A recently released Medicare trustee report found that the program’s hospital trust fund will run out of money by 2028, two years earlier than the forecast made by trustees last year. Between 2015 and 2040, Medicare’s total costs are projected to rise from 3.6 percent of GDP to 5.6 percent due to an increase in the number of individuals signing up for the program and rising drug costs. However, Medicare’s cost growth is at a historical low, and the trustees do not expect the Affordable Care Act’s Independent Payment Advisory Board to be required to step in and make cuts until 2017.
The Centers for Medicare and Medicaid Services (CMS) proposed a new rule aimed at reducing antibiotic overuse and improving equal access to health services. Under the proposed rule, hospitals participating in Medicare or Medicaid must appoint one individual tasked with combatting the overuse of antibiotics and one tasked with overseeing infection control and prevention efforts. In addition, hospitals would be required to enact anti-discrimination policies that ensure equity regardless of race, religion, national origin, sex, gender identity, sexual orientation, age, or disability. Facilities that have been designated as critical access hospitals would also be required to implement Quality Assessment and Performance Improvement (QAPI) programs to assess the progress of healthcare quality improvement efforts.
CMS has pushed back the rollout of a new lab testing payment system, originally scheduled for release in January 2017, until 2018 in order to give laboratories additional time to develop requisite IT systems. Once implemented in 2018, the payment system will assign clinical diagnostic test charges based on a weighted median of the costs calculated by private plans. CMS is required to update lab payment cost calculations due to the enactment of the Protecting Access to Medicare Act, passed in 2014.
In a proposed rule, CMS has delayed the rollout of its Payment Error Measurement program (PERM) and Medicaid Eligibility Quality Control program (MEQC) for several years. CMS proposed the delay in order to update the programs to include changes to Medicaid and CHIP eligibility requirements resulting from the Affordable Care Act. Under the proposed rule, MEQC would be reorganized into a pilot program that states would implement during the alternating years between PERM cycles. The proposed rule allows states to review features that do not fall under the PERM program and correct for any errors that they find. In the event that a state crosses over the national standard for PERM improper payment rates, CMS would provide assistance to that state. Over time, CMS aims to add more severe consequences for states with improper payment rates that are consistently over the threshold of 3 percent. Should a state not demonstrate an effort to catch up to national standards, CMS would cut off federal matching funds for that state.
In addition to delaying the programs, restructuring MEQC, and implementing mechanisms to ensure compliance with PERM national standards, the proposed rule includes provisions that would cite improper payments when the federal share is incorrect regardless of whether the total amount is correct; calculate a national sample size to ensure precise improper payment rates; and require federal contractors to conduct PERM eligibility reviews in conjunction with the state.
The Medicare Fraud Strike Force, which is a joint effort of the Department of Health and Human Services Office of Inspector General, the Department of Justice, the Federal Bureau of Investigation, and the United States Attorney General, has charged 301 doctors, nurses, pharmacists, and physical therapists with attempting to defraud Medicare and other insurance programs of an amount totaling $900 million. The cases involved tactics such as acquiring fake prescriptions by using stolen identities, filing claims for services that are not medically necessary, and defrauding insurance programs for compounded medicines. In some cases, clinic operators specifically targeted drug addicts by charging them for services that were not provided. This is the largest takedown of Medicare fraud since the strike force was created nine years ago.
The Medicare Payment Advisory Commission (MedPAC) submitted to Congress its June report in which it provides several recommendations aimed at decreasing the number of patients with excessively high out-of-pocket drug expenses. The report suggests reducing the Part D government reinsurance subsidy from 80 percent to 20 percent, eliminating cost-sharing mechanisms for beneficiaries who exceed their cap, and removing several brand drug discounts from counting towards the cap. The commission’s report also recommends reducing generic drug co-pays for those who receive low-income subsidies and lowering add-on payments for physicians.
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