1. Medicare Update May 2015

2. Agenda Medicare Access & CHIP Reauthorization Act of 2015 AHA Letter of February 13, 2015 to CMS MedPAC Report-Hospital short stay policy issues Hatch Statement at Finance Hearing on Medicare Audit and Appeals 2

3. Medicare Access & CHIP Reauthorization Act of 2015 Postpones Two Midnight Rule Extends a moratorium for RACs-Sept. 2015 Reprieve for admissions between 10/1/13 and 4/30/15 Probe & Educate continues

4. AHA Letter of February 13, 2015 to CMS New set of DRG classifications No clear solution on how to pay for the 2 midnight benchmark (1 day Obs + 1 day IP) Does not clearly address possible change in 3- Day Rule (for SNF transfers and coverage)

5. AHA Letter of February 13, 2015 to CMS Does not clarify full DRG payment for Wrinkles* Known “Wrinkles” *Early Discharges *Patient Expires *Transfers Out *2 Midnight Benchmark

6. MedPAC Report Hospital short stay policy issues ISSUE: As inpatient stays have shortened and some inpatient services have migrated to the outpatient setting, the issue of whether a patient requires inpatient care or could be treated successfully as an outpatient has received increasing attention. The high profitability of one-day stays under Medicare’s inpatient payment system and difference in payment rates between similar inpatient and outpatient stays has heightened concern about the appropriateness of one-day inpatient stays. KEY POINTS: The Commission has developed draft recommendations in several policy areas related to short hospital stays. ACTION: Commissioners should provide feedback at the April meeting in preparation for a vote on the draft recommendations.

7. Hatch Statement at Finance Hearing on Medicare Audit and Appeals “improper Medicare payments continue to be a serious issue” “in Fiscal Year 2014…..an estimated $60 billion, or approximately ten percent, were improperly paid, totaling over $1,000 in improper payments for every single Medicare beneficiary.” “auditors have recovered billions for the Medicare program– over $3 billion in 2013 alone”

8. Hatch Statement at Finance Hearing on Medicare Audit and Appeals “large portions of the initial determinations are reversed on appeal. The HHS OIG reported that, of the 41,000 appeals that providers made to Administrative Law Judges in FY 2010, over 60 percent were partially or fully favorable to the defendant.” “increase in appeals resulted in long delays for providers….in FY 2009, most appeals were processed within 94 days. In FY 2015, it will take, on average, 547 days to process an appeal.” “The Office of Medicare Hearings and Appeals has also taken steps to address its backlog, but there is only so much the agency can do with their current authorities and staffing.”

9. Rebecca Corzine Tarr Owner MedPerformance, LLC MedPerformance.com beckytarr@medperformance.com (813) 786-8974 Questions/Comments? 9 9