Virginia Physical Therapy Association 2012 Annual Conference Health Care Reform Gillian Russell, JD Senior Regulatory Affairs Specialist American Physical.

Virginia Physical Therapy Association 2012 Annual Conference Health Care Reform
Gillian Russell, JD Senior Regulatory Affairs Specialist American Physical Therapy Association

HCR / Goal of Integrated Care Three Part Aim
(Individuals) Better Care Better Health (Populations) Lower Growth in Expenditures

Emerging Themes in Health Care
Integrated Models of Care – Innovation in Programs Accountable Care Organizations Medical Homes Bundling Expansion of Coverage Prevention and wellness, Medicaid expansion, exchanges, nondiscrimination Refining / Changing Payment Methodologies Cuts in payment rates, refinements to payment systems, patient assessment instruments. Linking Payment to Quality Value based purchasing, hospital readmissions policy, electronic health records, registries Program Integrity Provider Enrollment Funding Increases for Enforcement Expansion of Audits (RACs)

Timeline of Key Health Reform Provisions

Collaborative Care Models: Accountable Care Organizations (ACOs)

What is an Accountable Care Organization (ACO)?
Networks of physicians, hospitals and other providers that will be incentivized to work together to provide quality care and lower growth in health care costs under Medicare FFS Goal is to provide seamless, high quality care instead of fragmented care in the current FFS model

ACO Final Rulemaking CMS Medicare Shared Savings Final Rule
OIG Fraud and Abuse Waivers FTC Anti-trust Enforcement Statement IRS Fact Sheet Advanced Payment Model

Highlights of MSSP Final Rule
Adds FQHCs and RHCs as ACO eligible providers Changed patient assignment to a prospective process Quality reporting program changed to 33 measures around 4 domains Modified risk models to include one model in which ACOs share in savings only; 2nd model ACOs share in small proportion of losses but larger proportion of savings Removed requirement that PCPs must meet EHR “meaningful use” criteria

ACO Multiple Pathways Pioneers CMMI Payment Advance Track 2 Track 1
MSSP

ACO Resources 116 MSSP ACOs 32 Pioneers 20 Advanced Payment

Eligible Participants
ACO Professionals in Group Practice Arrangements Networks of Individual Practices of ACO Professionals Partnerships or Joint Venture Arrangements Between Hospitals and ACO Professionals Hospitals Employing ACO Professionals Critical Access that bills for facility and professional services Federally Qualified Health Centers Rural Health Clinics

ACO Definitions ACO Participants ACO Professionals
ACO Providers/ Suppliers Individual or Groups of ACO providers/suppliers ACO provider/supplier Enrolled in Medicare and bills Medicare FFS Identified by Medicare-enrolled TIN Enrolled and bills Medicare FFS Has a Medicare billing number assigned to ACO participant and listed on ACO legal forms Alone or together with other ACO participants make-up an ACO Physician Physician Assistant Nurse Practitioner Clinical Nurse Specialist PTPPS HHAs SNFs Rehabilitation Agencies

ACO Structure Formal and legal structure and allows the ACO to receive and distribute payments for shared savings Formal CMS application and approval process Representatives from Medicare FFS beneficiaries and each ACO provider/ participant Allows for partnering with private entities but ACO participants must have at least 75 percent control of the ACO’s governing body

ACO Structure Evidence-based medical practice or clinical guidelines
Three-year contractual commitment (remedial actions for removing participants for non-compliance) 5000 yearly patient threshold Participation voluntary for providers and patients

Establishing a Benchmark
Current Medicare FFS payment Shared savings payments directly to the ACO Benchmark developed to assess performance An estimate of total Medicare FFS Parts A and B costs if provided absent ACO Benchmark factors in patient characteristics, geographic location, etc. Benchmark updated each year of the three-year period

Risk Models Minimum savings rate based on percentage of the benchmark that the ACO must exceed ACOs must opt into one of two risk-sharing models: One-sided Risk (up to 50% shared savings and <10% of benchmark) Two-sided Risk Model (up to 60% shared savings and <15 percent of benchmark, up to 10 % shared losses)

Beneficiary Assignment
Plurality test for determining beneficiary assignment to an ACO Whether a beneficiary receives more primary care from that ACO than from any other provider

ACO Quality: The Measures
Total of 33 measures (scored as 23) 4 domains Better care for individuals Better health for population 4 methods of data submission Patient survey Claims EHR Group Physician Reporting Option (GPRO) Measures will be phased in from pay for reporting to pay for performance

ACOs and Quality Quality reporting overview:
ACOs must report and meet quality measure standards for the contracted three years Quality reporting will include mix of measures: Evidence-based care process Outcome Patient experience CMS did not include utilization measures as the ACO program will address this through improved coordinated and quality

ACO Quality Reporting: Therapy Considerations
Possible Opportunities Therapists can participate in value-based purchasing and quality initiatives Identifying quality measures that PT’s can directly impact PT’s will remain eligible under the PQRS program even if participating in an ACO Possible Challenges Physical Therapists cannot report in PQRS through the ACO (GPRO)

Interim Final Rule on Fraud and Abuse Waivers
5 final waivers: ACO pre-participation ACO participation Shared Savings Distribution Compliance with Physician Self-referral Law Patient incentive Applies a “reasoned approach analysis” Existing exceptions and safe harbors still apply

Anti-trust Enforcement Policy
Establishes an anti-trust “safety zone” Combined share of 30% or less of each combined service PSA Exception for rural ACOs “Safety Zone” designation stays in effect for duration of ACO agreement ACOs outside of “safety zones” not necessarily unlawful

Private ACO Collaborations
Partnerships with Hospitals & State Government Aetna Brookings/Dartmouth ACO Pilot Sites Anthem Blue Cross/Blue Shield CIGNA

Medicare Shared Savings Program
ACOs Medicare Shared Savings Program CMMI Activity State activity Private Payer “ACOs”

Dispelling the Myths Myth Reality
ACOs are the same as the HMOs of the 1990s ACOs will replace Medicare FFS and providers will be paid by the ACO Patient choice is taken away ACOs widen the door for POPTs ACOs have significant quality, governance and marketing requirements Providers will still submit claims to Medicare Patients/ providers can receive care outside ACO ACOs do not affect Stark IOAS exception but does pose significant issues

Physical Therapy Considerations
Possible Opportunities Less fragmented, more integrated care for patients Providers practicing “at the top of their license” Cost savings may encourage more direct to PT visits, referrals, & PT primary care Should reward PT clinical expertise and professional capability Right provider for the right patient at the right time Possible Challenges Costs and complexity of electronic health record adoption and integration Adoption of evidence-based clinical standards Adoption of care management and utilization standards Ability to deal with complex contracting requirements Maintenance of autonomy within networks and pressures for consolidation

What Do ACOs Mean for PT Practice?
Physical Therapists Practicing Outside of ACO Model Physical Therapists Practicing Within ACO Setting

Is an ACO Partnership Right for Your Practice?
Analyze Determine the desired role, if any, for your practice in an ACO Plan Prepare adequately for this partnership---or develop a plan for success outside of the ACO structures Implement Advocate for a role for your practice in these new models---or pursue a strategy for success outside of the ACO structure Evaluate Conduct ongoing assessment of business metrics and modify course as needed

CMS Resources CMS Shared Savings Program
CMMI Pioneer and Advanced Payment Model

Key Points for Therapists
Can contract with multiple ACOs ACO activity and composition will vary ACOs are voluntary ACO final rules do not relax Stark II IOAS exception Know differences in MSSP, Pioneer, and Private ACOs Participation in quality initiatives and collection of outcomes data is crucial Assess interoperability of current and potential EMRs

Collaborative Care Models: Bundled Payments

Section 3023 of ACA: Bundling
Bundling Pilot Project – national, voluntary pilot program Hospitals, physicians and post-acute care providers (SNFs, home health, IRFs, and LTCHS) Improve patient care and cost-savings through bundled payment model Must be established by 2013 and will last for five years Episode of care: 3 days before admission to hospital, through LOS, and end 30 days post discharge Based on eight selected conditions Quality measures/assessment tool to be established Medicaid bundled payment demo to take place in eight states

CMMI: Bundling Payment Initiative
Designed to encourage doctors, hospitals and other health care providers to coordinate care Objectives: Support and encourage providers through three part aim Decrease the cost of an acute episode of care and the associated post-acute care while improving quality Develop and test new payment models for three-part aim Shorten the cycle time for adoption of evidence-based care

Bundling Initiative: Four Proposed Models
Model 1: Inpatient Stay Only (Physician services paid separately) Model 2: Inpatient and PAC Stay (30 or 90 days) Model 3: Discharge from Inpatient stay and PAC 30 days after Model 4: Inpatient Stay (all services including physician)

Relationship between Bundling Initiative and Pilot Project
Bundled Payments for Care Improvement initiative is a separate activity Consistent with goals of National Pilot Program on Payment Bundling authorized by ACA Bundled initiative will help inform future work under the pilot project

Definition of Bundled Payments
Single payment made for a defined group of services. May cover services furnished by a single entity or items and services furnished by several providers in multiple care delivery settings. Single negotiated episode payment of a predetermined amount for all services. Paid prospectively or retrospectively. Source: CMMI Website FAQs

Example Bundled Payment
Medicare and the provider would agree to a bundled payment target price for acute care hospital services for an inpatient stay plus professional services and post-acute care related to the principal reason for the hospitalization, rather than paying separately for each physician visit and procedure provided during the episode.

Bundling Key Focus: Reduction in Hospital Readmissions
Implementation of reduction measures in key acute and post acute care settings: Inpatient hospitals Inpatient rehabilitation facilities (IRF PPS 2012) Transitioning focus in home health, skilled nursing facilities, and LTCHs Private initiatives define readmissions – United Healthcare and Geisinger

Hospital Readmissions Reduction
The Patient Protection and Affordable Care Act (PPACA) established the Hospital Readmissions Reduction Program. Begins in 2013, and is aimed at adjusting hospital payments for those institutions that have higher than expected readmissions.

Hospital Readmissions Reduction Program
Program to reduce payments for facilities exceeding certain rate of readmissions Proposed Rule: August 18, 2011 Implementation: October 2012 Condition specific 30-day readmissions Acute myocardial infarction (AMI) Heart failure (HF) Pneumonia (PN)

Hospital Readmissions Reduction Program
Additional conditions to be added As determined by Secretary for FY2015 Chronic obstructive lung disease, coronary bypass grafting, percutaneous coronary interventions, other vascular procedures (as identified in 2007 MedPAC report) P4P Withholdings up to 1% FY2013, 2% FY2014, and 3% FY 2015 and beyond

Additional Readmissions Measures

APTA Readmissions Efforts
Increased member education regarding through a variety of educational sessions including: The Value of Physical Therapy in Reducing Avoidable Hospital Readmissions (audio conference) Medicare update presentations (CSM & Annual Conference) Coding, Payment and Practice Applications Seminars Creation of new readmission page on the website: Submission of comments by APTA on a variety of payment regulations and measurement methodologies related to readmissions

Collaborative Care Models: Patient-Centered Medical Homes (PCMHs)

Medical Homes Redefining primary care
Primary care medical home accountable for meeting the large majority of each patient’s physical and mental health care needs Prevention and wellness, acute care, and chronic care Team approach: physicians, nurses, physical therapists, pharmacists, nutritionists, social workers, etc.

Medical Homes: Affordable Care Act
Sec established person-centered health home for State Medicaid and other programs Individuals with chronic conditions PTs not specifically named in statute but can partner with state entities to participate Sec provides grants to “eligible entities” to establish community-based health teams to support primary care providers in the creation of PCMHs

Medical Homes: Beyond the ACA
CMMI Challenge Grants Up to $1 billion in grants for delivering better health, improved care and lower costs to people CMMI FQHC Advanced Primary Care Practice Private Partnerships Geisinger Health System Group Health, Seattle TransforMED National Demonstration Project

Patient-Centered Medical Home Functions and Attributes
Comprehensive Care Patient-Centered Coordinated Care Accessible Services Quality and Safety Source: AHRQ Patient Centered Medical Home Resource Center

Harris County Hospital (Houston, TX) NCQA distinction as PCMH
Case managers PT Access and communication Patient Support Tracking Performance Report Patient

Collaborative Care Resource Center
Evolving resource center designed for physical therapists to gain a better understanding of where PTs fit in integrated models of care Practice Applications: discover lessons learned from colleagues currently engaging in new delivery models Summary and analysis of federal rulemaking and how it impacts PT Communities Discussion Board

HCR Implementation: Health Insurance Exchanges

Health Insurance Exchanges
Section 1311 of ACA establishes health insurance exchanges State implementation by 2014 Centralized marketplace where individuals and small businesses can purchase coverage One-stop shop web portal

State Health Insurance Exchange
Financially stable – must be self-financing by January 1, 2015 Federal grants until then VA and Federal Funding: September 2010: Virginia State Department of Medical Assistance Services received a federal Exchange Planning grant of $1 million. VA planned to submit a Level One Establishment grant application in June 2012; however, the Governor announced in a letter to the Legislature in July, he decided not to submit the application. VA is one of 9 states receiving technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network This assistance includes help with setting up health insurance exchanges, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions

HHS Rulemaking on Exchanges
Establishment of Exchanges and Qualified Health Plans (QHPs) Standards Related to Reinsurance Risk, Risk Corridors and Risk Adjustment Exchange functions in the Individual Market: Eligibility Determinations; Exchange Standards for Employers Regulations afford states significant flexibility, but also demand substantial state implementation activity before 2014

Coverage under the Exchanges
Coverage for all individuals Individual mandate: All individuals must have insurance by 2014 Coverage facilitated by: Tax credits for premiums Subsidies for out-of-pocket costs Medicaid expansion Qualified health plan (QHP) coverage Essential Health Benefits

Tax Credits and Subsidies
Slide Source: The Commonwealth Fund presentation, “Achieving and Maintaining Near Universal Coverage Under the Affordable Care Act: Key Issues For Federal and State Policy Makers”

Exchange Development Timeline
Slide Source: Avalere Health LLC presentation “Understanding State Efforts to Implement Exchanges” July 18, 2011

Status of State Legislation to Establish Exchanges,
As of May 2012 NH WA VT ME MT ND AK MN OR NY ID WI SD MA RI WY MI CT PA IA NJ NV NE OH IN DE IL UT WV MD IA VA CA CO DC KS MO KY IL WV NC TN VA AZ OK SC NM AR GA AL MS HI LA TX FL State exchange in existence prior to passage of ACA Legislation failed/no gubernatorial action Legislation signed into law post passage of ACA Governors pursuing non-legislative options Legislation signed: intent to establish an exchange, creation of study panel or appropriation Governors working with HHS on options Legislation passed one or both houses Governor veto or decision not to establish exchange Legislation pending in one or both houses No legislative activity to date Source: National Conference of State Legislatures, Federal Health Reform: State Legislative Tracking Database. Politico.com; Commonwealth Fund Analysis.

Significant State Flexibility
Nationwide standard for: Enrollment period Approval for state exchanges Some national standards for: Streamlined applications and eligibility decisions Governance structure West Virginia vs. California vs. Maryland Subsidiary and regional exchanges SHOP Employer/Employee Choice Model

Significant State Flexibility
Some national standards for: Exchange consumer tools Navigator program Requirements for QHP offerings Network requirements States completely flexible on: Health plan selection process Utah vs. Massachusetts Network adequacy standards Marketing requirements Agent and broker roles Waivers?

Snapshot of State Exchanges
Utah Massachusetts Virginia:

Essential Health Benefits
Comprehensive set of services and items that must be offered in the qualified health plans within the Exchange, Small Business Health Options Program, and Medicaid expansion Ambulatory patient services Emergency services Hospitalization Mental health and substance abuse services Rehabilitative and habilitative services and devices Prescription drugs Laboratory services Preventive and wellness services and chronic disease management Maternity and newborn care Pediatric services

Flexibility for States’ EHBs
Institute of Medicine (IOM) issued reports advocating for flexibility in EHB definitions HHS Bulletin: December 16, 2011 States will choose benchmark plan from the following health insurance plans: One of the three largest small group plans in the state by enrollment; One of the three largest state employee health plans by enrollment; One of the three largest federal employee health plan options by enrollment; The largest HMO plan offered in the state’s commercial market by enrollment.

Rehabilitation and Habilitation Definitions under EHBs
National Association of Insurance Commissioners (NAIC) definitions: Rehabilitation Services: Health care services that help a person keep, get back or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings. Habilitation Services: Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.

Rehabilitation and Habilitation Definitions under EHBs
Mosby’s Medical Dictionary: Habilitation: the process of supplying a person with the means to develop maximum independence in activities of daily living through training or treatment. IOM Report: Congressional floor statement advocating broadly based interpretation for rehabilitation, habilitation and devices, including “items and services used to restore functional capacity, minimize limitations on physical and cognitive functions, and maintain or prevent deterioration of functioning” Advocates for children suggest modeling medical necessity after EPSDT coverage rules, “allowing a child to accommodate to a condition and reach his/her highest level of functioning”

APTA Efforts on Exchanges/EHBs
Comments submitted to HHS in response to IOM report, Essential Health Benefits: Balancing Coverage and Cost Comments submitted to HHS in response to Establishment of Exchanges and Qualified Health Plans proposed rule APTA Website created for EHB and Exchanges Member education State chapter advocacy tools

EHB Advocacy Principles
Generally, rehabilitation services may include: Diagnosis and management of movement dysfunction and human performance to enhance physical and functional abilities; Skilled interventions to address functional limitations, impairments and disabilities that diminish an individual’s quality of life, health status, or independence in activities of daily living. Restoration, maintenance and promotion of optimal physical function; and Prevention and management of the onset, symptoms, and progression of impairments, functional limitations and disabilities that may result from disease, disorders, conditions or injuries.

EHB Advocacy Principles (cont.)
Rehabilitative services should be provided by qualified health care professionals currently authorized under federal law No absolute limits on the provision of rehabilitation services No restriction on the number of therapy visits in EHB packages without allowing exceptions No limit on annual visits

Devices should be a covered benefit Defining medical necessity: Health care practitioners should determine what method, scope or type of treatment is medically necessary Allow latitude for treatment variations while balancing costs Actuarial data should be utilized if certain limits are allowable

Individual and community education and consumer choice If states have flexibility, appropriate education should be provided to ensure all stakeholders are aware of the minimum federal requirements and how to obtain information regarding any additional state requirements Planning grants and technical assistance could mitigate the impact of financial strain Plan Rating System

Virginia Health Insurance Exchange
April 6, 2011: Governor Bob McDonnell (R) signed HB 2434 into law, declaring the state’s intent to establish a health insurance exchange Based on a recommendation by the Virginia Health Reform Initiative Advisory Council November 25, 2011: Advisory Council’s exchange recommendations were submitted to the General Assembly by the Governor

Virginia Health Insurance Exchange
Council voted in favor of establishing a state-based exchange as a quasi-governmental agency with a governing board. Council recommended the exchange follow the state’s existing conflict of interest guidelines, maintain administrative flexibility in hiring, compensation, transparency and procurement, and appoint 11 to 15 board members.

Virginia Small Business Health Options Program (SHOP)
Advisory Council recommended that Virginia: Limit the size of the SHOP exchange to employers with up to 50 employees in 2014 Maintain one administrative structure for both the individual and SHOP Exchange, but keep the risk pools separate

Virginia EHB Advisory Council recommended in June 2012 that a subcommittee be established to consider Anthem, the state’s small-group PPO as the state’s benchmark plan. The subcommittee recommended Anthem as the EHB benchmark plan and the Children’s Health Insurance Program (CHIP) dental benefit plan (Smiles for Children) as the pediatric dental supplemental plan Drawing input from multiple stakeholders and various analyses, the Advisory Council recommended in June 2012 that a subcommittee be established to consider Anthem, the state’s small-group PPO as the state’s benchmark plan. The subcommittee recommended Anthem as the EHB benchmark plan and the Children’s Health Insurance Program (CHIP) dental benefit plan (Smiles for Children) as the pediatric dental supplemental plan

Virginia Information Technology
Focus on a significant Medicaid IT system upgrade and has received approval from the CMS for an enhanced federal match. May 2012: released a Request for Proposals soliciting subcontractors to streamline eligibility and enrollment for all existing social service benefits, including Medicaid, TANF, and food stamps. State officials envision eventual interoperability between the upgraded system and an exchange.

Virginia: Next Steps VA has declared a preference for a state-based exchange as opposed to a federally run exchange Must submit declaration letter signed by the Governor and an application to HHS by Nov. 16, 2012 VA has until Jan. 1, 2013 to create state-based exchange that HHS approves fully or conditionally.

HCR Implementation: Medicaid Expansion

Medicaid Expansion Jan. 1, 2014: ACA expands Medicaid to include individuals between the ages of 19 up to 65 (children, pregnant women, parents, and adults without dependent children) with incomes up to 138% FPL. CMS has stated that states may “decide whether and when to expand, and if a state covers the expansion group, it may later drop the coverage.

Impact of SCOTUS Decision
Between now and 2014, states will determine whether to implement the ACA’s Medicaid expansion and receive the associated enhanced federal matching funds CMS has stated: States may “decide whether and when to expand, and if a state covers the expansion group, it may later drop the coverage. No deadline yet by which states must tell CMS of Medicaid expansion plans (though Exchange blueprint to HHS by Nov. 16) Court decision does not impact reduction to DSH payments

Initial State Plans for Medicaid Expansion

Virginia and Medicaid Expansion
Gov. Bob McDonnell considering opting out of Medicaid expansion Letter to legislators in July 2012, considering opting out, stating that he needs more information Potential repeal of law after election

Beyond HCR: Medicare Therapy Cap Updates

2012 Therapy Cap For 2012, the therapy cap amount is $1880 for PT and SLP combined and a separate $1880 cap for OT. Therapy cap does not apply in outpatient hospitals. Medicare Advantage plans do not have to implement a therapy cap. Exceptions process will be in effect until December 31, 2012. If your patients exceed the therapy cap, you may submit the claim with a KX modifier (if services are medically necessary) until December 31 Congressional action is necessary to extend the exceptions process

2012 Therapy Cap: Hospitals
The therapy cap has applied in the past to all outpatient therapy settings except hospitals. Starting October 1, the therapy cap with an exceptions process will also apply to hospital outpatient settings. (critical access hospitals are exempt) Hospitals would no longer be subject to the therapy cap after December 31, 2012 unless Congress extends the provision in future legislation. In the past, the therapy cap has applied to all outpatient therapy settings with the exception of hospitals. Starting October 1, 2012 the therapy cap with an exceptions process will also apply to hospital outpatient therapy settings. Critical access hospitals will still remain exempt from the therapy cap. After December 31, hospitals will no longer be subject to the therapy. However, there is a possibility that Congress could pass legislation before the end of the year extending the application of the therapy cap to hospitals beyond 2012.

Therapy Cap: Exceptions
January 1-October 1, 2012: an automatic exception to the therapy cap may be made when documentation supports the medical necessity of the services beyond the cap. Providers should use the KX modifier. October 1, 2012-December 31, 2012: an automatic exception may be made for claims between $1880-$3700 (use KX modifier) October 1, 2012-December 31, 2012: Claims exceeding $3700 in expenditure will be subject to manual medical review to be paid As I mentioned earlier, you can get an exception for services beyond the therapy cap during From January 1 –October 1, 2012 therapists can obtain an automatic exception for their patients by placing a KX modifier on the claim form. The documentation must support the medical necessity of services beyond the cap amount. From October 1, 2012 to December 31, 2012 therapists can obtain an automatic exception for any claims that fall between $1880 and $3700 by using the KX modifier. Claims with dates of service between October 1, 2012 and December 31, 2012 could subject to manual medical review to be paid, depending on the provider.

Therapy Cap: Manual Medical Review
Starting October 1 for claims exceeding $3700 All therapy services beginning January 1, 2012 count toward the therapy cap amount in calculating the $3700. CMS issued guidance on manual medical review in a fact and question and answer document. Now I am going to speak in more detail regarding the manual medical review process. As I mentioned earlier, the process starts October 1, for claims exceeding $ All therapy services beginning January 1, 2012 count toward the calculation of $3700. CMS issued guidance on manual medical review in a fact and question and answer document and through several Transmittals. In addition, most Medicare Administrative Contractors (MACs) have placed additional guidance on their websites regarding the process.

Phase I providers: Subject to manual medical review from October 1‐December 31, 2012. Phase II providers: Subject to manual medical review from November 1‐December 31, 2012 Phase III providers: Subject to manual medical review from December 1‐December 31, 2012. List of NPIs and phases to which they are assigned is available at: Phase I providers will be subject to manual medical review from October 1-December 31, Phase II providers will be under review from November to December 31, 2012 and phase three for just the month of December In your slides I have included the link to the document on CMS’s website that assigns providers to the phases.

If a provider does not request advanced approval prior to providing services over $3700, payment for the claims will stop and a request for medical records will be sent to the provider. The provider will be subject to prepayment review for those claims and the time frame for review will be approximately 60 days. Also, CMS has stated that if a provider submits a claim that exceeds the $3700 and does not request advanced approval, payment for the claim will stop and a request for medical records will be sent to the provider. The provider will then be subject to prepayment review for those claims and will no longer get a decision from the MAC within 10 days. Instead, it could take the MAC approximately 60 days to review the claims. Therefore, it will be very important for providers to check regularly to determine whether the patient is close to exceeding $3700 in services if they are in a phase subject to the medical review process.

APTA Resources for Therapy Cap Changes
FAQ Webinar Podcast List of links to all MACs Complaint form

CMS Resources for Therapy Cap Changes
A transcript of a special open door forum held by CMS on the manual medical review process is available at the link below: ( Questions may be ed to: In slide 20 I have provided links to some of the documents issued by CMS on manual medical review and to the open door forum recording on this topic. Also, CMS has created on address for providers to send any questions regarding the therapy cap review process. This address is

CMS Resources for Therapy Cap Changes
Medicare Benefit Policy Manual Medicare Claims Processing Manual, chapter 5 Centers for Medicare and Medicaid Services CR 6660: CR 5871, Pub , Transmittal 1414 Transmittal 2537 CR 7881 (August 31, 2012) Transmittal 1117; CR Also, in slide 23 we have provided links to key sections of the Medicare Manuals that describe when outpatient physical therapy services are covered and to the section on APTA’s website where we provide helpful information regarding Medicare coverage and payment.

Beyond HCR: Reporting Functional Information on Medicare Claims

Reporting Functional Information on Claim Form
By 2013 CMS will implement a claims based data collection strategy designed to collect data on the claim form about patient function. Proposal included in 2013 physician fee schedule rule. Lastly, by January 2013 CMS will implement a claims based data collection requirement to report about the patient’s function on the claim form. There was an extensive proposal in the Medicare Physician Fee Schedule 2013 proposed rule.

Reporting Functional Information on Claim Form
Comment deadline: September 4 APTA submitted extensive comments Involves reporting of G codes regarding functional limitation accompanied by a severity modifier. CMS proposes the use of tools and translation of the scores from those tools to determine the level of impairment and severity modifier reported. Final rule will be published November 1, 2012 APTA submitted extensive comments regarding the proposal that basically involves the reporting of a G-code and modifier to indicate severity. You can go the APTA Medicare Fee Schedule page to review our extensive comments and the final rule will be made public by November 1, So stay tuned to your alerts from APTA for further information on what needs to be reported and how to report.

Functional Limitation Reporting

MedPAC report MedPAC must submit a report on how to improve the outpatient therapy benefit to Congress by June 15, 2013. MedPAC discussed outpatient therapy at March 2012 meeting, September 7 meeting, and October 5 meeting The Medicare Payment Advisory Commission has also been directed to draft a report on ways to improve the Medicare outpatient therapy benefit by June 5, The Commission has already held two meeting on this subject and is formulating possible options for their report as early as later this fall. APTA has met with MedPAC as well as submitted comments after each of its meetings discussing our views of their direction to reform the benefit.

HCR Initiatives: Program Integrity

Improper Payments Under Medicare
For fiscal year 2010, HHS reported almost $48 billion in Medicare improper payments, (38 percent of the total $125.4 billion estimate for the federal government) Medicare Fee for Service error rate in 2010 was around 10.5% ($34.3 billion) Governments goal is to reduce the Medicare FFS improper payment rate to: 8.5% by Nov 2011 and 6.2% by Nov 2012

Improper Payment Improper Payment: Any payment to the wrong provider for the wrong services or in the wrong amount Overpayments and underpayments Didn’t meet the statutory coverage requests Didn’t meet the Medical necessity requirements Incorrectly coded Didn’t submit sufficient documentation

Program Integrity Efforts
More coordination among Agencies CMS, Office of Inspector General, Department of Justice, FBI Use of Program Safeguard Contractors, Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors, HEAT (DOJ-FBI-HHS Strike Forces) HEAT is focused on: Detroit, Houston, Brooklyn, Tampa and Baton Rouge, Dallas, Chicago Increased Ability to Detect Aberrant Billing (collecting near real time data) Increased Focus on Physical Therapy Services

Strategies to Reduce Improper Payments

Provider Enrollment Enrollment Screening: Final Rule Issued Feb. 2011
ACA requires that HHS and OIG establish screening procedures for providers/suppliers Level of screening varies among categories of providers/suppliers based on risk of fraud and abuse Screen can include: Licensure checks, fingerprinting, criminal background checks, site visits, etc. Final Rule Issued Feb. 2011

-Revalidating home health agencies
Limited Moderate High -Physician or nonphysician practitioners, occupational therapists, speech language pathologists, medical groups or clinics -Hospitals -SNFs -CORFs -Physical therapists enrolling as individuals or groups in private practice -Revalidating home health agencies -Revalidating DMEPOS suppliers -Newly Enrolling Home Health Agencies -Newly Enrolling DMEPOS suppliers Licensure checks Site visits, Licensure checks Licensure checks, Fingerprinting, site visits

Provider Enrollment Physical Therapists in Private Practice (PTPPs) placed in moderate risk category. PTPPs must have a site visit prior to enrollment as of March 25, 2011. PTPPs may be subject to unannounced site visits PTPPs are exempt from the new $505 (raised to $523 for 2012) enrollment fee. If a PTPP also enrolls as a DMEPOS supplier (e.g. a hand therapist), they must meet the DMEPOS supplier requirements (pay enrollment fee of $523; high risk category for new DMEPOS suppliers)

Provider Enrollment: Revalidation
ACA established a requirement for all enrolled providers and suppliers to revalidate their enrollment information under new enrollment screening criteria. (applies to those providers and suppliers that were enrolled prior to March 25, 2011). Between now and March 23, 2015, MACs will send out notices to begin the revalidation process for each provider and supplier. Providers and suppliers must wait to submit the revalidation only after being asked by their MAC.

Resources on Provider Enrollment
February 2, 2011 final rule Transmittal 371 (effective date March 25, 2011)

Prepayment Review Reviews are conducted by Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs). Small business Jobs Act of 2010 required predictive modeling to identify &prevent improper payments CMS contracted with Northrop Grummon to deploy algorithms and an analytical process that looks at CMS claims in real time—by beneficiary, provider, service origin or other patterns Starting July 1, 2011 will identify problems and assign an “alert” and risk scores for claims that are aberrent Beginning with 10 states identified by CMS as having the highest risk of fraud, waste, or abuse.

Prepayment Review CMS identifies practices that are potentially fraudulent/abusive through Northrop Grummon and sends information to Safeguard Contractor. Safeguard Contractor sends personnel to visit the practice and request names, addresses, birth dates of all employees, business contracts, licenses of professionals, etc. Requests that information be provided within 24 hours.

Prepayment Review Medicare Administrative Contractors (MACs) are targeting providers with claims they think may have improper payments. Request medical records via paper letter, which are then reviewed by clinicians (nurses, physical therapists, etc) For prepayment review, contractors are initially requesting documentation on approximately 5 claims to review for medical necessity. If they find a problem, will request a greater number of medical records. If documentation does not support medical necessity, MAC may place the provider on 100% prepayment review.

Prepayment Review: MACs
Will deny payment if review and find it is not medically necessary Provider can appeal to the MAC any denials. Reviews will result in delays in payment.

Postpayment Review Reviews are being conducted by Office of Inspector General, ZPICs, MACs, Recovery Audit Contractors MACs will target certain claims; will review, and recoup payment if found to be improperly paid. Provider can appeal. Recovery Audit Contractors PPACA expanded Medicare’s RAC program to Medicare Advantage and the prescription drug benefit program.

Recovery Audit Contractors (RACs)
RACs identify Medicare underpayments & overpayments & recover overpayments. (Part A & B-so any provider can be subject to RAC review) RACs are paid contingency fees (for overpayments collected & for underpayments identified) A Database of claims for RACs to review was created by CMS Website:

Recovery Audit Contractors (RACs)
Region A – Diversified Collection Services, Inc. of Livermore, CA ( CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI and VT) Region B – CGI Technologies and Solutions, Inc. of Fairfax, VA ( IL, IN, KY, MI, MN, OH and WI) Region C – Connolly Consulting Associates, Inc. of Wilton. CT ( AL, AR, CO, FL, GA, LA, MS, NM, NC, OK, SC, TN, TX, VA, WV, Puerto Rico and U.S. Virgin Islands.) Region D – HealthDataInsights, Inc. of Las Vegas, NV ( AK, AZ, CA, HI, ID, IA, KS, MO, MT, ND, NE, NV, OR, SD, UT, WA, WY, Guam, American Samoa and Northern Marianas. )

Recovery Audit Contractors
Can reopen claims up to three years from the date the claim was paid. RACs cannot review claims prior to October 1, 2007 The RAC Program is required to follow all applicable Medicare regulations such as payment policies, reopening timeframes, and appeal rights for providers. RACs required to have a medical director on staff, and to use nurses, therapists, and certified coders. Cannot collect contingency fee if claim is being appealed at any level of appeal. APTA Coding Seminar, 2007

RACs choose issues to review based on data mining techniques, OIG and GAO reports and experience of staff. Two types of review Automated (no medical record) Complex (medical records) New Issues for review will be posted on RAC’s website.

RACs will send request for medical records. If provider does not submit requested record in 45 days, the service will be denied. Records may be submitted via mailed paper copy, fax, or mailed CD/DVD CMS has established medical record limits.

Medical Record Request Limits Inpatient hospital, IRF, SNF, hospice =10% of avg monthly Medicare claims (max of 45 days) per NPI Other Part A Billers (outpatient hospital, home health)=1% of avg monthly Medicare services (max of 200) per 45 days per NPI Physicians, Physical therapists in private practice Solo practitioner = 10 medical records per 45 days per NPI Partnership of 2-5 individuals: 20 medical records per 45 days per NPI Group of 6-15 individuals=30 medical records per 45 days per NPI Large Group (16+ individuals)=50 medical records per 45 days per NPI.

Zone Program Integrity Contractors
ZPICs combine data from a number of different sources to create a platform for complex data analysis. ZPICs were started by CMS by combining Program Safeguard Contractors (PSCs) and Medicare Prescription Drug Integrity Control (MEDIC) contracts. Use data to look for overpayments, and also to look for potential fraud. ZPIC auditors refer all identified overpayments to the a MAC, who subsequently sends the provider a demand letter for recoupment; may conduct site visits, refer cases to OIG, FBI, etc.

CA, NV, American Samoa, Guam, HI and the Mariana Islands
Zone 1 CA, NV, American Samoa, Guam, HI and the Mariana Islands Safeguard Services Zone 2 AK, WA, OR, MT, ID, WY, UT, AZ, ND, SD, NE, KS, IA, MO AdvanceMed Zone 3 MN, WI, IL, IN, MI, OH and KY PSC Zone 4 CO, NM, OK and TX Health Integrity, LLC Zone 5 AL, AR, GA, LA, MS, NC, SC, TN, VA and WV Zone 6 PA, NY, MD, DC, DE and ME, MA, NJ, CT, RI, NH and VT Zone 7 FL, PR and VI

Contractor Review ACA included provisions for CMS to evaluate contractors receiving Medicare Integrity Program and Medicaid Integrity Program funding every 3 years. ACA requires these contractors to provide performance statistics to HHS and its OIG upon request. Contractors must competitively bid for the contract; therefore, they are under pressure to keep their rates of improper payment low.

Summary of: Reviewers Medical Review Units at MACs
Prepay and postpay, automated and complex) Targeted claims selected To stop future incorrect payments Recovery Audit Contractors Postpay, automated and complex Detect and correct past improper payments CERT Postpay only, complex only Randomly Selected

Risk Areas for Physical Therapists In Outpatient Settings
Missing Certifications on plan of care Billing for services furnished by Aides/Techs Providing inadequate supervision Billing for one-on-one codes instead of group therapy Billing for co-treatment Failing to comply with the 8 minute rule Failing to comply with CCI edits Submitting claims for services that provider knows are not reasonable and necessary

Risk Areas for Physical Therapists In Outpatient Settings
Code Gaming Unbundling (hot pack, dressings) Upcoding (E-Stim) Billing for ‘not medically necessary’ services without an ABN Billing for maintenance care Billing for excessive duration and frequency of services Billing for services not furnished Billing for student services Documentation deficits or fraudulent modifications post denial or request for records

Risk Areas for Physical Therapists in Outpatient Settings
Signatures not legible (physician on plan of care or PT) Used a stamped signature Plan of care not signed by the physician Plan of care not recertified Duration/frequency not in compliance with that identified in Local Coverage Decision Documentation is insufficient Services not medically necessary

Risk Areas for Physical Therapists
Frequent use of the KX modifier (aberrent from the norm) In a private practice setting, the billing is going under one PT provider number rather than each separate PT enrolling. Collecting cash from the patient with no ABN

Risk Areas for Physical Therapists in Post-Acute Care Settings
Home Health: Documenting medical necessity Incomplete documentation (lack of measurable goals or rationale for number of therapy visits furnished) Supervision and use of PTAs Overlap of services between acute and post acute care Establishment and management of maintenance therapy Timely submission of claims and request for documentation Evidence to support patient homebound status

Skilled Nursing Facilities: Documenting medical necessity and justification for modes of therapy Use of different modes of therapy (individual, concurrent, and group therapy) Adherence to MDS scheduled assessment periods Use of physical therapy aides and students Use and documentation of modalities

Inpatient Rehabilitation Facilities Adherence to three hour rule (intensive therapy requirements) Distinction of skilled versus unskilled therapy Use of different modes of therapy (individual, concurrent, and group therapy) Use of physical therapy aides Completion of preadmission screening and post admission evaluation Physician involvement Interdisciplinary team meetings

Tips on How to Protect Yourself
Be familiar with Medicare coverage criteria (keep a copy of applicable Local and National Coverage Polices) Know how access key Medicare reference documents (Medicare Benefits Policy and Claims Processing manuals) Sign up for Medicare contractor list servs and alerts for Open Door Forums and other educational outreach opportunities Conduct periodic self audits

Appeal Rights You have an appeal right when your carrier/intermediary/MAC determines an overpayment occurred on prepayment or postpayment review. Five levels of appeal—each level has different requirements Redetermination Reconsideration Administrative Law Judge Medicare Appeals Council Federal District Court

Questions?

Virginia Physical Therapy Association 2012 Annual Conference Health Care Reform Gillian Russell, JD Senior Regulatory Affairs Specialist American Physical.

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Virginia Physical Therapy Association 2012 Annual Conference Health Care Reform Gillian Russell, JD Senior Regulatory Affairs Specialist American Physical.

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