Reimbursement/Medicare PPS
and
Legislative Update
Larry Goldberg
Larry Goldberg Consulting
August 2, 2012
1
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
2
Agenda
 Proposed PPS Updates
 OPPS
 HHA
 ESRD
 Physician
 Where is Medicare Heading
 Accountable Care Organizations (ACOs)
 Value-Based Purchasing Programs (VBP)
 Bundling
3
Federal Register Access
Prior to Publication Date
 1. Start here:
 http://www.archives.gov/federal-register/publicinspection/
 2. Scroll down and click on:
 View the Special Filing Document List
 Look under Centers for Medicare & Medicaid
4
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
5
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
6
FY 2013 IPPS
7
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
8
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
9
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
10
Rates
National Adjusted Operating Standardized Amounts
(68.8 Percent Labor Share/31.2 Percent Nonlabor
if Wage Index Is Greater Than 1.0000)
Full Update (1.8 percent)
Reduced Update (-0.2 percent)
Labor-related
Non-labor-related
Labor-related
Non-labor-related
$3,679.95 of FY $1,668.81
$3,607.65 Amounts
$1,636.02
Comparison
2012 Standardized
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)
Labor-related
Non-labor-related
$3,316.23
$2,032.53
Reduced Update (-0.2 percent)
Labor-related
Non-labor-related
$3,251.08
$1,992.59
11
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
12
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
13
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
14
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 ??
15
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
16
Comparison of FY 2012 Standardized Amounts
to the
FY 2013 Standardized Amount
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)
FY 2013 Update Factor
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
Labor:
$4,060.65
Nonlabor:
$1,841.46
Labor:
$3,659.31
Nonlabor:
$2,242.80
1.018
1.018
Reduced
Reduced
Update
Update
(-0.2 percent); (-0.2 percent);
Wage index is Wage index is
greater than
less than or
1.0000
equal to 1.0000
Labor:
$4,060.65
Nonlabor:
$1,841.46
0.998
Labor:
$3,659.31
Nonlabor:
$2,242.80
0.998
17
Comparison of FY 2012 Standardized Amounts
to the
FY 2013 Standardized Amount
Full Update
(2.1 percent);
Wage index is
greater than
1.0000
FY 2013 DRG Recalibration and
Wage Index Budget Neutrality
Factor
FY 2013 Reclassification Budget
Neutrality Factor
FY 2013 Rural Demonstration
Budget Neutrality Factor
Proposed FY 2013 Outlier Factor
Documentation and coding
adjustments required under
sections 7(b)(1)(A) and 7(b)(1)(B)
of Pub. L. 110-90
Full Update
(2.1 percent);
Wage index is
less than or
equal to 1.0000
Reduced Update Reduced Update
(0.1 percent);
(0.1 percent);
Wage index is
Wage index is
greater than
less than or equal
1.0000
to 1.0000
0.998761
0.998761
0.998761
0.998761
0.991276
0.991276
0.991276
0.991276
0.999677
0.999677
0.999677
0.999677
Comparison of FY 2012 Standardized Amounts
0.948999
0.948999
0.948999
0.948999
to the
FY 2013 Standardized Amount
Rate for FY 2013
0.9478
Labor:
$3,679.95
Nonlabor:
$1,668.81
0.9478
Labor:
$3,316.23
Nonlabor:
$2,032.53
0.9478
Labor:
$3,607.65
Nonlabor:
$1,636.02
0.9478
Labor:
$3,251.08
Nonlabor:
$1,992.59
18
Capital
 Federal rate will be $425.49
 Proposed at $424.22
 Corrected Proposed $422.47
FY 2012
Update Factor1
GAF/DRG Adjustment Factor
Outlier Adjustment Factor
Capital Federal Rate
FY 2013
Change
1.0150
1.0040
0.9382
1.0120
0.9998
0.9362
1.0120
0.9998
1.0019
Percent
Change
1.20
-0.02
-0.21
$421.42
$425.49
1.0097
0.97
19
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
20
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
21
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
22
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)
23
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
24
Readmissions
 Distribution of Readmission Adjustment Factors
Percent Reduction
No Adjustment
Up to -.09 Percent
-0.1 Percent to -0.19 Percent
-0.20 Percent to -0.29 Percent
-0.30 Percent to -0.39 Percent
-0.40 Percent to -0.49 Percent
-0.50 Percent to -0.59 Percent
-0.60 Percent to -0.69 Percent
-0.70 Percent to -0.79 Percent
-0.80 Percent to -0.89 Percent
-0.90 Percent to -0.99 Percent
-1.0 Percent
Total
Number of
Hospitals
1,171
347
280
228
196
180
129
118
110
77
76
481
3,393
Percent of
Hospitals
34.50%
10.20%
8.30%
6.70%
5.80%
5.30%
3.80%
3.50%
3.20%
2.30%
2.20%
14.20%
100.00%
25
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
26
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
27
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
28
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
29
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
30
MS-DRGs
MSDRG
65
190
191
192
193
194
247
287
291
292
309
310
312
313
378
392
470
Description
FY
2012
Weight
Intracranial hemorrhage or cerebral infarction w CC
Chronic obstructive pulmonary disease w MCC
Chronic obstructive pulmonary disease w CC
Chronic obstructive pulmonary disease w/o CC/MCC
Simple pneumonia & pleurisy w MCC
Simple pneumonia & pleurisy w CC
Perc cardiovasc proc w drug-eluting stent w/o MCC
Circulatory disorders except AMI, w card cath w/o MCC
Heart failure & shock w MCC
Heart failure & shock w CC
Cardiac arrhythmia & conduction disorders W CC
Cardiac arrhythmia & conduction disorders w/o CC/MCC
Syncope & collapse
Chest pain
G.I. hemorrhage w CC
Esophagitis, gastroent & misc digest disorders w/o MCC
Major joint replacement or reattachment of lower
1.1485
1.1684
0.9628
0.7081
1.4948
1.0026
1.9828
1.0743
1.5010
1.0214
0.8155
0.5608
0.7139
0.5434
1.0238
0.7421
2.0866
FY
2013
Weights
1.1345
1.1860
0.9521
0.7072
1.4893
0.9996
1.9911
1.0709
1.5174
1.0034
0.8098
0.5541
0.7339
0.5617
1.0168
0.7375
2.0953
Percent
Diff
-1.22
1.51
-1.11
-0.13
-0.37
-0.30
0.42
-0.32
1.09
-1.76
-0.70
-1.19
2.80
3.36
-0.68
-0.62
31
MS-DRGs
MSDRG
641
682
683
690
871
872
Description
Nutritional & misc metabolic disorders w/o MCC
Renal Failure w MCC
Renal Failure w CC
Kidney & urinary tract infections w/o MCC
Septicemia or severe sepsis w/o MV 96+ hours w MCC
Septicemia or severe sepsis w/o MV 96+ hours w/o
MCC
FY
2012
Weight
0.6988
1.6410
1.0183
0.7810
1.9090
1.1339
FY
2013
Weights
0.6920
1.5862
0.9958
0.7810
1.8803
1.0988
Percent
Diff
-0.97
-3.34
-2.21
0.00
-1.50
-3.10
32
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:
33
Quality Reporting
 Three AHRQ IQI 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
34
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
35
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”
36
Value-Based Purchasing
 Domain Weighting by Year
FY 2013




Clinical Process of Care
Patient Experience of Care
Outcomes
Efficiency
-
 Total
70%
30%
100%
FY 2014
FY 2015
45%
30%
25%
20%
30%
30%
20%
100%
100%
37
Value-Based Purchasing
 Correction Notice
38
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
39
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
40
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
41
Skilled Nursing PPS
42
SNF PPS
 Posted on 7-27-12
 Published in 8-2-12 Federal Register
 Copy at: http://www.ofr.gov/OFRUpload/OFRData/201218719_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
43
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
44
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).
45
Inpatient Rehabilitation Facilities PPS
46
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/201218433.pdf
 Notice -- no proposed rulemaking
 CMS say no new policy changes
 No adjustments to the facility-level items
47
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
48
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
49
Inpatient Rehabilitation Facilities PPS
 Quality
 See hospital OPPS rule for details
50
Hospice
51
Hospice Wage Index Update
 Posted July 25th
 Published in the Federal Register on July 27th
 Copy at:
 http://www.gpo.gov/fdsys/pkg/FR-2012-0727/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
52
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
53
Hospice Wage Index Update
 Quality – see proposed HHA notice
54
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
55
Hospice Rate Update
 Issued via Program Transmittal (CR 249CP)
 Copy at:
 http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/2012-TransmittalsItems/R2497CP.html
Co
de
Description
Rate
65
1
Routine Home Care
Continuous Home Care Full Rate = 24 hours
of care $=37.32 hourly rate
Inpatient Respite Care
General Inpatient Care
$153.45
Wage
Component
Subject to
Index
$105.44
$895.56
$158.72
$682.59
$615.34
$85.92
$436.93
65
2
65
5
65
6
NonWeighted
Amount
$48.01
$280.22
$72.80
$245.66
56
Inpatient Psychiatric PPS
57
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
58
Proposed OPPS
59
Hospital OPPS
 For CY 2013
 Published on July 30, 2012
 Copy at:
 http://www.gpo.gov/fdsys/pkg/FR-2012-0730/pdf/2012-16813.pdf
 Comments due by September 4, 2012
 Final rule by November 1, 2012
60
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
61
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
62
OPPS Wage Index
 Labor-related share remains 60%
 See website for proposed values
 Not making an adjustment for Massachusetts
63
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
64
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
65
OPPS Rural Issues
 Continue +7.1 percent add-on to rural SCHs
 TOPs ends on 1-1-13
66
OPPS Cancer Hospitals
 Proposed Payment with a Payment to Cost Ratio of 0.91
67
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
68
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
69
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
70
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
71
OPPS Quality
 No new measures for FY 2015 and subsequent years
72
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
73
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
74
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
75
proposal
ESRD Proposed
76
ESRD PPS
 Posted on 7-2-12
 Published in 7-11-12 Federal Register
 Copy at:
 http://www.gpo.gov/fdsys/pkg/FR-2012-0711/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
77
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
78
ESRD Transition
 CY 2013 will be third year
 Blend is 75 percent PPS / 25 percent composite
79
ESRD Wage Index
 Floor being reduced to 50 percent (from 55%)
 Labor-related shares:
 PPS – 41.737 percent
 CR53.711 percent
 Tables on CMS website (Addenda A & B)
80
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
81
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
82
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
83
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
84
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”
85
Home Health Proposed PPS
86
Home Health PPS
 Posted on 7-6-12
 Published in 7-13-12 Federal Register
 Copy at:
 http://www.gpo.gov/fdsys/pkg/FR-2012-0713/pdf/2012-16836.pdf
 Comments due by 9-4-12
87
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???
88
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
89
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.
90
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.
91
Proposed Physician and Other Part B
Services for CY 2013
92
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-2012-0730/pdf/2012-16814.pdf
 Comments due September 4, 2012
 Final rule on November 1, 2012
 Includes many Part B issues
93
Update
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

Current law CF is $34.0376
CMS has not re-based
SGR projected to be minus 27 percent
No doubt waiting for Congress
94
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
95
Multiple Procedure Payment Reduction
Expansion
 To include cardiovascular & ophthalmic diagnostic services
 TC only
 25 percent reduction on same patient / same day
 See Table 12
96
GPCIs
 1.0 floor for work expires 1-1-13
 See Addenda D & E for values
 No changes this year
97
Telehealth
 Add alcohol / substance abuse services
 CPT codes G0396-7
 Add preventive services
 CPT codes GO442-7
98
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.
99
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”
100
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
101
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
102
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
103
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
104
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
105
Middle Class Tax Relief And Job Creation
Act of 2012
106
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
107
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
108
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
109
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
110
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
111
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
112
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 (20122022)
113
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
114
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
115
Where is Medicare Heading???
116
Where is Medicare Heading???

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


Accountable Care Organizations
Value-based purchasing
Bundling
Paying lowest price irrespective of setting
More immediate payment constraints
117
Questions
118