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Support AAA’s Medicare Relief Legislation, S. 967

Written by Mark Postma on . Posted in Government Affairs, Legislative, Medicare, Member Advisories.

Dear Fellow Members,

As you know, the Medicare ambulance add-on payments are set to expire on December 31, 2017. I’m proud to share with you that today, due to AAA advocacy efforts, permanent ambulance relief legislation was introduced by Senators Stabenow, Roberts, Schumer, Collins, and Leahy.

This bill, S.967, “Medicare Ambulance Access, Fraud Prevention, and Reform Act” would make permanent the vital urban and rural Medicare add-ons and super-rural bonus payments. Although some changes are likely during the committee markup process, we are cautiously optimistic that it will also carry through proposals to reclassify ambulance organizations as providers of health care (not suppliers of transportation), as well as a cost data collection system that does not place undue burden on ambulance services.

On behalf of the AAA, I’d like to extend my deepest thanks to Senators Stabenow, Roberts, Schumer, Collins, and Leahy for sponsoring the legislation, as well as the AAA Board, Government Affairs Committee, advocacy consultants, and staff who worked so diligently to build support on Capitol Hill.

Over the coming months, AAA will continue to connect with policymakers to build support for sustainable ambulance Medicare reimbursement. However, we need your help to ensure that this critical revenue remains in place. We ask that you please contact your Senators to voice your support for S. 967. AAA makes it easy to connect with your legislators through our online advocacy tool—please use it today to quickly send messages expressing the importance of the legislation to your ambulance service and the communities you serve.

If possible, we ask that you also work with fellow ambulance providers in your area to schedule in-person meetings with your legislators’ offices. If you arrange a meeting in your home state, please contact AAA staff at info@ambulance.org for talking points to support your conversation.

Now, more than ever, we need the active participation of each member organization to ensure our collective future! Thank you in advance for your assistance with advocacy outreach, as well as for your continued membership to the American Ambulance Association.

Mark Postma
President, American Ambulance Association
“Representing EMS in America”

Time to Automate

Written by Wendy Becofsky on . Posted in Finance, Medicare, Operations, Quality, Reimbursement.

Founded in 1964, now nationally recognized, Mohawk Ambulance Service is the largest privately owned ambulance service in upstate New York. Our organization services six emergency centers, makes 56,000 trips annually and employs a team of more than 250 staff members. Eighty percent of our trips are for emergency transports where patients are unknown, in critical condition or have no identifying information. Finding fast, efficient ways to verify demographics and discover insurance coverage for these patients is imperative for our revenue cycle and our bottom line.

We’ve always worked closely with our local hospitals and nursing homes to obtain information. Many standard processes have been refined over the years with checks and balances to verify coverage, screen deductibles and reduce eligibility-related rejections before claims are submitted to a payor. But our billing team knew we could do more to eliminate duplicate data entry and processing lag time.

This article describes our journey to a more streamlined billing process. It includes lessons learned and best-practice recommendations for other EMS providers looking to improve staff efficiency and reduce receivables.

First Stop: Real-Time Insurance Discovery

The first area we tackled was insurance discovery where we had three employees stationed. We focused on our self-pay patients and transports lacking complete demographic or insurance information. The goal was to eliminate manual steps and workflow lags—which we quickly achieved.

The original process involved building a list, submitting it to Payor Logic, waiting three days for feedback, and then re-entering information into our billing system. By bringing our vendors together to meet with our team, a real-time technology solution was developed and implemented.

Now our insurance verification team has immediate access to Payor Logic’s search capabilities. Insurance discovery is an online, real-time process. Lists, batches, searching websites and waiting for results have all been eliminated. Also, the two vendors built a crosswalk that integrates insurance coverage results back into our billing system to eliminate duplicate data entry and rekeying.

The productivity our verification team is now able to achieve is amazing. They now do the work of three staff with only two employees—a 30 percent boost in staff efficiency for insurance verification.

Billing also Gets Tech Boost

At Mohawk, we use a combination of technology solutions to support our revenue cycle. But each company worked independently—creating separate silos. Billers would have to search across several different systems, payor websites and the digital pages to collate all the various demographic and insurance data required to submit a claim. We had technology, but the process remained cumbersome and labor intensive.

By working with our vendors, we built points of integration to increase the number of claims processed without adding billing staff. For example, once a biller pulls up a trip, dozens of data elements from the billing system are uploaded into a single view to eliminate searching and save time.

Everything the biller needs to complete a claim is displayed in a consolidated view, consistent across all Mohawk companies. Billers can easily see patient signature, facility signature, narrative, vital signs, advanced life support and more. This level of integration eliminates the need to look at every page of the system to build the claim—saving dozens of hours every week.

Lessons Learned

Like most EMS providers, our mission is to uphold the highest standard of services with consistent devotion to delivering superior emergency medical care. And through this automation project, we took service excellence one step further—delivering world-class service throughout our billing process. We find more insurance coverage, reduce eligibility-related rejections, convert self-pay accounts and collect more revenue from the right source. Results thus far include:

  1. 30% improvement in staff efficiency for insurance verification
  2. 67% less time needed per case to screen for Medicare deductibles
  3. 100% elimination of wait times to discover billable insurance for self-pay patients

EMS providers looking to streamline the billing process should revisit their existing technology applications and engage in serious discussions with current vendors. New capabilities are out there and should be explored. The automation efforts described above have resulted in an efficiency uptick for Mohawk, despite being short staffed. New workflows for verification are being maintained by our team and next steps for automation expansion are being discussed. By keeping open communications and an ongoing dialogue with all parties involved, this automation experience has been a win-win for our business, our staff and our patients.

Understanding CERT

Written by Brian Werfel on . Posted in Medicare, Member-Only, Talking Medicare.

Talking Medicare: Understanding CERT

Every year around this time, our firm receives a steady stream of questions from AAA members about the CERT Program. Typically, the provider has received a notice from what appears to be the Centers for Medicare and Medicaid Services (CMS), which asks for medical records for one or two patient transports. These providers naturally wonder whether they are being audited, and how they should respond. The intent of this post is to clear up any confusion.

What is the CERT program?

The Comprehensive Error Rate Testing (CERT) program is an attempt by CMS to measure the rate of improper payments in the Medicare Fee-for-Service Program. It does so by evaluating a statistically valid random sample of claims to determine whether these claims were properly paid under the applicable Medicare coverage, coding, and billing rules.

In August 2016, CMS awarded responsibility for conducting CERT reviews to AdvanceMed. Therefore, if you receive a letter from AdvanceMed, and that review is asking for only a single claim, it is likely that you are being asked to participate in the FY 2017 CERT review.

What is the National Error Rate for ambulance services?

In its report for Fiscal Year 2016, CMS indicated that the overall improper payment rate was 11.00% across all provider types. CMS estimated that this represented approximately $41.08 billion in improper payments. This is down slightly from the FY 2015 review, which estimated the improper payment rate at 12.09%, representing $43.33 billion in improper payments. The FY 2016 reporting period ran from July 1, 2014 through June 30, 2015.

The overall error rate for Part A Providers, i.e., hospitals, nursing homes, etc., was 13.98%. The overall error rate for Part B providers was 11.71%.  In contrast, the error rate for durable medical equipment, prosthetics, orthotics, and supplies (DME) was 46.26%.

The overall error rate for ambulance was 11.7%, or basically the same as the overall Part B error rate. The ambulance error rate was further broken down based on the basis for a payment error. The most common error, comprising more than three-fourths of all errors, was either no documentation or insufficient documentation. The lack of medical necessity for the ambulance comprised only 15.6% of all improperly paid ambulance claims.

Should I freak out if my service is selected for review?

In a word, “No.” The odds of your service being selected under the CERT program are quite low. If you are selected, it is helpful to keep in mind that the focus of this review is not on your billing practices. Rather, the focus is on whether your contractor processed your claim correctly. This is not to say that CMS will not attempt to recoup payment on the claim if it ultimately determines that the claim was paid in error; it will. However, from your perspective, that recoupment is the end of the matter.

In other words, the worst that can happen with a CERT review is that you would have to repay that single claim. It will not result in a large extrapolated overpayment. Nor is the denial of that claim likely to trigger a larger postpayment review. Therefore, other than being sure to respond to the record request in a timely fashion, there is little to fear from CERT.

I hope this helps put your mind at ease!

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

The Return of the Supplemental Medical Review Contractor

Written by Brian Werfel on . Posted in Medicare, Reimbursement.

In a November 2016 member advisory, we discussed StrategicHealthSolutions, LLC (Strategic), the CMS Supplemental Medical Review Contractor (SMRC). The SMRC is tasked by CMS to perform a variety of tasks aimed at lowering the improper payment rates and increasing the efficiencies of the medical review functions of the Medicare and Medicaid programs. In other words, the Strategic is yet another audit contractor.

In our earlier member advisory, we indicated that the Strategic had sent letters to a number of ambulance suppliers requesting medical records for certain ambulance transports. Those letters indicated that the Strategic was tasked with performing postpayment reviews of “Part B therapy claims for providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers.”

At this point, you are probably asking what the physical therapy cap threshold has to do with claims for ambulance services. If so, you are not alone.

On behalf of the AAA, our firm contacted Strategic to request further clarification. Specifically, we asked whether the intent was to limit its review to physical therapy providers, or whether the intent was to audit ambulance suppliers. Strategic responded by indicating that it intended to limit its review to physical therapy services, and that these letters were sent to ambulance suppliers in error. To its credit, Strategic did contact the affected ambulance suppliers by telephone to notify them of its error. Strategic also sent letters to the affected ambulance suppliers formally rescinding the record request.

Score one for the good guys, right? Think again.

Over the past few days, we have been notified by numerous AAA members that they have received a letter from Strategic requesting records for certain ambulance transports. These letters indicate that these postpayment reviews are being directed by CMS, and are based on an analysis of national claims data.

The audit notification letters cite the HHS Office of the Inspector General’s 2015 report on question billing practices as the establishing “good cause” for reopening the claims being audited. That report identified 7 billing practices that the OIG considered “questionable.”  Among the OIG findings being cited by Strategic are: (1) that CMS paid $17 million during the first half of 2012 for ambulance transports to and from a physician’s office and (2) that CMS paid $30 million over that same period for transports where there existed no record of the patient receiving covered Medicare services at either the pickup or drop-off locations on that date of service.

So, having cited two examples of improper payments from the industry as a whole as the basis to audit specific ambulance providers, one would naturally expect that the claims being audited would be limited to those instances, right? Unfortunately, when CMS and its contractors are involved, it is rarely that that simple.

Instead, Strategic appears to be consistently asking for samples of 40 or so claims. While it is difficult to discern a pattern from the handful of audit letters I have seen, one point of emphasis does appear to be ALS emergency claims, which typically represent more than half the sample being requested. However, in each case, the remaining claims come from each of the various base rates. In other words, it is possible that the claims being selected are truly random.

It is premature to speculate on how these audits turn out. However, the initial misstep by Strategic does not inspire confidence.

If you receive a letter from Strategic, it is important that you respond within the time frames set forth in your letter. If you are unable to meet that deadline, I would strongly recommend that you contact Strategic to ask for an extension. Typically, the contractor will grant an extension of 30 days as a courtesy. I would also use that time to obtain supporting documentation from the hospitals and SNFs. Given the scrutiny currently being paid to the patient signature requirement, I would review each claim to ensure that the requirement has been met. To the extent you are relying upon a facility signature, I would verify that the signature is legible (or accompanied by the signer’s printed name). If it is not, I would suggest obtaining a signature attestation from the individual that signed.

Please keep in mind that the best way to avoid a potential recoupment is to convince the contractor that the claim was properly paid in the first place. Maximum effort prior to your initial response is likely to pay big dividends down the road.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

Administration’s Proposed Rule on Marketplace Stabilization

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

The Centers for Medicare & Medicaid Services (CMS) has released the “Marketplace Stabilization Proposed Rule” (Proposed Rule). Overall, the rule proposes a series of modifications to the Marketplaces that align with requests made by issuers in an attempt to keep them in the Marketplaces. The background section of the Proposed Rule emphasizes the concerns of issuers and the Agency’s interest in making sure that consumers have more plan options for 2018. Comments are due March 7.

While ambulance services are not directly mentioned, the Proposed Rule could affect the ability of individuals in the marketplace to enroll and remain enrolled in plans. Another provision that could impact the ambulance industry is the proposal to rely more upon the States to enforce the network adequacy requirements of the ACA.  

Changes to Open Enrollment/Special Enrollment Periods

CMS proposes to tighten the enrollment rules in several ways. First, the Proposed Rule would change the open enrollment period to November 1 – December 15 to “increase the incentives for individuals to maintain enrollment in health coverage and decrease the incentives for individuals to enroll only after they discover they require services.”[1]  Individuals may still be eligible for a special enrollment period that would allow them to enroll outside of these dates.

CMS would increase the States’ pre-enrollment verification from 50 percent to 100 percent beginning June 1, 2017, and require consumers’ enrollment requests to be “pended” until verification is complete. CMS encourages State-based Exchanges to adopt a similar policy. The Proposed Rule would also limit the ability of existing Exchange enrollees to change plan metal levels during the coverage year.  It would allow Exchanges to require enrollees that qualify for a special enrollment period because of a dependent to be add only to the current Qualified Health Plan (QHP) or allow the enrollee and the new dependent to enroll in another QHP within the same level of coverage.[2]

The Proposed Rule would also require that if an enrollee or the dependent is not enrolled in a silver level QHP and becomes newly eligible for cost-sharing reductions and qualifies for the special enrollment periods, the Exchange may allow the enrollee and dependent to enroll in only a QHP at the silver level.[3] CMS also proposes a new restriction that would allow the Exchange only to allow an enrollee and dependents who qualify for remaining special enrollment periods to make changes to their enrollment in the same QHP or to change to another QHP within the same level of coverage, if other QHPs at that metal level are available.[4]

CMS would allow consumers to start their coverage one month later than their effective date would ordinarily have been, if the special enrollment period verification process results in a delay in their enrollment such that they would be required to pay two or more months of retroactive premium to effectuate coverage or avoid termination for non- payment. [5]

Additionally, CMS would permit the issuer to reject an enrollment for which the issuer has a record of termination due to non-payment of premiums unless the individual fulfills obligations for premiums due for previous coverage.

The Proposed Rule also expresses concern that some consumers not seeking coverage until they are married. CMS proposes that if consumers are newly enrolling in QHP coverage through the Exchange through the special enrollment period for marriage, at least one spouse must demonstrate having had minimum essential coverage for 1 or more days during the 60 days preceding the date of marriage. There is a special rule for individuals who may not have been living in the United States prior to their marriage.[6]

The Proposed Rule would also significantly limit the use of the exceptional circumstances special enrollment period. In previous years, this special enrollment period has been used to address eligibility or enrollment issues that affect large cohorts of individuals where they had made reasonable efforts to enroll, but were hindered by outside events. If the proposal were adopted, CMS would apply a more rigorous test for future uses of the exceptional circumstances special enrollment period, including requiring supporting documentation where practicable. It would grant this special enrollment period only if provided with sufficient evidence to conclude that the consumer’s situation was truly exceptional and in instances where it is verifiable that consumers were directly impacted by the circumstance, as practicable.[7]

CMS is also exploring ways to incentivize consumers to maintain continuous coverage.

These proposed special enrollment changes would not apply to special enrollment periods under the Small Business Health Options Program (SHOP).[8]

Network Adequacy

CMS proposes changes to the oversight of network adequacy requirements to “affirm the traditional role of States in overseeing their health insurance markets while reducing the regulatory burden of participating in Exchanges for issuers.”[9]

CMS proposes to rely on State reviews for network adequacy in States in which an FFE is operating, provided the State has a sufficient network adequacy review process, rather than performing a time and distance evaluation. Beginning in plan year 2018, it would defer to the States’ reviews in States with the authority that is at least equal to the “reasonable access standard” and means to assess issuer network adequacy, regardless of whether the Exchange is a State-based Exchange or federally facilitated, and regardless of whether the State performs plan management functions.

In States without the authority or means to conduct sufficient network adequacy reviews, CMS would rely on an issuer’s accreditation (commercial or Medicaid) from an HHS-recognized accrediting entity. HHS has previously recognized 3 accrediting entities for the accreditation of QHPs: the National Committee for Quality Assurance, URAC, and Accreditation Association for Ambulatory Health Care. An unaccredited issuer would have to submit an access plan.

Interpretation of the Guaranteed Availability Requirement

CMS proposes revising the interpretation of the guaranteed availability requirement to allow issuers to apply a premium payment to an individual’s past debt owed for coverage from the same issuer enrolled in within the prior 12 month. CMS argues this change is necessary to “remov[e] economic incentives individuals may have had to pay premiums only when they were in need of health care services and to encourag[e] individuals to maintain continuous coverage throughout the year and prevent gaming.”[10]

De Minimis Variation in the Actuarial Values

CMS proposes increasing the de minimis variation in the actuarial values (AVs) used to determine metal levels of coverage for the 2018 plan year to “allow issuers greater flexibility in designing new plans and to provide additional options for issuers to keep cost sharing the same from year to year.”[11]

Essential Community Providers

CMS proposes allowing issuers to use a write-in process to identify essential community providers (ECPs) who are not on the HHS list of available ECPs for the 2018 plan year; and lower the ECP standard to 20 percent (rather than 30 percent).[12] 

[1] CMS Patient Protection and Affordable Care Act; Market Stabilization Proposed Rule.

[2]Id.

[3]Id.

[4]Id.

[5]Id.

[6]Id.

[7]Id.

[8]Id.

[9]Id.

[10]Id.

[11]Id.

[12]Id.

The Future of Prior Authorization

Written by Brian Werfel on . Posted in Medicaid, Medicare, Member Advisories, Member-Only, Reimbursement.

In May 2014, CMS announced the creation of a three-year demonstration project that calls for the prior authorization of repetitive scheduled non-emergency ambulance transports. The demonstration project was first implemented in the states of New Jersey, Pennsylvania, and South Carolina. These states were selected based on their higher-than-average utilization rates for repetitive ground ambulance transportation. For example, in a June 2013 report to Congress, the Medicare Payment Advisory Commission (MedPAC) cited these states as having particular high utilization rates for dialysis transports. Prior authorization went live in these states on December 15, 2014.

Congress Acts to Expand the Prior Authorization Regime

On April 16, 2015, President Barack Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015. Section 515 of that law required CMS to expand the demonstration program into five additional states (Delaware, Maryland, North Carolina, Virginia, and West Virginia) and the District of Columbia on or before January 1, 2016. The law further instructed CMS to expand the prior authorization regime to the rest of the country beginning no earlier than January 1, 2017. However, the national expansion was conditioned on CMS determining that the demonstration project has been effective in reducing Medicare expenditures without jeopardizing patient’s access to necessary medical care.

Short Term Prospects for Expansion

As of the end of January 2017, CMS has yet to issue its report on the effectiveness of the prior authorization program in the original 8 states and the District of Columbia. Therefore, there it is highly unlikely that CMS will be expanding the program nationally in the foreseeable future. However, CMS has not officially ruled out the possibility of expanding the program at some point during 2017.

While CMS has not officially ruled out a national expansion in 2017, I rate the prospect as unlikely. I base this statement simply on the calendar. Even if CMS were to issue the required certifications tomorrow, it would still need to give its contractors instructions on how to implement the program. It would also need to give some advance notice to the provider community. If you assume it would want to give everyone involved at least a month to prepare, it would be April at the earliest before it could expand the program. Personally, I have a hard time believing that CMS would go through all that trouble—not to mention allocating the necessary funding—for 8 months.

Long Term Prospects for Prior Authorization

While I rate the short term prospects for prior authorization to be unlikely, I think that our industry should expect prior authorization for repetitive patients to be part of our long term future.

The data thus far suggests that prior authorization is highly effective at reducing Medicare expenditures. In 2014, the last year before prior authorization went into effect, Medicare paid more than $106 million for dialysis transports in New Jersey alone. In 2015, total spending on dialysis decreased to slightly more than $15 million, a decrease of more than 85%. While there has been anecdotal reports of patients in the state being unable to obtain transportation to their dialysis appointments, there is little empirical evidence to suggest that these are anything other than isolated occurrences, or that prior authorization is contributing to a systematic lack of access. The data from Pennsylvania and South Carolina shows similar dramatic decreases in spending on dialysis.

Collectively, total spending on dialysis in these three states was approximately $140 million less in 2015 than 2014. This corresponds to nearly 20% of total dialysis spending in 2014. To put these reductions in their proper perspective, it may be helpful to remember that the Congressional Budget Office scores the cost of our existing temporary adjustments (i.e., the 2% urban, 3% rural and super rural adjustments) at approximately $100 million a year.

Some will argue that the 2015 reductions in these states were magnified by what can be charitably described as “friction” in the implementation of the program. (We recognize that affected providers in these states are likely to use far less charitable descriptions.) These people would argue that the reductions in subsequent years is likely to be less dramatic. CMS will be releasing 2016 payment data in a few months; at which point we will know whether this prediction proves true. Regardless of whether the data shows an uptick in payments in these states, that same data is almost guaranteed to show a dramatic decrease in total spending on dialysis in these states over the 2014 base year.

In sum, the data makes clear that prior authorization offers substantial cost savings to the federal government. Moreover, the overwhelming majority of these cost savings come from dialysis transports, an area that CMS has long-identified with fraud, abuse, and overutilization. This represents a tempting target for both CMS and Congress when looking for future cost-savings.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

Medicare Relief and Reform Letter by President Postma

Written by Mark Postma on . Posted in Medicaid, Medicare, Member Advisories, Member-Only, Reimbursement.

This is a critical year for the legislative efforts of the American Ambulance Association and our members.  First and foremost, our temporary Medicare ambulance increases expire at the end of the year.  It is vital that we ensure the new 115th Congress makes these increases permanent, or at the very least approves another long-term extension.  To be successful, we will need all of your help in reaching out to your members of Congress in support of the increases.

The AAA and our partners have been also working to further the reform of the Medicare ambulance fee schedule.  To accomplish the first steps in this process, ambulance services need to be treated as providers of health care services rather than only suppliers of medical transportation.  In addition, we will need the cost data necessary for Congress, Centers for Medicare and Medicaid Services and the AAA to make data-driven decisions regarding the reform.

To achieve these goals, we are working with our champions in Congress to reintroduce a version of the Medicare Ambulance Access, Fraud Prevention and Reform Act (HR 745, S. 332 – 114th Congress).  We hope to have a bill reintroduced in the House and Senate in the coming weeks.  Only with your help in sustained outreach to your legislators will we be able to get the provisions of this bill passed.

Our absolute top priority this year is preventing the expiration of the Medicare add-on payments.  Building the increases into the base rates is also vital to the future of reform, as is provider standing and cost data collection.  These changes will lead, we hope, to the demonstration of the need for additional reimbursement as well as recognition of the role ambulance services can play in the larger health care picture.  The subsequent goal is coverage for services such as mobile integrated health and alternate destinations.

The AAA will also be closely following the debate and implications for our industry around repeal and replacement of the Affordable Care Act, potential Medicare and Medicaid reform, and other health care and broader initiatives of interest to us.  We will keep you posted of new developments as the process unfolds.

Since this is such a vital year for us in Congress, I ask that each of you respond to our Calls to Action for help with your members of Congress on the Medicare increases and other legislative priorities.  We will only be successful if we all push as one.

CMS Extends Temporary Moratorium (NJ, PA, TX)

Written by Brian Werfel on . Posted in Medicare, Member Advisories, Member-Only, Reimbursement.

On January 9, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a notice in the Federal Register extending the temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers in the states of New Jersey, Pennsylvania, and Texas. The extended moratoria will run through July 29, 2017.

Section 6401(a) of the Affordable Care Act granted CMS the authority to impose temporary moratoria on the enrollment of new Medicare providers and suppliers to the extent doing so was necessary to combat fraud or abuse. On July 31, 2013, CMS used this new authority to impose a moratorium on the enrollment of new ambulance providers in Houston, Texas and the surrounding counties. On February 4, 2014, CMS imposed a second moratorium on newly enrolling ambulance providers in the Philadelphia metropolitan areas. These moratoria have been extended every six months thereafter.

However, on August 3, 2016, CMS announced changes to its existing moratoria on the enrollment of new ground ambulance suppliers. Specifically, CMS announced that the moratoria would be lifted for the enrollment of new emergency ambulance providers and supplier, but that it would expand the enrollment moratorium on non-emergency ambulance services to cover the entire states of New Jersey, Pennsylvania, and Texas. At the same time, CMS announced the creation of a new “waiver” program that would permit the enrollment of new non-emergency ambulance providers in these states under certain circumstances.

On or before July 29, 2017, CMS will need to make a determination on whether to extend or lift the enrollment moratorium.

Have a Medicare question? AAA members, send your inquiry to Brian Werfel, Esq. using our simple form!

Federal Judge Offers Hope for Reduction in ALJ Appeal Backlog

Written by Brian Werfel on . Posted in Medicare, Reimbursement.

As our industry prepares to close the book on 2016 and turns its eye to 2017, I want to focus your attention on a recent federal court ruling that has the potential to significantly reduce the current backlog of appeals pending Administrative Law Judge (ALJ) hearings.

The Medicare regulations require ALJs to conduct a hearing and issue a written decision within 90 days of the filing of an appeal. However, the average time to process decisions has skyrocketed in recent years, from 94.9 days in FY 2009 to nearly 2.5 years in FY 2016. Those statistics come from the CMS Office of Medicare Hearings and Appeals (OMHA). On their face, those numbers may seem discouraging; however, the reality is far worse. Those numbers reflect the average time to render a decision on appeals filed by both beneficiaries and health care providers. However, the law requires the ALJs to give priority to appeals filed by beneficiaries. OMHA has indicated that it continues to decide these cases within approximately 90 days.

Of course, if the appeals filed by beneficiaries continue to be decided within 90 days, the pending appeals filed by health care providers must be delayed even further. In July 2016, OMHA indicated that there were approximately 750,000 claims currently awaiting ALJ hearings. This statement was made in the context of OMHA taking credit for increasing its capacity for processing appeals to approximately 77,000 claims a year. In other words, it is possible that the expected time for a hearing on an appeal filed today could be close to 10 years.

Enter the American Hospital Association. In May 2014, the AHA filed a lawsuit in the federal District Court for the District of Columbia seeking a writ of mandamus (lawyer-speak for “I would really appreciate it if you forced this government official to do his or her job”) to compel the Secretary of Health and Human Services to comply with statutorily imposed deadlines for ALJ decisions. In other words, the AHA was asking the court to force CMS to eliminate the ALJ backlog.

District Court Judge James E. Boasberg initially dismissed the case for lack of jurisdiction. The AHA then appealed to the Court of Appeals for the D.C. Circuit, which, in 2016, reversed the dismissal, and remanded the case back to the lower court for further proceedings. The Circuit Court specifically instructed the judge to determine whether “compelling equitable grounds” existed to justify the issuance of the writ.

CMS then moved to stay further proceedings until September 30, 2017. This is the close of the next full appropriations cycle, and CMS argued that this would give it time to pursue various administrative and legislative efforts to reduce the ALJ backlog. The court denied that request, finding that sufficient grounds existed to justify the writ of mandamus. The court then asked the parties to submit written suggestions on the form such mandamus relief should take. Both CMS and the AHA then submitted suggestions for how to deal with the issue.

The AHA proposed two possible avenues to reduce the backlog:

  1. CMS should: (i) offer reasonable settlements to broad groups of Medicare providers and suppliers (similar to its periodic settlement offers to hospitals over the past few years), (ii) defer the obligation for providers and suppliers to repay outstanding overpayments, and toll the accumulation of interest, while their ALJ appeal was pending, and (iii) impose financial penalties on RACs that have high reversal rates; or
  2. Set specific numeric targets for reducing the backlog over a four year period. These targets would be: (i) a 30% reduction in the backlog by December 31, 2017, (ii) a 60% reduction by December 31, 2018, (iii) a 90% reduction by December 31, 2019, and (iv) the elimination of the backlog by December 31, 2020. The AHA also recommended that, to the extent a backlog still existed on January 1, 2021, that any provider or supplier with an ALJ appeal pending for more than 1 year be granted summary judgment.

CMS objected to each of these requirements. Instead, CMS continued to argue that time should be allowed for its recent initiatives to have the desired impact. However, CMS indicated that the ultimate elimination of this backlog would require legislative action.

On December 6, 2016, Judge Boasberg issued his ruling. In his decision, he stated that, while he was sympathetic to the challenges faced by CMS, he found CMS’ argument somewhat less than persuasive. Moreover, he indicated that CMS’ plan was largely contingent on Congressional intervention, which was by no means a sure thing. However, the Judge indicated that he was hesitant to intrude upon CMS’ specific decision-making process. For that reason, he rejected the specific proposals offered by the AHA. Instead, he elected to adopt the AHA’s proposed timetable for reducing the backlog. The Judge did refuse to grant the AHA’s request that providers automatically be granted summary judgment if the backlog was not eliminated by 2021, agreeing with CMS that this might create some perverse incentives for providers and suppliers to file non-meritorious appeals. Instead, he indicated that, to the extent the backlog is not eliminated by that date, individual providers or suppliers would have the option of moving for default judgment or to seek their own writ of mandamus to compel an immediate hearing. Finally, the Judge ordered CMS to provide status reports every 90 days on its efforts to reduce the backlog.

In sum, a federal court has now ordered CMS to eliminate the current ALJ backlog over the next four years. It is likely that CMS will appeal this decision, and, therefore, this is unlikely to be the last time the courts weigh in on this issue. Moreover, even if the court order stands, it is unclear how CMS could significantly reduce the backlog without securing additional financial resources from Congress. One option might be to expand its settlement offers to additional provider groups. Another might be slow-down the pre- and postpayment audits that feed the appeals pipeline. However, these are purely speculative at this time.

Thus, the court’s decision is unlikely to have a meaningful impact on appeals in the near future. However, it is almost 2017, and I for one am choosing to be optimistic.

Best Wishes for a Happy and Healthy New Year!

 

Have an issue you would like to see discussed in a future Talking Medicare blog? Submit your question!

GAO Report on Revised Provider Enrollment Screening Process

Written by Brian Werfel on . Posted in Medicaid, Medicare, Member Advisories, Member-Only.

In March 2011, the Centers for Medicare and Medicaid Services (CMS) implemented a revised process for processing the enrollment of new Medicare providers and suppliers. This revised process also applied to existing Medicare providers and suppliers that were revalidating their enrollment information. This new process included assigning all providers and suppliers to one of three risk categories—limited, moderate, and high—based on the perceived risk of fraud and abuse. The risk category then determines the applicable screening process used for providers within that risk category.

Please note that ambulance providers and suppliers were placed in the moderate risk category. This risk category includes a verification of the information provided by the provider on its enrollment application, a check of the provider’s state licensure, a check of any adverse legal actions against the provider, and a site visit of the provider.

On December 15, 2016, the Government Accountability Office (GAO) released a report on the initial results of this revised provider enrollment screening process.

In its report, the GAO indicated that CMS applied its revised enrollment screening process to over 2.4 million newly enrolling and revalidating Medicare providers and suppliers from March 25, 2011 through December 31, 2015. Other relevant findings include:

  • The total number of enrolled Medicare providers and suppliers increased from 1.4 million in March 2011 to 1.9 million in December 2015, an increase of more than 30%.
  • CMS denied more than 6,000 applications for ineligible providers and suppliers. The most commonly cited reason for a denial was the failure of applicant to meet the provider/supplier type requirements. This included situations where the provider/supplier did not hold the required certification for that provider/supplier type.
  • CMS rejected 17,000 applications as incomplete. The GAO found that approximately 25% of the rejected applications were the result of the application being filed in error, either by the provider/supplier or the MAC. 21% of applications were rejected as being duplicates. Another 16% of rejections were the result of the provider/supplier failing to timely respond to the MAC’s request for additional information.
  • CMS screening of existing providers/suppliers resulted in more than 660,000 provider numbers being deactivated. This was typically (47%) the result of the provider failing to respond to the MAC’s request that they revalidate. Another 29% were the result of the provider/supplier voluntarily withdrawing from the Medicare program. Another 5% of deactivations were the result of the provider/supplier not submitting a claim to Medicare within the previous 12 months. The majority of these were likely individual practitioners (e.g., physicians) that either died, or who retired from professional practice, and who failed to inform the MAC at the time of retirement to request that their provider number be deactivated. This could also include organizational providers that were sold or otherwise no longer operational.
  • These were frequently the result of an individual practitioner (e.g., a physician) failing to deactivate his or her Medicare number upon their retirement, and their either not responding to a request to revalidate, or notifying the MAC of their retirement and agreeing to voluntarily withdraw
  • CMS revoked the billing privileges of 43,000 provider/suppliers. The most common reason cited (61%) was the failure of the provider/supplier to be professionally licensed. However, within the moderate risk category, which includes ambulance, 26% of all revocations were the result of a “CMS-approved revocation,” e.g., the result of some adverse legal action against the provider/supplier which was not properly disclosed to the MAC within 30 days.

 

CMS estimated that its revised screening procedures avoided $2.4 billion in Medicare payments to ineligible providers and suppliers over this period.

CMS also reported that it made several changes to its screening process over this period. This includes the implementation of a continuous license monitoring report in November 2013, and a continuous criminal monitoring report in July 2015. This also includes fingerprint-based criminal background checks for the owners and certain key employees of categorically high-risk providers and suppliers. In December 2015, CMS also began conducting site-visits for certain limited-risk providers and suppliers.

Despite the progress made by CMS, the GAO did find that certain program vulnerabilities still exist. For example, the GAO found that CMS had not established performance measures to monitor its ability to place providers and suppliers in the proper risk categories. The GAO recommended that CMS establish objectives and performance measures for assessing its progress in establishing better screening procedures for new enrollments and revalidations. CMS ultimately agreed with this recommendation.

Have a Medicare question? AAA members, send your inquiry to Brian Werfel, Esq. using our simple form!

 

2015 Medicare Data Shows Evident of Crackdown on Non-Emergency Transport

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

2015 Medicare Payment Data Offers Evidence of Nationwide Crackdown on Non-Emergency Ground Ambulance Transportation; Impact Varies Dramatically by Medicare Administrative Contractor

Every year, CMS releases data on aggregate Medicare payments for the preceding year. This file is referred to as the Physician/Supplier Procedure Master File (PSP Master File). This past month, CMS released the 2016 PSP Master File, which contains information on all Part B and DME claims processed through the Medicare Common Working File with 2015 dates of service.

In September’s blog post, I discussed the results of the first year of the prior authorization demonstration project for repetitive, scheduled non-emergency ground ambulance transports. During this first year, the project was limited to three states: New Jersey, Pennsylvania, and South Carolina. The data confirms that these three states saw a dramatic reduction in Medicare’s approved payments for dialysis transports.

This month, I will be discussing the national payment trends for non-emergency ground ambulance transports, and, in particular, Basic Life Support non-emergencies.

In 2015, Medicare paid approximately $990 million for BLS non-emergency transports. This is 13% less than what it paid for BLS non-emergency transports in 2014 ($1.14 billion). Please note that these figures only reflect payments for the base rate; when the payments for the associated mileage are included, the reduction is even more dramatic.

In actual terms, this means Medicare Administrative Contractors (MACs) approved nearly 1 million fewer BLS non-emergency transports in 2015 (5.86 million) than they approved in 2014 (6.81 million). Roughly 75% of this reduction can be directly attributed to the prior authorization program in the three states listed above. Note: the reduction in approved dialysis transports in New Jersey accounts for nearly half of the national decline). However, that leaves nearly 250,000 fewer approved transports in the remaining 47 states. This reduction was not the result of fewer claims being submitted in 2015; the number of submitted claims was actually higher in 2015 than 2014. Rather, the data shows that this reduction is the result of the MACs actively denying many more claims than in year’s past.

I believe these reductions are the direct result of a step-up in the enforcement activities of the MACs, which I also believe has the tacit, if not outright, approval of CMS.

To test this thesis, I looked at the state-by-state data to see if any trends could be found. What I found was that 28 states saw increases in the total number of approved BLS non-emergency transports in 2015, with 19 states seeing decreases. However, on its face, that number is somewhat deceiving. The states that saw increases tended: (1) to see either relatively small increases or (2) had relatively low utilization rates to begin with. The states that saw decreases tended to be larger states with higher utilization rates, and those decreases tended to be larger in percentage terms. For instance, California saw a 21.5% decrease in the number of approved BLS non-emergency transports. Ohio saw an 11.7% decrease.

Digging deeper, it becomes clear that a state’s overall change in payments for BLS non-emergencies is almost perfectly correlated with its change in payments for dialysis transports. In other words, to the extent the state saw an overall reduction in payments for BLS non-emergencies, that reduction – – in nearly all cases – – was the result of the total payments for dialysis decreasing by more than any offsetting increase in the total payments for non-dialysis transports.

These relative changes in dialysis were also highly correlated with the MAC that administers Medicare claims in that state. To the extent your state saw a reduction in dialysis payments, it is highly likely that neighboring states administered by the same MAC saw similar reductions in payments. The following charts will help illustrate this point:

2016-11-29-werfel-non-emergency-crackdown-chart-1As you can see, all three states within Cahaba’s jurisdiction saw a net increase in the total payments for dialysis. While the increases themselves were quite minor in Alabama and Tennessee, Georgia saw an 11.8% increase in total payments for dialysis. Similarly, both Florida and Puerto Rico saw significant increases in the approved payments for dialysis.

By contrast, every state in National Government Services’ (NGS’) jurisdiction with more than 1,000 paid dialysis transports in 2015 saw a net reduction in the total payments for dialysis. These reductions ranged from a relatively minor reduction of 1.17% in New York to a nearly two-thirds (64.58%) reduction in Minnesota.

2016-11-29-werfel-non-emergency-crackdown-chart-2This trend was present in all remaining jurisdictions, although the results were more mixed. For example, with the exception of South Carolina, the three remaining states administered by Palmetto all saw increases. Likewise, the majority of states administered by WPS saw decreases. This included Indiana, which has a sizeable dialysis population. Among WPS states, only Missouri saw a small (3.90%) increase.

California saw a 31.76% decrease in its payments for dialysis. The only other Noridian states with more than 1,000 paid dialysis trips were Hawaii and Washington, which both saw increases.

Novitas presents a more complicated picture, with several large states, such as Texas, seeing double-digit increases in payments for dialysis, while other large states saw sizeable decreases.

All in all, the data suggests that CMS and its contractors continue to pay close attention to the non-emergency side of our business, particularly BLS non-emergency transports. These transports have been under scrutiny for many years, as reports from the Office of Inspector General, the Government Accountability Office and other federal agencies have flagged this portion of our industry as being particularly prone to overutilization (and, in some cases, outright fraud).  However, this heightened scrutiny is not being uniformly applied across-the-board. The data suggests that certain MACs have been far more aggressive in targeting these sorts of trips across their entire jurisdictions, while others seem content to target specific (typically large) states within their jurisdictions. This could serve as a template for how MACs will approach prior authorization in their jurisdictions.

‘Praemonitus, Praemunitus’     

Latin Proverb, loosely translated to “forewarned is forearmed.”

 

 

CMS SMR Contractor Audit Error

Written by Brian Werfel on . Posted in Medicaid, Medicare, Member Advisories, Member-Only.

Over the past week, we have learned that several ambulance suppliers have received letters from the CMS Supplemental Medical Review Contractor (SMRC), StrategicHealthSolutions, LLC.  These letters indicate that the SMRC is conducting a medical review of their claims.

The letter contains a section that explains why the supplier has been selected for review.  That section contains the following explanation:

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), signed into law on April 16, 2015, extended the therapy cap exception process through December 31, 2017, and modified the requirement for manual medical review for services over the $3,700 therapy thresholds.  MACRA eliminated the requirement for manual medical review of all claims exceeding the therapy thresholds and instead allows a targeted review process.  CMS has tasked the SMRC with performing post-payment medical review of Part B therapy claims for providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers for dates of service July 1, 2015 to the present. 

Our firm contacted the SMRC on behalf of a number of affected providers.  On November 14, 2016, StrategicHealthSolutions responded to our inquiry.  The SMRC indicated that its review was intended to be limited to suppliers of physical therapy services.  Accordingly, the SMRC confirmed that these audit letters were sent to ambulance suppliers in error. 

The SMRC further indicated that ambulance suppliers that received this audit letter in error will be notified by telephone that they were selected in error.  The SMRC will also be sending letters to affected ambulance suppliers notifying them of its error.  These letters are expected to be mailed tomorrow, Tuesday, November 15, 2016.

If your organization received a letter from StrategicHealthSolutions, LLC, please know that this letter was sent in error.  Your organization is not being audited by the Supplemental Medical Review Contractor.  You can expect to receive a phone call and/or a letter in the next few days formally notifying you of the contractor’s error.  That letter should formally withdraw the SMRC’s request for medical records. 

If you received a letter from the SMRC, and have any further questions, please feel free to contact Brian S. Werfel, Esq., the AAA’s Medicare Consultant.  He can be reached via email at bwerfel@aol.com.

CMS List of Medically Unlikely Edits for Ambulance Services

Written by Brian Werfel on . Posted in Medicaid, Medicare, Member Advisories, Member-Only, Reimbursement.

On October 1, 2016, the Centers for Medicare and Medicaid Services (CMS) updated its list of Medically Unlikely Edits (MUEs). The MEU program is designed to reduce the paid claims error rate for Part B claims. The program operates by estimating the maximum number of units of service that a provider/supplier would report under most circumstances for a single beneficiary on a single date of service. A claim that submits units of service in excess of this threshold will typically be denied by the Medicare Administrative Contractor.

For additional information on the CMS Medically Unlikely Edit Program, click here.

Effective October 1, 2016, claims for ambulance services will be subject to the following MUE edits:

HCPCS Code MUE Threshold
A0425 (Ground Ambulance Mileage) 250
A0426 (Ground Ambulance, ALS Non-Emergency) 2
A0427 (Ground Ambulance, ALS Emergency) 2
A0428 (Ground Ambulance, BLS Non-Emergency) 4
A0429 (Ground Ambulance, BLS Emergency) 2
A0430 (Air Ambulance, Fixed Wing) 1
A0431 (Air Ambulance, Helicopter) 1
A0432 (Ground Ambulance, Paramedic Intercept) 1
A0433 (Ground Ambulance, ALS-2) 1
A0434 (Ground Ambulance, Specialty Care Transport) 2
A0435 (Air Ambulance, Fixed Wing Mileage) 999
A0436 (Air Ambulance, Helicopter Mileage) 300

 

AAA Posts 2015 National and State-Specific Medicare Data

Written by Brian Werfel on . Posted in Medicare, Member Advisories, Member-Only.

The American Ambulance Association is pleased to announce the publication of its 2015 Medicare Data Payment Report.  This report is based on the Physician/Supplier Procedure Summary Master File.  This report contains information on all Part B and DME claims processed through the Medicare Common Working File and stored in the National Claims History Repository.

The report contains an overview of total Medicare spending nationwide in CY 2015, and then a separate breakdown of Medicare spending in each of the 50 states, the District of Columbia, and the various other U.S. Territories.

For each jurisdiction, the report contains two charts: the first reflects data for all ambulance services, while the second is limited solely to dialysis transports.  Each chart lists total spending by procedure code (i.e., base rates and mileage).  For comparison purposes, information is also provided on Medicare spending in CY 2014.

Findings Patterns Where None Exist

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

On August 16, 2016, the HHS Departmental Appeals Board (DAB) issued a decision related to CMS’ authority to revoke a Medicare supplier’s billing privileges.  The DAB is the fourth and final level of administrative appeal within the Department of Health and Human Services.

Factual Background

The case involved John P. McDonough III, Ph.D., a clinical psychologist residing in Florida, and two of his affiliated medical practices, Geriatric Psychological Specialists and Geriatric Psychological Specialists II.  In October 2014, First Coast Service Options, Inc., the Medicare Administrative Contractor for Florida, notified McDonough and both medical practices that their Medicare billing numbers were being revoked for alleged abuses of their billing privileges.  Specifically, First Coast indicated that data analysis had revealed that the three suppliers had submitted a total of 420 claims for deceased beneficiaries over an approximately two-year period.

McDonough and his two medical practices appealed for a reconsideration of the revocation of their billing privileges, which was denied in February 2015.   The suppliers then appealed for an ALJ hearing.  The suppliers conceded that they submitted more than 200 claims for beneficiaries that were deceased on the date of service.  However, they attributed these claims to data-entry errors and other clerical mistakes.  The suppliers argued that these were simple billing errors, representing a small percentage of the tens of thousands of claims they submitted during this period of time.   In December 2015, the ALJ issued his decision.  While the ALJ seemingly accepted the suppliers’ explanation that these were billing errors, and that there was no intent on the part of the suppliers’ to submit false claims, the ALJ nevertheless upheld the revocation of their billing privileges.  Citing previous DAB decisions, the ALJ held that the admitted submission of repeated claims for services to deceased beneficiaries due to “incorrect billing entries due to similar beneficiary names or Medicare numbers, and inadvertent typing errors” was not inconsistent with a finding that the suppliers’ had abused their billing privileges.

The suppliers’ then appealed to the DAB. In its decision, the DAB first noted that it has consistently rejected contentions that revocation required a finding that the supplier acted intentionally:

“The Board has long held that the regulation’s plain language does not require CMS to establish fraudulent or dishonest intent to revoke a supplier’s billing privileges under this section and that the regulatory language also does not provide any exception for inadvertent or accidental billing errors.”

The DAB then countered the suppliers’ argument that CMS never intended to revoke a supplier’s billing privileges for simple mistakes.  They cited language from the June 27, 2008 final rule, where CMS stated revocation “is not intended to be used for isolated occurrences or accidental billing errors.”  The DAB noted that CMS, in that same final rule, indicated that it would not consider the submission of three or more improper claims to be accidental.  The DAB also noted that the relatively small percentage of erroneous claims was irrelevant, as the regulation does not require CMS to establish any particular error rate or percentage of improper claims.

The DAB held that since the record established that the suppliers’ had submitted more than 3 claims for deceased beneficiaries, CMS had met the requisite legal standard for revocation.  Accordingly, the DAB upheld the revocation of the suppliers’ billing privileges.

Potential Impact on Ambulance Providers

The DAB’s decision effectively establishes a strict liability standard for revocations based on the submission of claims for deceased beneficiaries.  The submission of three or more such claims over any designated period of time could constitute legal grounds for CMS to revoke a supplier’s Medicare billing privileges. 

The implications of this decision should give every Medicare provider pause.  However, given the nature of our operations, our industry needs to pay particular attention.  The psychologist and therapists that were the subject of the above-referenced case saw patients on a scheduled basis, and spent many hours with each of their patients.  This gave them ample time to obtain insurance information from each of their patients, and to confirm the accuracy of that information.  Yet the suppliers’ still had more than 200 claims billed incorrectly.

EMS providers do not have that luxury.  We frequently encounter patients on the street or at their home.  Many of these patients do not have their insurance information on them at the time of transport.  Even when the patient had this information on their person, under the stress of an emergency medical situation, the paramedic or EMT may not record this information accurately.

As a result, our billing offices spend a good portion of their time trying to verify a patient’s insurance.  Unfortunately, some of the administrative “shortcuts” we have developed to address these problems create the potential to inadvertently submit claims for deceased patients.  While there is nothing at present that suggests that CMS intends to expand the use of its revocation authority, we probably want to rethink these shortcuts.

An example you say?

Consider a transport of an elderly woman to the hospital in an emergency.  The crew does not obtain the patient’s insurance information at the time of transport.  However, they do obtain the hospital face sheet, which lists the patient’s social security number.  To convert this social security number to a Medicare HIC#, we need to include a Medicare suffix.  How would you go about doing that?

One option would be to ping the patient’s name, date of birth and SSN against an eligibility database.  While effective, provider’s typically pay for these lookups.

Another option would be to simply guess what the applicable suffix might be, affix that to the SSN, and submit the claim.  If it goes through, the provider guessed correctly.  If it rejects as an invalid name and HIC# combination, the provider would know to try another suffix.  So let’s assume the provider elects to use this option.  Playing the percentages, the provider would likely add the “B” suffix, on the theory that, given her age, the woman likely qualified for Social Security Benefits (and therefore Medicare benefits) based on the work history of her spouse.  But what if the provider was wrong, and the woman was the primary wage earner in her family?  If that were the case, her suffix would likely be the “A.”  Now imagine that her husband shared the same Social Security numerics, and that his suffix was the “B.”  Further imagine that he has since passed, and the provider has now inadvertently submitted a claim for the dead husband.

Now imagine this happens three times in a year…

Another way we can inadvertently submit claims for dead patients is not using front-end verification.  Many providers submit claims based off the insurance information they received at the time of transport (or from the hospital, nursing home, etc.), without any attempt to confirm its accuracy.  These providers recognize that the insurance information will be correct more often than not.  They are making the calculated decision that it is easier to deal with any issues after they have been identified by the payer.  However, one reason an insurance can come back as invalid is because the crewmember recorded the HIC# incorrectly.  For example, they may transpose a few digits (i.e., they wrote “1243” rather than “1234”).  If the transposed HIC# relates to a deceased beneficiary, that would be captured by the data analytics used by the Medicare contractors.

The DAB’s decision is certainly troubling.  However, I do not believe that our industry needs to overreact.  Rather, I would encourage everyone to view the DAB’s decision as a starting point, and to re-examine their own billing and verification processes to see if there is anything they can do to reduce the likelihood of their organization every confronting this issue.

 

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

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.

Prior Authorization Data Shows Dramatic Reductions in Spending on Dialysis Transports

Written by Brian Werfel on . Posted in Medicare, Talking Medicare.

In May 2014, CMS announced the implementation of a three-year prior authorization demonstration project for repetitive scheduled non-emergency ambulance transports.  CMS initially elected to limit this demonstration to three states: New Jersey, Pennsylvania, and South Carolina.  These states were selected based on higher-than-average utilization rates and high rates of improper payment for these services.  The Medicare Payment Advisory Commission (MedPAC) had previously singled out these states as having higher than average utilization of dialysis transports in a June 2013 report to Congress.

This demonstration project went into effect on December 15, 2014.  The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) subsequently expanded the demonstration project to five additional states and the District of Columbia on January 1, 2016, with a further expansion to all remaining states expected to occur at some time during 2017.  However, national expansion is contingent upon CMS determining that the demonstration project has been effective in reducing Medicare expenditures without jeopardizing patient’s access to necessary medical care.

Every year, CMS also releases data on aggregate Medicare payments for the preceding year.  This file is referred to as the Physician/Supplier Procedure Master File (PSP Master File).  This past month, CMS released the 2016 PSP Master File, which contains information on all Part B and DME claims processed through the Medicare Common Working File with 2015 dates of service.  I will be discussing this report in greater detail in next month’s blog.

This month, I want to focus on the impact the prior authorization project has had on total dialysis payments in the original three target states.  Reproduced below is a chart tracking the total payments for dialysis transports in these three states between 2010 and 2015.  Interestingly, these three states demonstrated very different trajectories prior to last year.

New Jersey saw a sustained, dramatic increase in payments over that time, increasing from approximately $56 million in 2010 to more than $106 million in 2014, an increase of nearly 90% over a 5-year period.  (Note: spending figures for 2014 and 2015 take into account the 10% reduction in payments for dialysis transports).
werfel-chart

South Carolina saw a much more moderate increase over that same period, increasing from $51 million in 2010 to slightly more than $60 million in 2014, an increase of roughly 18%.  By contrast, payments in Pennsylvania peaked in 2011 at $69.6 million, and have been in steady decline ever since.

While these states’ trajectories were different prior to 2015, the results for 2015 are fairly similar.  Each state saw a significant reduction in the total expenditures for dialysis once the prior authorization project went into effect. 

 The fact that these states saw a reduction in overall spending on dialysis is not surprising (to me at least, I recognize this came as a shock to many providers in these states).  These states were not selected at random; CMS selected these states based on its belief that they were particularly suspect to overutilization.

What I do find surprising is the relative sizes of the declines in these states.  New Jersey and Pennsylvania both experienced a more than 80% reduction in payments for dialysis.  By contrast, the reduction in South Carolina (approximately 25%) was far less dramatic.

Does this suggest that abuse was more prevalent in New Jersey and Pennsylvania?  Perhaps.  An ongoing federal Medicare Strike Force in the Philadelphia metropolitan area has resulted in a number of convictions against fraudulent providers in these states.  However, the impact has not been limited to these alleged “bad actors.”  Even those companies employing accepted best practices have seen significant reductions in their approved patient populations.

To me, the common factor seems to be the applicable Medicare contractor.  New Jersey and Pennsylvania are both administered by Novitas Solutions, Inc., whereas South Carolina is administered by Palmetto GBA.  While Medicare’s coverage standards are intended to be national, it seems reasonable to conclude that Novitas has taken a far harder stance on dialysis than Palmetto.  Anecdotal evidence from the states that came went live with prior authorization in January 2016 seems to confirm this thesis, although we will not be able to know for sure until the 2016 Medicare payment data is released this time next year.

Those of you that have attended this year’s AAA Regional Conferences, or who participated on AAA webinars this past year have heard me say that the Medicare Administrative Contractor’s stance on dialysis is the most important factor in determining whether an ambulance provider needs to rethink its current approach to its repetitive patient population.  To the extent the MAC takes a fairly lenient stance, providers will likely find that only a few “tweaks” are needed to align their existing practices with a prior authorization regime.  AAA members in these states may even find it worthwhile to even considering expanding the spectrum of patients they accept for transport. If, however, the MAC takes a fairly restrictive stances (as Novitas has clearly done), providers will likely find it necessary to dramatically trim these populations, or to arrange for alternative sources of payment for these transports.

I also encourage AAA members to attend our panel discussion at this year’s Annual Conference & Tradeshow in exciting Las Vegas (November 7 – 9th).  I have the privilege of serving as the moderator for a panel consisting of several providers that are currently operating under the prior authorization project.  These providers will talk about their experiences, and will be able to offer helpful tips on how to best navigate this major shift in Medicare’s coverage rules. (See full Conference Agenda)

Have an issue you would like to see discussed in a future Talking Medicare blog?  Please write to me at bwerfel@aol.com.

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

Acadian’s Asbel Montes on Ambulance Payment Reform

Written by Asbel Montes on . Posted in Medicaid, Medicare, Reimbursement.

“EMS is instrumental to the healthcare fabric of our country. As the healthcare industry continues to innovate, it is imperative to recognize the value that EMS brings to the pre- and post-hospital environment. EMS providers are the only gatekeepers to the healthcare system in many communities.

73% of all ambulance suppliers credentialed with Medicare bill the program less than 1,000 transports per year. It is imperative that any cost data collection system reporting requirements consider this to ensure the reliability of the data and the administrative burden to ambulance providers and suppliers.”

Asbel Montes
Vice President of Governmental Relations & Reimbursement, Acadian Ambulance
Co-Chair, American Ambulance Association Payment Reform Committee

Prior Authorization Expansion Delay

Written by David Werfel on . Posted in Medicare, Member Advisories, News, Reimbursement.

Prior Authorization – Repetitive Non-Emergencies – Expansion Delay

CMS has notified the American Ambulance Association that the expansion of Prior Authorization for repetitive non-emergencies, to the states not already on Prior Authorization, will not be implemented January 1, 2017.

The reason for the delay is that, pursuant to Section 515(b) of the Medicare Access and CHIP Reauthorization Act (MACRA), CMS must make determinations as to whether: (1) Prior Authorization for repetitive non-emergencies saves money, (2) it adversely affects quality of care and (3) it adversely impacts access to care.

These studies are being conducted and are expected to show the program saves money without adversely affecting quality or access to care.

For those of you in states currently not under Prior Authorization, it is highly recommended that you still prepare for it to be implemented, even though it will not be implemented January 1, 2017.  You should still ensure that these patients meet the requirements for medical necessity by reviewing your documents, obtaining documents from facilities, conducting assessments of repetitive patients, implementing internal procedures and processes, etc.

For those of you in states already under Prior Authorization for repetitive non-emergencies, there is no impact.  Your program continues.

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