Medical bill

CMS unveils new medicare payment programs for providers

Heart icon

At the agencies

On April 25, CMS issued a final rule for Medicaid’s managed care requirements. CMS’s plans to bring rules for Medicaid managed care and CHIP plans more in line with the regulations for other types of government subsidized coverage, notably Medicare Advantage and Affordable Care Act marketplace plans. One of the major provisions of the new rule was new network adequacy standards for private Medicaid plans; specifically, the agency requires states to create “time and distance” standards for many types of providers. The final rule also expands access to care for mentally ill patients if they stay no more than 15 days in an inpatient facility that provides behavioral health services. In addition, CMS finalized a national medical loss ratio standard of at least 85 percent for Medicaid managed care plans.

On April 27, CMS released the first of its proposed rules governing the new Quality Payment Program initiative which was created by the Medicare Access and CHIP Reauthorization Act (MACRA), the law that also did away with the sustainable growth rate formula or annual “doc fix” problem. The new program will offer two new ways for providers to receive Medicare payments. One program offered to providers is the Advanced Alternative Payment (APM) models where bonus payments will be provided to doctors who participate in systems such as a Next Generation Accountable Care Organization model or Comprehensive Primary Care Plus.

The other, non-APM, Merit-Based Incentive Payment System (MIPS), which CMS expects most providers to participate in initially, will give bonuses or penalties to providers based on their implementation. The score is based on four categories. Quality accounts for 50 percent of the score and is based on six reported measures. Twenty-five percent of the score comes from advancing electronic care information such as implementing new technology into daily operations. Clinical practice improvement activities such as care coordination, beneficiary engagement, and patient safety make up 15 percent of the score. The last 10 percent of the score will be based on cost. CMS will begin measuring provider performance in 2017, but payments based on those measures will not begin until 2019.

On April 21, CMS announced its proposed 2017 payment rates and rules for hospice, skilled nursing, and inpatient rehabilitation services. For hospice facilities, CMS is proposing a 2 percent increase in payments, skilled nursing facilities are expected to see a 2.1 percent increase, and inpatient rehabilitation facilities would experience a 1.45 percent increase. Hospices would be subjected to new quality measures that include tracking the number of visits from healthcare staff that a patient receives in the last days of life and measuring the percentage of patients that received care consistent with hospice care guidelines. Skilled nursing facilities would be subject to new readmission rate measurements under the proposed rule. Inpatient rehabilitation facilities would also be subjected to new quality measures including Medicare spending per beneficiary, post admission rates for potential preventable conditions, and reviews of drug regimen practices.

On April 18, CMS announced its proposed 2017 payment rates and rules for acute and long term care hospitals. Acute care hospitals are expected to see an overall 0.9 percent increase in rates. This was determined after accounting for the 0.6 percent increase that CMS has proposed after indicating that it will no longer enforce inpatient payment cuts under the two-midnight rule. Under the proposed rule CMS is reporting that long term care hospitals will see a 6.9 percent reduction in payments due to the expectation that fewer chronically ill patients will be treated in long term care hospitals. Payment rates for long term care hospitals will see a nominal rate increase of 0.3 percent. Additionally, CMS is proposing to streamline regulations for the 25 percent threshold policy, which makes a payment adjustment when the number of cases a long term care hospital admits from a single hospital exceeds 25 percent.

CMS has announced a delay for their new hospital quality rating measure. The new “star rating” program consolidates the various government efforts to measure hospital care into a single, easy metric. The new system uses 62 measures of care to determine a hospital’s star rating.  Readmission rates, patient experience, and safety of care account for 22 percent of the star ratings. Effectiveness of care, timeliness of care, and efficient use of medical imaging determines another 12 percent of the rating. The Administration decided to delay the release after receiving Congressional concerns that the process may be unfair due to inconsistency of the availability of data at some facilities to determine a correct star rating. CMS has stated that the star rating program will begin in July.

United States icon

In the states

Pennsylvania became the 24th state to approve medical marijuana for therapeutic uses. Before patients can access treatment, the Department of Health still has to implement regulations regarding the state’s medical marijuana program, a task expected to take 18-24 months; however, the department has begun drafting temporary regulations in order to meet the statue’s six month publishing requirement. The law includes a 5 percent sales tax on growers and processors, sets 17 initial conditions that the drug can be used to treat, and caps the number of dispensing locations to 150. Patients will only be able to access medical marijuana with a physician’s certification.

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