All Entries Tagged With: "CMS"
New bundled payments initiative aims to lower costs, improve care coordination
Editor’s note: The following article is adapted from a blog Judith Kares, an instructor for HCPro’s Medicare Boot Camp® – Hospital Version, wrote for the Medicare Mentor website.
CMS recently announced a new initiative to lower costs and help physicians, hospitals, and other healthcare providers better coordinate care. The new Center for Medicare and Medicaid Innovation created by the Affordable Care Act launched the Bundled Payments for Care Improvement Initiative. The innovation center is tasked with finding new and better ways to provide and pay for healthcare to a growing population of Medicare and Medicaid beneficiaries.
The current Medicare system pays physicians, hospitals, and other providers that are part of the healthcare delivery team separately for services they provide, including services provided during an episode of care. For purposes of the new initiative, an episode of care might include a single hospital stay (e.g., for a heart bypass or hip replacement) and/or recovery from that stay. Under the bundled payments initiative, CMS will bundle payments for services delivered by healthcare team members during an episode of care rather than paying each provider separately.
CMS says bundling payments across providers for multiple services will give providers greater incentive to coordinate and ensure continuity of care across settings, resulting in better care for patients. Better coordinated care is likely to reduce unnecessary duplication of services and prevent medical errors, thereby improving the quality of care, while lowering costs.
The expected benefits of the bundled payments initiative are not based on supposition, but on the research and experience of leading healthcare institutions nationwide that participated in similar initiatives and demonstration projects. CMS cited one example in which a Medicare heart bypass surgery bundled payment demonstration saved $42.3 million, approximately 10% of expected costs, and saved patients $7.9 million in coinsurance while improving care and lowering hospital mortality.
In response to industry concerns, this new initiative emphasizes flexibility. In its request for applications, the innovation center described four broad approaches to bundled payments. This will give providers flexibility in determining which episodes of care and which services to bundle, facilitating participation by providers of varying size and readiness.
Organizations may apply to participate to the bundled payments initiative by submitting letters of intent no later than September 22 for Model 1 and November 4 for Models 2, 3, and 4.
CMS complicates inpatient-only rule during August 23 ODF
Editor’s note: The following article is adapted from a blog post Kimberly Hoy, JD, director of Medicare and compliance atHCPro, Inc., in Danvers, MA, wrote for the Medicare Mentor website.
HCPro recently submitted questions to CMS about transmittal R2234CP, which indicates hospitals should use bill type-110 (inpatient) when they provide an inpatient-only procedure in an outpatient environment. This appears to be an error, says Kimberly Hoy, JD, director of Medicare and compliance atHCPro, Inc., in Danvers, MA.
Twi Jackson, a CMS Staff member, reiterated the transmittal language, but did not address HCPro’s questions directly during the August 23 Hospital Open Door Forum (ODF) call., “We are still hoping to get an answer to share with you in the near future,” Hoy wrote in a MedicareMentor blog.
Jackson further complicated the inpatient-only guidance. He said no established policy allows providers a grace period to enable physicians to write inpatient orders after outpatient procedures become inpatient-only. This was in response to a presenter’s comment during the previous ODF call that physicians could complete an order anytime during such an admission.
The statements seem to contradict prior guidance from a December 2007 ODF,, says Hoy. During that call, Dan Schroeder, from the Hospital & Ambulatory Policy Group, Division of Acute Care, said cases may be treated as inpatient if physicians write orders at the conclusion of these procedures.
“There are certain circumstances where a procedure may be performed on a non-inpatient and then at the conclusion of that procedure an inpatient order may be completed, and this would not be considered to be backdated or retroactive,” said Schroder.
Jackson described this as a unique situation and said providers should contact their contractors for further guidance. However, Hoy says the situation is rather common. She encourages providers to contact their contractors so that there may be national guidance in the future.
IPPS final rule confirms HRRP provisions
Approximately 60 pages of the 1,500-page Inpatient Prospective Payment System (IPPS) final rule focused on confirming the framework of the Hospital Readmissions Reduction Program (HRRP).
In addition to finalizing many provisions of the IPPS proposed rule, CMS also has given providers a glimpse of potential future HRRP readmission measures. For the first two years of the program (FY 2013 and 2014), CMS will review readmission rates for acute myocardial infarction (AMI), heart failure, and pneumonia. These conditions are among seven that account for almost 12% of potentially preventable readmissions, according to MedPAC’s 2007 “Report to Congress”.
CMS plans to add more conditions in FY 2015 and will consider the other four conditions identified in the MedPAC report:
- Chronic obstructive pulmonary disease,
- Coronary artery bypass graft surgery,
- Percutaneous transluminal coronary angioplasty, and
- Other vascular procedures.
One commenter warned CMS that use of only three conditions in the FY 2013 HRRP will create opportunities for gaming the system. For example, hospitals may change coding practices to avoid reporting patients with AMI, heart failure, or pneumonia. CMS said it would “monitor trends in admissions and readmissions to ensure there no systematic shift in patients’ primary discharge diagnoses codes occurs as a result of implementation of the Hospital Readmissions Reduction Program.”
Multiple readmissions
CMS also clarified that it will not count multiple readmissions. For example, a patient is discharged with AMI, readmitted five days later, discharged three days later, and then readmitted a second time five days later. CMS will consider this one readmission. The final rule states:
The readmissions measures are designed to measure whether a patient experienced at least one readmission within 30 days of an initial (or “index”) discharge as a single binary (yes/no) event, rather than counting the number of readmissions experienced within 30 days of discharge as a separate readmissions. For any given patient, only the first readmission they have will be counted for the Hospital Readmissions Reduction Program. In addition, only one readmission during the 30 days following the discharge from the initial hospitalization will count as a readmission for purposes of calculating the ratios set forth in section 1886(q) of the Act. For any given patient, none of the subsequent readmissions they experience within 30 days after discharge would be counted as a new “index” admission (that is, an admission evaluated in the measure for a subsequent readmission). Any eligible admission after the 30-day time period will be considered a new index admission.
Unrelated readmissions
Commenters also asked CMS to consider excluding readmissions for certain patients with the following conditions:
- Cancer
- Trauma, burns
- End-stage renal disease
- Psychiatric disorders
- Substance abuse
- Rehabilitation
CMS said it intends to explore whether to exclude other readmissions from the HRRP, but that it could not do so now. FY 2013 measures require National Quality Forum (NQF) endorsement, and the NQF-endorsed measures do not exclude such readmissions.
Payment adjustment
CMS will address further details of the HRRP in next year’s IPPS final rule. The adjustment CMS will use to reduce payment is a key element that is missing..The final rule states:
Although we did not propose specific policies regarding the payment adjustment under the Hospital Readmissions Reduction Program in the FY 2012 IPPS/LTCH PPS proposed rule, we believe that it is still important to set forth the general framework of the Hospital Readmissions Reduction Program, including the payment adjustment provisions, in order for the public to understand how the measures discussed and finalized in this rulemaking will affect certain hospital payments beginning in FY 2013.
CMS eyes Readmission Payment Reduction Program expansion
It appears that CMS is beginning to plan an expansion of the Readmission Payment Reduction Program.
The Readmission Payment Reduction Program, which will becomes effective at the start of FY2013, will reduce the aggregate DRG payments to hospitals that have a high readmission rate for three select conditions—acute myocardial infarction , heart failure, and pneumonia.
However, CMS announced June 9 that it is accepting comments on a new measure currently in development, “Hospital-Level 30-Day All-Cause Risk-Standardized Readmission Rate following Vascular Procedures.”
“I know [CMS] want[s] to expand the readmission reduction program from the current rule so this is the way they would do it—announce and ask for public comment and then finalize,” says Debbie Mackaman, RHIA, CHCO, regulatory specialist at HCPro, Inc., in Danvers, MA.
The new measure will likely not be added until to the program until FY2014 to give CMS time to collect the appropriate data.
CMS invites all comments on the new measure, but is particularly interested in feedback that addresses the following areas:
- Definition of the cohort
- Definition of the outcome
- Risk adjustment
- Technical Expert Panel comments
CMS will accept comments until Thursday, June 30, 11:59 pm EDT. Submit comments and review the measure specifications at www.CMS.gov/MMS/17_CallforPublicComment.asp.
Provider-friendly change to tracking observation hours
Editor’s note: The following article is adapted from a blog by Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc., that appeared on Medicare Mentor.
In the July OPPS update, CMS made a very provider-friendly manual change to the section on counting observation hours. CMS amended Medicare Claims Processing Manual, Chapter 4 – Part B Hospital (Including Inpatient Hospital Part B and OPPS), §290.2.2 Reporting Hours of Observation, to allow providers to use average times when determining the amount of time to subtract from observation time for other procedures.
Providers have struggled with this issue since CMS added a clarification to the manual in 2008 that requires providers to subtract time for procedures that require active monitoring and interrupt observation care. Providers struggled with determining which procedures required active monitoring and how much time to subtract for these procedures.
In early 2010, CMS published FAQ 9974, addressing the issue regarding which procedures require sufficient active monitoring to necessitate subtraction from overall observation time. The specific question related to drug administration services. CMS said hospitals must determine service-by-service whether a particular drug administration service required active monitoring because services with the same HCPCS code may or may not need active monitoring. It provided examples of an antibiotic infusion as something that doesn’t require active monitoring and a complex drug infusion titration as something that does.
But this left the issue of how much time to subtract once a hospital determined that a service did indeed require active monitoring. The manual indicated that the beginning and end times of observation, or more likely the procedures, would require documentation to calculate total observation time. However, this was problematic for many of these bedside procedures…For instance for a procedure such as a PICC line placement, providers normally document all pertinent details about the procedure, but don’t necessarily document when they entered or left the room.
The most recent change to the manual will be a welcome change for providers who have struggled with this. CMS now allows providers to use an average time for these procedures that interrupt observation. The new manual section give providers the option of documenting start and stop times or using an average time when subtracting these procedures.
Providers who wish to use this new option, should consider putting in place policies indicating which procedures will be deducted and the average time to be deducted for those procedures. This may be as simple as updating an existing policy on observation billing, with an addendum with the procedures and their times.
In developing their listing of procedures and average times, the provider should look for the procedures they provided in conjunction with observation by looking at reports for past billing for observation cases. When determining the average times for those procedures, the provider may need to use several sources including the CPT book, staff interviews and hospital protocols. Though it doesn’t appear required, it will be useful for future updating to note what resource was used to establish the average time for each particular procedure.
One last note about the July OPPS update; CMS manualized a topic I discussed a couple of months ago about inpatient only procedures on an outpatient basis within the three day payment window. At that time, the guidance I was reporting was from the Medical Director of a specific MAC, but CMS has now added this to the Claims Processing Manual, making this a national policy. For more information see my previous post.
UPDATE: CMS releases final rule on Medicaid HCACs
By Andrea Kraynak, CPC
Provider-preventable conditions (PPC), including health care-acquired conditions (HCAC), are now subject to payment adjustments under the Medicaid program, according to the final rule released by CMS June 1.
The rule, “Medicaid Program; Payment Adjustment for Provider-Preventable Conditions Including Health Care-Acquired Conditions,” implements provisions in the Patient Protection and Affordable Care Act requiring HHS to prohibit federal payment to states for specified HCACs, as well as additional conditions determined on a state-by-state basis.
“We found that 29 states do not have existing HCAC-related nonpayment policies,” according to the final rule. “Most of the 21 states that currently have HCAC-related nonpayment policies identify at least Medicare’s HACs [hospital-acquired conditions] for nonpayment in hospitals.
“However, it is important to note that at least half of the existing policies we reviewed exceeded Medicare’s current HAC requirements and policies, either in the conditions identified, the systems used to indicate the conditions, or the settings to which the nonpayment policies applied.”
CMS introduces the term PPCs in the rule, which consists of two categories: HCACs and other provider preventable conditions (OPPC). OPPCs would be those additional conditions identified and approved by states that are not found on the list of HCACs, which are included on pages 20 and 21 of the final rule. This also allows states to expand beyond the inpatient hospital setting HCACs.
“We believe, and confirmed through public comment, that incorporating Medicare’s HACs in Medicaid’s policy is inherently complex because of population differences across programs,” according to the rule. “We fully understand that the HACs developed for Medicare’s population will not directly apply to various subsets of Medicaid’s population. While we have established Medicare as a baseline, we understand that states will, through their payment policies, appropriately address these differences.”
As with the Medicare HAC program, there will be no payment reductions for those conditions that existed prior to treatment by the provider, according to the rule.
In addition, payment reductions are limited to only those PPCs that would otherwise result in a payment increase and those that the state can “reasonably isolate for nonpayment the portion of the payment directly related to treatment for the PPC.”
In the rule, CMS notes that while the point of the Medicaid PPC payment adjustments is to improve quality of care, it does expect to realize cost savings on a state and federal level.
The federal government expects to save approximately $4–5 million annually between 2012–2015, with states experiencing an additional savings of $3–4 million each fiscal year, leading to a total savings of $35 million through 2015.
“These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors. As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time,” CMS Administrator Donald M. Berwick, MD, said in a June 1 press release.
Due to the fact that the majority of hospitals already have programs in place to reduce the occurrence of Medicare HACs, CMS does not believe the cost of implementing a similar program for Medicaid HCACs will be significant.
The effective date of the rule is July 1, 2011; however, CMS is delaying compliance action until July 1, 2012.
Editor’s note: Access the display copy of the final rule here. The proposed rule was published in the Federal Register February 17.
Senators ask for a new ACO proposed rule
Seven U.S. senators believe the Accountable Care Organization (ACO) proposed rule will not only cost more than estimated but will not accomplish the program’s goals. They want CMS to try again.
CMS published the ACO proposed rule in the April 7 issue of the Federal Register. The ACO program allows groups of providers to work together to manage and coordinate care for Medicare beneficiaries through an ACO, according to CMS. An ACO may receive payments for shared savings if it meets certain quality performance standards.
Senators Tom Coburn (R-OK), Jon Kyl (R-AZ), Mike Crapo (R-ID), Mike Enzi (R-WY), John Cornyn (R-TX), Pat Roberts (R-KS), and Richard Burr (R-NC) wrote a letter to CMS asking the agency to scrap the current proposed rule and write a new one. The Senators say they have heard concerns from several leading healthcare institutions that believe the proposed rule will fail to accomplish the ACO program’s purpose. The senators also cite an American Hospital Association report which says implementing the ACO program will cost 10 times more than the proposed rule estimates.
The Senators acknowledge that the ACO concept is a worthwhile goal, stating “An ACO model that can increase provider coordination and patient accountability would be a step in the right direction.” However, they believe “this proposed rule misses the target.”
The Partnership for Patients brings a community approach to healthcare
The old saying “it takes a village” definitely applies to healthcare today. Maybe the tribal people who used the saying to describe what it takes to raise a child knew more about providing appropriate healthcare than they are given credit for. Peeling back the onion of CMS’ new Partnership for Patients: Improving Care and Lowering Costs reveals a community—a village—coming together to appropriately and efficiently care for the citizens of that community.
The Partnership for Patients aims to create new public and private working relationships that currently don’t exist. This CMS innovation targets high-risk Medicare patients with chronic conditions, organ system failure, and frailty. It aims to:
- Improve the transition of inpatients back into the community
- Improve quality of care
- Reduce readmissions
- Reduce patient harm
- Improve medication reconciliation
- Promote safe medication practices
- Standardize communication and information exchange
- Document savings and report it to Medicare
Through the Partnership, the U.S. Department of Health and Human Services (HHS) will reach out to hospital leaders nationwide as well as physicians, nurses, health plans, and employers to improve care and lower costs. HHS says the program has the potential to save 60,000 lives by eliminating preventable injuries and complications of patient care, while saving up to $35 million in healthcare dollars. This could mean a potential savings of $10 billion for Medicare.
HHS is investing up to $1 billion in federal funding under the Affordable Care Act to make this initiative possible. To date, $500 million of this funding has gone to the Community Based Care Transition Program. An additional $500 million will be allocated to the Center for Medicare and Medicaid Innovation to support new demonstration projects related to reducing hospital-acquired conditions. Funds will be invested in reforms intended to achieve two shared goals:
- Prevent hospital patients from injury or becoming sicker.
- Help patients heal without complication
Read more about Partnership for Patients at the HHS website.
CMS publishes IPPS proposed rule for 2012
Editor’s note: This blog by Kimberly Anderwood Hoy, director of Medicare and compliance at HCPro, Inc., first appeared on the Medicare Mentor blog.
On April 20, CMS put on display the proposed rule for IPPS services and other inpatient initiatives for 2012. This year’s proposed rule contains the widest variety of inpatient clarifications and initiatives we’ve seen in a number of years. It contains something for everyone, from the finance/accounting departments to the quality department, not to mention the coders and billers.
The proposed rule this year contains a proposed payment reduction of nearly half a billion dollars compared to payments in 2011. This reflects a controversial documentation and coding adjustment of -3.15%. This is greater than expected, although CMS indicates that it is required to recoup 3.9% and will recoup the remaining .75% in the future to avoid too great an impact on hospitals in 2012.
The documentation and coding adjustment is supposed to recoup increases in payments due to better coding and documentation, unrelated to real increases in the complexity of patients. However, it’s unclear whether CMS appreciates the increased use of observation in hospitals, resulting in less complex patients being taken out of the inpatient case mixes, causing case mixes to increase related to more complex patients rather than coding and documentation changes.
The proposed rule also includes some new quality initiatives, including a new proposed HAC for contrast-induced acute kidney injury and information on the readmission project required by the health care reform laws (PPACA). The new HAC works slightly differently than existing HACs because it will be triggered by the combination of the diagnosis code 584.9 (acute kidney failure, unspecified) and a procedure code for a diagnostic service using contrast (specific codes are listed in the rule). Current HACs require only the presence of a diagnosis code.
The hospital readmission reduction program will be implemented by an adjustment factor for excess readmissions that will apply to a particular hospital’s DRG base amount. The adjustment factor can be no more than 1% in FY2013, the first year the program will be implemented, and will be phased in until the full adjustment factor of 3% is reached in FY2015. The factor will be based on the excess readmission ratio for each hospital for applicable conditions, defined as acute myocardial infarction, heart failure, and pneumonia in FY2013, and may be expanded by four additional conditions by FY2015. The readmission timeframe is specified as 30 days, and there are exclusions for readmissions unrelated to the original diagnosis, as specified by the National Quality Forum monitoring of readmissions for these three conditions.
Finally, of note, are a number of “clarifications” to existing policies. These should always be read carefully, even if you believe you understand the policy, because simple “clarifications” have all but turned some areas in hospitals upside down recently. The most significant of these clarifications, operationally, is related to the three-day payment window. CMS clarified that the payment window applies to non-provider based, wholly owned or operated physician offices, i.e. hospital-owned freestanding physician practices. At one point during the hospital open door forum, CMS stated that only provider-based locations were included, but there was conflicting authority in a 1998 Federal Register. CMS now states this Federal Register is the correct interpretation of the statute, specifically applying the rule to non-provider-based hospital-owned practices.
Although the rule excludes the professional portion of services in these locations, the overhead portion of these services are included, meaning the hospitals would have to include the overhead on the inpatient claim and the physician’s claim would have to be reimbursed at the lower facility amount. It is unclear how this overhead should be calculated or how the payment reduction to the physician’s payment will be made. CMS indicated it will issue further clarifying instructions in the physician fee schedule proposed rule in August. In the interim, hospitals should apply three-day payment window logic to the diagnostic and non-diagnostic services at any freestanding practices they own. Additionally, I would recommend that these cases are tracked internally until the physician fee schedule rule is issued to ensure hospitals have the information for billing or rebilling the physician portion, as appropriate, under the new guidance in that rule.
Other clarifications that hospitals should consider reviewing include clarifying that IME and DSH provisions don’t apply to hospice patients, clarifying that routine services such as room and board may not be provided “under arrangements” with another provider, and clarifications to the threshold for discounts to devices that must be reported for payment reduction.
As I said, this rule has something for everyone, and some of the proposals are significant and hospitals would be well served to begin to prepare now. Additionally, some proposals will have a significant negative impact and hospitals may wish to comment to CMS on that impact in the hope that CMS will change or mitigate some of its proposals.
Home health face-to-face requirement effective April 1
The home healthcare face-to-face requirement will go into effect as scheduled.
CMS Director Jonathan Blum told the Face-to-Face Workgroup that CMS expects full compliance with the home health face-to-face requirement starting April 1.
The requirement mandates that any patient referred to a home health agency must have a face-to-face encounter with a physician or other licensed independent practitioner (e.g., nurse practitioner, certified nurse midwife, or physician assistant). Failure to comply will result in a payment denial.
The Face-to-Face Workgroup, which is made up of representatives from ACMA and a number of other organizations, has been actively working to share with CMS their concerns regarding the face-to-face requirement.
Linda Sallee, RN, MS, CMAC, IQCI, member of the ACMA National Board of Directors, met with CMS Administrators in Washington, DC to discuss case management’s concerns related to the home health face-to-face requirement March 18.
ACMA also detailed its concerns in a March 17 letter to CMS, which is available on the ACMA website. The letter included three requests, one of which asked CMS to delay the implementation of the requirement. Others included the development of a standardized tool for documenting that the face-to-face encounter occurred and that CMS would conduct educational efforts for providers.
Read the CMS email that states the agency expects full compliance with the requirement.
Read more about ACMA’s public policy efforts at the ACMA website.
