This week in Medicare updates–10/11/17

October 11, 2017
Medicare Insider

Clinicians: Medicare Part B Crossover Claims Issue Tied to Error Code H51082

On September 28, published an MLN Connects article explaining why many Part B crossover claims received a notice from a Medicare Administrative Contractor (MAC) containing error code H51082 (“The ICD-10 code must be coded to the highest specificity”). Most of these claim rejections were rejected as part of an error, as the ICD-10-CM codes which triggered the notice were still valid through September 30. CMS asked MACs on September 20 to repair these claims. The agency instructs providers to direct vendors not to bill patients’ supplemental insurers for balances remaining until October 6 to allow the claims to be crossed over.


New Medicare Cards Fact Sheet

On September 28, CMS announced the release of a Fact Sheet on the transition to new Medicare numbers and cards. The fact sheet explains why CMS is issuing new Medicare numbers and cards, what providers should do to prepare for the change, and where providers can find help with the transition.   


Clarification Regarding Use of Control Materials as Calibrators to Determine Test Cut-off Values

On September 29, CMS issued a Memorandum to state survey agency directors clarifying guidance regarding the use of control materials as calibrators under Clinical Laboratory Improvement Amendments regulation §493.1256(d). The clarification addresses the following:

  • Controls provided by manufacturers in a test kit are considered calibration materials if they are used to calculate cutoff value of a test or patient test result
  • If manufacturer instructions include a formula using positive and/or negative controls included in the kid to determine the cutoff, any addition external controls must also be tested
  • The laboratory director is responsible for determining which control materials to use in his or her laboratory. Surveyors will ensure the laboratory is following its own policies, especially its Quality Control procedures

Effective date: Immediately


Medicare Offers More Health Coverage Choices and Decreased Premiums in 2018

On September 29, CMS issued a Press Release regarding benefit and premium information for 2018 Medicare health and drug plans. CMS estimates enrollment in Medicare Advantage (MA) will reach an all-time high, and the agency said it expects the MA average monthly premium will decrease in 2018.

CMS also released a fact sheet on Medicare Advantage and Part D plans for 2018. The average monthly premium for a basic Medicare prescription drug plan in 2018 is projected to decline for the first time since 2012.  


Data show National Partnership to Improve Dementia Care Achieves Goals to Reduce Unnecessary Antipsychotic Medications in Nursing Homes

On October 2, CMS issued a Press Release announcing that the National Partnership to Improve Dementia Care met its goal of reducing antipsychotic use in long-stay nursing home residents by 30% nationwide by the end of 2016. It set a new goal of a 15% reduction by the end of 2019 for long-stay nursing homes with currently limited reduction rates. CMS also shared graphs showing the decreasing prevalence of antipsychotic use in long-stay nursing homes from quarter two of 2011 through the end of quarter one of 2017.


Broad Support for Puerto Rico and U.S. Virgin Islands with Hurricane Maria Recovery

On October 2, CMS issued a Press Release reviewing administrative actions the agency has taken to aid in Hurricane Maria recovery for Puerto Rico and the U.S. Virgin Islands. These actions include:

  • Waivers for hospitals and other healthcare facilities to provide continued access to care for beneficiaries
  • Special enrollment periods for beneficiaries and certain individuals seeking health plans through the Federal Health Insurance Exchange. More information on special enrollment periods is available here.
  • A toll-free hotline for Part B providers in the region to assist providers helping with recovery efforts to enroll in federal health programs and receive temporary Medicare billing privileges
  • Assistance evacuating dialysis patients to qualified facilities in Florida and Georgia and coordinating care and services for those patients

Additional information on CMS assistance with hurricane recovery is available on CMS’ emergency webpage.


Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2015 Average Sales Prices
On October 2, the OIG published a Report regarding an annual study on the savings generated by the price-substitution policy for Medicare Part B drug reimbursement.

The study found that CMS’s price substitution policy saved Medicare and its beneficiaries $5.4 million over one year by reducing reimbursement for 13 drugs. The reduced reimbursement for those drugs was based on average sales price (ASP) and average manufacturer price (AMP) comparison data from 2015. Based on these findings, OIG recommends that CMS expand the price-substitution policy. CMS does not concur at this time, but says as the agency becomes more familiar with the policy, it will consider future changes as necessary.


Shortcomings of Device Claims Data Complicate and Potentially Increase Medicare Costs for Recalled and Prematurely Failed Devices
On October 2, the OIG published its findings from a Study examining costs Medicare incurred because of recalled or prematurely failed medical devices. The study also sought to determine whether Medicare costs related to the replacement of recalled or prematurely failed devices could be tracked using claims data.

The OIG focused its study on the costs associated with seven cardiac devices that had been recalled or had high failure rates over a 10-year period and found that costs related to the replacement or premature failure of these devices reached an estimated $1.5 billion over a 10-year period. This resulted in an estimated $140 million in copayment and deductible liabilities for beneficiaries.

OIG recommends that CMS continue to work with the Accredited Standards Committee X12 to ensure the Device Identifier (DI) is included on claims forms and urges CMS to require hospitals to use condition codes 49 or 50 on claims for reporting a device replacement procedure due to recall or premature failure regardless of whether the device was reported at no cost or with a credit. CMS says it is currently reviewing its policy on including the DI and concurs with the recommendation to use condition codes 49 or 50 in cases where payment is affected.  


Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 24.0, Effective January 1, 2018

On October 2, CMS published MLN Matters 10306 to accompany Medicare Claims Processing Manual Transmittal 3869, dated September 29, 2017, regarding normal updates to the NCCI PTP edits.

Effective date: January 1, 2018

Implementation date: January 2, 2018


2018 Annual Update for the Health Professional Shortage Area (HPSA) Bonus Payments

On October 2, CMS published MLN Matters 10317 to accompany Medicare Claims Processing Manual Transmittal 3870, dated September 29, 2017. The transmittal provides files for the automated payments of HPSA bonuses for dates of service January 1, 2018 through December 31, 2018.

Effective date: January 1, 2018

Implementation date: January 2, 2018


New Provider Self-Disclosure Settlements

On October 3, the OIG updated its list of Provider Self-Disclosure Settlements, including several settlements involving cases where providers employed individuals excluded from participation in federal healthcare programs, violating the Civil Monetary Penalties Law. Providers include:

  • Leroy R. Polite, DMD, PA, d/b/a Economy Dentures and Economy Dentistry (Economy Dentures), of Florida
  • Adventist Health System Sunbelt Healthcare Corporation, d/b/a Rx Plus Pharmacy (Rx Plus), of Florida
  • Adventist Health System Sunbelt Healthcare Corporation, d/b/a AHS Information Services (AHS), of Florida

In addition, Humana Inc. (Humana), of Kentucky, reached a settlement after the OIG alleged Humana knowingly made or used false records or statements material to false or fraudulent claims. Specifically, the OIG said Humana knowingly made “meaningful use” attestations as part of its participation in the CMS Electronic Health Records Incentive Program.


Medicare Payments for Clinical Diagnostic Laboratory Tests in 2016: Year 3 of Baseline Data

On October 3, the OIG issued the third set of annual Reports on Medicare payments for the top 25 Medicare Part B lab tests in preparation for beginning the new system for setting payment rates for clinical diagnostic lab tests in 2018.

The report found:

  • Medicare paid $6.8 billion under Part B for lab tests in 2016
  • That $6.8 billion total changed very little in the 3-year period studying Part B lab test payments
  • The top 25 lab tests by Medicare payment in 2016 totaled $4.3 billion and represented 60% of all Medicare lab test payments
  • The top 6 tests were consistent with previous years and totaled $2.4 billion in 2016
  • Payments for an emerging category of tests and microbiology tests increased notably from 2015 to 2016
  • Payments for drug tests and molecular pathology decreased notably from 2015 to 2016


Correction: Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2018 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Program Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Provider-Based Status of Indian Health Service and Tribal Facilities and Organizations; Costs Reporting and Provider Requirements; Agreement Termination Notices

On October 4, CMS published a Correction to the IPPS and long-term care payment system 2018 final rule in the Federal Register. The correction addresses numerous technical and typographical errors in the final rule, including corrections regarding recalculation of MS-DRG relative weights, revisions to Factor 3 of the uncompensated care methodology, and corrections to the final FY 2018 IPPS wage index data.

CMS recalculated all IPPS budget neutrality adjustment factors, the fixed-loss cost threshold, the final wage indexes, and the national operating standardized amounts and capital federal rates.

Effective date: October 1, 2017


Correction: Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) for FY 2018, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, Survey Team Composition, and Correction of the Performance Period for the NHSN HCP Influenza Vaccination Immunization Reporting Measure in the ESRD QIP for PY 2020

On October 4, CMS published a Correction to the SNF prospective payment system 2018 final rule in the Federal Register. The correction addresses technical errors resulting from CMS’ use of incorrect wage data to calculate the final FY 2018 Inpatient Prospective Payment System (IPPS) wage indexes, the geographic adjustment factor, and other IPPS factors and adjustments.

CMS used corrected wage data to recalculate the final FY 2018 SNF PPS wage indexes, budget neutrality factors, federal per diem rates, case-mix adjusted rates, and labor adjusted rates.

Effective date: October 1, 2017


Revisions to Certain Patient’s Rights Conditions for Participation and Conditions for Coverage; Withdrawal

On October 4, CMS published a Withdrawal in the Federal Register to a proposed rule which originally intended to revise certain definitions and patient’s rights provisions that currently defer to state law, to ensure that same-sex spouses are recognized and afforded equal rights in Medicare and Medicaid-participating facilities. The proposed rule was originally published December 12, 2014.    

CMS said it withdrew the proposed rule due to the June 26, 2015, Obergefell v. Hodges Supreme Court decision, which held that a state must license a marriage between two people of the same sex, and states must recognize same-sex marriages lawfully performed in other states. CMS said the Obergefell decision addressed many of the concerns from the December 2014 proposed rule.


Withdrawal: Establishment of Special Payment Provisions and Requirements for Qualified Practitioners and Qualified Suppliers of Prosthetics and Custom-Fabricated Orthotics

On October 4, CMS published a Withdrawal in the Federal Register of a proposed rule specifying qualifications needed to furnish and fabricate prosthetics and custom-fabricated orthotics. CMS said it withdrew the proposed rule, which was originally published January 12, 2017, due to cost and time burdens the proposed rule would create for providers and suppliers.


Comment Request: Manufacturer Submission of Average Sales Prices (ASP) Data for Medicare Part B Drugs

On October 4, CMS published a Comment Request in the Federal Register regarding information on the average sales price of Part B drugs and biologicals.

Comments are due November 3, 2017


Withdrawal: Medicare Part B Drug Payment Model

On October 4, CMS published a Withdrawal of a Medicare Part B Drug Payment Model proposed rule in the Federal Register. The rule, originally published March 11, 2016, proposed a new two-phase model to test whether alternative drug payment designs would reduce Medicare expenditures while preserving or enhancing quality of care. CMS said it withdrew the proposed rule due to the complexity of issues related to the proposed model design and a desire to increase stakeholder input.


Updated Corporate Integrity Agreement Documents

On October 4, the OIG published information on new Corporate Integrity Agreements with the following organizations:

  • Aegerion Pharmaceuticals, Inc., of Cambridge, MA
  • AnMed Health, of Anderson, SC
  • Health Services Management, Inc., of Murfreesboro, TN


Civil Monetary Penalties Settlement - Arizona Pain Management Practice Settles Case Involving Kickback and Stark Allegations

On October 6, the OIG published information on a $186,210.20 Settlement with Advanced Pain Management (APM), a pain management practice in Arizona, to resolve allegations of improper remuneration from Millennium Health, LLC f/k/a Millennium Laboratories, Inc. The OIG alleged that APM received improper remuneration in the form of point of care test cups from Millennium, which resulted in prohibited referrals between the two businesses because the remuneration created a financial relationship. OIG also alleged that APM caused Millennium to present claims for designated health services that resulted from the prohibited referrals.  


CMS Approved Review Topics for Durable Medical Equipment, Prosthetic, Orthotics Supplies (DMEPOS)

On October 6, CMS published One-Time Notification Transmittal 1929, identifying issues pertaining to DMEPOS which the Center for Program Integrity believes would be most appropriate for medical review as part of the CMS Approved Review Topics program.

Effective date: November 6, 2017

Implementation date: November 6, 2017


Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2018

On October 6, CMS published Medicare Claims Processing Transmittal 3872 announcing the changes included in the January 2018 quarterly release of the edit module for clinical diagnostic laboratory services.   

Effective date: October 1, 2017

Implementation date: January 2, 2018


Place of Service Codes

On October 6, CMS published Medicare Claims Processing Transmittal 3873 updating descriptors for place of service (POS) codes 32 and 54. Both codes will be updated to replace outdated language referring to individuals with intellectual disabilities.

Effective date: April 1, 2018

Implementation date: April 2, 2018