Washington Report – September, 2012
Bill Finerfrock, Pam Jackson, Zhaneta Mansaku, Kristen Metzger and Jessica Harrington
CMS approves RAC Audit Expansion
CMS Announces a “new” POS Policy, Delays Effective Date
CMS Awards new MAC Contracts
SGR Fix, SGR Fix, Wherefore art our SGR Fix?
CBO: 6 Million People Will Pay Health Care Penalty
Sequestration Update
Bi-partisan Group of Senators Work to Avoid Fiscal Cliff
HHS: Enrollment in Medicare Advantage Remains Strong
CMS Announces Preliminary Decisions on Hospital Outpatient Supervision Levels for Select Services
CMS Extends Code Freeze Schedule
HHS OIG Announces Fiscal Year 2013 Work Plan
CMS Transmittals
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CMS approves RAC Audit Expansion
On September 12, 2012, The Centers for Medicare and Medicaid Services (CMS) has approved a request by one of the Recovery Audit Contractors (RACs) to expand their scope of work to include “Incorrect Billing of Evaluation and Management Claims (CPT 99215).” The Contractor (Connolly) has received approval to use a statistical sampling methodology in making their review and analysis.
Connolly has indicated they intend to begin reviewing claims in the following states: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virgin Islands, Virginia, West Virginia in the near future. It should be noted that CMS can expand this initiative to other states without prior public notice
Limited information about the new initiative is available on Connolly's website. Billing companies that bill E/M services for physicians and non-physicians in the affected states may wish to check the Connolly website periodically to learn more about their plans as they become available.
Several organizations, including HBMA, have expressed concerns about this decision by CMS to expand the RAC auditing process into this area. While expansion into physician billing has long been expected, most observers were surprised that CMS is beginning this program with E/M codes given the highly subjective nature of these claims.
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CMS Announces A “new” POS Policy, Delays Effective Date
On September 28th, CMS announced it is delaying enforcement of the Place of Service Policy the agency had announced in April, 2012; and, that the agency had also made revisions to the policy based upon industry feedback. HBMA and other healthcare organizations had sought this delay and had also been aggressively pushing CMS to change its policy.
The effective date for the “new” policy is April 1, 2013.
Unfortunately, a close reading of the “new” Place of Service Policy concludes that it is not substantially different from the policy announced in April, 2012. Other than a clarification HBMA requested with respect to “infrequent” locations in which the PC of a diagnostic test is performed, the key problem area - identification of the physical location of the physician at the time he/she reviews a medical image - remained largely unchanged. HBMA and other organizations have repeatedly pointed out to CMS that this new policy presents huge technical and practical problems for physicians, medical billing companies and practice management software providers. Despite these efforts, it appears that CMS has largely ignored the industry’s concerns.
HBMA is preparing a response to the “new” policy and will once again reiterate both the technical and practical problems with the policy CMS is seeking to adopt.
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CMS Awards new MAC Contracts
As part of the on-going process of competitively bidding and awarding the Medicare Administrative Contractor contracts, CMS announced earlier this year that it was accepting bids on new MAC contracts for various regions of the country. Most MAC contracts are for a five-year period and, unless there are extenuating circumstances, these contracts will be re-bid every five years.
On September 27, 2012, CMS made a contract award for the Jurisdiction 6 A/B MAC to National Government Services, Inc (NGS). The Jurisdiction 6 A/B MAC administers Medicare Part A and Part B claims for covered services in the states of Illinois, Minnesota, and Wisconsin. This contractor will also administer Medicare billings from home health and hospice providers in thirteen states and five U.S. territories. The current Medicare fiscal intermediaries and carriers
for these Medicare workloads (in addition to NGS, Wisconsin Physicians Service and Noridian Administrative Services are currently servicing some of the Medicare claims to be transferred to the new contract) will continue in their responsibilities for several months while CMS and NGS implement the new contract. Jurisdiction 6 Award Fact Sheet
On September 20, 2012, CMS made a contract award for the Jurisdiction E A/B MAC contract to Noridian Administrative Services. The Jurisdiction E A/B MAC administers Medicare Part A and Part B claims for covered services in the California, Hawaii, and Nevada, as well as the U.S.
territories of American Samoa, Guam, and the Northern Mariana Islands.
The current A/B MAC for this geographic area, Palmetto GBA, will continue to administer provider claims for up to six months as CMS oversees the transfer of these Medicare contract responsibilities to Noridian Administrative Services. For more information about the Jurisdiction E award: Jurisdiction E Award Fact Sheet
On September 17, 2012, CMS made a contract award for the Jurisdiction L A/B MAC contract to Novitas Solutions, Inc. The Jurisdiction L A/B MAC administers Medicare Part A and Part B claims for covered services in the states of Delaware, Maryland, New Jersey, and Pennsylvania, as well as the District of Columbia. For more information about the Jurisdiction L award: Jurisdiction L Award Fact Sheet
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SGR Fix, SGR Fix, Wherefore art our SGR Fix?
HBMA and other organizations have been hammering Congress to enact legislation to avoid the projected 27% cut in physician fee schedule payments on January 1, 2013. On September 11th, a group of 75 HBMA members traveled to Capitol Hill to meet with their Representatives and Senators to personally educate them about the problems the SGR cuts would create if enacted and, more importantly, the unnecessary costs that would occur if the Congress delayed a decision to rescind the SGR cuts until after January 1 and then made that rescission retroactive to January 1, 2013.
The Members and staff the HBMA members met with seemed genuinely impressed with information they were presented and were near universal in their belief that Congress would act in time to prevent the SGR cut from taking place.
HBMA will continue to impress upon Congress the need to fix the SGR problem permanently and to do so in a way that does not discourage physicians from continuing to see Medicare patients.
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CBO: 6 Million People Will Pay Health Care Penalty
According to the non-partisan Congressional Budget Office (CBO) six million people will pay the “tax” penalty for not having health insurance in 2016. This represents an increase of 2 million above CBO’s original when the Patient Protection and Affordable Care Act (PPACA) was signed into law in 2010.
According to the updated report, the vast majority of the increase can be attributed to higher than expected unemployment rates and lower wages and salaries. The Supreme Court’s decision ruling that the Medicaid expansion included in the PPACA was voluntary for the states rather than mandatory, will also play a role. CBO thinks it is likely that many states will opt out of Medicaid expansion.
If states opt out, this would mean that many low-income workers residing in those states, that CBO originally assumed would have been covered by Medicaid, will not have that option. These individuals will have to be covered by either employer-sponsored insurance or individual policies. CBO believes many of these low-wage workers will be in jobs that will not offer insurance (the employer will be exempt or opt to pay the penalty) and be unable to afford to buy individual insurance in the Healthcare Exchanges.
The new estimate means that about 20% of the non-elderly people expected to be uninsured in 2016 will actually pay the penalty. The CBO also noted that some people will try to avoid the tax and so based its estimates on likely compliance rates and the Internal Revenue Service’s ability to enforce the penalty.
CBO estimates that the “tax” payments that these people will pay will amount to about $7 billion in 2016 and then about $8 billion each year from 2017 to 2022. These new figures are approximately $3 billion more than the previous estimate.
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Sequestration Update
In August 2011, the federal government was facing the prospect of defaulting on interest owed on certain debt obligations unless Congress and the President agreed to raise the aggregate U.S. debt limit. As part of an agreement to raise the debt limit, called the Budget Control Act of 2011 (BCA), bipartisan majorities in the House and Senate voted for major cuts in future, unspecified, federal spending. Because there was some fear that Congress would not follow-through on the spending reduction agreement, the legislation also authorized across-the-board spending cuts beginning in 2013 if Congress failed to enact the required cuts in spending.
The across-the-board spending reductions are referred to as Sequestration.
The expectation at the time the BCA was enacted was that the prospect for major reductions in virtually every federal program (defense and non-defense) would be so onerous to a broad political spectrum that it would force a bi-partisan agreement on targeted reductions in order to avoid the across-the-board reductions. Frankly, the hope on both sides of the political spectrum was that sequestration would never occur. It was viewed as a threat – but a very powerful threat.
In late 2011, Congress failed to reach agreement on the necessary spending cuts and that failure triggered a count-down to January 1, 2013 when the sequestration cuts are slated to take effect.
For most of the past 10 months, there has been tremendous finger pointing as each party to the 2011 budget agreement attempts to point the blame at someone else. It has been so bad recently, that you would think that the Budget Control Act, which triggered this process, was enacted by a group of aliens who briefly occupied the bodies of our elected officials. In truth, the bi-partisan group who approved the BCA in August, 2011 and the President who signed it into law are the current occupants of their respective offices.
Subsequent to enactment of the BCA, the Congress approved legislation entitled, “The Sequestration Transparency Act of 2012 (STA). This legislation, signed by the President, requires the President to submit a report to Congress on the potential impact of sequestration.
On September 14th, the Office of Management and Budget (OMB) released its report based on assumptions as required by the STA. The report provides Congress with a breakdown of exempt and non-exempt budget accounts, an estimate of the funding reductions that would be required across non-exempt accounts, an explanation of the calculations in the report, and additional information on the potential implementation of the sequestration.
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Bi-partisan Group of Senators Work to Avoid Fiscal Cliff
HBMA’s government relations staff have picked up rumblings of bi-partisan negotiations among a group of eight senators to reach a compromise on the expiring tax cuts and the automatic spending reductions (Sequestration) schedule to take effect on January 2, 2012.
According to Senate Majority Leader Harry Reid (D-NV) the group includes:
Democrats Republicans
Mark Warner – Virginia Mike Crappo - Idaho
Dick Durbin – Illinois Tom Coburn - Oklahoma
Kent Conrad – North Dakota Saxby Chambliss - Georgia
Michael Bennett – Colorado Lamar Alexander – Tennessee
Any proposal agreed to by the group would have to be approved by both Houses of Congress as well as the President in order to avoid the double whammy of tax increases and major spending reductions slated to take effect in early January.
Because any legislation aimed at extending the tax cuts or avoiding large spending cuts would have to be considered during a lame duck session of Congress, the outcome of the election will largely dictate what, if anything will be accomplished during that 4 week post-election session.
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HHS: Enrollment in Medicare Advantage Remains Strong
According to a statement issued by Kathleen Sebelius, Secretary of the Department of Health and Human Services, “Enrollment in the Medicare Advantage (MA) program is projected to increase by 11 percent in the next year and premiums will remain steady.” In a press release accompanying the announcement, HHS officials noted that since enactment of the Patient Protection and Affordable Care Act in 2010, Medicare Advantage premiums have fallen by 10 percent and enrollment has risen by 28 percent.
In addition to the growth in MA plan enrollment, HHS also noted that “Access to supplemental benefits remains steady and beneficiaries’ average out-of-pocket spending remains constant.”
In 2013, HHS estimates that the average monthly Medicare Advantage premium will increase by $1.47 compared to 2012.
The Annual Medicare Advantage Open Enrollment Period begins on October 15 and ends December 7. CMS provides helpful tools to beneficiaries seeking more information on plan benefits and costs.
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CMS Announces Preliminary Decisions on Hospital Outpatient Supervision Levels for Select Services
In the Calendar Year 2012 Outpatient Prospective Payment System (OPPS) Final Rule, CMS established a process to obtain independent advice from the Hospital Outpatient Payment Panel regarding the appropriate supervision levels for certain individual hospital outpatient therapeutic services.
As part of the Panel’s charge, CMS directed the Panel to recommend the supervision level for certain services that that will “ensure the appropriate quality and safety for delivery of a given service as defined by its Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) code.”
Based on the Panel’s recommendations, CMS is proposing the following changes to the current supervision requirements.
For the following services CMS accepts the Panel’s recommendations that they change the requirement from direct supervision to general supervision, since provision of the service does not typically require the immediate availability of the supervising physician or appropriate non-physician practitioner.