Stethoscope and gavel

CMS may be ahead of schedule to provide 30% of Medicare payments through alternative payment models and much more

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At the agencies

 On February 29, the Centers for Medicare and Medicaid Services (CMS) announced that they would not be imposing federal network adequacy requirements on states that the agency had previously identified as having inadequate standards. The agency had proposed that a nationwide standard for the time and distance between providers in a given network would be created but they have rescinded that proposal. It is expected that many states will instead adopt a state network adequacy model created by the National Association of Insurance Commissioners.

 On March 3, CMS announced that it is almost a year ahead of schedule on its goal to provide 30 percent of Medicare payments through alternative payment models. The agency has determined that it will be paying $117 billion through alternative pay programs in 2016. The agency’s new goal is to tie 50 percent of Medicare payments to these alternative models by 2018.

 CMS proposed new anti-fraud policies intended to target healthcare providers who dodge previous Medicare evictions or who are associated with “shady” physicians. The proposed rule targets physicians who are evicted from Medicare but nevertheless try to reenroll under a different name or company. One method of evaluation will be investigating the “degrees of commonality” between the new and evicted providers, such as geographic location, provider type, and ownership and management. Another notable provision would require disclosure of affiliations with providers who have had payment suspended under a federal healthcare program or have outstanding Medicare or Medicaid debt. Other important provisions include lengthening the amount of time before revoked providers can reenroll and allowing for revocation for patterns of risky referrals and/or prescriptions.

According to a study by HHS, the number of Medicare beneficiaries being readmitted to the hospital within 30 days of discharge is in decline. The study shows a correlation between the Affordable Care Act (ACA)’s Hospital Readmission Reduction Program, which penalizes hospitals with higher than average readmission and decreased readmission rates. However, because of other possible factors, including the Medicare Payment Advisory Commission’s reports to Congress on readmission and public release of Medicare data on discharge and readmission, no definite cause and effect relationship could be concluded. The study argued against the theory that the decline is attributable to hospitals listing readmitted patients as “under observation,” since the trends have been long-term rather than suddenly changing after the ACA’s implementation.

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In the courts

A DC federal judge, US District Judge Randolph D. Moss, ruled against a suit brought by more than 100 hospitals to challenge how Medicare reimbursement is adjusted based on local labor costs. The suit concerned a 2005 CMS rule that limited the use of pension obligations in wage data. The changes were enacted in 2007 and 2008 based on data generated prior to the finalized rule, making the approach impermissibly retroactive, according to the hospitals. Moss rejected the argument, citing a reconciliation process for updating previously reported data, and stating that hospitals were mischaracterizing how Medicare reimbursement works. He also disagreed with the argument that the 2005 rule was an unacceptable departure from previous policy, and said that CMS acted well within its discretion to determine how costs should be measured.

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On the hill

On March 2, the House passed the “Ensuring Terminated Providers are Removed from Medicaid and CHIP Act,” a bill aimed at improving program integrity for these two programs. The unanimous vote in favor of the bill came in large part as a result of an HHS Inspector General report which found that 12 percent of providers that were cut from Medicaid or the Children’s Health Insurance Program (CHIP) in one state were still able to participate in these programs in another state. The bill would assist in identifying these terminated providers. A separate provision of the bill would also create an online provider directory for Medicaid, intended to make it easier for Medicaid patients to find care. The White House supports the bill but the Senate has not decided whether they will act on the legislation.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.

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