This week in Medicare updates–12/28/2016
Notice of Interim Final Rule (IFR) Third Party Payment and Information on Implementation Plan
On December 16, CMS issued a Memorandum regarding the interim final rule published in the Federal Register December 14, 2016, which implements new requirements for Medicare-certified dialysis facilities that make financial contributions to patients in order to support enrollment in individual market health plans either directly or indirectly through a parent organization or third party. The interim final rule establishes new standards under the End Stage Renal Disease (ESRD) Conditions for Coverage 42 CFR 494.70 Patient Rights (c) Standard: Right to be informed of health insurance options and 42 CFR 494.180 Governance (k) Standard: Disclosure of financial assistance to insurers. The requirements of the IFR apply to any dialysis facility offering financial contributions in the form of premium assistance to support enrollment in individual market health plans. The requirements will be effective 30 days from the date of publication with the exception of one portion of 42 CFR 494.180(k) which may be delayed to July 1, 2017 if there is a potential for a coverage gap for the beneficiary.
Transplant Centers: Citation for Outcome Requirements
On December 16, CMS issued a Memorandum regarding enforcement of the outcomes requirement for certain Medicare-approved organ transplant center programs, which must maintain one-year patient and graft survival rates consistent with the Standard: Outcome requirements within the Transplant Center Conditions of Participation (CoP) at 42 CFR §482.82. CMS uses risk-adjusted statistical reports, released semi-annually by the Scientific Registry of Transplant Recipients (SRTR), to measure and determine program compliance. Beginning with the January 2017 SRTR center-specific reports, CMS will identify those transplant programs who cross CMS’ thresholds for one-year patient and/or graft survival rates, in accordance with 42 CFR §482.82(c). Simultaneously, CMS will review more recent SRTR data to determine whether the program’s one year patient/graft survival rate is improving, static or declining. If the program is out of compliance upon the release of the next SRTR report and is not showing improvement in more recent data, CMS will consider the program to be non-compliant at a Condition level and may conduct an on-site survey to determine whether there are deficiencies with other requirements.
Use of the Fire Safety Evaluation System (FSES), National Fire Protection Association (NFPA) 101A, Guide on Alternative Approaches to Life Safety, 2013 Edition by Health Care Occupancies and Board and Care Occupancies
On December 16, CMS issued a Memorandum regarding the adoption of the 2012 Life Safety Code (LSC) and the 2012 Health Care Facilities Code (HCFC) through regulation (see 81 FR 26872, 5/4/16), effective July 5, 2016.
Clarification of Automatic Fire Sprinkler System Installation Requirements in Attic Spaces in Long-Term Care (LTC) Facilities
On December 16, CMS issued a Memorandum regarding the final rule Medicare and Medicaid Programs: Fire Safety Requirements for Certain Health Care Facilities (81 FR 26872). This regulation adopted the 2012 Life Safety Code (LSC), and the 2012 Health Care Facilities Code (HCFC). The 2012 LSC requires all existing and newly constructed healthcare facilities including long term care facilities to be equipped with a supervised automatic sprinkler system.
Vulnerabilities Remain Under Medicare's 2-Midnight Hospital Policy
On December 19, the OIG released a Report on CMS’ implementation of the 2-midnight rule. The OIG found that the number of inpatient stays decreased and the number of outpatient stays increased since the implementation of the 2-midnight policy. Short inpatient stays also decreased more than long outpatient stays. The OIG also found:
- Hospitals are billing for many short inpatient stays that are potentially inappropriate under the policy; Medicare paid almost $2.9 billion for these stays in FY 2014.
- Medicare pays more for some short inpatient stays than for short outpatient stays, although the stays are for similar reasons.
- Hospitals continue to bill for a large number of long outpatient stays.
- An increased number of beneficiaries in outpatient stays pay more and have limited access to SNF services than they would as inpatients.
- Hospitals continue to vary in how they use inpatient and outpatient stays.
OIG Advisory Opinion No. 16-13
On December 20, the OIG released an Advisory Opinion regarding a proposal to waive cost-sharing obligations incurred by individuals for healthcare services required for participation in a government-funded clinical research study and the payment of a stipend to study participants for the time and effort required to participate in study visits.
Advancing Care Coordination through Episode Payment Models (Cardiac and Orthopedic Bundled Payment Models) Final Rule (CMS-5519-F) and Medicare ACO Track 1+ Model
On December 20, CMS published a Press Release regarding the finalization of the following new payment models:
- Improve cardiac care: Three new payment models will support clinicians in providing care to patients who receive treatment for heart attacks, heart surgery to bypass blocked coronary arteries, or cardiac rehabilitation following a heart attack or heart surgery.
- Improve orthopedic care: One new payment model will support clinicians in providing care to patients who receive surgery after a hip fracture, other than hip replacement. In addition, CMS is finalizing updates to the Comprehensive Care for Joint Replacement Model, which began in April 2016.
- Provides an Accountable Care Organization opportunity for small practices: The new Medicare ACO Track 1+ Model will have more limited downside risk than Tracks 2 or 3 of the Medicare Shared Savings Program in order to encourage more practices, especially small practices, to advance to performance-based risk.
Implementation of Prior Authorization Process for Certain DMEPOS Items and Publication of the Initial Required Prior Authorization List of DMEPOS Items That Require Prior Authorization as a Condition of Payment
On December 21, CMS published an announcement in the Federal Register regarding implementation of the prior authorization program for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items in two phases and the issuance of the initial Required Prior Authorization List of DMEPOS items that require prior authorization as a condition of payment. Phase one of implementation is effective on March 20, 2017. Phase two of implementation is effective on July 17, 2017.
Early Implementation Review: CMS's Management of the Quality Payment Program
On December 21, the OIG released a Report on CMS' early management of the Quality Payment Program (QPP) due to the importance and complexity of these payment reforms and the tight timeline to launch the program. The OIG found that CMS made significant progress towards implementing the QPP and identified two vulnerabilities that are critical for CMS to address in 2017, because of their potential impact on the program's success:
- Providing sufficient guidance and technical assistance to ensure that clinicians are ready to participate in the QPP
- Developing IT systems to support data reporting, scoring, and payment adjustment
The Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents – Payment Reform
On December 21, CMS released Special Edition MLN Matters SE1636 regarding “The Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents – Payment Reform,” which tests a new payment model for nursing facilities and practitioners to incent early identification of changes in condition, treatment of specific conditions in a nursing facility without a hospital transfer, and improved care planning. The payment model has three components:
- Nursing facility payments for the treatment of qualifying conditions (for beneficiaries not on a Medicare Part A skilled nursing facility stay)
- Practitioner payment for the treatment of conditions onsite at the nursing facility
- Practitioner payment for care coordination and caregiver engagement
Participation in this Initiative is limited to selected nursing facility and practitioners in Alabama, Colorado, Indiana, Missouri, Nevada, New York, and Pennsylvania.
2017 Durable Medical Equipment Prosthetics, Orthotics, and Supplies Healthcare Common Procedure Coding System (HCPCS) Code Jurisdiction List
On December 22, CMS posted Transmittal 3684 regarding the annual update of the spreadsheet containing an updated list of the HCPCS codes for Durable Medical Equipment Medicare Administrative Contractors (DME MAC) and Part B Medicare Administrative Contractor jurisdictions to reflect codes that have been added or discontinued (deleted) each year.
Effective date: January 1, 2017
Implementation date: January 24, 2016
Calendar Year (CY) 2017 Annual Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
On December 22, CMS posted Transmittal 3582 to provide instructions for the CY 2017 clinical laboratory fee schedule, mapping for new codes for clinical laboratory tests, and updates for laboratory costs subject to the reasonable charge payment.
Effective date: January 1, 2017
Implementation date: January 3, 2017
January 2017 Update of the Ambulatory Surgical Center (ASC) Payment System
On December 22, CMS posted Transmittal 3683 regarding updates to the ASC payment system, payment rates for separately payable drugs and biologicals, including descriptors for newly created Level II HCPCS codes for drugs and biologicals, the ASC PI file, and the CY 2017 ASC payment rates for covered surgical and ancillary services.
Effective date: January 1, 2017
Implementation date: January 3, 2017