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CMS Lightens Changes to Medicare Advantage Funding

Medicare Advantage customers will not likely see the big benefit cuts or premium hikes next year that insurers have been warning about, says business writer for the Associated Press Tom Murphy. Painful changes for many of Medicare Advantage customers were predicted by health insurers, after the federal government said in February that the amount it pays per person for the coverage will decline by more than 2 percent in 2014.

However, the Centers for Medicare & Medicaid Services (CMS) changed its course and now said it expects that the cost per person to increase more than 3 percent.

Because of many several other variables like a premium tax that is needed in the health care overhaul and the massive federal law that aims to cover millions of uninsured people, Medicare Advantage plans will ultimately get paid less in2014. Analysts also predict that insurer profits from the plans will be strained by the growing cost of care.

CMS to change RAC Program for Home Health and DME

According to sources, CMS plans to change the recovery audit contractor (RAC) program that could intensify audit activity for DME providers. The agency’s plan targets to create a fifth RAC specifically dedicated to identifying overpayments for home health, hospice and DME nationwide, as shown in the agency’s request for proposal and the issuance of a statement of work.

Change to the RAC program will put four RACs to continue identifying overpayments in Regions A, B, C and D, but they will be focusing on hospitals and other healthcare providers. In addition, CMS plans put in place a new structure in 2014. The plan also requires that the RACs play a bigger role in the appeals process, a move that will likely reduce the number of denials that are overturned, sources said.

Stakeholders believe the new MPP bill could get a CBO score

According to HME industry stakeholders, their bill to replace competitive bidding with a market-pricing program (MPP) is expected to get a Congressional Budget Office (CBO) score. With the introduction of H.R. 1717 on April 24 by Rep. Tom Price with 25 other co-sponsors, their budget-neutral bill takes a 25% cut in reimbursement for the industry, with Congress covering the remaining 20% of the 45% cut planned for Round 2. The cuts would be made in over 18 months: 5% on July 1, 2013; 10% on Jan. 1, 2014; and 10% on July 1, 2014.

AAHomecare says with MPP, reimbursement starts fresh. However, if the industry and the CBO don’t agree on the “pay for” or the timeline for getting MPP approved and implemented, stakeholders have no choice but to negotiate.

ER Visits due to Zolpidem Complications are Increasing

According to a new federal report, the number of people seeking emergency medical treatment due to the adverse effects of sleep medications containing zolpidem has increased in recent years. Zolpidem, which is the active ingredient in several of the most commonly prescribed sleep medications, is believed to be associated with several side effects such as hallucinations, problems with memory, excessive daytime tiredness, sleepwalking and engaging in other behaviors like eating and even driving while not fully awake and alert.

The report, issued by the Substance Abuse and Mental Health Services Administration’s Drug Abuse Action Network (DAWN), included all emergency-department visits that involved adverse effects of zolpidem during the years 2005-2010. It was found that women were significantly more likely to seek emergency treatment for problems with zolpidem than men.

According to the report:
•In 2010, there were 64,175 emergency-department visits involving zolpidem. Of these, 19,487 or 30%–specifically involved adverse reactions to the sleep medication.
•In 2005, there were just 6,111 emergency-room visits involving adverse reactions to the sleep drug. During the period 2005-2010, emergency department visits involving adverse reactions to zolpidem rose almost 220%.

CMS Begins Emailing Notifications Regarding Program

Notification emails announcing Round Two of competitive bidding and its coming implementation has been sent out by the Centers for Medicare and Medicaid Services to patients and providers. Described in the emails is the bidding program, and the affected categories, as well as the national mail order bid program. In addition, the messages discuss the fact that there is a good chance a beneficiary might have a new contracted supplier. The e-mails also note that CMS will mail information to Medicare beneficiaries in the 91 Round Two competitive bidding areas.

The notifications include information about grandfathering. This is for people with Original Medicare who live in or travel to one of the 91 areas and need medical supplies. Needed items should be acquired from contract suppliers in order for Medicare to pay for them, unless their current suppliers decide to become grandfathered suppliers.

Survey Indicates Continuous Growth of Sleep Revenue

According to the second quarter 2013 survey done by HME Business and MIzuho Securities USA, sleep providers revenue will continue to grow. Respondents of the survey believe that their sleep revenue will grow by 2.5 percent in the next 12 months. In addition, a growth of 5.5 percent in the past 12 months was reported by providers replying to the survey.

The economy is expected by the survey respondents to decrease growth by 1.6 percent in the next 12 months, which could likely be an effect of Round Two of competitive bidding.

With 53 percent of responding providers doing business in a city that is covered by Round Two of competitive bidding, most providers strategize to cope with lower reimbursement by negotiating lower prices with existing suppliers and shifting Medicare patients’ lower-end products from existing suppliers.

NAIMES and AAHomecare to Join Forces

The industry’s leading associations announced on April 26 that they will be merging into one organization. AAHomecare and NAIMES, will bring about 600 members under one umbrella. Set to take effect on May 22, the merger is aimed at creating a better, more focused and reenergized trade association says, NAIMES president and CEO Wayne Stanfield.

Along with a partner, Stanfield launched NAIMES in 2007 as a grassroots advocacy and support organization for independent providers. After the merger he will join AAHomecare as vice president of provider relations. His new role will focus on working with state associations to create a district-level grassroots advocacy program, as well as reaching out to allied professional associations in pharmacy, home infusion and long-term care.

HHS Proposal Could Reward Fraud Reporters Nearly $10 Million

A proposed rule that would increase the pay-outs for rewards paid to Medicare fraud reporters to as high as $9.9 million was introduced by Health and Human Services Secretary Kathleen Sebelius. The reward offers very high increase from its current incentive program. Under the proposed change, a person that provides specific information leading to the recovery of funds may be eligible to get a reward of 15 percent of the amount recovered, up to nearly $9.9 million. Currently, the agency offers a reward of 10 percent up to $1,000.

Modeled on an IRS program that has returned $2 billion in fraud since 2003, the proposed rule would also strengthen certain provider enrollment provisions like permitting HHS not to accept enrollment of providers who are affiliated with an entity that has unpaid debit with Medicare.

Report Hints Possible Changes to Medicare and Medicaid

A recently released bipartisan report by five members of the U.S. Finance Committee summarized concerns raised by the healthcare industry, patient advocates and other stakeholder groups about how to better improve efforts to prevent waste, fraud and abuse in Medicare and Medicaid programs. The key recommendations that emerged from the 146 stakeholder groups that submitted white papers to the Senate Finance Committee last year, focused on improper payments, burdens of audits, enforcement issues, data management and the protection of beneficiaries.

Although the report merely presents an overview of varied concerns from different parties, a statement from the committee gives assurance of upcoming recommendations to determine whether legislative action is essential. In addition, the Senate Finance Committee asked the Government Accountability Office to look into the federal auditing process for Medicare and Medicaid providers.

Proposed Hospital Inpatient Admissions Rule Released by CMS

A proposed rule to clarify when a Medicare beneficiary is appropriately admitted to a hospital as an inpatient and what is required for Medicare Part A payment of hospital inpatient services was issued by  the Centers for Medicare & Medicaid Services (CMS) on April 26, 2013. It proposes a time-based presumption of medical necessity for hospital inpatient services taking into consideration beneficiary’s length of stay. Specifically,  hospital inpatient admissions would be presumed by RACs and other Medicare contractors as appropriate for payment under Medicare Part A if the beneficiary is admitted to the hospital pursuant to a physician order and receives care for at least two midnights.

In addition, the proposed rule gives clarity to the requirement that a patient is admitted as an inpatient only if recommended by a physician or licensed practitioner permitted by the State to admit patients to the hospital. The rule also tries to address hospital’s longstanding concern that they need more guidance on when a patient is appropriately treated and paid by Medicare as an inpatient.