This week in Medicare updates—7/15/2020
Medicare Quarterly Provider Compliance Newsletter
On July 6, CMS published the Medicare Quarterly Provider Compliance Newsletter regarding three recovery auditor findings. These include an audit of payments for services provided to beneficiaries in a skilled nursing facility Part A stay, documentation proving medical necessity for hyperbaric oxygen therapy for diabetic wounds, and documentation and indications for coverage of durable medical equipment in the form of urological supplies. The newsletter provides multiple links to resources for each of the topics included in these recovery auditor findings.
CY 2021 End Stage Renal Disease Prospective Payment System Proposed Rule
On July 6, CMS published a draft copy of the 2021 ESRD PPS Proposed Rule, which is scheduled to be published in the Federal Register on July 13. Proposals include expanding the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) to include new dialysis machines used in the home, changes to the eligibility criteria and determination process for TPNIES, updates to the wage index to adopt new OMB statistical delineations, and updates to the ESRD quality incentive program (QIP). CMS estimates payment updates in the rule will increase ESRD payments for freestanding clinics by 1.6% and for hospitals by 0.4% compared to CY 2020.
CMS published a Fact Sheet and Press Release on the proposed rule on the same date. Comments on the proposals are due by September 4.
COVID-19 Provider Burden Relief FAQs
On July 7, CMS updated FAQs regarding assorted demonstration models which were paused during the COVID-19 public health emergency. CMS notes in the FAQs that it expects to discontinue exercising Medicare FFS medical review enforcement discretion beginning August 3, 2020, regardless of the status of the public health emergency. CMS also expects to resume full model operations for the Repetitive, Scheduled, Non-Emergent Ambulance Transport Prior Authorization (RSNAT) Model, the Review Choice Demonstration for Home Health Services, and the Prior Authorization Program for DMEPOS on August 3. The MACs will conduct postpayment review on claims that were subject to the models and that were submitted and paid during the pause once the models resume.
Prior authorization for certain lower limb prosthetics (HCPCS codes L5856, L5857, L5973, L5980, and L5987) will be required in California, Michigan, Pennsylvania, and Texas for claims with dates of service on or after September 1, 2020. The remaining states will be required to complete the prior authorization process for these codes on December 1, 2020.
Updated Provider Self-Disclosure Settlements
On July 8, the OIG published an updated List of Provider Self-Disclosure Settlements, including:
- On June 9, Memorial Hospital Association, d/b/a Beartooth Billings Clinic, of Montana, reached a $13,110.10 settlement agreement with the OIG for allegedly submitting claims for Intensive Behavioral Therapy for Obesity provided by a dietician at the full physician rate as incident to the physician services when the services did not satisfy incident to billing requirements.
- On June 12, St. Vincent’s Medical Center, Inc. d/b/a St. Vincent’s Medical Center - Riverside, of Florida, reached a $63,420.92 settlement agreement with the OIG to resolve allegations that it paid remuneration to an independent oncology practice in the form of diagnostic testing services to the oncology practice’s research study patients for which St. Vincent’s did not invoice the oncology practice, bill third-party payors, or otherwise seek payment for the diagnostic testing services.
The list also included settlements with multiple facilities who employed individuals they knew or should have known were excluded from participation in federal health care programs. These facilities included:
- St. Joseph Health Personal Care Services d/b/a Nurse Next Door
- Providence Health System-Southern California d/b/a Providence Little Company of Mary, of California
- Providence Health System-Southern California, of California
- Green County Human Services, of Wisconsin
- St. Mary’s Passaic, LLC d/b/a St. Mary’s General Hospital, of New Jersey
Comment Request: Medicare Program: Conditions for Payment of Power Mobility Devices, Including Power Wheelchairs and Power-Operated Vehicles
On July 8, CMS published a Comment Request in the Federal Register regarding an information collection titled “Medicare Program: Conditions of Payment of Power Mobility Devices, Including Power Wheelchairs and Power-Operated Vehicles.” Comments are due by September 8, 2020.
Loophole in Drug Payment Rule Continues to Cost Medicare and Beneficiaries Hundreds of Millions of Dollars
On July 8, the OIG published a Report on how a payment loophole for certain self-administered drugs cost Medicare and its beneficiaries half a billion dollars for two drugs in 2017 and 2018. Manufacturers provide CMS with the average sales price (ASP) and sales volume per NDC, but Medicare sets payment amounts for Part B drugs by HCPCS code. Medicare must then crosswalk manufacturers’ NDCs to the corresponding HCPCS code when setting payment amounts by HCPCS code. However, NDCs may be used for certain versions of drugs that do not meet Part B drug coverage criteria. CMS included two of these noncovered, self-administered drugs, Orencia and Cimzia, when determining payments for those two drugs. These two drugs were identified in a 2017 OIG report to CMS, but CMS continued to include the noncovered versions when calculating Part B payments as of December 2019.
The HCPCS code descriptions associated with Part B coverage of the drugs specifically exclude self-administration, meaning they should not be included in the self-administered drug benefit. Part B spending for these drugs would have been reduced by $497 billion from 2017 through 2018 had CMS only included the physician-administered versions when determining payment. Because these drugs are rarely used, those totals are astronomic. The payment loophole also may have provided physicians with incentives to administer Orencia and Cimzia instead of other drugs for the same condition, because the loophole led to physicians receiving an average of 40% above their cost for the Orencia in 2018 and 23% above the cost of administering Cimzia in 2018. The OIG recommends that CMS seek a legislative change requiring that noncovered, self-administered versions of drugs be excluded in the calculation of Part B payment amounts.
Freedom Orthotics, Inc.: Audit of Medicare Payments for Orthotic Braces
On July 8, the OIG published a Review of whether Freedom Orthotics complied with Medicare requirements when billing for orthotic braces. The OIG determined that none of the 100 sampled beneficiaries included in the review showed medical necessity for orthotic braces, as there was insufficient information from the beneficiaries’ medical records to meet Medicare requirements for medical necessity. The OIG estimates that this led to at least $6.9 million in unallowable Medicare payments. The OIG recommends Freedom refund the $6.9 million in overpayments, identify and return any similar overpayments, and obtain as much information from beneficiary medical records as necessary to ensure claims meet Medicare requirements for medical necessity.
Freedom stated that it disagreed with the entirety of the review and all OIG findings. It also disagreed with OIG recommendations and stated it will appeal. The OIG maintains its findings and recommendations are valid, but it also clarified that OIG recommendations do not represent final determinations by Medicare.
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
On July 8, CMS published Medicare Claims Processing Transmittal 10217, which rescinds and replaces Transmittal 10174, dated June 12, 2020, to revise the policy section to include additional COVID-19 codes 87426, 0223U, and 0224U. The original transmittal was issued regarding quarterly updates to the clinical laboratory fee schedule (CLFS).
CMS revised MLN Matters 11815 on the same date to accompany the transmittal.
Effective date: July 1, 2020
Implementation date: July 6, 2020
Nursing Home Five Star Quality Rating System Updates, Nursing Home Staff Counts, and FAQs
On July 9, CMS revised a Memorandum to state survey agency directors, originally published April 24, 2020, to add information about providing ombudsman access to residents as required by 42 CFR §483.10(f)(4)(i) and the CARES Act. The memo details how to facilitate resident communication with the ombudsman should in-person access be limited due to infection control concerns. It also details continued requirements for facilities to comply with federal disability rights laws despite the pandemic. The original memo was published regarding updates to the Nursing Home Compare website and other nursing home information due to the COVID-19 pandemic.
Effective date: Immediately. This policy should be communicated with all survey and certification staff, their managers, and the state/regional office training coordinators immediately.
Present on Admission (POA) Exempt Codes FY 2021
On July 9, the CDC published a Download Link to the file containing the FY 2021 POA Exempt ICD-10-CM codes. The list includes 196 added codes, 13 deleted codes, and 43 revised codes.
CMS Directs Additional Resources to Nursing Homes in COVID-19 Hotspot Areas
On July 10, CMS published a Press Release regarding additional resources for nursing homes in COVID-19 hotspots. CMS will be deploying Quality Improvement Organizations to hotspot areas in an attempt to help provide resources and support to facilities with known infection control issues as a way to improve quality and safety.
Change to the Payment of Allogeneic Stem Cell Acquisition Services
On July 10, CMS published Medicare Claims Processing Transmittal 10218 regarding changes to the claims processing system to prepare it to pay for allogeneic stem cell acquisition services on a reasonable cost basis. This includes adding in new data elements, new pass through amounts, maintenance edits, and more.
Effective date: For cost reporting periods beginning on or October 1, 2020
Implementation date: October 5, 2020 - Analysis and Design; January 4, 2021 - Design, Coding, and Testing
Manual Update to Section 20.7 in Chapter 23 of Pub. 100-04
On July 10, CMS published Medicare Claims Processing Transmittal 10211 regarding changes to the manual to modernize languages regarding ownership of and access to codes established by the AMA, ADA, and NUBC.
Effective date: August 10, 2020
Implementation date: August 10, 2020
Update to the Internet Only Manual Publication 100-04, Chapter 3, Section 20 and 90.6
On July 10, CMS published Medicare Claims Processing Transmittal 10210 regarding changes to language in the manual pertaining to the lower percentage rate for services provided by hospitals in Maryland subject to the Health Services Cost Review. It also changes language pertaining to the determination of appropriate coverage and payment for intestinal and multi-visceral transplants.
Effective date: August 10, 2020
Implementation date: August 10, 2020
Reprocessing of FY 2019 and 2020 IPPS Claims for Certain Hospitals
On July 10, CMS published One-Time Notification Transmittal 10212 regarding reprocessing of FY 2019 and 2020 hospital claims affected by an issue in which certain hospitals had outmigration values passed to the IPPS Pricers that were inadvertently omitted from the calculation of the hospital’s wage index. The transmittal includes the criteria for MACs to use to determine which claims to reprocess.
Effective date: August 25, 2020
Implementation date: August 25, 2020