Corporate Compliance

Note from the Instructor: Sustainable Growth Rate fix legislation and other hot topics from Medicare/Medicaid Payment Institute

Medicare Insider, March 31, 2015

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This week’s note from the instructor is written by Kimberly Anderwood Hoy Baker, JD, regulatory specialist for HCPro.  
Last week I had the pleasure of attending the American Health Lawyers Association Institute on Medicare and Medicaid Payment Issues in Baltimore, Maryland. It was announced on the first day that there were over 150 regulators from the OIG, CMS and HHS in attendance. I had the pleasure of personally speaking with Marc Hartstein, Twi Jackson, Tiffany Swygert, and Dan Schroder, all from CMS. They were all very receptive to audience questions and confirmed and clarified several recent items for me. 
Although there were many informative sessions, there is one item I wanted to share that could directly affect some of your payments. Additionally, it may require action to verify you are receiving the correct payments not only from your MAC, but also anyone using the CMS PCPricer to set payment rates (e.g. Medicare Advantage plans). The FY2015 IPPS pricer issued to the MACs, as well as the PCPricer, has been incorrectly applying the rural wage index floor, which was just discovered by CMS last week.
The rural wage index floor applies when an area’s wage index is lower than the statewide rural wage index for their state. In that case, the wage index is brought up to the statewide rural average, which can have a potentially large impact on a provider’s payments. Application of the rural wage index floor has been increasing. For example, in California where I live, at least 16 metropolitan areas use the rural floor, including cities like LA and San Diego. 
To determine if you are receiving the rural wage index floor, compare your wage index in Table 4A with the wage index for your state in Table 4B. If they match, your area has been brought up to the rural floor and you should verify you have been paid at that rate. You can actually use the PCPricer’s change data feature to change the wage index to the index published for you and compare that to the payments you are receiving. It is important you don’t just verify the wage index CBSA on the information screen for your provider because, as I understand the error, if your CBSA is correct it may be pulling the calculated wage index for that CBSA, rather than the rural floor as it should. If you find a discrepancy, you should bring it to the attention of your MAC or check their website about reprocessing of claims with this error. CMS indicated all these claims would have to be reprocessed.
One of the biggest topics of discussion was House bill H.R. 2 Medicare Access and CHIP Reauthorization Act of 2015, better known as the Sustainable Growth Rate (SGR) fix. Kimberly Brandt, who works with members of the US Senate Finance Committee, discussed various items included in the Senate version of the bill, as well as coordination between the House and Senate for passage of the bill before the negative payment rate adjustment of approximately 21% hits physicians April 1. The House did pass the bill on Thursday March 26; however, the Senate didn’t take action prior to leaving for a two week scheduled break on Friday. With the 14 day payment hold on claims, they would return just in time, on April 13, to allow the rates to be corrected before claims are paid for April 1 dates of service.
In addition to elimination of the SGR reduction, there are several provisions in the law that will affect hospitals. It extends the probe and educate audits on the 2-midnight rule, as well as the prohibition on RAC review of patient status, through the end of this fiscal year (September 30, 2015). But it’s not all good news for hospitals. One of the ways the increase to the doctors will be paid for is by spreading the documentation and coding adjustment return payment across six years in .5% increments beginning in 2018. Originally, the full 3.2% payment increase was to be added back to rates in 2018.
Another area that will see potentially limited increases in coming years to pay for the fix is the post-acute setting, including skilled nursing, home health, hospice, inpatient rehab hospitals, and long term acute care hospitals. Their market basket increase, essentially the rate of annual inflation in their rates, will be frozen at 1%, while the market basket typically exceeds 2 or 2.5%. There was discussion in one session of the conference that, based on some current proposals from the Medicare Payment Advisory Commission (MedPAC), this may in fact provide the post-acute setting more of an update than was recommended.
Other provisions included an extension of the Low Volume Hospital adjustment and the Medicare Dependent Hospital Adjustment. Unlike in prior years, when the adjustments were approved in single year increments, this bill actually extends them through the remainder of FY2015, as well as FY2016 and FY2017. 
Likewise, the therapy caps and exception process, as it currently exists, also were extended through October 1, 2017. However, they did make a tweak to the manual review process. Currently, there is a manual review when therapy claims for a particular patient exceed $3,700. That process will now be directed at providers with high denial rates, questionable billing practices, newly enrolled providers, or for specific services that might be questionable.  
Included in the bill was also a related bill that had previously been introduced called the Protecting the Integrity of Medicare Act (PIMA). This additional section of the bill directs the MACs to implement a new program called the Improper Payment Outreach and Education Program aimed at giving providers more information on the audit process, audits being done, and how to avoid the errors being identified. CMS will also be required to provide the MACs information to support their efforts. 
One additional provision, oddly located in the PIMA, but potentially relating more to the SGR fix, is a prohibition on CMS implementing their plan to eliminate the 10 and 90 day global period in favor of a 0 day global period. This was big news when CMS announced it and would have caused significant difficulty and increased billing and costs for the professional provider community, so this is undoubtedly a welcome change for physicians.
Again, this bill has passed the house and a similar bill was pending in the Senate, and Kimberly Brandt indicated it would undoubtedly pass. Additionally, one of the other conference speakers, John Hellow, of Hooper, Lundy & Bookman, PC, stated that President Obama indicated he would sign the bill even if the length of the CHIP extension (the key difference between the House and Senate versions) is for the shorter timeframe in the House bill. He indicated this signals a presumably favorable treatment of the bill by House Democrats. We’ll keep you posted on the passage of this bill.

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