Baker Tilly healthcare update December 12, 2014

At the agencies

On November 24, CMS announced that it will give hospitals until December 31 to attest to Medicare meaningful use program requirements for 2014—extending the deadline by one month. Under the program, hospitals that meet program requirements regarding electronic health record utilization will receive incentive payments and those that do not will have their Medicare reimbursement cut by 1 percent.

On December 3, CMS issued a final rule that will prevent providers and suppliers with unpaid Medicare debt from enrolling in the Medicare program and will revoke the billing privileges of providers and suppliers with histories of abusive billing.

CMS released a final rule on November 28 regarding Medicaid disproportionate share hospital (DSH) payments. The final rule clarifies the definition of “uninsured” which is used to calculate hospital-specific DSH limits. The final rule stated that the DSH limits cannot be greater than the uncompensated costs of providing hospital services to those who are Medicaid eligible or have no health insurance or other source of third party coverage for the services provided.

On December 1, CMS released its long-awaited Medicare Shared Savings Program (MSSP) proposed rule. The 400-page rule covers many operational details of the MSSP including permitting certain accountable care organizations (ACOs) currently enrolled in the MSSP’s upside risk only model to continue in the model for an additional agreement period with a maximum shared savings rate of 40 percent (down from 50 percent); creating a new shared savings model with upside and downside risks and higher savings rates and prospective beneficiary attribution, and eliminating the requirement that ACOs send out data sharing opt-out letters to beneficiaries.

On December 2, a report released by the Department of Health and Human Services (HHS) found that the rate of hospital-acquired conditions between 2010 and 2013 fell by 17 percent, resulting in savings of approximately $12 billion and 50,000 fewer patient deaths.

According to HHS’s Fiscal Year 2014 Agency Financial Report, the Medicare fee-for-service improper payment rate increased from 10.1 percent in 2013 to 12.7 percent in fiscal year 2014. The Medicaid improper payment rate also increased from 5.8 percent to 6.7 percent.

On the Hill

On December 2, leadership from the House Ways and Means Committee introduced the “Protecting the Integrity of Medicare Act 2014,” a bill that would change aspects of Medicare fraud enforcement.  A previous version of the bill had received pushback from the both Federation of American Hospitals and the American Hospital Association. The new version does maintain some of the controversial provisions but contains modifications that are intended to ease some of the hospital associations’ concerns. 

A primary modification made to the previous version would be to ease requirements for arrangements between hospitals and physicians in which physicians receive bonuses from hospitals for lowering the cost of care while maintaining quality. Some of the controversial aspects of the legislation include providing 1.5 percent of the proceeds collected as a result of false claims act investigations to the HHS Office of the Inspector General and requiring recovery audit contractors to recover payments for care to undocumented immigrants.

In the courts

On December 2, the panel for the 11th Circuit Court rejected a challenge to the postponement of the employer mandate under the ACA. In this case, Kawa Orthodontics had argued that they were “injured” when they adopted ACA compliance standards before President Obama’s Administration made the decision to delay the mandate until 2016. Kawa claims that it would have used the resources used for compliance differently had they known it would be delayed. The 11th Circuit panel found that Kawa was not injured by the delay and therefore Kawa lacked legal standing to move forward with the case.

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