentage (62/38)

28 28 Documentation & Coding FY 2013 Base Rate after removing: 1. FY 2013 Geographic Reclassification Budget Neutrality ( ) 2. FY 2013 Rural Community Hospital Demonstration Program Budget Neutrality ( ) 3. Cumulative FY 2008, FY 2009, FY 2012, FY 2013 Documentation and Coding Adjustment as Required under Sections 7(b)(1)(A) and 7(b)(1)(B) of Pub. L (0.9478) 4. FY 2013 Operating Outlier Offset ( ) Labor: $4, Nonlabor: $1, Total $6, Labor: $3, Nonlabor: $2, Total $ Labor: $4, Nonlabor: $1, Total $6, Labor: $3, Nonlabor: $2, Total $6, Full Update 1.7 percent (69.6/30.4) Full Update 1.7 Percent (62/38) Reduced Update (-0.3 percent) Reduced Update (-0.3 percent)

29 29 Documentation & Coding FY 2014 Update Factor FY 2014 MS-DRG Recalibration and Wage Index Budget Neutrality Factor FY 2014 Reclassification Budget Neutrality Factor FY 2014 Rural Community Demonstration Program Budget Neutrality Factor FY 2014 Operating Outlier Factor Adjustment to Offset the Cost of the Policy on Admission and Medical Review Criteria for Hospital Inpatient Services under Medicare Part A0.998 Full Update (1.7percent) (69.6/30.4) Full Update (1.7 Percent) (62/38) Reduced Update (-03 percent) Reduced Update (-03 percent)

30 30 Documentation & Coding Cumulative Factor: FY 2008, FY 2009, FY 2012,and FY 2013 Documentation and Coding Adjustment as Required under Sections 7(b)(1)(A) and 7(b)(1)(B) of Pub. L and Proposed Documentation and Coding Recoupment Adjustment as required under Section 631 of the American Taxpayer Relief Act of Full Update (1.7 percent) (69.6/30.4) Full Update (1.7 Percent) (62/38) Reduced Update (-03 percent) Reduced Update (-03 percent)

31 31 Documentation & Coding Totals$5, $ National Standardized Amount for FY 2014 Labor: $3, Labor: $3, Labor: $3, Labor: $3, Nonlabor: $1, Nonlabor: $2, Nonlabor: $1, Nonlabor: $2, Full Update (1.7 percent) (69.6/30.4) Full Update (1.7 Percent) (62/38) Reduced Update (-0.3 percent) Reduced Update (-0.3 percent)

32 32 Documentation & Coding  FY 2013 Documentation & Coding Adjustment was  Multiply X =  Cited FY 2014 adjustment = * (Rounding??)  Next year X 0.992= ??

33 33 Wage Index  Not using the revised OMB CBSAs released on 2/28/13  To be used for FY 2015  Copy at: ns/2013/b pdf  Data is from FY 2010 CRPs (including OCC mix adjustment)  Comment  CMS is changing (via an instruction) the wage index data corrections due date for FFY November 21 st is now the due date when traditionally it was the first Monday in December

34 34 Wage Index  No change to the statewide budget neutrality adjustment factor – federal versus state specific  Massachusetts continues to be “big” winner

35 35 Wage Index – Rural Floor FY 2014 IPPS Estimated Payments Due to Rural Floor and Imputed Floor with National Budget Neutrality StateNumber of Hospitals Number of Hospitals Receiving Rural Floor or Imputed Floor Percent Change in Payments Difference (in millions) California $94.1 Massachusetts $167.6 Connecticut $65.4 Kentucky ($8.3) New York ($47.7) Florida ($29.7) Illinois ($27.4) North Carolina ($12.6) Missouri ($10.9)

36 36 More on Floors  Frontier Floor  Montana, North Dakota, South Dakota, and Wyoming, covering 46 providers, will receive a frontier floor value of  Imputed Floor  Extended till September 30, 2014  Benefits 25 providers in New Jersey 4 providers in Rhode Island

37 37 Occupational Mix  FY 2014 occupational mix adjusted national average hourly wage is $ [ Proposed at $ ] Occupational Mix Nursing Subcategory Average Hourly Wage National RN National LPN and Surgical Technician National Nurse Aide, Orderly, and Attendant National Medical Assistant National Nurse Category

38 38 Reclassifications  FY 2014 – 296 approved  FY 2013 – 169 approved  FY 2012 – 214 approved  CMS says there are 679 hospitals reclassified for FY 2014  Applications to MGCRB due by September 3 rd  There is a typo in the original display copy – 169 shown as 196. Has been corrected

39 39 Outliers  Outlier fixed-loss cost threshold for FY 2014 equal to the prospective payment rate for the DRG, plus any IME and DSH payments, and any add-on payments for new technology, plus $21,748  Proposed at $24,140  The current amount is $21,821

40 40 Outliers  CMS currently estimates that actual outlier payments for FY 2013 will be approximately 4.77 percent of actual total MS- DRG payments  The proposed estimated amount was 5.17 percent  CMS continues to fail to recognize the amount it underestimates for outlier payments  “No one seems to object” Why???

41 41 Redesignations  “Lugar” Hospitals – by statute  List available on the CMS Web site.  Waiving Lugar for the Out-Migration Adjustment  Becomes rural for all purposes  FY 2014 Wage Index Adjustment Based on Commuting Patterns of Hospital Employees  Refer table 4J

42 42 MDH/ Low-Volume/ CAH Hospitals  MDH and Low-Volume Hospital programs expire FY 2014  Low-Volume reverts to 200 discharges  CAHs must provide I/P care on-site

43 43 Capital  Rate will increase from $ to $ Final FY 2013FY 2014Change Percent Change Update Factor GAF/DRG Adjustment Factor Outlier Adjustment Factor Adjustment for admission and medical review criteria 3 N/A Capital Federal Rate $425.49$

44 44 Excluded Hospitals  Rates will increase 2.5 percent  Cancer and Children’s Hospitals

45 45 IME / GME  IME multiplier unchanged at 1.35 – by law  Hospital cannot count a resident training at a CAH for either IME or GME  Revising yet again the policy concerning the counting of labor / delivery room days  Will include labor and delivery days as inpatient days in the Medicare utilization calculation, effective for cost reporting periods beginning on or after October 1, 2013.

46 46 DRGs  Will use 4 new cost centers for calculating CCRs  Implantable devices  MRI  CT scans  Cardiac cath  There will now be 19 CCRs  See Table 5 for new weights

47 47 DRGs  Minor changes to specific coding procedures, etc

48 48 MS- DRG Description FY 2014 Weight FY 2013 Percentage Difference 65 Intracranial hemorrhage or cerebral infarction w CC % 189Pulmonary Edema & Respiratory Failure % 190 Chronic obstructive pulmonary disease w MCC % 191 Chronic obstructive pulmonary disease w CC % 193Simple pneumonia & pleurisy w MCC % 194Simple pneumonia & pleurisy w CC % 247 Perc cardiovasc proc w drug-eluting stent w/o MCC % 287 Circulatory disorders except AMI, w card cath w/o MCC % 291Heart failure & shock w MCC % 292Heart failure & shock w CC % 309 Cardiac arrhythmia & conduction disorders W CC % 310 Cardiac arrhythmia & conduction disorders w/o CC/MCC % 312Syncope & collapse % 313Chest pain %

49 49 MS- DRG Description FY 2014 Weight FY 2013 Percentage Difference 378G.I. hemorrhage w CC % 392 Esophagitis, gastroent & misc digest disorders w/o MCC % 470 Major joint replacement or reattachment of lower extremity w/o MCC % 603Cellulitis w/o MCC % 641 Nutritional & misc metabolic disorders w/o MCC % 682Renal Failure w MCC % 683Renal Failure w CC % 690 Kidney & urinary tract infections w/o MCC % 871 Septicemia or severe sepsis w/o MV 96+ hours w MCC % 872 Septicemia or severe sepsis w/o MV 96+ hours w/o MCC %

50 50 New Technology Add-ons  For FY 2014 continuing 3:  Voraxase® (max pay of $45,000)  Dificid™ (max of $868)  Zenith® AAA Graft (max of $8,171)  2 new for FY 2014  Argus® II Retinal Prosthesis System; Responsive Neurostimulator (RNS®) System (max pay of $72,028)  Zilver® PTX® Drug Eluting Peripheral Stent (max of $1,705)

51 51 I/P Admissions  Creating a “two midnights” rule  Longer than two midnights – will be deemed an I/P  Shorter than two – O/P assumed Exception if good documentation Supports admitting docs expectation that stay > 2 midnights  Contractor can ignore if hospital suspected of abuse  Applies to CAHs  But not IRFs

52 52 IPPS DSH Formula  Mandated by Section 3133 of ACA  Splits system  25 percent remains as old formula  Rescrambles 75 percent  Uses 3 factors  Revised by 10/3/13 correction notice  Will NOT make payments based on FFY  Will now compute on hospital CRP  Revises Formula Values

53 53 IPPS DSH Formula  If a hospital is eligible for DSH on its cost report for the cost reporting period ending on December 31, 2013, it will receive a pro rata share of its FY 2014 uncompensated care payment. This pro rata share would be approximately three-twelfths (that is, the period of time from October 1, 2013 through December 31, 2013, divided by the period of time from January 1, 2013 through December 31, 2013) of the hospital’s FY 2014 uncompensated care payment.  If the hospital’s subsequent cost reporting period is January 1, 2014 through December 31, 2014, CMS also will reconcile the interim FY 2014 uncompensated care payments received for discharges from January 1, 2014 through September 30, 2014 on the hospital’s cost report for the cost reporting period beginning on January 1, 2014 against a pro rata share of its FY 2014 uncompensated care payment.

54 54 DSH Factor One  Determines 75 percent of what would have been paid under the old methodology  Excluded hospitals  MD wavier  SCHs paid on a hospital-specific basis  23 hospitals in Rural Community Demo  Using CMS actuary estimates from July 2013  Current DSH total estimate is $ billion  Current 25% estimate is $3.198 billion (revised)  Current 75% estimate – Factor 1 is $9.593 billion (revised)

55 55 DSH Factor Two  Reduces Factor One amount by percentage reduction in uninsured from 2013 to 2014  Using CBO “projections”  CY 2013 rate of insurance coverage (May 2013 CBO estimate): 80 percent  CY 2014 rate of insurance coverage (May 2013 CBO estimate, updated with July 2013 CBO estimate): 84 percent  FY 2014 rate of insurance coverage: (80 percent *.25) + (84 percent *.75) = 83 percent.

56 56 DSH Factor Two  Percent of individuals without insurance for 2013 (March 2010 CBO estimate): 18 Percent  Percent of individuals without insurance for FY 2014 (weighted average): 17 Percent  Formula;  1 – |[( )/0.18]| = = (94.4 percent)  (94.4 percent) (0.1 percentage points) = (94.3 percent)  = Factor 2

57 57 DSH Factor Two  For the purpose of this final rule, the amount available for uncompensated care payments for FY 2014 will be approximately $9.046 billion (0.943 times Factor 1 estimate of $9.593 billion)(Revised values)  Impact of revised rule is an increase in payments of $15 million  This represents a reduction of DSH of $546 $531 million

58 58 DSH Factor Three  Factor 3 is “equal to the percent, for each subsection (d) hospital, that  represents the quotient of (i) the amount of uncompensated care for such hospital for a period selected by the Secretary (as estimated by the Secretary, based on appropriate data (including, in the case where the Secretary determines alternative data is available which is a better proxy for the costs of subsection (d) hospitals for treating the uninsured, the use of such alternative data)); and (ii) the aggregate amount of uncompensated care for all subsection (d) hospitals that receive a payment under this subsection for such period (as so estimated, based on such data)”  Based on each hospital’s share of total uncompensated care costs across all PPS hospitals that received DSH payments numerator is all PPS hospitals, but denominator is just DSH hospitals

59 59 DSH Factor Three  CMS is using the utilization of insured low-income patients defined as inpatient days of Medicaid patients plus inpatient days of Medicare SSI patients as defined in 42 CFR (b)(4) and (b)(2)(i), respectively to determine Factor 3  From 2010/2011 cost reports

60 60 DSH Factor Three  Definition of “uncompensated care” is bound to be controversial  Tables are posted showing CMS estimate of each hospital’s share  Payment/AcuteInpatientPPS/dsh.html

61 61 DSH Eligibility  Can you obtain DSH if you did not have any in 2013 ?????  So far there is no guidance

62 62

63 63

64 64 Readmissions  Maximum reduction increases to 2 percent – based on individual hospital ratio  2,225 hospitals expected to incur some loss  1,134 expected to be clear  Is not budget neutral

65 65 Readmissions  FY 2014 uses 3 readmission measures  Heart attack  Heart failure  pneumonia  Will expand conditions for FY 2015  COPD  Total hip arthoplasty  Total knee arthoplasty  Will reduce overall payments $227 million

66 66 Readmissions  Aggregate payments for excess readmissions = [sum of base operating DRG payments for AMI x (Excess Readmission Ratio for AMI-1)] + [sum of base operating DRG payments for HF x (Excess Readmission Ratio for HF-1)] +[sum of base operating DRG payments for PN x (Excess Readmission Ratio for PN-1)].  Aggregate payments for all discharges = sum of base operating DRG payments for all discharges.

67 67 Readmissions  Ratio = 1-(Aggregate payments for excess readmissions/Aggregate payments for all discharges)  Readmissions Adjustment Factor for FY 2014 is the higher of the ratio or  Based on claims data from July 1, 2009 to June 30, 2012 for FY 2014

68 68 Value Based Purchasing  Withhold amount increases to 1.25 percent for all hospitals  Total amount available for performance-based incentive payments for FY 2014 will be approximately $1.1 billion  Supposed to be budget neutral

69 69 Value Based Purchasing  17 measures for FY 2014  AMI-7a, AMI-8a  HF-1  PN-3b, PN-6  SCIP-INF-1; -2; -3; -4; -9  SCIP-Card-2  SCIP-VTE-1*, VTE-2  HCAHPS  MORT-30 AMI; -HF; -PN *deleted for FY 2015

70 70 Value Based Purchasing  FY 2015  Adding AHRQ PSI Composite CLASBI MSPB-1 (Medicare spending per beneficiary)  Removing SCIP-VTE-1

71 71 Value Based Purchasing  FY 2016  Removing AMI-8a PN-3b HF-1  Adding three new measures for FY 2016 IMM-2 CAUTI Surgical Site Infection (SSI), the latter of which is stratified into two separate surgery sites

72 72 HAC Reduction  Affects payment in FY 2015  Lowest-performing quartile get 1.0 percent reduction  Two measures of two types (domains)  Each weighted equally  First domain – six patient safety indicators  Pressure ulcers rate  Foreign objects left in body percent  Iatrogenic Pneumothorax rate  Post-op physiologic / metabolic derangement rate  Post-op pulmonary embolism / deep vein thrombosis rate  Second domain – two infection measures  CLABSI  CAUTI

73 73 Quality Reporting  59 measures for FY 2015  Removing 8 measures for FY 2016  AMI-2, AMI-10, PN-3b, HF-1, HF-3, SCIP-INF-10, IMM- 1, Participation in a systematic clinical database registry for stroke care  Adding 5 for FY 2016 (outcome-focused)

74 74 Quality Reporting  LTCH  Adding 5  For FY ‘18 adding 1  Cancer hospitals  For FY ’15 – one new measure  For FY ’16 – 13 new measures  Psych hospitals  For FY ’16 – three new measures

75 75 LTCHs  Update of 1.7% (-0.3% for non-reports)  MB of 2.5%  Less PPACA offsets of (0.8%)  Standardized amount adjustment   Second-year of three-year adjustment period  Results in Federal rate of $40,  Current is $40,  Labor-related share is  Current is  Fixed-loss amount is $13,314  Current is $15,408  Update quality reporting  25% rule reinstated

76 76 Skilled Nursing

77 77 Skilled Nursing  Published in Aug 6 th Federal Register  Tables on CMS website  Copy at: 06/pdf/ pdf  Tables at: Service-Payment/SNFPPS/index.html  Effective 10/1/13

78 78 SNF PPS Update  Market Basket Increase = 2.3 percent  Less MB correction adjustment – -0.5 percent  Comment Good vs Bad  Update = 1.8 percent  Further reduced by MFP = -0.5 percent  Net Update is 1.3 percent  Labor Share increases to  AWI Budget neutrality factor  CMS estimates payments to increase $470 million

79 79 SNF PPS Update  Reporting of Distinct Therapy Days  CMS adding an item to the MDS item set (Item O 0420) effective October 1, 2013, which will capture the number of distinct calendar days that the resident received therapy services during the assessment look-back period across all rehabilitation disciplines.  ICD-10-CM Item  Effective with services furnished on or after October 1, 2014, the AIDS add-on will apply to beneficiaries with an ICD-10-CM diagnosis code of B20

80 80 Inpatient Rehabilitation Facilities

81 81 Inpatient Rehabilitation Facilities  Published in 8/6/13 Federal Register  Tables on CMS website  Copy at:.http://www.gpo.gov/fdsys/pkg/FR /pdf/ pdf.  Tables at: Fee-for-Service-Payment/InpatientRehabFacPPS/  Effective 10/1/13

82 82 Inpatient Rehabilitation Facilities  Market Basket Increase – 2.6 percent  Further reduced by MPF = 0.5 percent  Further reduced by ACA = 0.3 percent  Update is 1.8 percent  Change in Outlier payments to add 0.3 percent  Labor Share increases to  AWI Budget neutrality factor  CMS estimates payments to increase $170 million

83 83 Inpatient Rehabilitation Facilities

84 84 Inpatient Rehabilitation Facilities  Facility-level adjustment updates  Rural adjustment of 14.9 percent  Low Income Percentage adjustment factor of  Teaching status adjustment factor of  Will assign a value of “1” if the facility is a freestanding IRF hospital and will assign a value of “0” if the facility is an IRF unit of an acute care hospital (or CAH) in regression analysis

85 85 Inpatient Rehabilitation Facilities  “60-percent rule” presumptive methodology code list updates  To qualify for IRF PPS - 60 percent of patients require intensive inpatient rehabilitation services for one or more of 13 conditions specified in regulation  CMS removing codes from presumptive compliance  List of ICD-9-CM codes to be removed from “ICD-9- CM Codes That Meet Presumptive Compliance Criteria” in the rule’s Table 9  Will be effective for FY 2015

86 86 Inpatient Rehabilitation Facilities  High-Cost Outliers Under the IRF PPS  Paying only 2.5 of 3.0 for outliers  Threshold amount decreases to $9,272 from $10,466

87 87 Inpatient Rehabilitation Facilities  Quality  Quality Measures for FY 2014 CMS will continue to use the NQF-endorsed National Healthcare Safety Network (NHSN) Catheter-Associated Urinary Tract Infection (CAUTI) outcome measure CMS will adopt the NQF-endorsed version of the “Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay)” measure, and to stop using the non-risk adjusted version of this measure

88 88 Inpatient Rehabilitation Facilities  Quality Measures Affecting the FY 2016 IRF PPS Annual Increase Factor  Continued Measure Affecting FY 2015 Increase Factors: NQF #0138: National Health Safety Network (NHSN) Catheter-associated Urinary Tract Infection (CAUTI) Outcome Measure  Continued Measure Affecting FY 2015 and FY 2016 Application of NQF #0678: Percent of Residents with Pressure Ulcers That are New or Worsened (Short- Stay)*

89 89 Inpatient Rehabilitation Facilities  Quality Measures Affecting the FY 2016 IRF PPS Annual Increase Factor  New IRF QRP Measure Affecting FY 2016 NQF #0431: Influenza Vaccination Coverage among Healthcare Personnel

90 90 Inpatient Rehabilitation Facilities  Quality Data Reporting Affecting FY 2017 and Subsequent Years  (1) All-Cause Unplanned Readmission Measure for 30 Days Post Discharge from Inpatient Rehabilitation Facilities  (2) Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short-Stay) (NQF #0680)  Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (short-stay) (NQF #0678) with adoption of the NQF-endorsed version of this measure

91 91 Inpatient Rehabilitation Facilities  IRF-Patient Assessment Instrument  Revising to include data to accommodate risk adjustment for pressure ulcer measure  Will add new patient influenza vaccination data elements

92 92 Inpatient Psychiatric Facilities

93 93 Inpatient Psychiatric Facilities  Published in Aug 1 st Federal Register  Copy at: 01/pdf/ pdf  Tables are part of the rule  Effective 10/1/13

94 94 Inpatient Psychiatric Facilities  Market Basket increase is 2.6 percent  Reduced by a 0.5 percent multifactor productivity (MFP) adjustment  Reduced by a 0.1 percentage point reduction by the ACA  Net increase is 2.0 percent  CMS estimates increase of $115 million  Rule is a Notice – no proposed rulemaking – second year in a row

95 95 Inpatient Psychiatric Facilities  Update  MB of 2.0 percent  AWI budget neutrality factor =  FY 2013 Federal per diem base rate of $  Yields Federal Per Diem Base Rate = $ Labor Share ( ) = $ Non-Labor Share ( ) = $217.57

96 96 Inpatient Psychiatric Facilities  Electroconvulsive Therapy Rate (ECT) rate will be $ Current amount is $  Patient-Level Adjustments:  Adjustment for MS-DRG Assignment that group to one of 17 MS-IPF-DRGs  Payment for Comorbid Conditions  Patient Age Adjustments  Variable Per Diem Adjustments

97 97 Inpatient Psychiatric Facilities  Facility-Level Adjustments  For the wage index –  IPFs located in rural areas – 17 percent  Teaching IPFs =  Cost of living adjustments for IPFs located in Alaska and Hawaii  IPFs with a qualifying emergency department (ED)

98 98 Inpatient Psychiatric Facilities  Outlier Payments  FY 2014 $10,245  Current $11,600  Failed to pay the 2.0 percent outlier pool

99 99 Hospice

100 100 Hospice  Published in Aug 7 th Federal Register  Copy at: 07/pdf/ pdf  Tables at: Service-Payment/Hospice/index.html  Effective 10/1/13

101 101 Hospice  Market Basket = 2.5 percent  Reduced by MPF = 0.5 Percent  Reduced by ACA = 0.3 percent  Net increase 1.7 percent  Labor portions  Routine Home Care68.71 percent  Continuous Home Care68.71  General Inpatient Care64.01  Respite Care54.13

102 102 Hospice

103 103 Hospice  Fifth year of 7 year BNAF AWI Reduction  Reduces 15 percent for a total of 70 percent  Coding  Clarifying that non-specific diagnosis codes are unacceptable  Need to use principal diagnoses codes  CMS will return claims beginning FY 2015

104 104 Hospice  Quality Reporting  For FY 2014 – 2 measures NQF 0209/Pain Management Structural measure  Eliminating for FY 2016  For FY 2016 Adopting Hospice Item Set (HIS)

105 105 CY 2014 Proposed PPS  OPPS & ASC  MPFS  ESRD  Home Health

106 106 CY 2014 OPPS & ASC Proposed

107 107 CY 2014 Proposed OPPS & ASC PPS  Published in July 19 th Federal Register  Copy at: 19/pdf/ pdf  OPPS Tables at: Fee-for-Service-Payment/HospitalOutpatientPPS/index.html  ASC Tables at: Fee-for-Service-Payment/ASCPayment/index.html  Effective 1/1/2014  Correction notice in September 6 th Federal Register

108 108 CY 2014 Proposed OPPS  Updates  Disregard proposed updates  Will follow IPPS increase of 1.7 percent  Conversion factor at $  May be lower since IPPS increase is lower than proposed OPPS  Would maintain rural SCH and EACH 7.1 percent rural adjustment  Would maintain (11) cancer hospital adjustment

109 109 CY 2014 Proposed OPPS  Labor Share would continue at 60 percent  Part B drugs would be payable at ASP+6 percent, unless packaged  APC weights and rates in Addendum A & B  Would expand CCR departments from 15 to 19  Outliers would be 1.75 times the APC payment amount and exceeds the APC payment rate plus a $2,775 fixed-dollar threshold  Corrected to $2,900  Outliers for CMHC would be 3.40 times the payment rate for APC 0173, calculated as 50 percent of the amount by which the cost exceeds 3.40 times the APC 0173 payment rate

110 110 CY 2014 Proposed OPPS  Partial Hospitalization Program

111 111 CY 2014 Proposed OPPS  Quality (OQR)  Proposing five new measures affecting payment in CY 2016, with data collection beginning in CY 2014: Influenza Vaccination Coverage among Healthcare Personnel Complications within 30 Days Following Cataract Surgery Requiring Additional Surgical Procedures (NQF #0564). Endoscopy/Poly Surveillance: Appropriate follow-up interval for normal colonoscopy in average-risk patients (NQF #0658). Endoscopy/Poly Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps -- Avoidance of Inappropriate Use (NQF #0659). Cataracts -- Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536).

112 112 CY 2014 Proposed OPPS  Quality (OQR)  Proposing to delete 2 measures affecting payment in CY 2016 Transition Record with Specified Elements Received by Discharged ED Patients (OP-19), because this measure cannot be implemented with the degree of specificity that would be needed to fully address safety concerns related to confidentiality without being overly burdensome. Cardiac Rehabilitation Measure: Patient Referral from an Outpatient Setting (OP-24)

113 113 CY 2014 Proposed OPPS  Packaging  Proposing to package 7 new categories (1) Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; (2) Drugs and biologicals that function as supplies or devices when used in a surgical procedure; (3) Certain clinical diagnostic laboratory tests; (4) Procedures described by add-on codes; (5) Ancillary services, such as a chest x-ray, that are assigned status indicator “X”; (6) Diagnostic tests on the bypass list, and (7) Device removal procedures.

114 114 CY 2014 Proposed OPPS  Single Procedure APC Criteria–Based Costs  Device Dependent APCs Proposing to define 29 device-dependent APCs associated with 136 HCPCS codes as single complete services and to assign them to comprehensive APCs that would provide all-inclusive payments for those services  Blood and Blood Products Would continue current policy using blood and blood product CCR methodology

115 115 CY 2014 Proposed OPPS  Composite APC Criteria-Based Costs  Proposing to continue composite policies for extended assessment and management services, LDR prostate brachytherapy, cardiac electrophysiologic evaluation and ablation services, mental health services, and multiple imaging service  Proposing to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology

116 116 CY 2014 Proposed OPPS  Contains numerous additions and deletions of CPT and HCPCS codes  Contains adjustments to OPPS payment for full or partial credit devices  Identifies 15 drug and biologicals that will lose pass through status December 31, 2013  Identifies 18 drugs and biologicals that will continue pass through status

117 117 CY 2014 Proposed OPPS  CMS is proposing to increase packaging items to $90  Rule’s table 25 contains list

118 118 CY 2014 Proposed OPPS  Proposing to modify outpatient and clinic visits as follows:

119 119 CY 2014 Proposed ASC  Update  For CY 2014, the CPI-U update is projected to be 1.4 percent  The MFP adjustment is projected to be 0.5 percent  Resulting in an MFP-adjusted CPI-U update of 0.9 percent for CY 2014

120 120 CY 2014 Proposed ASC  Update  CMS is proposing to adjust the CY 2013 ASC conversion factor ($42.917) by the wage adjustment for budget neutrality of in addition to the MFP-adjusted update factor of 0.9 percent results in a proposed CY 2014 ASC conversion factor of $  Addenda AA and BB (which are available via the Internet on the CMS web site) display the proposed updated ASC payment rates for CY 2014 for covered surgical procedures and covered ancillary services, respectively

121 121 CY 2014 Proposed ASC  Quality  CMS is proposing to adopt four measures for the ASCQR Program Complications within 30 Days following Cataract Surgery Requiring Additional Surgical Procedures; Endoscopy/Poly Surveillance: Appropriate follow-up interval for normal colonoscopy in average risk patients (NQF #0658); Endoscopy/Poly Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps – Avoidance of Inappropriate Use (NQF #0659); and Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536)

122 122 CY 2014 Proposed MPFS

123 123 CY 2014 Proposed MPFS  Published in July 19 th Federal Register  Copy at: 19/pdf/ pdf  The PFS Addenda along with other supporting documents and tables referenced in the proposed rule at website at  Effective 1/1/2014

124 124 CY 2014 Proposed MPFS  Does NOT reflect SGR reduction under current law of percent  Proposing new phased in over CY 2014 and CY 2015  The statutory work GPCI “floor” of 1.0 is scheduled to expire under current law on December 31, 2013  The proposed GPCIs reflect the elimination of the work “floor” and as a result 51 localities will have a work GPCI below 1.0

125 125 CY 2014 Proposed MPFS  CMS is proposing to change the practice cost indicies  Work from percent to percent  Practice Expense from percent to percent  The cost share weight for the MP GPCI (4.295 percent) remains unchanged

126 126 CY 2014 Proposed MPFS  Misvalued codes – CMS is proposing to adjust payment rates for more than 200 codes where Medicare pays more for services furnished in an office than in an outpatient hospital department or ASC  Application of Therapy Caps to Critical Access Hospitals – CMS proposes to apply the therapy cap limitations and related policies to outpatient therapy services furnished in a CAH beginning on January 1, 2014 to conform Medicare’s regulations to current law

127 127 CY 2014 Proposed MPFS  Telehealth – Proposing to add CPT codes and to the list of telehealth services for CY 2014 on a category 1 basis  Complex Chronic Care Management Services – Proposing to establish a separate payment under the PFS for complex chronic care management services furnished to patients with multiple complex chronic conditions that are expected to last at least 12 months or until the death of the patient, and that place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline

128 128 CY 2014 Proposed MPFS  Proposed rule contains extensive discussion and measures for the Physician Quality Reporting System (PQRS)

129 129 CY 2014 Proposed ESRD

130 130 CY 2014 Proposed ESRD  Published in July 8 th Federal Register  Copy at: 08/pdf/ pdf  Tables at:  Payments expected to decrease $970 million  Effective 1/1/2014

131 131 CY 2014 Proposed ESRD  Update  The CY 2014 changes is projected to be a 9.4 percent decrease in payments  Current rate = $  Market Basket would be 2.9 percent  Reduced by productivity factor of 0.4  Net = 2.5 percent  AWI budget neutrality factor =  Results in a proposed amount of $246.47

132 132 CY 2014 Proposed ESRD  Update  ATRA requires CMS to reduce payments for changes in drug utilization  Reduction would be $29.52  Net = $ $29.52 = $  Wage Index values on line  Labor-related share is percent

133 133 CY 2014 Proposed ESRD  Outliers  CMS is proposing to update the fixed dollar loss amounts that are added to the predicted Medicare Allowable Payment (MAP) amounts per treatment to determine the outlier thresholds for CY 2014 from $ to $94.26 for adult patients and from $47.32 to $54.23 for pediatric patients compared with CY 2013 amounts  Proposal provides crosswalks from ICD-9-CM to ICD-10- CM that will become effective 10/1/2014

134 134 CY 2014 Proposed ESRD  Quality  CMS is proposing to continue to use nine of the ten measures for the PY 2016 ESRD QIP modifying three of the measures as follows: ICH CAHPS (reporting measure): Expand Mineral Metabolism (reporting measure): Revise Anemia Management (reporting measure): Revise

135 135 CY 2014 Proposed Home Health

136 136 CY 2014 Proposed Home Health  Published in July 3 rd Federal Register  Copy at: 03/pdf/ pdf  Tables at:  Service-Payment/HomeHealthPPS/Home-Health- Prospective-Payment-System-Regulations-and-Notices.html.  Effective 1/1/2014

137 137 CY 2014 Proposed Home Health  Update  Market Basket = 2.4 percent  There are no ACA offsets  CMS proposes to reduce the average case-mix weight for 2012 from to Would reduce rates by 3.5 percent each year – 2014, 2015, 2016 and 2017  Rural add-on continues

138 138 CY 2014 Proposed Home Health  Update – Proposed 60 day national episode payment amount

139 139 CY 2014 Proposed Home Health  Update – Proposed Per Visit Payment Amounts

140 140 CY 2014 Proposed Home Health  Outliers  No changes being proposed  Quality  For 2014 – OASIS submission satisfies compliance  For 2015 – Proposing 2 claims based measures (1) Rehospitalization during the first 30 days of HH; and (2) Emergency Department Use without Hospital Readmission during the first 30 days of HH

141 141 CY 2015 Proposed FQHC PPS

142 142 CY 2015 Proposed FQHC PPS  Published in September 23 rd Federal Register  Effective 10/1/2014  Payments must equal 100 percent of the estimated amount of reasonable costs without the application of the current system’s UPLs or productivity  Would increase payments to FQHCs by about 28 percent

143 143 CY 2015 Proposed FQHC PPS  Would remove the exception to the single encounter payment per day  The adjusted base payment that reflects the MEI historical updates and forecasted updates to the MEI would be $  Would move update to CY basis in 2016  Tied to MPFS – use GPCIs instead of AWIs

144 144 CY 2015 Proposed FQHC PPS  The adjusted base payment that reflects the MEI historical updates and forecasted updates to the MEI would be $155.90

145 145 Questions


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