Category: Medicare

CMS Issues The 2018 MACRA Quality Payment Program Final Rule

The Centers for Medicare and Medicaid Services (“CMS”) recently published the 2018 Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) Quality Payment Program (“QPP”) final rule.  CMS maintained that it is listening to feedback and concerns from providers and that what it has heard is reflected in many of the provisions of the rule.

Among the many changes in the final rule are the following:

  • For 2018, CMS will exempt providers and groups with less than $90,000 in Medicare Part B allowed charges or that care for less than 200 Medicare Part B patients. These providers would be exempt from participating in the QPP altogether.
  • Small practices (those with fifteen or fewer practitioners) can earn five additional points to their Merit-Based Incentive Payment System final score if they submit data on at least one performance category. Further, CMS will award providers up to five bonus points if their patient population is deemed particularly complex, as measured by a combination of Hierarchical Conditions Category risk scores and the number of dually eligible patients treated.
  • Providers are allowed to continue using 2014 Edition Certified Electronic Health Record Technology (“CEHRT”), rather than upgrading to 2015 Edition technology, to report the Advancing Care Information (“ACI”) transition measures.  Providers that exclusively use 2015 CEHRT to report the ACI objectives and measures (the Stage 3 equivalent measure set) could be eligible for a ten percent bonus score.
  • The reporting period for quality performance, which was ninety days during 2017, which was the transition year, is now the full calendar year.
  • Solo practitioners and small practices can form a virtual group without specialty or location limitations to participate in MIPS.  While it was previously known that virtual groups would be an option, more detail on how those groups can be formed and can apply for treatment as virtual groups is now available.
  • CMS will implement a MIPS measurement option that allows hospital-based clinicians to use their hospital’s value-based purchasing results for the MIPS cost and quality categories.  However, this option will not be available until calendar year 2019.
  • Providers will be assessed on cost measures for 2018.  This was originally a 2019 requirement under the proposed rule.  The cost category will be weighted at ten percent of the MIPS final score in 2018 and will increase to thirty percent in 2019.

The 2018 final rule is emblematic of CMS’ continued approach to tinker with MACRA’s obligations and burdens on providers of all sizes.  From the beginning, it has been clear that MACRA would be a work in progress that would evolve, especially in the early years.  Thus, it is important that providers continue to pay attention to additional MACRA-related rules to ensure that they are current on the latest requirements, especially those that may be beneficial.

Changes to MACRA to Hopefully Lessen the Burdens

The Centers for Medicare & Medicaid Services (“CMS”) recently published a proposed rule, which included modifications to the final rule that implemented the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) in 2017.  Some of the changes are detailed in this blog post.

The proposed rule increases the required participation threshold for providers from Medicare Part B annual charges of $30,000 to $90,000 and 100 or less Medicare patients annually to 200 or less Medicare patients annually.

CMS also finally provided proposed guidance on how to participate in virtual groups.  A virtual group is a combination of two or more federal tax identification numbers (“TIN”), with each TIN consisting of ten or fewer eligible clinicians.  The virtual group must form itself and provide written notice of this election to CMS by December 1 of the calendar year preceding the performance period.  Clinicians can only participate in one virtual group.  All eligible clinicians in a TIN must participate in the virtual group except for those who participate in the Alternative Payment Model (“APM”) scoring.  Virtual groups can opt to receive a determination as to whether the participants qualify to form a virtual group and will then be required to establish a formal agreement amongst the members.  Virtual groups will be subject to the same reporting and performance standards as non-virtual Merit-Based Incentive Payment System (“MIPS”) track groups.

Another part of the proposed rule is the creation of a new partial group reporting option.  Under this option, some clinicians under a TIN could use the APM reporting standard while the remaining participants would collectively report under MIPS.

CMS also proposed a Facility Based Measurement for the 2018 MIPS performance year.  Facility-based clinicians who have at least seventy-five percent of their professional services furnished in the emergency department or other hospital inpatient setting would qualify for this option.  The hospital Total Performance Score from the facility where the clinician treats the highest number of Medicare beneficiaries during the measurement period would be converted into the MIPS quality performance category and cost performance category score.

By proposing these changes and others, CMS has indicated a willingness to continually examine the impact of MACRA on providers and make adjustments to help with compliance while preserving the goals of the program. While 2017 is the transition year, 2018 is fast approaching, and providers need to be prepared for a full year of MACRA implementation.  Providers of all sizes, including institutional providers that employ clinicians, should continue to ramp up their readiness for full MACRA performance.

MACRA: Alignment Beyond The New Advanced Alternative Payment Models

The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) provides for two reporting tracks for eligible practitioners:  the Merit-based Incentive Payment System (“MIPS”) and Advanced Alternative Payments Models (“AAPMs”). There are only a few models that have been approved by the Centers for Medicare and Medicaid Services as AAPMs for 2017, and the list of expected 2018 AAPM models is quite short.  Further, the AAPM requirements include, among other criteria, a strict risk-bearing standard.

Missing from the list of AAPMs: clinically integrated networks (“CINs”), physician-hospital organizations (“PHOs”) and many of their brethren.  However, that does not mean that CINs and PHOs and other non-advanced alternative payment models (“APMs”) are about to fade into the night.  On the contrary, it is likely that these types of models will continue to proliferate.  The reporting requirements for eligible practitioners on the MIPS track are quite daunting.  Additionally, independent practitioners will need to expend significant sums and time reporting for MIPS.

This is where the non-advanced APMs come in. By this time, most of the remaining independent practitioners fall into one of three categories: (1) those who do not want to be employed by a health system; (2) those who a health system does not want to employ and (3) those that were employed by a health system, but are not any longer.  Yet, most of those practitioners will be subject to MACRA and will have a difficult time going it alone.  Moreover, in an era of continued consolidation and competition, health systems continue to evaluate alignment models with community practitioners.

It is possible that independent practitioners will now see more than ever the value of joining a non-advanced APM. The non-advanced APM likely has the personnel and the resources to help practitioners choose the appropriate measures for MIPS reporting, compile the necessary data, analyze the data and complete the actual reporting.  Further, the cost of joining and maintaining participation in a non-advanced APM for an independent practitioner is likely much less than what it would cost that same practitioner to comply with MACRA on his or her own.  Additionally, these benefits would be in addition to those already offered by non-advanced APMs such as data sharing, best practice protocols and joint contracting.  Non-advanced APMs allow the practitioners to remain independent, but also bring alignment, on a non-exclusive basis, with a health system.

MACRA represents a significant change for health care providers, but it also represents a great opportunity.

Medicare Part B Inappropriately Paid $6.7 Billion for E/M Services in 2010

In a recent report, the Department of Health and Human Services (DHSS) Office of Inspector General (OIG) examined whether or not Medicare Part B management (“E/M”) services in 2010 were incorrectly coded and/or lacking overall documentation.

This is the third in a series of reviews by the OIG concerning E/M services.  The first study found that from 2001 to 2010, physicians increased their billing of higher level E/M services in all visit types, and that in 2010, over 1,600 physicians consistently billed for the two highest level codes for E/M services.  The second study looked at the adoption of electronic health record (EHR) technology, finding that 57 percent of all physicians providing E/M services in 2010 used EHR technology at their primary practice location in 2011.

This most recent analysis determined that in 2010, approximately $6.7 billion in Medicare Part B claims, representing some 55 percent of claims submitted by physicians and non-physician practitioners, were incorrectly coded and/or so lacking documentation that payment should have been denied.  This sum represents over a fifth of all Medicare payments for evaluation and management (E/M) services in 2010.

Over a quarter of all claims surveyed were “upcoded,” i.e., the correct code for the services provided was lower than the code originally billed for, while nearly another 20 percent were either insufficiently documented or undocumented altogether.   In the aggregate, over 45 percent of E/M claims reviewed were either upcoded or unsupported by the medical records.  Most miscoded claims (79 percent) were upcoded or downcoded by one level; in addition, 17 percent and 4 percent of claims were upcoded and downcoded, respectively, by two levels.

In its study, the OIG identified “high-coding physicians” as those whose average code level was in the top 1 percent of their specialty and billed for the two highest E/M level codes at least 95 percent of the time.  Claims by these physicians were more likely than not to be incorrectly coded or insufficiently documented compared to physicians outside of this classification.  The overwhelming amount of coding errors (99 percent) were in the form of upcoding, resulting in an average of $15,594 inappropriately paid to each physician.

OIG made three recommendations as result of this study:  first, increased physician education concerning proper E/M coding; second, contractor encouragement to review E/M services billed by high-coding physicians; and third, follow up on claims that were paid in error that have resulted in overpayments or underpayments.

CMS agreed with the first recommendation to increase physician education on this topic.  However, it did not concur with OIG’s second recommendation based on negative return on investment after previously directing a medical review contractor to review claims by high-coding physicians.  CMS also partially agreed with OIG’s third recommendation to pursue overpayment recoveries beyond a certain threshold and to implement remedial educational requirements for physicians below this threshold.

CMS and its contractors clearly have the resources and incentive to seek recovery of overpayments.  Even though Medicare payment rates for individual E/M services are small (approximately $100 on average), the volume of claims is enormous:  physicians billed for some 370 million E/M services in 2010 that accounted for nearly 30 percent ($32.3 billion) of all Part B payments that year.

Given the substantial spending on E/M services and prevalence of error (56 percent of E/M claims by high-coding physicians, and 42 percent of E/M claims for all other physicians) it can be readily expected that physicians who regularly provide E/M services under Part B will face increased audit risk from CMS and its contractors.

Down With the Two-Midnight Rule

On April 14, 2014, the American Hospital Association, New Jersey Hospital Association, and other hospital associations and systems (“Plaintiffs”) filed a federal lawsuit in the United States District Court for the District of Columbia, case 1:14-cv-00609, against Kathleen Sebelius as Secretary of Health and Human Services (“HHS”) challenging three “unlawful” Medicare policies.[1] One of these policies is known as the two-midnight rule and involves Medicare Part A reimbursement.[2]  This involves reimbursement for “inpatient” hospital services.

Neither HHS nor its administrative agency, the Centers for Medicare and Medicaid Services (“CMS”), has ever formally defined “inpatient.” CMS has recognized that the decision to admit a patient is a “complex judgment” call involving various factors including medical history, current medical needs, severity of signs and symptoms, types of facilities available, hospital by-laws and admissions policies, the medical predictability of something adverse happening to the patient, and the relative appropriateness of the treatment.  Medicare Benefit Policy Manual  Ch. 1 §10.  Indeed, hospitals and physicians have been instructed by CMS that “generally, a patient is considered an inpatient if formally admitted as [such] with the expectation that he or she will remain at least overnight, and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a bed overnight.”  Id. According to CMS, a physician should “use a 24-hour period as a benchmark; i.e., [physicians] should order admission for patients who are expected to need hospital care for 24 hours or more.” Id.

Despite its own guidance, CMS published a final rule in August 2013 that a Medicare beneficiary is not an “inpatient” unless the admitting physician expects the patient to require care in the hospital spanning two midnights (admitted on Day 1 and discharged on Day 3).  Thus, CMS will not pay for an inpatient stay that spans less than two midnights (regardless of level of care, i.e., intensive care unit).  Instead, that patient stay will be converted to an outpatient stay and one reimbursed under Medicare Part B.

The Plaintiffs allege this CMS rule is “arbitrary and capricious” and undoes decades of Medicare Policy.  The Plaintiffs find it “unwise” to supplant physician judgment with a government rule.  It “defies common sense” for “inpatient” to mean “a person who stays in the hospital until Day 3.”

This, allege the Plaintiffs, is contrary to the Administrative Procedures Act (“APA”).  The policy deprives hospitals of reimbursement to which they are entitled and forces them to spend an exorbitant amount of money and time and change their medical records systems, admissions policies and procedures and documentation protocols to comply with the rule.  It further redirects resources that would otherwise be invested in patient care.  Thus, request the Plaintiffs, the policy must be set aside.

As of May 14, 2014 an Answer by the Government has not been filed.


 

[1] A second federal lawsuit was also filed contending that the 0.2 percent Medicare payment based on CMS’ expectation of more patients being admitted for a two-midnight stay is unlawful.

[2] The other two policies being challenged are (1) requiring rebilling of denied claims within one year of service when many claims are at least a year old when audited and (2) expecting that physicians certify at admission that a Medicare patient is expected to need treatment for a period spanning two midnights.