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CMS Announces 2017 Inflation Factor

Written by David Werfel on . Posted in Government Affairs, Medicare, Member Advisories, Member-Only, Regulatory, Reimbursement.

The Centers for Medicare and Medicare Services (CMS) issued Transmittal 3625 officially announcing that the inflation factor for payments under the Medicare ambulance fee schedule for 2017 will be 0.7%.

The calculation for determining the Medicare ambulance inflation factor is as follows: Consumer Price Index – Urban (which is the change in the CPI-U from June to June) minus the non-farm business multi-factor productivity adjustment (MFP) as projected by the Secretary of HHS (10-year average). The CPI-Urban for 2017 is 1.0% with a MFP of 0.3% which equals the 0.7% inflation factor. As part of the Affordable Care Act, a productivity adjustment is subtracted from the CPI-Urban for the final inflation update.

Telling Our Story

Written by Maria Bianchi on . Posted in Government Affairs, Legislative, Regulatory.

To this day, ambulance services in the United States are still the only health care provider that delivers care regardless of a patient’s ability to pay. When you call 911, the medics show up and immediately begin providing health care. No one asks for an insurance card, or a credit card. They ask questions regarding the patient’s medical history… anything they need to know to provide better patient care.

Ambulance services provide more uncompensated care than any other health care professional in the United States. They must be ready to provide that service any moment, any hour of any day. There are no “office hours” or closed signs.

For many patients and their families, they are the best things to happen on the worst day of their lives. They take care of us.

But for whatever reason, some legislators, regulators, insurers look at our providers as transportation services, a commodity, and a supplier of services like durable medical equipment. They assume our costs are related to each trip and rarely consider that we always have to be ready to respond and only get paid when we transport. That is until someone they love needs us.

The AAA leadership is committed to changing all that. We refuse to let our industry be defined by stakeholders who may not understand the complexities of our world, of our medicine, our protocols and our services. We are looking to change the course of our future by mandating that we be viewed as providers and not suppliers or widgets. We fervently and wholeheartedly believe that we make an even greater difference to the health and well being of the communities we serve because of our distinct nature of our services: we are mobile, we are everywhere, we are underutilized because of a reimbursement structure that only allows for compensation when transporting. Therefore, the only way for ambulance services to not just survive but thrive in any future health care system is to attain provider status. It is the game changer. It puts us in the drivers seat regarding the type of service we should provide (treat and refer, alternative destinations, collaborative models of care). It makes our services more nimble, efficient, and better able to serve our communities.

Because CMS will mandate cost reporting for anyone getting reimbursement through their programs, we are fighting hard to insure that our data is collected accurately, allowing our industry of primarily small, rural providers who at times are the only ones within 100’s of square miles providing health care the least burdensome way of providing that data… and make no mistake, folks—we need data to prove what every ambulance service providers knows in the United States… we are significantly underpaid by Medicare and Medicaid. So I implore every ambulance service to join us in our fight for our future… to help us be identified by those who have influence on our regulations and reimbursement rates, that we have been and are providers of health care and as such need to be recognized and compensated for the lifesaving work we do.

We cannot do it without you.

Get Involved with AAA’s Advocacy Efforts

Maria Bianchi, CAE, is the executive vice president of the American Ambulance Association.

Life EMS’s Jimmy Johnson on Sustainable Reimbursement

Written by Jimmy Johnson on . Posted in Government Affairs, Legislative, Medicare, Reimbursement.

To address the importance of the work that the payment reform committee is doing, we must consider the value of the part that small providers play in the healthcare delivery system today, and how imperative it is that we accomplish goals such as moving from Supplier to Provider status for all ambulance services in order to set the table for reimbursement that is more creative than just fee for transports. For example, 73% of all ambulance services who are credentialed by Medicare do less than 1,000 transports per year, which does not add up to sustainability for ambulances services endeavoring to adhere to best practices in providing emergency medical care.   A vast majority of those services represented in the 73% are the first line—and in many cases the only line—of emergency medical care in their communities.

—Jimmy Johnson
CEO, Life EMS
Past President, American Ambulance Association
Co-Chair, American Ambulance Association Payment Reform Committee
Enid, OK

Northwell Health’s Jonathan Washko on AAA Membership

Written by Jon Washko on . Posted in Government Affairs, Reimbursement.

“Northwell Health’s Center for EMS is an active participant in the AAA and encourage every EMS agency in the U.S. to participate. Through this relationship, we receive insights, expert analysis and input into important industry issues that affect us all. Our membership has returned  dividends in countless ways and therefore its value proposition is significant.  From risk management, to financial reform, leadership development and industry best practice, the AAA has given us a platform from which to learn, share and grow as an organization and as leaders in our industry.”

Jonathan D. Washko, MBA, NREMT-P, AEMD
Assistant Vice President, Center for EMS at Northwell Health
Alternate Director, American Ambulance Association Board

CMS Moratoria Update

Written by Kathy Lester on . Posted in Government Affairs, Medicaid, Medicare, Member Advisories, Member-Only, Regulatory.

The Centers for Medicare & Medicaid Services Lifts Moratoria on Enrollment of Part B Emergency Ground Ambulance Suppliers in All Geographic Locations; Moratoria for Part B Non-Emergency Ground Ambulance Suppliers Extended

Effective July 29, the Centers for Medicare & Medicaid Services (CMS) has lifted the temporary moratoria in all geographic locations for Part B emergency ground ambulance suppliers.  Beginning in 2013, CMS placed moratoria on Medicare Part B ground ambulance suppliers in Harris County, Texas, and surrounding counties (Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller).  In February 2014, CMS announced it would add six more months to these moratoria and add Philadelphia, Pennsylvania, and surrounding counties (Bucks, Delaware, and Montgomery), as well as the New Jersey counties of Burlington, Camden, and Gloucester.  Since that date, CMS extended the moratoria four additional times, most recently in February of this year.

CMS considers qualitative and quantitative factors when determining if there is a high risk of fraud, waste, and abuse in a particular area and whether or not it should establish a moratorium.  If CMS identifies an area as posing an increased risk to the Medicaid program, the State Medicaid agency must impose a similar temporary moratorium as well.  CMS also consults with the Office of the Inspector General (OIG) within the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) when identifying potential areas and providers/suppliers that should be subject to a temporary moratorium.  Finally, CMS also considers whether imposing a moratorium would have a negative impact on beneficiary access to care.  In areas where there is a temporary moratorium, the policy does not apply to changes in practice location, changes to provider/supplier information (e.g., phone number, address), or change in ownership.  Temporary moratoria remain in place for six months, unless CMS extends the policy through notice in the Federal Register.

CMS may lift a moratorium at any time if the President declares an area a disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, if circumstances warranting the imposition of a moratorium have abated, if the Secretary of HHS has declared a public health emergency, or if, in the judgment of the Secretary of HHS, the moratorium is no longer needed.  After a moratorium is lifted, providers/suppliers previously subject to it will be designated to CMS’s “high screening level” for six months from the date on which the moratorium was lifted.

CMS has announced it will lift the moratoria on new Part B emergency ambulance suppliers in all geographic locations because the Agency’s evaluation has shown the primary risk of fraud, waste, and abuse comes from the non-emergency ambulance supplier category and that there are potential access to care issues for emergency ambulance services in the areas with moratoria.  New emergency ambulance suppliers seeking to enroll as Medicare suppliers will be subject to “high risk” screening.  If enrolled, these suppliers will be permitted to bill only for emergency transportation services.  They will not be permitted to bill for non-emergency services.

The moratoria remain in place for Medicare Part B non-emergency ground ambulance suppliers for all counties in which moratoria already are in place in New Jersey, Pennsylvania, and Texas.

 

2016 Ambulance Ride-Alongs

Written by Tristan North on . Posted in Government Affairs, Legislative, Member Advisories.

The AAA 2016 Congressional Ride-Along Toolkit is now available.

Congress adjourned on July 15 for their August congressional recess with members of Congress returning home to their districts and states.  This is the perfect opportunity for you to educate your members of Congress about those issues, in particular Medicare ambulance relief and reform, which are important to your operation.  The most effective way to deliver these key messages is to host your member of Congress or their staff on a tour of your operation and an ambulance ride-along.  If you cannot host a tour and ride-along, we strongly encourage you to arrange local meetings with your members of Congress during August. The AAA has made the process of arranging a ride-long or scheduling a meeting easy for you with our 2016 Congressional Ride-Along Toolkit.

While the current temporary Medicare ambulance relief increases don’t expire unit December 31, 2017, meet with your members of Congress now to gain their support for making the relief permanent.  Also, there is a potential opportunity this year to make progress on provisions to change our status from “suppliers” to “providers” of health care services and to direct CMS to collect ambulance cost data.  Enactment of these two provisions is necessary to set the stage for future reform of the Medicare fee schedule and reimbursement for services other than a transport.  During the tours or meetings, please therefore request your members of Congress to cosponsor the Medicare Ambulance Access, Fraud Prevention and Relief Act (S. 377, H.R. 745) and support moving the provider status and cost data provisions of the bill this year.

Everything you need to arrange the ride-along or schedule a meeting is included on the AAA Website.

Email the AAA at info@ambulance.org if you need any assistance.

AAA Submits Testimony on Access to Emergency Medications

Written by Tristan North on . Posted in Government Affairs, Legislative.

On July 12, the House Energy and Commerce Subcommittee on Health held a hearing on “Strengthening our National Trauma System.”  As part of the hearing, the Subcommittee heard from witnesses about the Preserving Patient Access to Emergency Medications Act (H.R. 4365).  The AAA strongly supports H.R. 4365 which would ensure that EMS personnel can continue to administer controlled substances to patients. The AAA submitted written testimony for the hearing record which can be accessed here and read below.

—

The American Ambulance Association (AAA) thanks the Chairman, Ranking Member, and Members of the Subcommittee on Health for holding a hearing to consider proposals to improve and strengthen the national trauma system. The AAA represents hundreds of ambulance services across the United States that participate in emergency and nonemergency health care and medical transportation. The Association serves as a voice and clearinghouse for ambulance services, and views prehospital care not only as a public service, but also as an essential part of the total public health care system. To that end, we urge Congress to pass the Protecting Patient Access to Emergency Medications Act of 2016 (H.R. 4365) by Congressman Hudson (R-NC). This legislation is necessary to ensure that patients in need of emergency medical care have access to life-saving medications.

A longstanding practice has allowed Emergency Medical Services (EMS) practitioners to administer and deliver controlled substances under the oversight of physicians through directional guidelines known as standing orders. The use of standing orders allows EMS personnel who are the often the entry point into the health care system to administer potentially life-saving drugs as quickly as possible to patients in emergency situations. However, the Drug Enforcement Administration has determined that the Controlled Substances Act as currently written prohibits EMS personnel from administering such medications to patients through standing orders. This endangers lives by limiting access to emergency medications that seriously ill or injured patients may need.

Congressman Hudson’s legislation would remedy this situation by clarifying that EMS agencies are allowed to use standing orders from their medical director to administer controlled substances to patients. Codifying this current practice will ensure that EMS practitioners and patients do not see any disruption in the provision of emergency care. H.R. 4365 would also permit EMS agencies to register directly with the DEA; require each EMS agency to have one or more medical directors; allow a single registration for an EMS agency, not a separate registration for each location; and update requirements for EMS agencies’ receipt, storage, and tracking of controlled substances.

The unique nature of mobile emergency medical services sets us apart from other health care services governed by the Controlled Substances Act. H.R. 4365 is needed to ensure that regulatory oversight to prevent abuse of controlled substances does not threaten the provision of time-sensitive emergency medical care to those with critical injuries and illnesses. The AAA respectfully requests that the Committee move expeditiously to support this vital legislation so that our nation’s EMS practitioners can care effectively for patients in need.

Supreme Court Clarifies Liability of Federal Contractors

Written by Brian Werfel on . Posted in Judicial.

Supreme Court issues a decision clarifying  under Implied False Certification Theory

On June 16, 2016, the Supreme Court issued a decision that clarifies the liability of federal contractors, including health care providers that participate in the Medicare or Medicaid programs, under the False Claims Act for implied frauds.  Writing for a unanimous court, Justice Clarence Thomas held in Universal Services v. United States ex rel. Escobar that the so-called “implied false certification theory” can serve as the basis for False Claims Act liability in situations where a federal contractor has submitted claims for payment, and where the contractor makes specific representations regarding the services it has provided but fails to disclose the contractor’s non-compliance with one or more material requirements that make those representations otherwise misleading.  The Court further held that liability under the False Claims Act does not turn on whether the noncompliance related to a requirement that had been expressly designated as a condition for payment.

The case involved Universal Health Services, Inc., and its subsidiary Arbour Counseling Services.  Arbour operated a mental health facility in Lawrence, Massachusetts.  For the period from 2004 through 2009, Arbour provided mental health counseling services to Yarushka Rivera, a Massachusetts Medicaid beneficiary.  In May 2009, Rivera had an adverse reaction to a medication that a purported doctor at Arbour had prescribed after diagnosing her as suffering from bipolar disorder.  In October 2009, Rivera had a seizure and died.  At the time of her death, she was 17 years old.

Following Rivera’s death, a counselor employed by Arbour indicated to Rivera’s mother and stepfather that only a handful of Arbour employees were actually licensed mental health professionals.  Further investigation revealed that only 1 of the 5 professionals that had treated Rivera was properly licensed.  The practitioner that diagnosed Rivera as bipolar had identified herself as a Ph.D; however, it turns out that her degree was from an unaccredited Internet college, and that the State of Massachusetts had rejected her application to be licensed as a psychologist.  The individual that prescribed the medication that ultimately led to Rivera’s death held herself out to be a psychiatrist, when in fact she was a nurse who lacked the authority to prescribe medications.  21 other Arbour employees were found to have lacked the proper licensures to provide counseling services.

In 2011, the mother and stepfather filed a qui tam alleging that Universal Health had violated the False Claims Act under an implied false certification theory of liability.  Specifically, they alleged that Universal Health had made representations that its services were provided by specific types of professionals, but failed to disclose the numerous violations of the Massachusetts Medicaid Program’s regulations pertaining to staff qualifications and licensing.

The federal district court granted Universal Health’s motion to dismiss the complaint.  While local precedent had previously embraced the implied false certification theory of liability, the district court held that liability could not be established because none of the regulations Arbour was alleged to have violated constituted a condition of payment.  The First Circuit Court of Appeals reversed the lower court.

The Supreme Court agreed to hear the case to resolve the disagreement among the Circuit Courts over the validity of the implied false certification theory of liability.  In his decision, Justice Thomas noted that the Seventh Circuit had expressly rejected the theory.  Other Circuit Courts had accepted the theory, but limited its application to cases where the defendant failed to disclose violations of expressly designated conditions of payment.  Finally, some Circuit Courts had held that the condition of payment need not be expressly designated as such to establish False Claims Act Liability.

The Court first held, in no uncertain terms, that the implied false certification theory can, under certain circumstances, provide a basis for liability under the False Claims Act.  The Court emphasized that common-law fraud has long encompassed certain misrepresentations by omission.  To establish False Claims Act liability, the Court determined that two conditions must be satisfied: (1) the claim must not merely request payment, but must also make specific representations about the goods or services provided and (2) the parties’ failure to disclose its noncompliance with material statutory, regulatory, or contractual requirements must render those representations misleading.

The Court then turned to Universal Health’s contention that, even if one accepts the implied certification theory, its application must be limited to misrepresentations about express conditions of payment.  Justice Thomas rejected this interpretation, noting that nothing in the statute suggested that an express condition of payment was relevant to determining whether a claim was false or fraudulent.  However, the Court failed to adopt the expansive ruling offered by the federal government, namely that any omission made in connection with a request for payment could trigger False Claims Act liability.  Instead, the Court adopted a relatively narrow view of those omissions that could establish liability, focusing primarily on the concept of “materiality.”  Essentially, the Court held that the omission would only trigger liability if its proper disclosure was outcome determinative.  In other words, the omission would be considered material if its proper disclosure would have likely resulted in the claim being denied.

A number of commentators have suggested that the Court’s ruling expands the scope of potential False Claims Act liability.  This is undoubtedly true for contractors (including health care providers) that operate within the Seventh Circuit’s jurisdiction (Illinois, Indiana, and Wisconsin), which previously rejected the implied false certification theory.  However, the impact of the Court’s ruling on other parts of the country will be more nuanced.  In some important respects, the creation of the new materiality requirement may limit the instances in which the government can establish False Claims Act Liability.

To see how this decision could be applied to the EMS industry, consider the following hypotheticals:

  • An ambulance provider submits a claim to Medicaid for a medically necessary transport; however, it is known at the time that the claim is submitted that the EMT that drove the ambulance had allowed his state EMT certification to lapse.
  • An ambulance provider submits a claim to Medicare for a medically necessary transport. The patient had previously been transported by the same ambulance provider, and the ambulance provider had obtained a valid lifetime signature authorization signed by the patient.  The ambulance provider checked the appropriate box on the electronic claim for to indicate that they had a valid signature for the patient on file.  However, during the interim period between the two transports, a legal guardian had been assigned to handle the patient’s affairs.  The legal guardian took the unusual step of notifying the ambulance that she had been appointed the patient’s guardian, and expressly revoked the prior lifetime signature authorization.  The guardian further indicated that she preferred to make future decisions regarding payment authorization on a case-by-case basis.

The first hypothetical is a close parallel to the facts of the actual case before the Court.  Applying the Court’s reasoning, False Claims Act liability would hinge on whether the omission of the fact that the EMT’s certification had lapsed was material.  In other words, if the court feels that the State Medicaid Program would have likely rejected the claim had the lapse in certification been properly disclosed, then liability under the False Claims Act liability might exist.  If, however, the State was likely to have treated the lapse as a minor technical violation but not something worthy of denying the claim, then False Claims Act liability would not exist.  Note: in the actual case, the State of Massachusetts investigated Arbour’s misconduct, and decided the appropriate action was a nominal fine, and not the recoupment of its Medicaid payments.

The second hypothetical is a bit more complex.  There is no question that the failure to disclose that the lifetime signature had been revoked was an omission.  It could also be argued that its omission was misleading, i.e., by not disclosing that the lifetime signature had been revoked, the provider was suggesting that it had the patient’s affirmative consent to the submission of the claim, when in fact it did not.  The question is whether the omission was material to Medicare’s decision to pay the claim.  On the one hand, the Medicare regulations do make compliance with the patient signature requirement an express condition for payment.  One the other hand, Medicare permits that requirement to be satisfied in multiple ways, several of which do not require the patient’s affirmative consent.  In the hypothetical, the patient had a legal guardian, which strongly suggests that he or she would have been incapable of signing at the time of transport anyway.  Wat if the ambulance provider subsequently obtained a valid form of secondary verification?  What if the ambulance provider subsequently obtained verbal consent from the legal guardian to the submission of the claim?  Would Medicare be likely to deny the claim on the basis of not complying with the strict documentation standards of the signature requirement, even though the patient (through his or her guardian) has no objection to the submission of the claim?

Only time will tell how future courts interpret this material standard.  Stay tuned.

MedPAC Issues June 2016 Report to the Congress

Written by Kathy Lester on . Posted in Finance, Government Affairs, Medicare, Member Advisories, Member-Only, Regulatory.

MedPAC Issues June 2016 Report to the Congress with Chapter on Improving Efficiency and Preserving Access to Emergency Care in Rural Areas

Medicare Payment Advisory Commission (MedPAC or the Commission) has issued its June 2016 Report to the Congress.   The June report includes recommended refinements to Medicare payment systems and identifies issues affecting the Medicare program, broader changes in health care delivery, and the market for health care services.

Chapter 7 focuses on preserving access to emergency care in rural areas.  The Commission recognizes that access to inpatient and emergency services in rural areas is threatened because of the dwindling populations.  Declining populations can lead to fewer hospital admissions and reduced efficiencies that can create financial and staff problems for hospitals.  The Report notes that “[d]eclining volume is a concern because low-volume rural hospitals tend to have worse mortality metrics and worse performance on some process measures.” In addition, “low-volume CAHs have the difficult job of competing with each other for a shrinking pool of clinicians who want the lifestyle of operating an outpatient practice during the day, covering inpatient issues that arise at night, and covering the emergency department.”

Under current policies, most rural hospitals are critical access hospitals (CAHs).  They receive a cost-based payment for providing inpatient and outpatient services to Medicare beneficiaries.  To receive these payments, a hospital must maintain acute inpatient services.  In rural areas, many small towns do not have a sufficient population to support such a model.  Yet eliminating these services would mean giving up the supplemental payments that their hospitals receive through the CAH cost-based payment model.

The hospital prospective payment system serves as the payment model for other hospitals.  Rural providers receive supplemental payments, which are also linked to providing inpatient services.

MedPAC highlights the concerns with cost-based payment models:

  • Cost-based payments do not direct payments toward isolated hospitals having the greatest financial difficulty, but rather reward hospitals in high-income areas with higher non-Medicare margins by providing them with higher Medicare payments.
  • Cost-based payments encourage providers to expand service lines with high Medicare and private-payer shares rather than primarily focus on services that are needed on an emergency basis.
  • Cost-based models reduce the incentive for hospitals to control their costs, which can lead to unnecessary growth in capital costs, despite declining volumes.

In light of these challenges, MedPAC sets forth a two of options that would give isolated rural hospitals the option of converting to an outpatient-only model while maintaining their special payment arrangements.  These models seek to ensure access to essential services:

  • Establishing a 24/7 emergency department model; and
  • Adopting a clinic with ambulance services model.

Under the 24/7 emergency department model, the hospital would be paid under the outpatient prospective payment rates and would receive an annual grant/fixed payment from Medicare to cover the standby costs associated with 24/7 emergency services.  The current supplemental payments would be redirected to support this annual grant/fixed payment amount.  If a hospital chose to use inpatient beds as skilled nursing facility (SNF) beds, it would be reimbursed under the Medicare SNF prospective payment system.  The hospital could be required to use the fixed payment for emergency standby capacity, ambulance service losses, telehealth capacity, and uncompensated care in the emergency department.

Under the clinic and ambulance model, hospitals could convert their existing inpatient facilities into primary care clinics.  These clinics would be “affiliated” with an ambulance service.   Medicare would pay the prospective rates for primary care visits and ambulance transports.  Medicare would provide an annual grant/fixed payment to support the capital costs of having a primary care practice, the standby costs of the ambulance service, and uncompensated care costs.

The Commission recognizes that the “low population density would also make it difficult to retain primary care providers and support an ambulance service.”  It could also be difficult to describe the exact level of primary care and ambulance access that is required to receive the fixed Medicare payment.

MedPAC reiterates its position that “supplemental payments beyond the standard PPS rates should be targeted to isolated rural providers that are essential for access to care.”  Thus, it states that a program to support stand-alone emergency departments should be limited to facilities that are a minimum distance in road miles from the nearest hospital.

 

AAA Issues Response to GAO Claims Report

Written by Tristan North on . Posted in Medicare, Member Advisories, Regulatory.

On May 13, the Government Accountability Office (GAO) issued a report entitled “Claim Review Programs Could Be Improved with Additional Prepayment Reviews and Better Data“. In the report, the GAO recommended that CMS be provided legislative authority to allow Recovery Auditors to use prepayment claims reviews to address improper Medicare payments. CMS fortunately disagreed with the GAO on the recommendation and cited better options such as prior authorization to address potentially improper payments.

The AAA has now issued a Formal Statement in response to the GAO report noting the problems with prepayment claims review for ambulance services and promoting the better alternative of prior authorization for nonemergency BLS transports of dialysis patients. The statement is in follow up to our Member Advisory providing an in-depth review of the report. Please feel free to share the statement if you receive questions about the report.

On June 26, 2015, the AAA had participated in a conference call with the GAO officials conducting the report in which AAA representatives had pushed for recommendations in line with our statement. The AAA will continue to advocate for policies to address improper payments that address the issue but are also the least burdensome to AAA members and help ensure our ability to continue to provide high-quality emergency and nonemergency ambulance services to patients.

Indian Health Service Issues Final Rule on Payments to Non-Contracted Providers

Written by Brian Werfel on . Posted in Government Affairs, Medicare, Member Advisories, Talking Medicare.

On March 21, 2016, the Indian Health Service (IHS), an agency with the Department of Health and Human Services, issued a final rule with comment period titled “Payment for Physician and Other Health Care Professional Services Purchased by Indian Health Programs and Medicare Charges Associated with Non-Hospital-Based Care.” This final rule will change the way the Indian Health Service pays for Purchased/Referred Care (PRC), formerly known as Contract Health Services (CHS). The provisions of this final rule will become effective on May 20, 2016.

Under current regulations, payment for PRC services is based on rates established by arms-length negotiations between the physician or other health care provider (including ambulance providers and suppliers) and the IHS, Tribe, Tribal Organization or urban Indian organizations (collectively referred to hereinafter as I/T/U programs). In the absence of an agreement, the health care provider is generally paid its full billed charges.

Provisions of Final Rule

The final rule amends the regulations at 42 C.F.R. 136.1 e. seq. to provide that payment for PRC services will now be based on Medicare payment methodologies. Specifically, payments would generally be set at the lowest of: (1) the amount provided for such service under the applicable Medicare fee schedule or Medicare waiver, (2) the amount negotiated with a specific provider or its agent, or the amount negotiated by a repricing agent, if applicable, or (3) the rate for such service paid by the health care provider’s or supplier’s “Most Favored Customer” (MFC). For these purposes, IHS has indicated that the MFC rate will be evidenced by commercial price lists or paid invoices and other related pricing and discount data.

While the previous paragraph sets forth the general rate-setting regime, a number of important exceptions will apply. First, any negotiated rate between the parties must be equal to or better than the provider’s or supplier’s MFC rate. The AAA is interpreting this requirement to require the provider or supplier to offer better (i.e. lower pricing) to the I/T/U program than it offers to any nongovernmental entities, including insurance plans. However, IHS indicated that this restriction would not apply to the extent the I/T/U program determines that the negotiated rate is otherwise fair and reasonable, and is otherwise in the best interests of the I/T/U (as determined by the I/T/U). Second, in the event that no agreement exists, and the Medicare Fee Schedule amount is greater than the provider’s or supplier’s MFC rate (i.e. the provider or supplier has voluntarily elected to accept a rate lower than the corresponding Medicare allowable from at least one nongovernmental entity), then the rate may not exceed the MFC rate, but may be lower than the MFC rate.

The final rule can be viewed in its entirety here.

The GAO Releases New Report on Claims Review Programs, Recommending Additional Prepayment Review Authority and Written Guidance on Calculating Savings from Prepayment Review

Written by Kathy Lester on . Posted in Government Affairs, Medicare, Member Advisories, Reimbursement, Talking Medicare.

On Friday, May 13, the Government Accountability Office (GAO) publicly released a new Medicare report entitled, “Claim Review Programs Could Be Improved with Additional Prepayment Reviews and Better Data,” which it shared with the Congress and the Centers for Medicare & Medicaid Services (CMS) in April. The report is addressed to the Senate Finance Committee Chairman Orrin Hatch (R-UT) in response to his request.

The Report examines:

1. The differences, if any, between prepayment and post-payment reviews, and the extent to which the contractors utilize these types of reviews;

2. The extent to which the Medicare claim review contractors focus their reviews on different types of claims; and

3. CMS’s cost per review and the amount of improper payments identified by the claim review contractors per dollar paid by CMS.

In compiling the Report, the GAO reviewed Administration documents, interviewed CMS officials, Recovery Auditors (RAs), and Medicare Administrative Contractors (MACs). The GAO also interviewed representatives from 10 Medicare provider/supplier organizations that have experienced claim reviews on both a pre- and post-payment review basis. The AAA worked the GAO by participating in a telephone interview and providing written comments.

The GAO examined three types of contractors – the RAs, the MACs, and the Supplemental Medicare Review Contractor (SMRC). These contractors are responsible for reviewing claims that are at high risk of improper payment and claims that pose the greatest financial risk to Medicare. Only MACs conduct both pre- and post-payment reviews. RAs and the SMRC conduct only post-payment reviews, but RAs did participate in a pre-payment review demonstration project. RAs are paid on a contingent basis from recovered overpayments. During the demonstration, RAs were paid contingency fees based on claim denial amounts.

In its review, the GAO found that few differences exist between pre- and post-payment reviews, but noted that pre-payment reviews “better protect Medicare funds.” The GAO found that CMS is not always able to collect overpayments from post-payment reviews and that post-payment reviews require more administrative resources than pre-payment reviews.

The provider/supplier organizations highlighted two issues that need to be resolved with regard to pre-payment review audits. First, they identified that the option to hold discussions with RAs before payment determinations are made in the context of post-payment reviews can be helpful. These discussions are not part of the pre-payment review process; nor are they part of the MAC process. CMS indicated that it is not practical to have such an option in these contexts because of the timing requirements.

Second, the providers/suppliers noted that pre-payment reviews create cash flow burdens, in light of the appeals process. When appealing a post-payment review, providers/suppliers retain their Medicare payments through the first two rounds of review. If the denial is overturned at a higher level, CMS must pay back the recovered amount with interest accrued. However, for pre-payment reviews, providers/suppliers do not receive payment and CMS does not provide interest on the dollars withheld if the provider/supplier wins on appeal.

MACs have traditionally relied upon post-payment review. MACs will also use post-payment reviews to analyze billing patterns to inform other review activities, such as future pre-payment reviews and educational outreach. CMS has encouraged MACs to perform extrapolation, especially for providers/suppliers that submit large volumes of low-dollar claims with high improper payment rates.

The SMRC reviews often include studies to develop sampling methodologies or other policies that could be rolled out more broadly in the future.

The GAO also found that different contractors focused on different claims during 2013 and 2014. RAs focused on inpatient claim reviews primarily. RAs have the discretion to select the claims they review and the GAO stated that “their focus on reviewing inpatient claims is consistent with the financial incentives associated with the contingency fees they receive, as inpatient claims generally have higher payment amounts compared to other claim types.” The GAO also found that RA claim reviews had higher average identified improper payment amounts per post-payment claim review relative to other claim types in 2013 and 2014. For the upcoming contracts, CMS has indicated that it will more closely monitor RAs to ensure that they are reviewing all types of claims. For DME claims in particular, CMS has increased the contingency fee percentage paid to the RAs for DME, home health agencies, and hospice claims.

In contracts, MAC claim reviews focused primarily on physician and DME claims. DME claims accounted for 29 percent of their reviews in 2013 and 26 percent in 2014, while representing 22 percent of total improper payments in fiscal year 2013 and 16 percent of improper payments in fiscal year 2014. DME claims also had the highest rates of improper payments in both years.

Physician claims is a broadly used term that includes labs, ambulances, and individual physician.

The SMRC focused its claim reviews on studies that CMS directs the contractor to conduct. In 2013, the SMRC reviews focused on outpatient and physician claims, but in 2014 the focus shifted to home health agency claims and certain DME suppliers.

The GAO concluded that both RAs and SMRC generated savings for CMS, but unreliable data prevented comparing these results to those of MACs. CMS paid the RAs an average of $158 per review; the RAs averaged $14 in identified improper payments per dollar paid by CMS in both 2013 and 2014. CMS paid the SMRC an average of $256 per review, and the SMRC averaged $7 in identified improper payments per dollar paid in 2013 and 2014. The higher SMRC costs related to the study costs and extrapolation.

CMS lacks reliable MAC cost and savings data. CMS does not collect reliable data on claim review funding and does not have consistent data on identified improper payments. While CMS has established ways to collect this information, some MACs are not reporting it. MACs also use different methods to calculate and report savings.

The GAO recommended that CMS take two actions:

• In order to better ensure proper Medicare payments and protect Medicare funds, CMS should seek legislative authority to allow the RAs to conduct prepayment claim reviews.

• In order to ensure that CMS has the information it needs to evaluate MAC effectiveness in preventing improper payments and to evaluate and compare contractor performance across its Medicare claim review program, CMS should provide the MACs with written guidance on how to accurately calculate and report savings from prepayment claim reviews.

CMS did not agree with the first recommendation, stating that it has a strategy to move away from “pay and chase” using different policies, such as prior authorization initiatives and enhanced provider enrollment screening. CMS concurred with the second recommendation.

CMS Releases Medicare Provider Utilization and Payment Data for CY 2014 for Ambulance Suppliers, Physicians and Other Part B Organizations

Written by Brian Werfel on . Posted in Government Affairs, Medicare, Member Advisories, Reimbursement, Talking Medicare.

On May 5, 2016, CMS publicly released the “Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File,” which provides information on the services and procedures provided to Medicare beneficiaries by ambulance suppliers, physicians and other healthcare provider groups.  The data file is based on calendar year 2014 data. This release follows on last year’s release of payment data for calendar year 2012.

The database lists all individual and organizations providers by National Provider Identifier (NPI), and provides information on utilization, total payments and submitted charges.  It can also be searched by Healthcare Common Procedure Coding System (HCPCS) code and place of service.

The Public Use File can be obtained here. Please note that you will need to download the desired file and then import it into an appropriate database or statistical software program.  CMS is indicating that Microsoft Excel is not sufficient for these purposes, and that importing it into Excel may result in an incomplete loading of data.

A number of news organizations have already created searchable databases that will allow you to search the CY 2012-2013 data by physician/organizational name, provider specialty, city, state, etc.  It is expected that these news organizations will be updating their websites to incorporate the CY 2014 data in the coming weeks. The searchable database created by the Wall Street Journal can be accessed here.

New Member Benefit: StateTrack

Written by Aidan Camas on . Posted in Government Affairs, Legislative, Member-Only, Regulatory.

Introducing the AAA’s newest member benefit, StateTrack, powered by CQ Roll Call. StateTrack will give AAA members the ability to easily track crucial legislation and regulations in one state or all of them as well as the Federal Government.

StateTrack Map

AAA StateTrack

StateTrack will show you a map of the entire United States. Click on the state you are interested in tracking and you will see a list of all regulations and legislation impacting the following areas:

► Affordable Care Act
► Ambulance
► Community Paramedicine
► EMT
► Medicaid
► Medicare
► Mobile Integrated Health
► Paramedic

Click on the key words above to narrow down your search to only legislation and regulations that contain those terms.

Members will be able to view the full text of each piece of legislation as well as edits that have been made to the text, bill number, status of the bill and the representative who introduced it. StateTrack will make it easier for AAA members to keep track of legislation and regulations on the state level that could have enormous impacts on their ambulance services. States that are white, are either out of session or do not have any pending legislation or regulations that fall under the AAA search criteria.

Please contact Aidan Camas at acamas@ambulance.org if you have any questions.

HHS Office of Civil Rights Announces Phase 2 HIPAA Audit Review Program

Written by Brian Werfel on . Posted in Medicaid, Medicare, Regulatory, Reimbursement, Talking Medicare.

On March 21, 2016, the Office for Civil Rights of the Department of Health and Human Services announced Phase 2 of its HIPAA Audit Program.  The Health Information Technology for Economic and Clinical Health Act (HITECH) required HHS to perform periodic audits of covered entities and business associates to assess their compliance with the HIPAA Privacy, Security and Breach Notification Rules.  These rules are enforced by the HHS Office for Civil Rights (OCR).

Background on Phase 1

In 2011, OCR implemented a pilot audit program to assess the controls and processes covered entities have adopted to meet their HIPAA obligations.  The pilot audit program was conducted in three phases.  OCR first developed a set of audit protocols that it would use to evaluate covered entities’ compliance.  This protocol was then tested using a limited number of audits.   The final step involved using the revised audit protocols on a larger number of covered entities.  Ultimately, 115 covered entities were selected for review, and all audits were concluded by December 31, 2012.

Phase 2

Phase 2 of the HIPAA Audit Program will focus on the policies and procedures adopted and employed by entities to meet the requirements of the Privacy, Security, and Breach Notification Rules.  OCR has indicated that these audits will be conducted primary through desk audits (i.e., document submissions), although by a limited number of on-site audits will also be conducted.

Unlike Phase 1, which focused exclusively on covered entities, OCR is indicating that Phase 2 will involve audits of both covered entities and their business associates.

As with the initial pilot audit program, Phase 2 will consist of several stages.  The first stage involves verification of a covered entity’s or business associate’s address and contact information.  A sample address verification letter can be viewed by clicking here.  OCR has indicated that emails will be sent to entities requesting accurate contact information for the entity.  OCR will then transmit a “pre-audit questionnaire” to the entity.  These questionnaires will be used to gather data about the size, type, and operations of potential auditees.  Based on this data, OCR will create potential audit subject pools.

Note: OCR has indicated that if an entity fails to respond to OCR’s request to validate its contact information and/or fails to return the pre-audit questionnaire, OCR will use publicly available information about the entity to create its audit subject pool.  As a result, an entity that fails to respond may still be selected for audit and/or compliance review.  OCR is specifically reminding entities to check their email “junk” or “spam” folders for any communications from OCR.

Once OCR has developed its audit subject pools, it will randomly select auditees from these pools.  Auditees will then be notified by OCR of their participation.  OCR has indicated that the first set of audits will focus on covered entities, with a subsequent round of audits focused on business associates.  These audits will focus on compliance with specific requirements of the Privacy, Security, or Breach Notification Rules.  Auditees will be notified of the scope of their audit in a document request letter.  Both of these rounds will be desk audits.  OCR indicated that all desk audits will be completed by the end of December 2016.

A third round of on-site audits will take place after the completion of the desk audits, and will examine a broader scope of requirements under HIPAA.  OCR further indicated that desk auditees may also be subject to on-site audits.

If an entity is selected for audit, OCR will notify them by email.  The email will introduce the OCR audit team, explain the audit process, and discuss OCR’s expectations in greater detail.  The email notification letter will also include initial requests for documentation.  OCR has indicated that it will expect entities to respond to these documentation requests within ten (10) business days.  Documents will be submitted through a new secure online portal.  Once received, OCR’s auditors will review the submitted information and inform the entity of its draft findings.  The entity will then have ten (10) business days to respond with written comments, if any.  OCR will then review the entity’s comments and issue a final audit report within thirty (30) business days.

OCR has indicated that the audits are primarily intended as a compliance improvement activity.  OCR will use aggregated data to better understand compliance with respect to particular aspects of the HIPAA rules.  The goal being to understand what types of technical assistance and/or corrective actions would be most helpful.  In other words, OCR is indicating that the goal of these audits is to improve its understanding of the state of compliance, and not to penalize specific companies for violations.  However, OCR indicated that should an audit reveal a serious compliance issue, OCR may initiate a further compliance review of the company.

OCR indicated that it will not post a list of the audited entities, nor will its findings be available in a format that would clearly identify the audited entity.  However, OCR noted that audit notification letters and other information regarding these audits may be discoverable under the Freedom of Information Act (FOIA).

Additional information from OCR regarding the Phase 2 HIPAA Audit Program can be obtained by clicking here.

CMS Implements Cycle 2 Revalidation Program

Written by Brian Werfel on . Posted in Government Affairs, Medicaid, Medicare, Regulatory, Reimbursement.

By Brian S. Werfel, Esq. AAA Medicare Consultant

Want to learn more?

Join Brian Werfel and Angie Lehman for a 60 minute webinar on Revalidation for All Services.
June 29, 2016 at 2:00 PM EASTERN
Register►

CMS recently announced the start of its Cycle 2 Revalidation Program. This program affects all enrolled Medicare providers and suppliers.

In Cycle 1, which was conducted from 2011 through 2015, the so-called “trigger” to revalidate was a formal request to do so by your Medicare Administrative Contractor (MAC). For Cycle 2, CMS is adopting a new approach. CMS will be assigning revalidation due dates, i.e., dates by which the provider or supplier must revalidate. These due dates will be the last day of a particular calendar month. These due dates are based on the provider’s or supplier’s last successful revalidation or the date of the provider’s or supplier’s initial enrollment with Medicare. In other words, providers or suppliers that last revalidated in 2011 are likely to have new revalidation due dates in 2016, providers or suppliers that revalidated in 2012 are likely to have 2017 due dates, etc. The first set of due dates is May 31, 2016.

CMS has indicated that it will notify providers or suppliers by email within 2-3 months of their due date. These emails will include the following subject line: Urgent: Medicare Provider Enrollment Revalidation Request. If the email is returned as undeliverable, the MAC is instructed to send a paper revalidation notice to at least two of your reported addresses: correspondence address, special payments address, or primary practice address.

Providers or suppliers will be permitted to submit revalidations up to 6 months prior to their scheduled due date. Revalidations can be submitted either on paper or by using the online Provider Enrollment, Chain, and Ownership System (PECOS).

If a provider or supplier fails to submit a timely revalidation packet, CMS has indicated that the entity’s Medicare billing privileges will be deactivated. The entity will be required to submit a complete enrollment application to “reactive” its billing privileges. However, CMS has indicated that no payments will be made for services provided during the interim period.

If you have not received an email from your MAC asking that you revalidate, it is likely that your revalidation due date is more than 3 months out, or has not even been assigned. However, it is possible that the requests to revalidate may have been sent to invalid email addresses, or may have been routed to your email “spam” folder. It is also possible that paper revalidation notices may have been sent to obsolete physical addresses.

For these reasons, the AAA is strongly encouraging members to check the CMS revalidation webpage. That webpage includes a lookup tool that you can use to determine whether your organization has been assigned a revalidation due date. Currently, CMS has assigned due dates through the end of October 2016. Providers and suppliers that have yet to be assigned due dates will display as “TBD”. You can also download the entire list of currently enrolled providers and suppliers into an Excel spreadsheet. This option may be particularly helpful for organizations that bill under multiple Medicare PTANs (which can have separate revalidation due dates) and for billing agents that intend to assist their clients with the revalidation process.

In sum, the new process appears to be a vast improvement over how revalidations were handled during Cycle 2. Assuming things work as intended, AAA members should have a minimum of 2 months prior notice of the need to revalidate, and potentially up to 6 months prior notice. This should be more than enough time to submit the revalidation and avoid any potential disruptions to your ability to bill Medicare.

FDA Issues First Responder Drug Dispenser Guidance

Written by Tristan North on . Posted in Government Affairs, Operations, Professional Standards, Regulatory.

In accordance with the Drug Supply Chain Security Act of 2013, the FDA issued regulations last year to require drug dispensaries to build an electronic system to identify and track the distribution of drugs. Many small dispensaries do not have the ability currently to electronically trace small quantities of drugs. The AAA became concerned that hospital and other small dispensers would no longer provide first responders with critical drugs in fear of not being compliant with the new regulations. The AAA joined a coalition of dispensaries, pharmacists and others that also had concerns with the new regulations.

As a result of the efforts of the coalition and the AAA, we were able to delay enforcement of the requirements until today, March 1. The AAA then worked directly with the FDA to educate them about the unique nature that small dispensaries sometimes play in restocking certain ambulance service providers. Upon learning of these transactions, the FDA shared our concerns and worked quickly to release the guidance.

The guidance states that the FDA will not take action against drug dispensaries in providing drugs to first responders if the dispensary follows certain basic recording keeping policies. The agency will also not take any action against the first responder. The guidance is entitled “Requirements for Transactions with First Responders under Section 582 of the Federal Food, Drug, and Cosmetic Act — Compliance Policy Guidance for Industry“.

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