Proposed rule implementing the Merit Based Incentive Program System (MIPS) expected to be released soon


At the agencies

According to a Department of Health and Human Services (HHS) Office of Inspector General (OIG) report, hospices billed as much as $268 million in incorrect Medicare payments, about one-third of inpatient stays. The report found that often providers billed for inpatient stays that could have been handled at home, and that for-profit hospices were the most likely to bill inappropriately. Additionally, Medicare occasionally paid for the same drug through daily hospice payments and again through Medicare Part D. The OIG report recommended that HHS improve oversight of hospice and Part D claims and that doctors be involved in the decision to use inpatient stays. Increased enforcement for poor hospice performance and inappropriate payments were also recommended.

A proposed rule implementing the Merit Based Incentive Program System (MIPS) is currently in the final review process, and is expected to be released soon. The Office of Management and Budget (OMB) reviews these proposed rules and has up to 90 days to review a rule, with the possibility of an extension. The law implementing MIPS mandated that a proposed rule be released by November 1, 2016.

In response to public health officials declaring opioid abuse an epidemic, the Food and Drug Administration (FDA) is requiring new warning labels on prescription immediate-release opioid painkillers. The FDA now requires stronger ‘black box’ warnings on immediate-release opioids to inform doctors and patients of the risk of “misuse, abuse, addiction, overdose and death.” The FDA action closely mirrors that from the Centers for Disease Control that cautioned doctors to limit prescriptions for opioids to no longer than three days. However, these new measures from the FDA do not impact how drug makers discuss opioids with doctors.

On March 29, the Centers for Medicare and Medicaid Services (CMS) finalized a mental health and substance use disorder parity rule for Medicaid and the Children’s Health Insurance Program (CHIP). The final rule maintains the flexibility that states have in using non-Medicaid managed care organizations, such as prepaid inpatient health plans, to service Medicaid enrollees who need access to substance abuse and mental health services. The rule also requires health plans to release information on the mental health and substance abuse services they provide as well as disclosure from the states on their reasons for any denial of such services. This final rule was released a day before President Obama’s speech at an opioid addiction summit that focused on what the Administration is planning to stem the opioid abuse epidemic.


In the courts

On March 29, a New York federal judge ordered the HHS to review their Medicare reimbursement decision of a New York City hospital system that claims the decision cost it $15 million. The judge in this case concluded that the agency could not justify imposing a reimbursement cap. HHS had concluded that the hospital system forfeited its right to challenge the cost calculation method because it should have changed its method of cost appointment and updated its bookkeeping systems. However, in his ruling the judge noted that the administrative record sheds no light on whether the hospital system could have changed its record keeping system during the time period at issue.

A DC federal court dismissed a lawsuit brought by 186 hospitals against HHS over its Medicare payment calculations for unusually expensive patients. The suit was regarding a 2004 regulation related to outlier payments, which the court had remanded to the agency for further explanation during a previous summary judgment. According to the judge, the agency’s January explanation sufficiently explained the matter and addressed the court’s concerns, and the hospitals failed to offer an effective argument to the contrary. Specifically, the court had asked why HHS included 123 hospitals that had been “turbocharging” in the charge inflation calculation for FY04. HHS explained that correcting calculations for those 123 hospitals would hurt rather than improve the quality of the data.


In the states

Oklahoma’s Medicaid agency wants to slash provider reimbursement rates by 25% across the board, putting the reimbursement levels at 65% of Medicare rates. This cut comes as a response to the state’s $1.3 billion budget hole. These cuts will affect 46,000 providers and those providers have very little recourse since the Supreme Court ruled last year that private parties do not have the right to sue states over reimbursement rates. The providers must initially seek relief from HHS, which can withhold Medicaid funding if it determines a state is not complying with the law. Though the rate cut is still awaiting CMS approval the state hopes the cut will take effect June 1.

On March 27, a new law went into effect in New York that requires physicians to issue prescriptions electronically in an effort to mitigate opioid addiction and abuse. This law is the final step in the implementation of 2012’s Internet System for Tracking Over-Prescribing Act. The goal of this program is to reduce the value of stolen or forged paper prescriptions. In addition, the database allows doctors to check if a patient has already been prescribed opioids elsewhere. The New York Health Commissioner issued 12 blanket waivers, set to expire March 26, 2017, to accommodate places where electronic prescribing is difficult, such as patients in nursing homes and residential healthcare facilities.

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