Reimbursement/Medicare PPS and Legislative Update Larry Goldberg Larry Goldberg Consulting August 2, 2012

Agenda Accessing the Federal Register PPS Updates IPPS SNF IRF Hospice IPF Where is Medicare Heading Accountable Care Organizations (ACOs) Value-Based Purchasing Programs (VBP) Bundling

Agenda Proposed PPS Updates OPPS HHA ESRD Physician Where is Medicare Heading Accountable Care Organizations (ACOs) Value-Based Purchasing Programs (VBP) Bundling

Federal Register Access Prior to Publication Date 1. Start here: http://www.archives.gov/federal-register/public-inspection/ 2. Scroll down and click on: View the Special Filing Document List Look under Centers for Medicare & Medicaid

Federal Register Access After Publication Date 1. http://www.gpoaccess.gov/fr/index.html is now “deactivated : 2. Go to: http://www.gpo.gov/fdsys 3. Choose Federal Register from right side menu 4. Know date 5. Select CMS

The Fiscal Cliff The following expire and/ or need to be addressed on December 31, 2012 Bush era tax cuts The Payroll tax holiday The debt ceiling The sequester – 2.0 percent for all Medicare services The doc fix

FY 2013 IPPS

IPPS FY 2013 Posted August 1st Copy at www.ofr.gov/inspection.asp Published in Federal Register on August 31 Tables on CMS website only Becomes effective October 1st 2012

Update Market Basket is 2.6 percent [proposed at 3.0] ACA adjustments are -0.8 percent (net 1.8 percent) Productivity is (0.7 percent) Statutory is (0.1 percent) Documentation & Coding adjustment is +1.0 percent Minus 0.5 percent for Hospital Specific Rates

Update Other adjustments: VBP (1.0 percent now, but budget neutral) Readmits – (0.3 percent) CMS estimate Rural demo – (0.001 percent) PPS excluded hospitals to receive 2.6 percent increase

Rates National Adjusted Operating Standardized Amounts (68.8 Percent Labor Share/31.2 Percent Nonlabor if Wage Index Is Greater Than 1.0000) Comparison of FY 2012 Standardized Amounts to the FY 2013 Standardize Amount with Full and National Adjusted Operating Standardized Amounts (62 Percent Labor Share/38 Percent Nonlabor Share if Wage Index Is Less Than or Equal To 1.0000 Full Update (1.8 percent) Reduced Update (-0.2 percent) Labor-related Non-labor-related $3,679.95 $1,668.81 $3,607.65 $1,636.02 Full Update (1.8 percent) Reduced Update (-0.2 percent) Labor-related Non-labor-related $3,316.23 $2,032.53 $3,251.08 $1,992.59

IPPS Documentation & Coding Recap: CMS proposed to correct 4.8 percent with adoption of MS-DRGs over 3 years 2008 @ 1.2 percent 2009 @ 1.8 percent 2010 @ 1.8 percent Congress said no – take instead 2008 – 0.6 percent 2009 – 0.9 percent 2009 – look back and correct in FYs 2010, 2011 2012

IPPS Documentation & Coding CMS look back & found 2008 should have been 2.5 percent (1.9 still needed) 2009 should have been 4.8 percent (3.9 still needed) In other words CMS says 5.8 percent overpaid

IPPS Documentation & Coding Took ½ for FY 2011 (2.9 percent) Took another ½ for FY 2012 (2.9 percent) OK – we are even (may be) CMS says that FY 2010 was over paid by 3.9 percent since no adjustments were made in 2010 Took 2.0 percent of 3.9 percent in FY 2012 Taking Balance of 1.9 in FY 2013

IPPS Documentation & Coding Convoluted explanation Proposing to complete D&C adjustments by: Removing (adding back) 2.9 percent in effect in FY 2012 Removing the 1.9 percent it didn’t take in FY 2012 CMS is NOT as proposed removing an additional 0.8 percent for FY 2010 Will there be more coding adjustments? Statutory ??

IPPS Documentation & Coding Hospital-specific rate reduced, too CMS says HSR should also be subject to D&C Will reduce HSR by -0.5 percent

Comparison of FY 2012 Standardized Amounts to the FY 2013 Standardized Amount Full Update (1.8 percent); Wage index is greater than 1.0000 Full Update (1.8 percent); Wage index is less than or equal to 1.0000 Reduced Update (-0.2 percent); Wage index is greater than 1.0000 (-0.2 percent); Wage index is less than or equal to 1.0000 FY 2012 Base Rate, after removing geographic reclassification budget neutrality, demonstration budget neutrality, cumulative FY 2008 and FY 2009 documentation and coding adjustment, FY 2012 documentation and coding recoupment, and outlier offset (based on the labor-related share percentage for FY 2012) Labor: $4,060.65 Nonlabor: $1,841.46 Labor: $3,659.31 Nonlabor: $2,242.80 $4,060.65 Nonlabor: $1,841.46 $3,659.31 Nonlabor: $2,242.80 FY 2013 Update Factor 1.018 0.998

Comparison of FY 2012 Standardized Amounts to the FY 2013 Standardized Amount Comparison of FY 2012 Standardized Amounts to the FY 2013 Standardized Amount Full Update (2.1 percent); Wage index is greater than 1.0000 Full Update (2.1 percent); Wage index is less than or equal to 1.0000 Reduced Update (0.1 percent); Wage index is greater than 1.0000 (0.1 percent); Wage index is less than or equal to 1.0000 FY 2013 DRG Recalibration and Wage Index Budget Neutrality Factor 0.998761 FY 2013 Reclassification Budget Neutrality Factor 0.991276 FY 2013 Rural Demonstration Budget Neutrality Factor 0.999677 Proposed FY 2013 Outlier Factor 0.948999 Documentation and coding adjustments required under sections 7(b)(1)(A) and 7(b)(1)(B) of Pub. L. 110-90 0.9478 Rate for FY 2013 Labor: $3,679.95 Nonlabor: $1,668.81 Labor: $3,316.23 Nonlabor: $2,032.53 $3,607.65 Nonlabor: $1,636.02 Labor: $3,251.08 Nonlabor: $1,992.59

Capital Federal rate will be $425.49 Proposed at $424.22 Corrected Proposed $422.47   FY 2012 FY 2013 Change Percent Change Update Factor1 1.0150 1.0120 1.20 GAF/DRG Adjustment Factor 1.0040 0.9998 -0.02 Outlier Adjustment Factor 0.9382 0.9362 1.0019 -0.21 Capital Federal Rate $421.42 $425.49 1.0097 0.97

Outliers Threshold will be $21,821 Currently at $22,385 Estimated a 6 percent payout for FY 2012 Now estimated at 5.0 percent for FY 2012 Estimated FY 2011 at 4.7 percent

Wage Index Using data from FY 2009 New occupancy mix adjustment applied Based on survey data submitted on July 1, 2011 Massachusetts 5.5% increase for those hospitals Rural floor effect Impact is $118 million Frontier floor continues for 4 states MT, SD, ND, WY

Wage Index Imputed floor continues for New Jersey 663 hospitals have reclassification status 193 approved for FY 2013 MGCRB reclassification applications for FY 2014 Due September 4th Instructions on website See Table 4J for out-migration hospitals

Readmissions Per ACA provisions Section 3025 & Section 10309 Effective October 1st CMS estimates hospitals will lose $300 million Three measures for FY 2013 AMI (ICD-9 codes 410-410.91)(20 codes) Heart failure (ICD-9 codes 402-404, plus 428)(10 codes) Pneumonia (ICD-9 codes 480-88)(31 codes)

Readmissions Three years of data ending 6-30-11 Base operating rate includes new technology, but no DSH or IME Only about 34 percent of all hospitals will avoid an adjustment Max cap is 1.0 percent for FY 2013 (about 14 percent) Hospital will know by June 20th 30-day appeal period

Readmissions Distribution of Readmission Adjustment Factors Percent Reduction Number of Hospitals Percent of Hospitals No Adjustment 1,171 34.50% Up to -.09 Percent 347 10.20% -0.1 Percent to -0.19 Percent 280 8.30% -0.20 Percent to -0.29 Percent 228 6.70% -0.30 Percent to -0.39 Percent 196 5.80% -0.40 Percent to -0.49 Percent 180 5.30% -0.50 Percent to -0.59 Percent 129 3.80% -0.60 Percent to -0.69 Percent 118 3.50% -0.70 Percent to -0.79 Percent 110 3.20% -0.80 Percent to -0.89 Percent 77 2.30% -0.90 Percent to -0.99 Percent 76 2.20% -1.0 Percent 481 14.20% Total 3,393 100.00%

Rural Issues “Clarifying” SCH status reg CMS can act unilaterally Make a change retroactively MDHs wishing to become SCHs MDH program ends on September 30th Can apply to switch at least 30 days ahead

Rural Issues Usual update of the RRC criteria CMI Discharges Low-Volume Adjustment Special (ACA) adjustment sunsets on September 30th Reverts back to pre-ACA rules Hospital must make request by September 1st to keep it

IME / GME IME multiplier unchanged at 1.35 Claims for MA enrollees Must comply with regs for timely filing Including nursing / allied health Include labor / delivery beds in bed count Effective with cost reporting periods on / after October 1, 2012

IME / GME “Five year window” for new programs To grow resident count Then cap would be set Effective for new programs only on October 1, 2012 Must fill half of new (§ 5503) slots (from closed programs) by one of following: First 12-month c.r.p. Second 12-month c.r.p. Third 12-month c.r.p

MS-DRGs See rule’s table 5 for MS-DRGs and weighting factors Hospital Acquired Conditions Would add diagnosis codes 999.32 & 999.33 – Blood stream infection, and local infection due to central venous catheter Would add surgical site infection following Cardiac Implantable Electronic Device (CEID) with diagnosis codes 996.61 or 998.59 in conjunction with 21 associated procedure codes Contains other minor changes

MS-DRGs MS-DRG Description FY 2012 Weight FY 2013 Weights Percent Diff 65 Intracranial hemorrhage or cerebral infarction w CC 1.1485 1.1345 -1.22 190 Chronic obstructive pulmonary disease w MCC 1.1684 1.1860 1.51 191 Chronic obstructive pulmonary disease w CC 0.9628 0.9521 -1.11 192 Chronic obstructive pulmonary disease w/o CC/MCC 0.7081 0.7072 -0.13 193 Simple pneumonia & pleurisy w MCC 1.4948 1.4893 -0.37 194 Simple pneumonia & pleurisy w CC 1.0026 0.9996 -0.30 247 Perc cardiovasc proc w drug-eluting stent w/o MCC 1.9828 1.9911 0.42 287 Circulatory disorders except AMI, w card cath w/o MCC 1.0743 1.0709 -0.32 291 Heart failure & shock w MCC 1.5010 1.5174 1.09 292 Heart failure & shock w CC 1.0214 1.0034 -1.76 309 Cardiac arrhythmia & conduction disorders W CC 0.8155 0.8098 -0.70 310 Cardiac arrhythmia & conduction disorders w/o CC/MCC 0.5608 0.5541 -1.19 312 Syncope & collapse 0.7139 0.7339 2.80 313 Chest pain 0.5434 0.5617 3.36 378 G.I. hemorrhage w CC 1.0238 1.0168 -0.68 392 Esophagitis, gastroent & misc digest disorders w/o MCC 0.7421 0.7375 -0.62 470 Major joint replacement or reattachment of lower extremity w/o MCC 2.0866 2.0953

MS-DRGs MS-DRG Description FY 2012 Weight FY 2013 Weights Percent Diff 641 Nutritional & misc metabolic disorders w/o MCC 0.6988 0.6920 -0.97 682 Renal Failure w MCC 1.6410 1.5862 -3.34 683 Renal Failure w CC 1.0183 0.9958 -2.21 690 Kidney & urinary tract infections w/o MCC 0.7810 0.00 871 Septicemia or severe sepsis w/o MV 96+ hours w MCC 1.9090 1.8803 -1.50 872 Septicemia or severe sepsis w/o MV 96+ hours w/o MCC 1.1339 1.0988 -3.10

Quality Reporting Will reduce 17 measures for FY 2015 reporting SCIP-Venous Thromboembolism (VTE) measure: “SCIP-VTE-1: Surgery patients with recommended VTE prophylaxis ordered” Eight HAC measures: Air Embolism; Blood Incompatibility; Catheter-Associated Urinary Tract Infection (UTI); Falls and Trauma: (Includes Fracture Dislocation, Intracranial Injury, Crushing Injury, Burn, Electric Shock); Foreign Object Retained After During Surgery; Manifestations of Poor Glycemic Control; Pressure Ulcer Stages III or IV; and Vascular:

Quality Reporting Three AHRQ IQI Measures: Five AHRQ PSI Measures:   IQI-11: Abdominal aortic aneurysm (AAA) repair mortality rate (with or without volume); IQI-19: Hip fracture mortality rate; and IQI-91: Mortality for selected medical conditions (composite) Five AHRQ PSI Measures: PSI 06: Iatrogenic pneumothorax, adult PSI 11: Postoperative Respiratory Failure PSI 12: Postoperative PE or DVT PSI 14: Postoperative wound dehiscence PSI 15: Accidental puncture or laceration

Value-Based Purchasing Effective for FY 2013 13 measures adopted in 2 domains Increased to 17 measures for FY 2014 Several measures are suspended for FY 2014 Including the spending-per-beneficiary for one year Definition of “base operating payments” Excludes outliers, DSH, IME & LV adjustment But does include the new-tech add on

Value-Based Purchasing 1.0 percent cut to base operating payments in FY 2013 Will make an estimate of reduction for each hospital in advance Then summing each estimated reduction to get total for pool Getting the adjustment payment is explained Appeals process is created 30 days from posting of report To “review and correct”

Value-Based Purchasing Domain Weighting by Year FY 2013 FY 2014 FY 2015 Clinical Process of Care 70% 45% 20% Patient Experience of Care 30% 30% 30% Outcomes - 25% 30% Efficiency - 20% Total 100% 100% 100%

Value-Based Purchasing Correction Notice

LTCH PPS Update MB is 2.6 percent ACA adjustment (0.7%) for productivity (0.1%) per statute Coding adjustment (1.3 percent) for this year, starting on 12-28 More to come in future years Standardized amount is $40,397.96 Current is $40,222.05

LTCH PPS Quality reporting Adding five measures for FY 2016 In addition to three (adopted last year) for FY ‘14 Labor-related share will be 63.217 percent Current is 70.199 percent Wage Index tables are 12A & B Outlier threshold will be $15,408 Current is $17,931 Proposed one-year delay to 25 percent rule

LTCH PPS Correction to Proposed one-year delay to 25 percent rule LTCHs and LTCH “satellite facilities with a cost reporting period beginning on or after July 1,2012, and before October 1, 2012 would have to comply with §§ 412.534 and 412.536 for discharges occurring in that respective cost reporting period These facilities would then have a moratorium the following (2014) FY

Skilled Nursing PPS

SNF PPS Posted on 7-27-12 Published in 8-2-12 Federal Register Copy at: http://www.ofr.gov/OFRUpload/OFRData/2012-18719_PI.pdf Link Changes 8-2-12 Notice – no proposed rulemaking CMS says no need for proposed rule inasmuch as no policy changes made Overall payments to increase $670 million

SNF PPS Update Market Basket Increase – 2.5 percent Less MFP adjustment – 0.7 percent Net Update = 1.8 percent Labor Share to 68.383 from 68.693 Budget neutrality factor 1.0004 NO market basket error rate adjustment Was positive 0.1 percent (CMS’ favor) Threshold is 0.5 percent

SNF PPS Update Notice contains the wage index addenda CMS says its continuing to monitor: Recalibration of the FY 2011 SNF parity adjustment to align overall payments under RUG-IV with those under RUG-III. Allocation of group therapy time to pay more appropriately for group therapy services based on resource utilization and cost. Implementation of changes to the MDS 3.0 patient assessment instrument, most notably the introduction of the Change-of-Therapy (COT) Other Medicare Required Assessment (OMRA).

Inpatient Rehabilitation Facilities PPS

Inpatient Rehabilitation Facilities PPS Posted July 25th Published in Federal Register on July 30th Copy at: http://www.gpo.gov/fdsys/pkg/FR-2012-07-30/pdf/2012-18433.pdf Notice -- no proposed rulemaking CMS say no new policy changes No adjustments to the facility-level items

Inpatient Rehabilitation Facilities PPS Market Basket at 2.7 percent Less MFP adjustment 0.7 percent Less ACA adjustment 0.1 percent Net increase 1.9 percent CMS says payments to increase $140 million – net update =$130 million + Outlier increase of $10 million Area Wage index on line only Labor share = 69.981 Conversion factor = $14,343, currently $14,076

Inpatient Rehabilitation Facilities PPS High cost outliers Paid at 2.8 percent for 2012 Says overall IRF increase to be 2.1 percent 1.9 rate + 0.2 by changing outlier threshold Outlier threshold to be $10,466

Inpatient Rehabilitation Facilities PPS Quality See hospital OPPS rule for details

Hospice

Hospice Wage Index Update Posted July 25th Published in the Federal Register on July 27th Copy at: http://www.gpo.gov/fdsys/pkg/FR-2012-07-27/pdf/2012-18336.pdf Notice only – no proposed rulemaking CMS says no new policy changes Continuing to phase-out Budget Neutral Adjustment Factor Now down to 55 percent Phase-out at 15 percent per year over next 3 years

Hospice Rate Update Market Basket at 2.6 percent MFP adjustment of 0.7 percent Further reduced by ACA of 0.3 percent Net update at 1.6 percent Taking into account the 1.6 percent market basket update (+$240 million), in addition to the updated wage data ($10 million), and the additional 15 percent reduction in the BNAF ($90 million), hospice payments would increase by $140 million

Hospice Wage Index Update Quality – see proposed HHA notice

Hospice Wage Index Update CMS states providers need to report additional diagnoses on claims Hospices required to start reporting quality data as of October 1, 2012 If not, will face 2.0 percent update reduction for FY 2014 No change from quality measures promulgated last year

Wage Component Subject to Index Hospice Rate Update Issued via Program Transmittal (CR 249CP) Copy at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2012-Transmittals-Items/R2497CP.html Code Description Rate Wage Component Subject to Index Non-Weighted Amount 651 Routine Home Care $153.45 $105.44 $48.01 652 Continuous Home Care  Full Rate = 24 hours of care  $=37.32 hourly rate $895.56 $615.34 $280.22 655 Inpatient Respite Care $158.72 $85.92 $72.80 656 General Inpatient Care $682.59 $436.93 $245.66

Inpatient Psychiatric PPS

Inpatient Psychiatric PPS Posted August 2 Published August 7tht Market Basket 2.7 percent less 0.7 and 0.1 Per Diem will be $698.51 Current is $685.01 ECT at $300.72 Outlier Threshold at $11,600 Current $7,340 Labor at 0.69981

Proposed OPPS

Hospital OPPS For CY 2013 Published on July 30, 2012 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2012-07-30/pdf/2012-16813.pdf Comments due by September 4, 2012 Final rule by November 1, 2012

OPPS Update MB is +3.0% (1.0% for non-reporters) Offset by ACA mandates of – 0.9% (0.8%) is for productivity (0.1%) for good measure Net is +2.1 percent

OPPS Update Proposed CF would be $71.537 Current is $70.016 X 2.1 percent X 1.0003 proposed wage index adjustment X cancer hospital adjustment of 1.000 X 1.0004 drug pass-through = $71.537 Would be $70.106 for non-reporters CMS says OPPS payments will total $48.1 billion; ASC 4.10 billion

OPPS Wage Index Labor-related share remains 60% See website for proposed values Not making an adjustment for Massachusetts

OPPS Outliers Proposed threshold would be $2,400 And 1.75 times the APC payment Current threshold is $2,025 Payment remains 50percent of cost above the threshold Pool remains at 1.0 percent with 0.12 earmarked for CMHCs

OPPS APC Weights Moving to geometric mean costs Has been median costs Supposedly makes little difference Can you verify??? File on website allows comparison Proposed weights on website Addenda A & B

OPPS Rural Issues Continue +7.1 percent add-on to rural SCHs TOPs ends on 1-1-13

OPPS Cancer Hospitals Proposed Payment with a Payment to Cost Ratio of 0.91

OPPS Drugs ASP +6% for separately payable That do not have pass-through status Includes blood-clotting factors 23 drugs lose pass-through status 21 drugs maintain pass-through status Adjustment for non-Highly Enriched Uranium radioisotopes + $10 Packaging threshold would be $80, up from $75

OPPS Composite Rates CMS is proposing to continue its composite policies for extended assessment and management services, LDR prostate brachytherapy, cardiac electrophysiologic evaluation and ablation services, mental health services, multiple imaging services, and cardiac resynchronization therapy services Refer the rule for exact APCs involved and their proposed payment amounts Expect to see expansion of composite rates in the future

Other Revised statewide cost-to-charge ratios See Table 12 Revised APC groupings Revised list of I/P procedures only Seeking comment on observation days

Partial Hospitalization Using geometric mean costs Amounts proposed for free-standing: APC 172 -- $87.76 APC 173 -- $111.89 Amounts for hospital-based: APC 175 -- $182.66 APC 176 -- $232.74

OPPS Quality No new measures for FY 2015 and subsequent years

ASCs Revising policy on new-technology IOLS FDA-approved label must contain a specific clinical benefit Must be supported by evidence of improved outcomes Proposed CF of $43.190 Up from $42.627 currently See website for rates for specific procedures 1.3 percent increase No change in quality reporting A few newly covered procedures

Inpatient Rehabilitation Facilities Quality Reporting CMS is proposing to 1) adopt updates on a previously adopted measure for the IRF QRP that will affect annual prospective payment amounts in FY 2014; (2) adopt a policy that would provide that any measure that has been adopted for use in the IRF QRP will remain in effect until the measure is actively removed suspended, or replaced; and (3) adopt policies regarding when notice-and-comment rulemaking will be used to update existing IRF QRP measures

Inpatient Rehabilitation Facilities Quality Reporting CMS is making the following proposals: (1) CMS is proposing to adopt changes made to the NQF #0138 CAUTI measure which will apply to the FY 2014 annual payment update determination; (2) CMS is proposing to adopt the CAUTI measure, as revised by the NQF on January 12, 2012, for the FY 2015 payment determination and all subsequent fiscal year payment determinations; and (3) CMS is proposing to incorporate, for use in the IRF QRP, any future changes to the CAUTI measure to the extent these changes are consistent with CMS’s proposal

ESRD Proposed

ESRD PPS Posted on 7-2-12 Published in 7-11-12 Federal Register Copy at: http://www.gpo.gov/fdsys/pkg/FR-2012-07-11/pdf/2012-16566.pdf Comments due by COB on 8-31-12 Contains legislative mandated Bad Debt revisions ESRD payments expected to total $8.7 billion Payments for ESRD to increase by $320 million

ESRD Update Market Basket at 3.2 percent Productivity offset is – 0.7 percent Wage Index positive BN adjustment of 1.000826 Proposed base rate is $240.88 Current rate is $234.81 Proposed composite rate (CR) is $145.49 Current is $141.94

ESRD Transition CY 2013 will be third year Blend is 75 percent PPS / 25 percent composite

ESRD Wage Index Floor being reduced to 50 percent (from 55%) Labor-related shares: PPS – 41.737 percent CR- 53.711 percent Tables on CMS website (Addenda A & B)

ESRD Outliers For pediatric patients Threshold drops from $71.64 to $50.15 MAP decreases from $45.44 to $43.63 For adult patients Threshold drops from $141.21 to $113.35 MAP decreases from $78.00 to $61.06

Drug Issues No change in drug add-on rate to CR ($20.33) Daptomycin Would allow separate payment When used to treat non-ESRD-related condition Thrombolytics Would no longer be eligible for separate payment Under the CR Continue using ASP to set prices

ESRD Quality Eleven new measures affecting PY 2015 Keeping five measures from PY 2014 for PY 2015 Performance score calculation essentially unchanged Payment reductions for PY 2015 0.5% if < 10 points under minimum 1.0% if 11-20 points under minimum 1.5% if 21-30 points under minimum 2.0% if > 30 points under minimum Refer to the rule for details Do not underestimate requirements and scoring

Bad Debt Implements provisions contained in the February “doc-fix” law Affects all providers Hospitals reduced to 65 percent (from 70%) in FY 2013 SNFs reduced as follows: Non-dual eligibles from 70percent to 65 percent in FY 2013 Dual eligibles from 100% to 88% in FY 2013; 76% in FY 2014 and 65% in FY 2015 Impact is payment reduction of $330 million

Bad Debt Hospital swing beds For non-dual eligibles from 100% to 65% in FY 2013 For dual eligibles from 100% to 88% to 76% to 65% For CAHs, ESRD facilities, CMHCs, FQHCs, RHCs, HMOs, HCPPs, and CMPs 88% in FY 2013 76% in FY 2014 65% in FY 2015 CMS says these reductions are “self-implementing”

Home Health Proposed PPS

Home Health PPS Posted on 7-6-12 Published in 7-13-12 Federal Register Copy at: http://www.gpo.gov/fdsys/pkg/FR-2012-07-13/pdf/2012-16836.pdf Comments due by 9-4-12

HHA Update MB would be 2.5 percent (0.5% for non-quality) ACA offset is – 1.0 percent Adjustment effect for wage index update Net is 1.5 percent Code creep offset is an additional 1.32 percent based on FY 2012 Code creep is now estimated at 2.18 percent When will CMS take this back???

HHA Update Standardized amount would be $2,141.95 (current – $2,138.52) Impact would be $20 million – update $300 million-updated wage index ($-70 million) Code offset ($-250 million)-other (-$10 million) Labor-related share is 78.535 percent -currently 77.082% No change to outlier policy New wage indexes on internet Rural add-on remains percent

HHA Update Hospice Quality Reporting For the FY 2014 payment determination: Report on 2 measures: An NQF-endorsed measure that is related to pain management, NQF #0209: The percentage of patients who report being uncomfortable because of pain on the initial assessment (after admission to hospice services) who report pain was brought to a comfortable level within 48 hours.

HHA Update Hospice Quality Reporting A structural measure that is not endorsed by NQF: Participation in a Quality Assessment and Performance Improvement (QAPI) program that includes at least three quality indicators related to patient care. Specifically, hospice programs are required to report whether or not they have a QAPI program that addresses at least three indicators related to patient care. In addition hospices are required to check off, from a list of topics, all patient care topics for which they have at least one QAPI indicator.

Proposed Physician and Other Part B Services for CY 2013

Physician Fee Schedule For CY 2013 Posted July 6, 2012 Published in July 30, 2012 Federal Register Copy at: http://www.gpo.gov/fdsys/pkg/FR-2012-07-30/pdf/2012-16814.pdf Comments due September 4, 2012 Final rule on November 1, 2012 Includes many Part B issues

Update Current law CF is $34.0376 CMS has not re-based SGR projected to be minus 27 percent No doubt waiting for Congress

Changes to RVUs Interest rate assumption for practice expense Cut from 11 percent to range of 5.5% -- 8% Depending on loan size and maturity Specific changes to PEs Add 10 minutes to pacemaker follow-up Add 15 minutes to the RT for GO424 Adding new categories of “misvalued codes” Harvard-valued > $10 million Services with “anomalous” time

Multiple Procedure Payment Reduction Expansion To include cardiovascular & ophthalmic diagnostic services TC only 25 percent reduction on same patient / same day See Table 12

GPCIs 1.0 floor for work expires 1-1-13 See Addenda D & E for values No changes this year

Telehealth Add alcohol / substance abuse services CPT codes G0396-7 Add preventive services CPT codes GO442-7

Outpatient Therapy Claims-based data strategy for 2013 Statutory mandate Goal is to reform payment Proposing to add codes to all claims Non-payable G codes To capture data on the beneficiary’s functional limitations: (a) at the outset of the therapy episode, (b) at specified points during treatment and (c) at discharge from the outpatient therapy episode of care.

Outpatient Therapy Proposing modifiers for each G code Describing impairment in 10 percent increments Testing period for first six months of 2013 After 7-1-13, claims without appropriate codes / modifiers would be returned “unpaid”

Care Coordination New HCPCS G codes for: Non face-to-face services Related to transitional care management Furnished by physician / NPP Within 30 days after discharge from hospital or SNF Service elements include Communication within 2 days post-discharge Medical decision-making of at least moderate complexity Face-to-face visit within 30 days prior or 14 days after the transition Proposing an RVU of 1.28

New Preventive Services New codes created for: Alcohol misuse Depression screening Behavioral therapy for heart disease Obesity counseling RVUs for all are less than 0.5

Quality Reporting CMS spends 239 pages discussing the PQRS Measures For 2013 and 2014 -- 264 individual measures Value-Based Modifier Mandated by Section 3007 of ACA Affects payment on 1-1-15 For some physicians On 1-1-17 for all Budget neutral

Other Seeking comment on whether molecular pathology services should be paid under MPFS or CLFS CRNA services to include anything allowed under state law Ambulance services Extend add-ons to 12-31-12 (statutory) Make clear that physician certification, by itself, is insufficient to support medical necessity for repetitive, scheduled trips

Other AMP does not apply to drug on FDA shortage list Mandatory face-to-face encounter for certain DME No more than 90 days before order or 30 days after order See Table 24 (p. 263) for list of affected items Eliminate a limitation on contractors to do prepayment reviews Allow NPPs to order portable x-rays

Middle Class Tax Relief And Job Creation Act of 2012

Middle Class Tax Relief And Job Creation Act of 2012 HR 3630 Part of a larger bill to extend payroll tax cut Date of Enactment was February 22 P.L.112-96

Middle Class Tax Relief And Job Creation Act of 2012 Extension of Freeze on Medicare Physician Payment Rates. Extends current payment rates through December 31, 2012. The cost of this provision is $18 billion over eleven years  Extension of MMA section 508 reclassifications. The bill would extend these reclassifications through March 31, 2012. The cost of this provision is $100 million over eleven years  Extension of Medicare work geographic adjustment floor. This provision boosts payments for the work component of physician fees in areas where labor cost is lower than the national average. The provision would extend the existing 1.0 floor on the “physician work” index through December 31, 2012.  The cost of this provision is $400 million over eleven years

Middle Class Tax Relief And Job Creation Act of 2012 Extension of exceptions process for Medicare therapy caps.  Current law places annual per beneficiary payment limits on outpatient therapy services provided by non-hospital providers Beneficiaries can get an exception to the cap for medically necessary therapy services. This provision extends the exceptions process through December 31, 2012 The provision also expands the cap on outpatient therapy services by applying both the cap and exceptions process to therapy services provided in hospital outpatient departments.  Both the exceptions process and expansion of the therapy caps to the outpatient setting expire at the end of 2012. The net cost of this provision is $700 million over eleven years

Middle Class Tax Relief And Job Creation Act of 2012 Extension of payment for technical component of certain physician pathology services.  Extends the ability of independent laboratories to receive direct payments for the technical component for certain pathology services through June 30, 2012.  The estimated cost of the provision is $100 million over eleven years  Extension of ambulance add-ons.  Extends the add-on payment for ground and air ambulance services, including in super rural areas, through December 31, 2012.  The cost of this provision is $100 million over eleven years Extension of outpatient hold harmless provision.  Extends the outpatient hold harmless provision through December 31, 2012, except for sole community hospitals with more than 100 beds who will no longer be held harmless.  The cost of this provision is $100 million over eleven years

Middle Class Tax Relief And Job Creation Act of 2012 Extension of the qualifying individual (QI) program.  Under current law, QI expires February 29, 2012.  The provision would extend the QI program until December 31, 2012.  The cost of this provision is $600 million over eleven years Extension of Transitional Medical Assistance (TMA).  Transitional Medical Assistance (TMA) allows low-income families to maintain their Medicaid coverage for up to one year as they transition from welfare to work.  Under current law, TMA expires February 29, 2012.  The provision extends TMA until December 31, 2012.  The cost of this provision is $1.1 billion over eleven years

Middle Class Tax Relief And Job Creation Act of 2012 The bill fails to extend two Medicare provisions that were included in the Temporary Payroll Tax Cut Continuation Act enacted in December. Mental Health Add-On:  Medicare payments for certain mental health services have been increased to ameliorate a past payment reduction that disproportionately affected non-physician mental health providers. This provision expired on March 1, 2012 Payment for Bone Density Tests: Dual energy x-ray absorptiometry (DXA) is a test measuring bone mineral density to identify individuals who may have osteoporosis, or are at risk of osteoporosis.  These tests currently receive a special Medicare payment amount, which expired on March 1, 2012

Middle Class Tax Relief And Job Creation Act of 2012 Reduction of Bad Debt Treated as an Allowable Cost.  The provision would phase down bad debt reimbursement for all providers for all populations to 65 percent.  Providers currently receiving 100 percent reimbursement for their bad debt would have a three-year transition of 88 percent, 76 percent, and 65 percent, respectively. Providers currently reimbursed at 70 percent for their bad debt would be reduced to 65 percent.  This provision does not continue the existing accommodation for bad debt incurred by SNF providers on behalf of dual eligibles, which is currently reimbursed at 100 percent. The savings from this policy are $6.9 billion over 11 years (2012-2022)

Middle Class Tax Relief And Job Creation Act of 2012 Prevention and Public Health Fund.  The ACA established the Prevention and Public Health Fund to help shift the focus of the health care system to prevention rather than treatment.  The provision reduces the authorized amount for the Fund, for a reduction in spending of $5 billion. This does not account for further cuts anticipated in the sequestration that will go into effect beginning in FY 2013. The savings from this policy are $5 billion over 11 years

Middle Class Tax Relief And Job Creation Act of 2012 Rebasing Medicaid State DSH Allotments.  The Affordable Care Act (ACA) reduced DSH payments, starting in 2014, to reflect the expected decrease in uncompensated care as reform increases the number of patients with insurance.  This policy would extend the DSH payment reductions for an additional year, through fiscal year 2021.  The savings from this policy are $4.1 billion over 11 years Rebase Medicare Clinical Laboratory Payment Rates.  This policy reduces clinical lab payment rates by 2 percent in 2013.  The savings from this policy are $2.7 billion over ten years 

Where is Medicare Heading???

Where is Medicare Heading??? Accountable Care Organizations Value-based purchasing Bundling Paying lowest price irrespective of setting More immediate payment constraints

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