The FY 2014
Medicare
Annual Update
Larry Goldberg
Larry Goldberg Consulting
Larry A Oday Esq, PLLC
October 16, 2013
1
Agenda




Congressional Activity
President’s Budget
Sequester
FY 2014 Final PPS Updates
 IPPS
 SNF
 IRF
 IPF
 Hospice
2
Agenda
 CY 2014 Proposed PPS Updates
 OPPS
 ESRD
 Physician
 Home Health
 Proposed FQHC PPS
3
Congress
 Politics have made it difficult if not impossible to enact
all legislation
 FY 2014 Budget seems unlikely
 Government shut down
 Republicans in House have tried 42 times to repeal the
ACA
 Nice but it “ain’t” going to happen unless they get
veto proof margins in both chambers
 Trying to stop by defunding – hasn’t worked so far???
 Debt ceiling limits
4
President’s Budget
5
President’s FY 2014 Budget
 2 months late
 Would avoid sequestration
 Comment
 Going nowhere
 But do not ignore specifics
 Does NOT fix the physician payment problem
 Does suggest where Medicare is heading
6
President’s FY 2014 Budget
 Includes a package of Medicare legislative proposals
that will “save” $371.0 billion over 10 years
 Reduce Medicare Coverage of Bad Debts: Starting in 2014,
this proposal would reduce bad debt payments to 25 percent over 3
years for all providers who receive bad debt payments [$25.5 billion in
savings over 10 years]
 Better Align Graduate Medical Education (GME)
Payments with Patient Care Costs: Would reduce GME
payments by 10 percent, beginning in 2014 [$11.0 billion in savings
over 10 years]
7
President’s FY 2014 Budget
 Reduce Critical Access Hospital (CAHs)
Reimbursements to 100% of Costs: Would reduce rate to 100
percent beginning in 2014. [$1.4 billion in savings over 10 years]
 Prohibit Critical Access Hospital Designation for
Facilities that are Less Than 10 Miles from the Nearest
Hospital: Beginning in 2014. [$690 million in savings over 10
years]
8
President’s FY 2014 Budget
 Adjust Payment Updates for Certain Post-Acute Care
Providers: Would gradually realign payments with costs by reducing
the market basket updates for Inpatient Rehabilitation Facilities (IRFs),
Long-Term Care Hospitals (LTCHs), SNFs and Home Health agencies,
by 1.1 percentage points beginning in 2014 through 2023. Payment
updates for these providers would not drop below zero under this
provision. [$79.0 billion in savings over 10 years]
 “Encourage” Appropriate Use of Inpatient
Rehabilitation Facilities (IRFs): Beginning in 2014, this
proposal would reinstitute the 75 percent standard. [$2.5 billion in
savings over 10 years]
9
President’s FY 2014 Budget
 Equalize Payments for Certain Conditions Treated in
Inpatient Rehabilitation Facilities and Skilled Nursing
Facilities: Would adjust payments for three conditions involving hips,
knees, and pulmonary conditions, as well as other conditions selected
by the Secretary. Beginning in 2014, would reduce the disparity in
Medicare payments between the settings. [$2.0 billion in savings over
10 years]
 Adjust Skilled Nursing Facilities Payments to Reduce
Hospital Readmissions: Would reduce payments by up to three
percent for SNFs with high rates of care-sensitive, preventable hospital
readmissions, beginning in 2017. [$2.2 billion in savings over 10
years]
10
President’s FY 2014 Budget
 Implement Bundled Payment for Post-Acute Care
Providers: Beginning in 2018, this proposal would implement
bundled payment for post-acute care providers, including LTCHs, IRFs,
SNFs, and home health providers. [$8.2 billion in savings over 10
years]
 Reduce Overpayment of Part B Drugs: Lowers
reimbursement to 103 percent of ASP. [$4.5 billion in savings over 10
years]
 Modernize Payments for Clinical Laboratory Services:
Would lower the payment rates under the Clinical Laboratory Fee
Schedule (CLFS) by -1.75 percent every year from 2016 through 2023
[$9.5 billion in savings over 10 years]
11
President’s FY 2014 Budget
 Introduce Home Health Copayments for New
Beneficiaries: Would create a co-payment for new beneficiaries of
$100 per home health episode, starting in 2017. [$730 million in
savings over 10 years]
 Align Medicare Drug Payments with Medicaid Policies
for Low-Income Beneficiaries: Would require manufacturers to
pay the difference between rebate levels they already provide Part D
plans and the Medicaid rebate levels. [$123.2 billion in savings over
10 years]
12
President’s FY 2014 Budget
 Increase Income-Related Premiums under Medicare
Part B and Part D: Would restructure income-related premiums
under Medicare Parts B and D by increasing the lowest income-related
premium five percentage points, from 35 percent to 40 percent, and
also increasing other income brackets until capping the highest tier at
90 percent. The proposal maintains the income thresholds associated
with these premiums until 25 percent of beneficiaries under Parts B and
D are subject to these premiums. [$50.0 billion in savings over 10
years]
13
Final FY 2014 PPS Updates





IPPS
SNF
IRF
IPF
Hospice
14
IPPS Update for FY 2014
15
FY 2014 IPPS
 Personal Comments
 Reg is simply too long
 Display copy is 2,225 pages
 Original law was only 138 pages
 Too much history
 Too much redundancy
• Supposedly for lawyers and to ward off law suits
 Hard to find changes being proposed
 Does not have clear final decision making
summaries
16
FY 2014 IPPS




Posted on 8/2/2013
Published in 8/19/13 Federal Register
Tables on CMS website
Copy at:
 http://www.gpo.gov/fdsys/pkg/FR-2013-08-19/pdf/201318956.pdf
 Tables at: http://www.cms.hhs.gov/Medicare/medicare-Fee-forService-Payment/AcuteInpatientPPS/index.html
 Effective 10/1/13
 Correction Notice published 10/3/13
17
IPPS Update
 MB is 2.5 percent (0.5 percent for “non-quality”
providers)( same as proposed)
 Offsets:
 (0.5%) for productivity [up from proposed amount of
0.4]
 (0.3%) for ACA mandate
 (0.8%) for documentation & coding (per ATRA)
 (0.2%) for new policy proposal on I/P criteria
 CMS says net Increase is 0.7% (-1.3% for non-quality
providers)
 Increase in total payments ??????
18
IPPS Update
 There are more offsets:
 Budget neutrality items
• Readmissions (reductions increase to 2.0%)
• DSH
• Value-Based Purchasing (increases to 1.25%)
 ACA law said updates could be less than current may
now become “real”
 Impact of sequester
19
IPPS Update
 Revising the MB
 Using 2010 data in lieu of 2004
 Results in new labor-related share values
 “Large” Urban areas – those with wage index greater
than 1.000 – from 68.8 to 69.6 percent
 “Other” areas with wage index values equal to or
less than 1.000 will remain at 62.0 percent by law
• If no law, would be 63.2 percent
20
IPPS Budget Neutrality
 Budget neutrality adjustments for:
 DRG recalibration
 Wage index changes
 Geographic reclassification
 Rural community hospital demonstration program
 Removing the FY 2013 outlier offset
 Documentation and coding to date
 Offsetting the cost of the policy proposal on admission
and medical review criteria
21
National Adjusted Operating Standardized Amounts
69.6 Percent Labor Share/30.4 Percent Nonlabor
Wage Index Is Greater Than 1.0000
FY 2014 Full Update
1.7 percent
LaborNon-laborrelated
related
$3,737.71 $1,632.57
Reduced Update
minus 0.3 percent
LaborNon-laborrelated
related
$3,664.21
$1,600.46
Rates Currently in Effect
Full Update
Non-laborLabor-related
related
$3,679.95
$1,668.81
Reduced Update
Non-laborLabor-related
related
$3,607.65
$1,636.02
22
National Adjusted Operating Standardized Amounts
62 Percent Labor Share/38 Percent Nonlabor
Wage Index Equal to or Less Than 1.0000
FY 2014 Full Update
1.7 percent
LaborNon-laborrelated
related
$3,329.57 $2,040.71
Reduced Update
minus 0.2 percent
LaborNon-laborrelated
related
$3,264.10
$2,000.57
Rates Currently in Effect
Full Update
Non-laborLabor-related
related
$3,316.23
$2,032.53
Reduced Update
Non-laborLabor-related
related
$3,251.08
$1,992.59
23
IPPS Rate Comparison (w/Quality)
 FY 2013
 Large
$3,679.95
1,668.81
$5,348.76
FY 2014
Difference
$3,737.71
1,632.57
$5,370.28
$21.52/ 0.4%
 Other
$3,316.23
2,032.53
$5,348.76
$3,329.57
2,040.71
$5,370.28
$21.52/ 0.4%
Proposed was an increase of $27.28
24
IPPS Documentation & Coding
 American Taxpayers Relief Act changes the game
 Requires CMS recoup $11 billion over 4 years starting in
FY 2014
 CMS will reduce payments by 0.8 percent reduction
 This amount will recover about $1 billion in FY 2014
 How do you get the remaining $10+ billion?
 Will this item ever be settled?
25
Documentation & Coding
 Compound the reductions;
 2014 0.8% = $1 billion =
 2015
$2 billion
 2016
$3 billion
 2017
$4 billion
 Total
$10 billion
1.0000-.008=0.992
.992 X .992= 0.984
.984 X .992= 0.976
.976 X .992= 0.968
26
Documentation & Coding
 CMS’ Addendum table
Full Update
1.7
Percent
Wage Index is
greater
than 1.0000;
Labor/NonLabor Share
Percentage
(69.6/30.4)
Full
Update
1.7
Percent
Reduced
Update
(-0.3
percent)
Reduced
Update
(-0.3
percent)
Wage
index is
less than
or equal to
1.0000;
Wage index
is greater
than
1.0000;
Wage
index is
less than
or
equal to
1.0000;
Labor/Non
-Labor
Share
Percentage
(62/38)
Labor/Non Labor/Non-Labor
Labor Share
Share
Percentage
Percentage (69.6/30.4)
(62/38)
27
Documentation & Coding
FY 2013 Base Rate after removing:
1. FY 2013 Geographic Reclassification
Budget Neutrality (0.991276)
2. FY 2013 Rural Community Hospital
Demonstration Program Budget
Neutrality (0.999677)
3. Cumulative FY 2008, FY 2009, FY
2012, FY 2013 Documentation and
Coding Adjustment as Required under
Sections 7(b)(1)(A) and 7(b)(1)(B)
of Pub. L. 110-90 (0.9478)
4. FY 2013 Operating Outlier Offset
(0.948999)
Full Update
1.7 percent
Full Update
1.7 Percent
(69.6/30.4)
(62/38)
Reduced
Update
(-0.3
percent)
Labor:
$3,720.56
Nonlabor:
$2,280.34
Labor:
$4,176.63
Nonlabor:
$1,824.27
Total
$6000.90
Total
$6,000.90
Labor:
$4,176.63
Nonlabor:
$1,824.27
Total
$6,000.90
Reduced
Update
(-0.3
percent)
Labor:
$3,720.56
Nonlabor:
$2,280.34
Total
$6,000.90
28
Documentation & Coding
Full Update
(1.7percent)
(69.6/30.4)
FY 2014 Update Factor
FY 2014 MS-DRG Recalibration and Wage
Index Budget Neutrality Factor
FY 2014 Reclassification Budget Neutrality
Factor
FY 2014 Rural Community Demonstration
Program Budget Neutrality Factor
FY 2014 Operating Outlier Factor
Adjustment to Offset the Cost of the Policy on
Admission and Medical Review Criteria for
Hospital Inpatient Services under Medicare
Part A
Full Update
(1.7
Percent)
(62/38)
Reduced
Update
(-03
percent)
Reduced
Update
(-03 percent)
1.017
1.017
0.997
0.997
0.997936
0.997936
0.997936
0.997936
0.990718
0.990718
0.990718
0.990718
0.999415
0.999415
0.999415
0.999415
0.948995
0.948995
0.948995
0.948995
0.998
0.998
0.998
0.998
29
Documentation & Coding
Full Update
(1.7
percent)
(69.6/30.4)
Cumulative Factor: FY 2008, FY
2009, FY 2012,and FY 2013
Documentation and Coding
Adjustment as Required under
Sections 7(b)(1)(A) and 7(b)(1)(B)
of Pub. L. 110-90 and Proposed
Documentation and Coding
Recoupment Adjustment as required
under Section 631 of the American
Taxpayer Relief Act of 2012
0.9403
Full Update
(1.7
Percent)
(62/38)
0.9403
Reduced
Update
(-03
percent)
0.9403
Reduced
Update
(-03 percent)
0.9403
30
Documentation & Coding
(69.6/30.4)
Full Update
(1.7
Percent)
(62/38)
$5,370.28
$5,370.28
$5264.67
$5264.67
Labor:
$3,731.71
Labor:
$3,329.57
Labor:
$3,664.21
Labor:
$3,264.10
Nonlabor:
$1,632.57
Nonlabor:
$2,040.71
Nonlabor:
$1,600.46
Nonlabor:
$2,000.57
Full Update
(1.7 percent)
Totals
National Standardized Amount for
FY 2014
Reduced
Update
(-0.3
percent)
Reduced
Update
(-0.3
percent)
31
Documentation & Coding
 FY 2013 Documentation & Coding Adjustment was 0.9478
 Multiply 0.9478 X 0.992 = 0.9402176
 Cited FY 2014 adjustment = 0.9403* (Rounding??)
 Next year 0.9403 X 0.992= 0.9328??
32
Wage Index
 Not using the revised OMB CBSAs released on 2/28/13
 To be used for FY 2015
 Copy at:
http://www.whitehouse.gov/sites/default/files/omb/bulleti
ns/2013/b-13-01.pdf
 Data is from FY 2010 CRPs (including OCC mix
adjustment)
 Comment
 CMS is changing (via an instruction) the wage index
data corrections due date for FFY 2015. November 21st
is now the due date when traditionally it was the first
Monday in December
33
Wage Index
 No change to the statewide budget neutrality adjustment
factor – federal versus state specific
 Massachusetts continues to be “big” winner
34
Wage Index – Rural Floor
FY 2014 IPPS Estimated Payments Due to Rural Floor and Imputed Floor
with National Budget Neutrality
State
Number of
Number of
Percent
Difference
Hospitals
Hospitals
Change in
(in millions)
Receiving
Payments
Rural Floor or
Imputed Floor
California
309
182
1.0
$94.1
Massachusetts
61
60
5.5
$167.6
Connecticut
32
19
4.2
$65.4
Kentucky
65
1
-0.5
($8.3)
New York
166
0
-0.6
($47.7)
Florida
168
7
-0.4
($29.7)
Illinois
127
1
-0.6
($27.4)
North Carolina
87
0
-0.4
($12.6)
Missouri
77
0
-0.4
($10.9)
35
More on Floors
 Frontier Floor
 Montana, North Dakota, South Dakota, and Wyoming,
covering 46 providers, will receive a frontier floor value
of 1.0000
 Imputed Floor
 Extended till September 30, 2014
 Benefits
• 25 providers in New Jersey
• 4 providers in Rhode Island
36
Occupational Mix
 FY 2014 occupational mix adjusted national average hourly
wage is $38.3698 [ Proposed at $38.2094]
Occupational Mix Nursing Subcategory
Average
Hourly Wage
National RN
37.430602011
National LPN and Surgical Technician
21.771626577
National Nurse Aide, Orderly, and Attendant
15.323325633
National Medical Assistant
National Nurse Category
17.20567090
31.80354668
37
Reclassifications




FY 2014 – 296 approved
FY 2013 – 169 approved
FY 2012 – 214 approved
CMS says there are 679 hospitals reclassified for FY 2014
 Applications to MGCRB due by September 3rd
 There is a typo in the original display copy – 169 shown
as 196. Has been corrected
38
Outliers
 Outlier fixed-loss cost threshold for FY 2014 equal to the
prospective payment rate for the DRG, plus any IME and
DSH payments, and any add-on payments for new
technology, plus $21,748
 Proposed at $24,140
 The current amount is $21,821
39
Outliers
 CMS currently estimates that actual outlier payments for FY
2013 will be approximately 4.77 percent of actual total MSDRG payments
 The proposed estimated amount was 5.17 percent
 CMS continues to fail to recognize the amount it
underestimates for outlier payments
 “No one seems to object” Why???
40
Redesignations
 “Lugar” Hospitals – by statute
 List available on the CMS Web site.
 Waiving Lugar for the Out-Migration Adjustment
 Becomes rural for all purposes
 FY 2014 Wage Index Adjustment Based on Commuting
Patterns of Hospital Employees
 Refer table 4J
41
MDH/ Low-Volume/ CAH Hospitals
 MDH and Low-Volume Hospital programs expire FY
2014
 Low-Volume reverts to 200 discharges
 CAHs must provide I/P care on-site
42
Capital
 Rate will increase from $425.49 to $429.31
Final FY 2013
Update Factor
FY 2014
Change
Percent
Change
1.012
1.009
1.009
0.9
GAF/DRG Adjustment Factor
0.9998
0.9987
0.9987
-0.13
Outlier Adjustment Factor
0.9362
0.9393
1.0033
0.33
0.998
0.998
-0.2
$429.31
1.0190
1.90
Adjustment for admission
and medical review criteria3
Capital Federal Rate
N/A
$425.49
43
Excluded Hospitals
 Rates will increase 2.5 percent
 Cancer and Children’s Hospitals
44
IME / GME
 IME multiplier unchanged at 1.35 – by law
 Hospital cannot count a resident training at a CAH for either
IME or GME
 Revising yet again the policy concerning the counting of
labor / delivery room days
 Will include labor and delivery days as inpatient days in
the Medicare utilization calculation, effective for cost
reporting periods beginning on or after October 1, 2013.
45
DRGs
 Will use 4 new cost centers for calculating CCRs
 Implantable devices
 MRI
 CT scans
 Cardiac cath
 There will now be 19 CCRs
 See Table 5 for new weights
46
DRGs
 Minor changes to specific coding procedures, etc
47
MSDRG
65
189
190
191
193
194
247
287
291
292
309
310
312
313
Description
Intracranial hemorrhage or cerebral
infarction w CC
Pulmonary Edema & Respiratory Failure
Chronic obstructive pulmonary disease w
MCC
Chronic obstructive pulmonary disease w
CC
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
FY 2014
Weight
FY
2013
Percentage
Difference
1.0776
1.1345
-5.02%
1.2184
1.2461
-2.22%
1.1708
1.1860
-1.28%
0.9343
0.9521
-1.87%
1.4550
0.9771
1.4893
0.9996
-2.30%
-2.25%
2.0408
1.9911
2.50%
1.0866
1.0709
1.47%
1.5031
0.9938
1.5174
1.0034
-0.94%
-0.96%
0.7867
0.8098
-2.85%
0.5512
0.5541
-0.52%
0.7228
0.5992
0.7339
0.5617
-1.51%
6.68%
48
MSDRG
Description
FY 2014
Weight
FY
2013
Percentage
Difference
378
G.I. hemorrhage w CC
1.0029
1.0168
-1.37%
392
Esophagitis, gastroent & misc digest
disorders w/o MCC
0.7395
0.7375
-0.27%
470
603
641
682
683
690
Major joint replacement or
reattachment of lower extremity w/o
MCC
Cellulitis w/o MCC
Nutritional & misc metabolic disorders
w/o MCC
Renal Failure w MCC
Renal Failure w CC
Kidney & urinary tract infections w/o
MCC
2.1463
2.0953
2.43%
0.8404
0.8392
0.14%
0.6992
0.6920
1.04%
1.5401
0.9655
1.5862
0.9958
-2.91%
-3.04%
0.7693
0.7810
-1.50%
871
Septicemia or severe sepsis w/o MV
96+ hours w MCC
1.8527
1.8803
-1.47%
872
Septicemia or severe sepsis w/o MV
96+ hours w/o MCC
1.0687
1.0988
-2.74%
49
New Technology Add-ons
 For FY 2014 continuing 3:
 Voraxase® (max pay of $45,000)
 Dificid™ (max of $868)
 Zenith® AAA Graft (max of $8,171)
 2 new for FY 2014
 Argus® II Retinal Prosthesis System; Responsive
Neurostimulator (RNS®) System (max pay of $72,028)
 Zilver® PTX® Drug Eluting Peripheral Stent (max of
$1,705)
50
I/P Admissions
 Creating a “two midnights” rule
 Longer than two midnights – will be deemed an I/P
 Shorter than two – O/P assumed
• Exception if good documentation
• Supports admitting docs expectation that stay > 2
midnights
 Contractor can ignore if hospital suspected of abuse
 Applies to CAHs
 But not IRFs
51
IPPS DSH Formula
 Mandated by Section 3133 of ACA
 Splits system
 25 percent remains as old formula
 Rescrambles 75 percent
 Uses 3 factors
 Revised by 10/3/13 correction notice
 Will NOT make payments based on FFY
 Will now compute on hospital CRP
 Revises Formula Values
52
IPPS DSH Formula
 If a hospital is eligible for DSH on its cost report for the cost reporting
period ending on December 31, 2013, it will receive a pro rata share of
its FY 2014 uncompensated care payment. This pro rata share would
be approximately three-twelfths (that is, the period of time from October
1, 2013 through December 31, 2013, divided by the period of time from
January 1, 2013 through December 31, 2013) of the hospital’s FY 2014
uncompensated care payment.
 If the hospital’s subsequent cost reporting period is January 1, 2014
through December 31, 2014, CMS also will reconcile the interim FY
2014 uncompensated care payments received for discharges from
January 1, 2014 through September 30, 2014 on the hospital’s cost
report for the cost reporting period beginning on January 1, 2014
against a pro rata share of its FY 2014 uncompensated care payment.
53
DSH Factor One
 Determines 75 percent of what would have been paid under
the old methodology
 Excluded hospitals
 MD wavier
 SCHs paid on a hospital-specific basis
 23 hospitals in Rural Community Demo
 Using CMS actuary estimates from July 2013
 Current DSH total estimate is $12.772 billion
 Current 25% estimate is $3.198 billion (revised)
 Current 75% estimate – Factor 1 is $9.593 billion
(revised)
54
DSH Factor Two
 Reduces Factor One amount by percentage reduction in
uninsured from 2013 to 2014
 Using CBO “projections”
 CY 2013 rate of insurance coverage (May 2013 CBO
estimate): 80 percent
 CY 2014 rate of insurance coverage (May 2013 CBO
estimate, updated with July 2013 CBO estimate): 84
percent
 FY 2014 rate of insurance coverage: (80 percent * .25) +
(84 percent * .75) = 83 percent.
55
DSH Factor Two
 Percent of individuals without insurance for 2013 (March
2010 CBO estimate): 18 Percent
 Percent of individuals without insurance for FY 2014
(weighted average): 17 Percent
 Formula;
 1 – |[(0.17 - 0.18)/0.18]| = 1 - 0.056 = 0.944 (94.4
percent)
 0.944 (94.4 percent) - 0.001 (0.1 percentage points) =
0.943 (94.3 percent)
 0.943 = Factor 2
56
DSH Factor Two
 For the purpose of this final rule, the amount available for
uncompensated care payments for FY 2014 will be
approximately $9.046 billion (0.943 times Factor 1
estimate of $9.593 billion)(Revised values)
 Impact of revised rule is an increase in payments of $15
million
 This represents a reduction of DSH of $546 $531 million
57
DSH Factor Three
 Factor 3 is “equal to the percent, for each subsection (d) hospital, that
 represents the quotient of (i) the amount of uncompensated care for
such hospital for a period selected by the Secretary (as estimated
by the Secretary, based on appropriate data (including, in the case
where the Secretary determines alternative data is available which
is a better proxy for the costs of subsection (d) hospitals for treating
the uninsured, the use of such alternative data)); and (ii) the
aggregate amount of uncompensated care for all subsection (d)
hospitals that receive a payment under this subsection for such
period (as so estimated, based on such data)”
 Based on each hospital’s share of total uncompensated care costs
across all PPS hospitals that received DSH payments
• numerator is all PPS hospitals, but denominator is just DSH
hospitals
58
DSH Factor Three
 CMS is using the utilization of insured low-income patients
defined as inpatient days of Medicaid patients plus inpatient
days of Medicare SSI patients as defined in 42 CFR
412.106(b)(4) and 412.106(b)(2)(i), respectively to
determine Factor 3
 From 2010/2011 cost reports
59
DSH Factor Three
 Definition of “uncompensated care” is bound to be
controversial
 Tables are posted showing CMS estimate of each
hospital’s share
 http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/dsh.html
60
DSH Eligibility
 Can you obtain DSH if you did not have any in 2013 ?????
 So far there is no guidance
61
PROVIDER
330059
100022
330101
100006
450015
150056
100007
330169
180088
450388
330024
440049
450289
330009
330194
050373
050327
250001
340113
070022
330046
050060
Name
MONTEFIORE MEDICAL CENTER
JACKSON HEALTH SYSTEM
NEW YORK-PRESBYTERIAN HOSPITAL
ORLANDO REGIONAL HEALTHCARE
PARKLAND HEALTH AND HOSPITAL SYSTEM
INDIANA UNIVERSITY HEALTH
FLORIDA HOSPITAL
BETH ISRAEL MEDICAL CENTER
NORTON HOSPITALS, INC
METHODIST HOSPITAL
MOUNT SINAI HOSPITAL
METHODIST HEALTHCARE MEMPHIS HOSPIT
HARRIS COUNTY HOSPITAL DISTRICT
BRONX-LEBANON HOSPITAL CENTER
MAIMONIDES MEDICAL CENTER
LAC+USC MEDICAL CENTER
LOMA LINDA UNIVERSITY MEDICAL CENTE
UNIVERSITY OF MISSISSIPPI MED CENTE
CAROLINAS MEDICAL CENTER/BEHAV HEAL
YALE-NEW HAVEN HOSPITAL
ST LUKE'S ROOSEVELT HOSPITAL
COMMUNITY REGIONAL MEDICAL CENTER
Medicaid
Days
SSI
Days
Insured
Low
Income
Days
185096
195957
168017
138508
137560
127778
114674
87384
107995
98256
88121
91065
105922
92214
82170
101407
93585
92913
89969
86993
75644
81897
41265
22380
38429
13037
4003
10140
23019
32052
10521
20205
23794
18299
3233
16811
26571
4132
6707
7249
6744
7503
18762
11361
226361
218337
206446
151545
141563
137918
137693
119436
118516
118461
111915
109364
109155
109025
108741
105539
100292
100162
96713
94496
94406
93258
Days
Factor 3
Total
Uncompensated
Care Payment
Amount
0.621640%
0.599605%
0.566949%
0.416178%
0.388765%
0.378755%
0.378137%
0.327999%
0.325473%
0.325322%
0.307345%
0.300339%
0.299765%
0.299408%
0.298628%
0.289835%
0.275425%
0.275068%
0.265597%
0.259508%
0.259261%
0.256108%
$56,154,472.31
$54,163,919.67
$51,214,061.57
$37,594,503.94
$35,118,220.74
$34,213,987.89
$34,158,171.05
$29,629,068.41
$29,400,839.55
$29,387,195.43
$27,763,297.43
$27,130,458.47
$27,078,610.83
$27,046,361.10
$26,975,907.84
$26,181,572.15
$24,879,923.38
$24,847,673.65
$23,992,063.48
$23,442,081.52
$23,419,754.79
$23,134,964.85
62
PROVIDER
100128
100075
230038
010033
450068
370093
100113
440039
180040
450869
260032
450184
330005
Name
TAMPA GENERAL HOSPITAL
ST JOSEPH'S HOSPITAL
SPECTRUM HEALTH - BUTTERWORTH CAMPU
UNIVERSITY OF ALABAMA HOSPITAL
MEMORIAL HERMANN TEXAS MEDICAL CENT
O U MEDICAL CENTER
SHANDS HOSPITAL AT THE UNIVERSITY O
VANDERBILT UNIVERSITY HOSPITAL
JEWISH HOSPITAL & ST MARY'S HEALTHC
DOCTORS HOSPITAL AT RENAISSANCE
BARNES JEWISH HOSPITAL
MEMORIAL HERMANN HOSPITAL SYSTEM
KALEIDA HEALTH
Medicaid
Days
81459
77858
82423
77590
78339
82149
76629
79199
74779
69476
70891
65575
71052
SSI
Days
10137
12945
7399
10717
8054
3680
8759
5095
9422
12218
10540
15708
9610
Insured
Low
Income
Days
91596
90803
89822
88307
86393
85829
85388
84294
84201
81694
81431
81283
80662
Days
Factor 3
0.251544%
0.249366%
0.246672%
0.242512%
0.237255%
0.235707%
0.234495%
0.231491%
0.231236%
0.224351%
0.223629%
0.223222%
0.221517%
Total
Uncompensated
Care Payment
Amount
$22,722,664.44
$22,525,941.08
$22,282,579.65
$21,906,746.24
$21,431,930.97
$21,292,016.75
$21,182,615.74
$20,911,221.85
$20,888,150.89
$20,266,227.23
$20,200,983.54
$20,164,268.46
$20,010,213.98
63
Readmissions
 Maximum reduction increases to 2 percent – based on
individual hospital ratio
 2,225 hospitals expected to incur some loss
 1,134 expected to be clear
 Is not budget neutral
64
Readmissions
 FY 2014 uses 3 readmission measures
 Heart attack
 Heart failure
 pneumonia
 Will expand conditions for FY 2015
 COPD
 Total hip arthoplasty
 Total knee arthoplasty
 Will reduce overall payments $227 million
65
Readmissions
 Aggregate payments for excess readmissions = [sum of
base operating DRG payments for AMI x (Excess
Readmission Ratio for AMI-1)] + [sum of base operating
DRG payments for HF x (Excess Readmission Ratio for
HF-1)] +[sum of base operating DRG payments for PN x
(Excess Readmission Ratio for PN-1)].
 Aggregate payments for all discharges = sum of base
operating DRG payments for all discharges.
66
Readmissions
 Ratio = 1-(Aggregate payments for excess
readmissions/Aggregate payments for all discharges)
 Readmissions Adjustment Factor for FY 2014 is the
higher of the ratio or 0.9800
 Based on claims data from July 1, 2009 to June 30, 2012
for FY 2014
67
Value Based Purchasing
 Withhold amount increases to 1.25 percent for all
hospitals
 Total amount available for performance-based incentive
payments for FY 2014 will be approximately $1.1 billion
 Supposed to be budget neutral
68
Value Based Purchasing
 17 measures for FY 2014
 AMI-7a, AMI-8a
 HF-1
 PN-3b, PN-6
 SCIP-INF-1; -2; -3; -4; -9
 SCIP-Card-2
 SCIP-VTE-1*, VTE-2
 HCAHPS
 MORT-30 AMI; -HF; -PN
• *deleted for FY 2015
69
Value Based Purchasing
 FY 2015
 Adding
• AHRQ PSI Composite
• CLASBI
• MSPB-1 (Medicare spending per beneficiary)
 Removing
• SCIP-VTE-1
70
Value Based Purchasing
 FY 2016
 Removing
• AMI-8a
• PN-3b
• HF-1
 Adding three new measures for FY 2016
• IMM-2
• CAUTI
• Surgical Site Infection (SSI), the latter of which is stratified
into two separate surgery sites
71
HAC Reduction
 Affects payment in FY 2015
 Lowest-performing quartile get 1.0 percent reduction
 Two measures of two types (domains)
 Each weighted equally
 First domain – six patient safety indicators
 Pressure ulcers rate
 Foreign objects left in body percent
 Iatrogenic Pneumothorax rate
 Post-op physiologic / metabolic derangement rate
 Post-op pulmonary embolism / deep vein thrombosis rate
 Second domain – two infection measures
 CLABSI
 CAUTI
72
Quality Reporting
 59 measures for FY 2015
 Removing 8 measures for FY 2016
 AMI-2, AMI-10, PN-3b, HF-1, HF-3, SCIP-INF-10, IMM1, Participation in a systematic clinical database registry
for stroke care
 Adding 5 for FY 2016 (outcome-focused)
73
Quality Reporting
 LTCH
 Adding 5
 For FY ‘18 adding 1
 Cancer hospitals
 For FY ’15 – one new measure
 For FY ’16 – 13 new measures
 Psych hospitals
 For FY ’16 – three new measures
74
LTCHs
 Update of 1.7% (-0.3% for non-reports)
 MB of 2.5%
 Less PPACA offsets of (0.8%)
 Standardized amount adjustment
 0.98734
 Second-year of three-year adjustment period
 Results in Federal rate of $40,607.31
 Current is $40,397.96
 Labor-related share is 62.537
 Current is 63.096
 Fixed-loss amount is $13,314
 Current is $15,408
 Update quality reporting
 25% rule reinstated
75
Skilled Nursing
76
Skilled Nursing
 Published in Aug 6th Federal Register
 Tables on CMS website
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0806/pdf/2013-18770.pdf
 Tables at: http://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/SNFPPS/index.html
 Effective 10/1/13
77
SNF PPS Update
 Market Basket Increase = 2.3 percent
 Less MB correction adjustment – -0.5 percent
 Comment
• Good vs Bad






Update = 1.8 percent
Further reduced by MFP = -0.5 percent
Net Update is 1.3 percent
Labor Share increases to 69.545
AWI Budget neutrality factor 1.0006
CMS estimates payments to increase $470 million
78
SNF PPS Update
 Reporting of Distinct Therapy Days
 CMS adding an item to the MDS item set (Item O 0420)
effective October 1, 2013, which will capture the number
of distinct calendar days that the resident received
therapy services during the assessment look-back
period across all rehabilitation disciplines.
 ICD-10-CM Item
 Effective with services furnished on or after October 1,
2014, the AIDS add-on will apply to beneficiaries with an
ICD-10-CM diagnosis code of B20
79
Inpatient Rehabilitation Facilities
80
Inpatient Rehabilitation Facilities
 Published in 8/6/13 Federal Register
 Tables on CMS website
 Copy at:.http://www.gpo.gov/fdsys/pkg/FR-2013-0806/pdf/2013-18770.pdf
 Tables at: http://www.cms.hhs.gov/Medicare/MedicareFee-for-Service-Payment/InpatientRehabFacPPS/
 Effective 10/1/13
81
Inpatient Rehabilitation Facilities








Market Basket Increase – 2.6 percent
Further reduced by MPF = 0.5 percent
Further reduced by ACA = 0.3 percent
Update is 1.8 percent
Change in Outlier payments to add 0.3 percent
Labor Share increases to 69.494
AWI Budget neutrality factor 1.0010
CMS estimates payments to increase $170 million
82
Inpatient Rehabilitation Facilities
Explanation for Adjustment
Calculations
Standard Payment Conversion Factor for FY 2013
$14,343
Market Basket Increase Factor for FY 2014 (2.6 percent), reduced by
1.018
0.3 percentage point in accordance with the ACA and a 0.5 percentage
point reduction for the productivity adjustment as required by the ACA
Budget Neutrality Factor for the Wage Index and Labor-Related Share
Budget Neutrality Factor for the Revisions to the CMG Relative Weights
Budget Neutrality Factor for the Update to the Rural Adjustment Factor
1.0010
1.0010
1.0000
1.0000
1.0025
Budget Neutrality Factor for the Update to the LIP Adjustment Factor
Budget Neutrality Factor for the Update to the Teaching Status
1.00251.
1.0171
1.0171
X
0.9962
Adjustment Factor
FY 2014 Standard Payment Conversion Factor
=
$14,846
83
Inpatient Rehabilitation Facilities
 Facility-level adjustment updates
 Rural adjustment of 14.9 percent
 Low Income Percentage adjustment factor of 0.3177
 Teaching status adjustment factor of 1.0163
 Will assign a value of “1” if the facility is a
freestanding IRF hospital and will assign a value of
“0” if the facility is an IRF unit of an acute care
hospital (or CAH) in regression analysis
84
Inpatient Rehabilitation Facilities
 “60-percent rule” presumptive methodology code list
updates
 To qualify for IRF PPS - 60 percent of patients
require intensive inpatient rehabilitation services for
one or more of 13 conditions specified in regulation
 CMS removing codes from presumptive compliance
 List of ICD-9-CM codes to be removed from “ICD-9CM Codes That Meet Presumptive Compliance
Criteria” in the rule’s Table 9
 Will be effective for FY 2015
85
Inpatient Rehabilitation Facilities
 High-Cost Outliers Under the IRF PPS
 Paying only 2.5 of 3.0 for outliers
 Threshold amount decreases to $9,272 from $10,466
86
Inpatient Rehabilitation Facilities
 Quality
 Quality Measures for FY 2014
• CMS will continue to use the NQF-endorsed National
Healthcare Safety Network (NHSN) Catheter-Associated
Urinary Tract Infection (CAUTI) outcome measure
• CMS will adopt the NQF-endorsed version of the “Percent
of Residents or Patients with Pressure Ulcers that are New
or Worsened (Short Stay)” measure, and to stop using the
non-risk adjusted version of this measure
87
Inpatient Rehabilitation Facilities
 Quality Measures Affecting the FY 2016 IRF PPS
Annual Increase Factor
 Continued Measure Affecting FY 2015 Increase Factors:
• NQF #0138: National Health Safety Network (NHSN)
Catheter-associated Urinary Tract
• Infection (CAUTI) Outcome Measure
 Continued Measure Affecting FY 2015 and FY 2016
Application of NQF #0678: Percent of Residents with
Pressure Ulcers That are New or Worsened (ShortStay)*
88
Inpatient Rehabilitation Facilities
 Quality Measures Affecting the FY 2016 IRF PPS
Annual Increase Factor
 New IRF QRP Measure Affecting FY 2016
• NQF #0431: Influenza Vaccination Coverage among
Healthcare Personnel
89
Inpatient Rehabilitation Facilities
 Quality Data Reporting Affecting FY 2017 and
Subsequent Years
 (1) All-Cause Unplanned Readmission Measure for 30
Days Post Discharge from Inpatient Rehabilitation
Facilities
 (2) Percent of Residents or Patients Who Were
Assessed and Appropriately Given the Seasonal
Influenza Vaccine (Short-Stay) (NQF #0680)
 Percent of Residents or Patients with Pressure Ulcers
That Are New or Worsened (short-stay) (NQF #0678)
with adoption of the NQF-endorsed version of this
measure
90
Inpatient Rehabilitation Facilities
 IRF-Patient Assessment Instrument
 Revising to include data to accommodate risk
adjustment for pressure ulcer measure
 Will add new patient influenza vaccination data
elements
91
Inpatient Psychiatric Facilities
92
Inpatient Psychiatric Facilities
 Published in Aug 1st Federal Register
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0801/pdf/2013-18445.pdf
 Tables are part of the rule
 Effective 10/1/13
93
Inpatient Psychiatric Facilities
 Market Basket increase is 2.6 percent
 Reduced by a 0.5 percent multifactor productivity (MFP)
adjustment
 Reduced by a 0.1 percentage point reduction by the
ACA
 Net increase is 2.0 percent
 CMS estimates increase of $115 million
 Rule is a Notice – no proposed rulemaking – second
year in a row
94
Inpatient Psychiatric Facilities
 Update
 MB of 2.0 percent
 AWI budget neutrality factor = 1.0010
 FY 2013 Federal per diem base rate of $698.51
 Yields Federal Per Diem Base Rate = $713.19
• Labor Share (0.69494) = $495.62
• Non-Labor Share (0.30506) = $217.57
95
Inpatient Psychiatric Facilities
 Electroconvulsive Therapy Rate (ECT) rate will be
$307.04
Current amount is $300.72
 Patient-Level Adjustments:
 Adjustment for MS-DRG Assignment that group to one
of 17 MS-IPF-DRGs
 Payment for Comorbid Conditions
 Patient Age Adjustments
 Variable Per Diem Adjustments
96
Inpatient Psychiatric Facilities
 Facility-Level Adjustments
 For the wage index – 1.0010
 IPFs located in rural areas – 17 percent
 Teaching IPFs = 0.5150
 Cost of living adjustments for IPFs located in Alaska and
Hawaii
 IPFs with a qualifying emergency department (ED)
97
Inpatient Psychiatric Facilities
 Outlier Payments
 FY 2014 $10,245
 Current $11,600
 Failed to pay the 2.0 percent outlier pool
98
Hospice
99
Hospice
 Published in Aug 7th Federal Register
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0807/pdf/2013-18838.pdf
 Tables at: http://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/Hospice/index.html
 Effective 10/1/13
100
Hospice





Market Basket = 2.5 percent
Reduced by MPF = 0.5 Percent
Reduced by ACA = 0.3 percent
Net increase 1.7 percent
Labor portions
 Routine Home Care
 Continuous Home Care
 General Inpatient Care
 Respite Care
68.71 percent
68.71
64.01
54.13
101
Hospice
Code
651
Description
FY 2013
Payment
Rates
Multiply by
the FY 2014
final hospice
payment
update of 1.7
percent
FY 2014
Payment
Rate
Labor
Share of
the
payment
rate
NonLabor
share of
the
payment
rate
$153.45
x1.017
$156.06
$107.23
$48.83
652
Routine Home Care
Continuous Home Care
Full Rate = 24 hours of care
$=37.99 hourly rate
$895.56
x1.017
$910.78
$625.80
284.98
655
Inpatient Respite Care
$158.72
x1.017
$161.42
$87.38
$74.04
656
General Inpatient Care
$682.59
x1.017
$694.19
$436.93
$245.66
102
Hospice
 Fifth year of 7 year BNAF AWI Reduction
 Reduces 15 percent for a total of 70 percent
 Coding
 Clarifying that non-specific diagnosis codes are
unacceptable
 Need to use principal diagnoses codes
 CMS will return claims beginning FY 2015
103
Hospice
 Quality Reporting
 For FY 2014 – 2 measures
• NQF 0209/Pain Management
• Structural measure
 Eliminating for FY 2016
 For FY 2016
• Adopting Hospice Item Set (HIS)
104
CY 2014 Proposed PPS




OPPS & ASC
MPFS
ESRD
Home Health
105
CY 2014 OPPS & ASC Proposed
106
CY 2014 Proposed OPPS & ASC PPS
 Published in July 19th Federal Register
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0719/pdf/2013-16555.pdf
 OPPS Tables at: http://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/HospitalOutpatientPPS/index.html
 ASC Tables at: http://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/ASCPayment/index.html
 Effective 1/1/2014
 Correction notice in September 6th Federal Register
107
CY 2014 Proposed OPPS
 Updates
 Disregard proposed updates
 Will follow IPPS increase of 1.7 percent
 Conversion factor at $72.728
 May be lower since IPPS increase is lower than
proposed OPPS
 Would maintain rural SCH and EACH 7.1 percent rural
adjustment
 Would maintain (11) cancer hospital adjustment
108
CY 2014 Proposed OPPS
 Labor Share would continue at 60 percent
 Part B drugs would be payable at ASP+6 percent, unless
packaged
 APC weights and rates in Addendum A & B
 Would expand CCR departments from 15 to 19
 Outliers would be 1.75 times the APC payment amount and
exceeds the APC payment rate plus a $2,775 fixed-dollar
threshold
 Corrected to $2,900
 Outliers for CMHC would be 3.40 times the payment rate for
APC 0173, calculated as 50 percent of the amount by which
the cost exceeds 3.40 times the APC 0173 payment rate
109
CY 2014 Proposed OPPS
 Partial Hospitalization Program
APC
Group Title
172 Level I Partial Hospitalization (3 services) for CMHCs
173 Level II Partial Hospitalization (4 or more services) for CMHCs
175 Level I Partial Hospitalization (3 services) for hospital-based PHPs
Level II Partial Hospitalization (4 or more services) for hospital-based
176 PHPs
Proposed
Geometric Mean
Per Diem Costs
$94.51
$106.20
$212.85
$215.13
110
CY 2014 Proposed OPPS
 Quality (OQR)
 Proposing five new measures affecting payment in CY
2016, with data collection beginning in CY 2014:
• Influenza Vaccination Coverage among Healthcare Personnel
• Complications within 30 Days Following Cataract Surgery Requiring
Additional Surgical Procedures (NQF #0564).
• Endoscopy/Poly Surveillance: Appropriate follow-up interval for normal
colonoscopy in average-risk patients (NQF #0658).
• Endoscopy/Poly Surveillance: Colonoscopy Interval for Patients with a
History of Adenomatous Polyps -- Avoidance of Inappropriate Use (NQF
#0659).
• Cataracts -- Improvement in Patient’s Visual Function within 90 Days
Following Cataract Surgery (NQF #1536).
111
CY 2014 Proposed OPPS
 Quality (OQR)
 Proposing to delete 2 measures affecting payment in CY
2016
• Transition Record with Specified Elements Received by
Discharged ED Patients (OP-19), because this measure
cannot be implemented with the degree of specificity that
would be needed to fully address safety concerns related to
confidentiality without being overly burdensome.
• Cardiac Rehabilitation Measure: Patient Referral from an
Outpatient Setting (OP-24)
112
CY 2014 Proposed OPPS
 Packaging
 Proposing to package 7 new categories
• (1) Drugs, biologicals, and radiopharmaceuticals that function as supplies
when used in a diagnostic test or procedure;
• (2) Drugs and biologicals that function as supplies or devices when used
in a surgical procedure;
• (3) Certain clinical diagnostic laboratory tests;
• (4) Procedures described by add-on codes;
• (5) Ancillary services, such as a chest x-ray, that are assigned status
indicator “X”;
• (6) Diagnostic tests on the bypass list, and
• (7) Device removal procedures.
113
CY 2014 Proposed OPPS
 Single Procedure APC Criteria–Based Costs
 Device Dependent APCs
• Proposing to define 29 device-dependent APCs associated
with 136 HCPCS codes as single complete services and to
assign them to comprehensive APCs that would provide
all-inclusive payments for those services
 Blood and Blood Products
• Would continue current policy using blood and blood
product CCR methodology
114
CY 2014 Proposed OPPS
 Composite APC Criteria-Based Costs
 Proposing to continue composite policies for extended
assessment and management services, LDR prostate
brachytherapy, cardiac electrophysiologic evaluation and
ablation services, mental health services, and multiple
imaging service
 Proposing to continue to pay for all multiple imaging
procedures within an imaging family performed on the
same date of service using the multiple imaging
composite APC payment methodology
115
CY 2014 Proposed OPPS
 Contains numerous additions and deletions of CPT and
HCPCS codes
 Contains adjustments to OPPS payment for full or
partial credit devices
 Identifies 15 drug and biologicals that will lose pass
through status December 31, 2013
 Identifies 18 drugs and biologicals that will continue
pass through status
116
CY 2014 Proposed OPPS
 CMS is proposing to increase packaging items to $90
 Rule’s table 25 contains list
117
CY 2014 Proposed OPPS
 Proposing to modify outpatient and clinic visits as
follows:
Proposed CY
CY 2013
Visit Type
CLINIC VISIT
TYPE A ED
VISIT
24 hour
TYPE B ED
VISIT
Non-24 hour
HCPCS
Code
99201
99202
99203
99204
99205
99211
99212
99213
99214
99215
99281
99282
99283
99284
99285
G0380
G0381
G0382
G0383
G0384
APC
0604
0605
0606
0607
0608
0604
0605
0605
0606
0607
0609
0613
0614
0615
0616
0626
0627
0628
0629
0630
2014
HCPCS
Code
APC
GXXXC
0634
GXXXA
0635
GXXXB
0636
118
CY 2014 Proposed ASC
 Update
 For CY 2014, the CPI-U update is projected to be 1.4
percent
 The MFP adjustment is projected to be 0.5 percent
 Resulting in an MFP-adjusted CPI-U update of 0.9
percent for CY 2014
119
CY 2014 Proposed ASC
 Update
 CMS is proposing to adjust the CY 2013 ASC conversion
factor ($42.917) by the wage adjustment for budget
neutrality of 1.0004 in addition to the MFP-adjusted
update factor of 0.9 percent results in a proposed CY
2014 ASC conversion factor of $43.321
 Addenda AA and BB (which are available via the Internet
on the CMS web site) display the proposed updated ASC
payment rates for CY 2014 for covered surgical
procedures and covered ancillary services, respectively
120
CY 2014 Proposed ASC
 Quality
 CMS is proposing to adopt four measures for the ASCQR
Program
• Complications within 30 Days following Cataract Surgery
Requiring Additional Surgical Procedures;
• Endoscopy/Poly Surveillance: Appropriate follow-up interval for
normal colonoscopy in average risk patients (NQF #0658);
• Endoscopy/Poly Surveillance: Colonoscopy Interval for Patients
with a History of Adenomatous Polyps – Avoidance of
Inappropriate Use (NQF #0659); and
• Cataracts: Improvement in Patient’s Visual Function within 90
Days Following Cataract Surgery (NQF #1536)
121
CY 2014 Proposed MPFS
122
CY 2014 Proposed MPFS
 Published in July 19th Federal Register
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0719/pdf/2013-16547.pdf
 The PFS Addenda along with other supporting documents
and tables referenced in the proposed rule at website at
http://www.cms.gov/PhysicianFeeSched/
 Effective 1/1/2014
123
CY 2014 Proposed MPFS
 Does NOT reflect SGR reduction under current law of 24.4 percent
 Proposing new phased in over CY 2014 and CY 2015
 The statutory work GPCI “floor” of 1.0 is scheduled to
expire under current law on December 31, 2013
 The proposed GPCIs reflect the elimination of the work
“floor” and as a result 51 localities will have a work
GPCI below 1.0
124
CY 2014 Proposed MPFS
 CMS is proposing to change the practice cost indicies
 Work from 48.266 percent to 50.866 percent
 Practice Expense from 47.439 percent to 44.839
percent
 The cost share weight for the MP GPCI (4.295 percent)
remains unchanged
125
CY 2014 Proposed MPFS
 Misvalued codes – CMS is proposing to adjust payment
rates for more than 200 codes where Medicare pays
more for services furnished in an office than in an
outpatient hospital department or ASC
 Application of Therapy Caps to Critical Access
Hospitals – CMS proposes to apply the therapy cap
limitations and related policies to outpatient therapy services
furnished in a CAH beginning on January 1, 2014 to
conform Medicare’s regulations to current law
126
CY 2014 Proposed MPFS
 Telehealth – Proposing to add CPT codes 99495 and
99496 to the list of telehealth services for CY 2014 on a
category 1 basis
 Complex Chronic Care Management Services –
Proposing to establish a separate payment under the PFS
for complex chronic care management services furnished to
patients with multiple complex chronic conditions that are
expected to last at least 12 months or until the death of the
patient, and that place the patient at significant risk of death,
acute exacerbation/decompensation, or functional decline
127
CY 2014 Proposed MPFS
 Proposed rule contains extensive discussion and
measures for the Physician Quality Reporting System
(PQRS)
128
CY 2014 Proposed ESRD
129
CY 2014 Proposed ESRD
 Published in July 8th Federal Register
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0708/pdf/2013-16107.pdf
 Tables at: http://www.cms.gov/ESRDPayment/PAY/list.asp
 Payments expected to decrease $970 million
 Effective 1/1/2014
130
CY 2014 Proposed ESRD
 Update
 The CY 2014 changes is projected to be a 9.4 percent
decrease in payments
 Current rate = $240.36
 Market Basket would be 2.9 percent
 Reduced by productivity factor of 0.4
 Net = 2.5 percent
 AWI budget neutrality factor = 1.000411
 Results in a proposed amount of $246.47
131
CY 2014 Proposed ESRD
 Update
 ATRA requires CMS to reduce payments for changes
in drug utilization
 Reduction would be $29.52
 Net = $246.47 - $29.52 = $216.95
 Wage Index values on line
 Labor-related share is 41.737 percent
132
CY 2014 Proposed ESRD
 Outliers
 CMS is proposing to update the fixed dollar loss amounts
that are added to the predicted Medicare Allowable
Payment (MAP) amounts per treatment to determine the
outlier thresholds for CY 2014 from $110.22 to $94.26 for
adult patients and from $47.32 to $54.23 for pediatric
patients compared with CY 2013 amounts
 Proposal provides crosswalks from ICD-9-CM to ICD-10CM that will become effective 10/1/2014
133
CY 2014 Proposed ESRD
 Quality
 CMS is proposing to continue to use nine of the ten
measures for the PY 2016 ESRD QIP modifying three of
the measures as follows:
• ICH CAHPS (reporting measure): Expand
• Mineral Metabolism (reporting measure): Revise
• Anemia Management (reporting measure): Revise
134
CY 2014 Proposed Home Health
135
CY 2014 Proposed Home Health
 Published in July 3rd Federal Register
 Copy at: http://www.gpo.gov/fdsys/pkg/FR-2013-0703/pdf/2013-15766.pdf
 Tables at: http://www.cms.gov/Medicare/Medicare-Feefor Service-Payment/HomeHealthPPS/Home-HealthProspective-Payment-System-Regulations-and-Notices.html.
 Effective 1/1/2014
136
CY 2014 Proposed Home Health
 Update
 Market Basket = 2.4 percent
 There are no ACA offsets
 CMS proposes to reduce the average case-mix weight
for 2012 from 1.3517 to 1.0000
• Would reduce rates by 3.5 percent each year – 2014,
2015, 2016 and 2017
 Rural add-on continues
137
CY 2014 Proposed Home Health
 Update – Proposed 60 day national episode payment
CY 2014
amount
2013
Estimated
Average
Payment
per
Episode
Proposed
National,
2014
Standardized
2014
Outlier
HH
60Rebasing Adjustment Standardization Market Day Episode
Adjustment
Factor
Factor
Basket
Payment
X
$2,963.65 X 0.9650
X 0.975
X 1.0017
1.024
=$2,860.20
138
CY 2014 Proposed Home Health
 Update – Proposed Per Visit Payment Amounts
HH Discipline
Type
Home Health
Aide
Medical Social
Services
Occupational
Therapy
Physical
Therapy
Skilled
Nursing
SpeechLanguage
Pathology
CY 2013
Per-Visit
Rates
Including
Outliers
CY 2014
Rebasing
Adjustment
Wage
Index
Budget
Outlier
Neutrality
Adjustment
Factor
$53.12
X 1.035
X 0.975
X 1.0003
$188.01
X 1.035
X 0.975
X 1.0003
$129.11
X 1.035
X 0.975
X 1.0003
$128.24
X 1.035
X 0.975
X 1.0003
$117.28
X 1.035
X 0.975
X 1.0003
2014
HH
Market
Basket
X
1.024
X
1.024
X
1.024
X
1.024
X
1.024
X 1.0003
X
1.024
$139.34
X 1.035
X 0.975
Proposed
CY 2014
Per-Visit
Rates
$54.91
$194.34
$133.46
$132.56
$121.23
$144.03
139
CY 2014 Proposed Home Health
 Outliers
 No changes being proposed
 Quality
 For 2014 – OASIS submission satisfies compliance
 For 2015 – Proposing 2 claims based measures
• (1) Rehospitalization during the first 30 days of HH; and
• (2) Emergency Department Use without Hospital
Readmission during the first 30 days of HH
140
CY 2015 Proposed FQHC PPS
141
CY 2015 Proposed FQHC PPS
 Published in September 23rd Federal Register
 Effective 10/1/2014
 Payments must equal 100 percent of the estimated amount
of reasonable costs without the application of the current
system’s UPLs or productivity
 Would increase payments to FQHCs by about 28 percent
142
CY 2015 Proposed FQHC PPS
 Would remove the exception to the single encounter
payment per day
 The adjusted base payment that reflects the MEI historical
updates and forecasted updates to the MEI would be
$155.90
 Would move update to CY basis in 2016
 Tied to MPFS – use GPCIs instead of AWIs
143
CY 2015 Proposed FQHC PPS
 The adjusted base payment that reflects the MEI historical
updates and forecasted updates to the MEI would be
$155.90
144
Questions
145