On April 16, 2015, President Barack Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 and thereby repealed the sustainable growth rate (“SGR”) Medicare Part B provider reimbursement methodology, represented by the Physician Fee Schedule that had been in place for nearly twenty years. SGR reimbursement was originally intended to control Medicare costs by keeping provider reimbursement proportionate to America’s overall economic growth. This was to be accomplished by setting reimbursement ceilings and then cutting reimbursement when those ceilings were exceeded in a given year. Historically, rather than instituting these cuts as planned, Congress repeatedly delayed the implementation of reimbursement reductions through the use of repeated short term legislative patches delaying any cutbacks
This pattern of emergency stop-gap measures ended on April 16, 2015 when, in an uncharacteristically bipartisan move, Congress permanently repealed and replaced the SGR. This revised reimbursement formula includes:
- eliminating delayed reimbursement rate reductions under the SGR;
- from 2015 – 19, increasing reimbursement rates by 0.5%;
- from 2020 – 25, freezing reimbursement rates; and
- from 2026 – forward, instituting annual reimbursement rate increases based upon provider participation in one of two provider risk-sharing arrangements: (1) the Merit-Based Incentive Payment System (“MIPS”) provides for a 0.25% annual increase; or (2) Alternative Payment Models (“AMP”) provides for a 0.75% annual increase.
Both incentive programs incorporate value-based payments beginning in 2019. First, MIPS combines and replaces existing incentive programs and provides a payment adjustment to fee-for-service reimbursement based upon a composite score made up of four categories: (1) Quality; (2) Resource Use; (3) Clinical Improvement; and (4) EHR Use. Second, AMP participants will receive a 5% of annual reimbursement bonus payment in exchange for generating sufficient revenue through qualified risk-sharing payment models, such as Accountable Care Organizations and Medical Homes.
The SGR repeal is funded by reductions in Medicare payments to hospitals and post-acute care providers, elimination of first-dollar Medigap coverage, and increases to Medicare premium cost-sharing for high income beneficiaries. Despite these cuts, the Congressional Budget Office estimates that the legislation will still add a grand total of $141 billion to the Federal deficit.
The elimination of the SGR provides some enduring stability following years of uncertainty. After repeated, temporary SGR legislative fixes, the legislation eliminating the SGR and instituting the replacement reimbursement methodology represents a bipartisan effort to transition Federal health care program reimbursement away from traditional fee-for-service arrangements and into a new era of value-based payments. Consistent with trends in the health care industry at-large, and the Federal health care programs in particular, providers seeking meaningful reimbursement increases through Medicare Part B under the revised reimbursement methodology must meet quality metrics, whether through an incentivized fee-for-service model or through participation in alternative payment mechanisms.
For more information on health care reimbursement trends, please contact a member of Benesch’s health care team.
In a recently released MLN Matters (Number: SE1417), CMS announced that it is implementing the enhanced enrollment screening provisions of the Affordable Care Act (ACA) by requiring finger print based background checks for certain so called “high risk” providers. Currently this means that for newly enrolling Durable Medical Equipment, Prosthetic, Orthotic and Supplies (DMEPOS) suppliers and Home Health Agencies, individuals with a 5% or greater ownership interest in the provider or supplier will be subject to criminal background checks based on fingerprint identification. The procedure will also apply to providers that CMS has elevated to the high risk category pursuant to regulations. Affected providers will be notified by their MAC and be given 30 days to comply. The notification will identify contact information for the Fingerprint Based Background Check Contractor (FBBC). Continue reading
Posted in Community Based Care, Compliance Programs, Durable Medical Equipment, Employee Background Checks, Fraud and Abuse, General, Health & Human Services, Health Care, Health Care Providers, Health Reform, Home Health, Medicare, MLN Matters, Participation, Program Integrity, Provider Enrollment - Medicare, Regulation, Regulatory Compliance
Last week, Ohio Medicaid Director John McCarthy announced that the launch date for voluntary enrollment in MyCare Ohio (fka as Ohio’s Integrated Care Delivery System) will be delayed until March 1, 2014. The announcement was made during Director McCarthy’s recent testimony before the Joint Legislative Commission for Unified Long Term Care Services and Supports. Continue reading
On May 3, 2013, the US Department of Health and Human Services Office of the Inspector General’s (OIG) Office of Evaluation and Inspections (OEI) issued a report (OEI-02-10-00490) entitled “Medicare Hospice: Use of General Inpatient Care.” The report found that while Medicare paid $1.1 billion for hospice general inpatient care (“GIP”) in 2011, there were unusual Medicare billing patterns for hospice inpatient stays, raising concerns about whether the stays were billed appropriately and whether the patients received the right level of care. Continue reading
The Health Resources and Services Administration (HRSA) has announced that the Healthcare Integrity and Protection Data Bank (HIPDB) and the National Practitioner Data Bank (NPDB) will merge on May 6, 2013. On that date, the HIPDB will close down, and all future reporting must be done through the NPDB.
While the databases are merging, there has been no change in the reporting requirements. Any user who was previously required to report information to the HIPDB must now do so through the NPDB. All information currently in the HIPDB will now be available through the NPDB. Continue reading
Posted in Exclusion, Final Rule, Health Care, Health Care Providers, Health Reform, Hospital, Long Term Care Hospital, Nursing Facility, Nursing Home, Out-Patient Care, Physicians, Regulatory Compliance, Rehabilitation Hospital, Skilled Nursing Facility
Compliance program fatigue is nothing new. Over at least the last 15 years, health care organizations have jumped in head first, put together detailed manuals and taken the plunge. However, reimbursement cuts, quality initiatives, RACs, ZPICs, whistleblowers, physical plant renovations and simply significant industry challenges got in the way of sustaining an efficient and effective compliance effort. Health care organizations have also become desensitized to the barrage of compliance education, enforcement press releases, audits and reviews and other shock-value communications on the importance of regulatory compliance. In that vein, this very article may get lost in the shuffle, although, we hope it doesn’t.
An efficient and effective compliance effort with your organization is extremely important, if only as an insurance policy against government scrutiny. Additionally, the Patient Protection and Affordable Care Act of 2010, H.R. 3590 (“ACA”) includes requirements that CMS implement mandatory compliance program requirements for all providers and suppliers. In a distinct section of ACA, nursing home mandatory compliance programs were given a specific implementation timeline. Continue reading
Posted in Acute Care, Adult Home, Ambulatory Surgery Centers, Assisted Living, Clinical Laboratory, Clinics, Community Based Care, Compliance Programs, Continuing Care, Diagnostic Testing, Disability, Durable Medical Equipment, Fraud and Abuse, Group Home, Health Care, Health Care Providers, Health Information Privacy, Health Reform, Home Health, Hospice, Hospital, Intermediate Care Facility, Long Term Care, Long Term Care Hospital, Medicare, Mental Health, Nursing Facility, Nursing Home, Occupational Therapy, Out-Patient Care, Palliative Care, Pharmacy, Physicial Therapy, Physician Assistants, Physicians, Post Acute Care, Primary Care, Program Integrity, Regulatory Compliance, Rehabilitation, Rehabilitation Hospital, Residential Care, Senior Housing, Skilled Nursing Facility, Supplier
On February 1, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released the long-awaited final version of the Physician Payment Sunshine Act Final Rule (the “Sunshine Act”). The Sunshine Act will make information publicly available concerning payments or other transfers of value from applicable manufacturers to physicians. The Sunshine Act will also make information publicly available concerning physician ownership or investment interests in applicable manufacturers and group purchasing organizations (“GPOs”), including physician-owned distributors (“PODs”). Continue reading