Med Law Blog

The Centers for Medicare/Medicaid Services posted the proposed 2009 Medicare Fee Schedule Rule on July 7, 2008. The link to those rules was provided in an earlier Medlaw Blog post.  

The proposals include numerous items, but I would like to highlight the following:

1.  Proposed changes to the Independent Diagnostic Testing Facility (IDTF
     enrollment requirements;

2. Significant clarification and proposed changes to the Purchased Diagnostic Testing or Anti
     markup Rules;

3.  A new Stark exemption for incentive payment and shared saving programs (gainsharing); and

4.  Proposed revisions to the Physician and Non-Physician Practitioner Enrollment Requirements.

Over the next several weeks, I will be posting articles on the Medlaw Blog regarding each of these.

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Congress
Clash on Preventing Cut to Doctor Payments
Centers on How to Pay for Medicare Bill

By ANNA WILDE MATHEWS
July 7, 2008

Before Congress took the July 4th week off, a partisan standoff in the Senate blocked a bill that would prevent a cut in doctors' Medicare fees. When members return to Capitol Hill this week, the question for Democrats and Republicans will be: Who will blink to get it done?

Both parties want to avoid the 11% drop-off in physician payments. Already, lawmakers have missed the July 1 deadline for the automatic cut to go into effect, but the Bush administration said it won't process claims at the new, lower rate for the first 10 business days of July.

The clash -- and the holdup -- center mostly on how to pay for the bill. Its cost, about $20 billion over five years, reflects a package of other tweaks in addition to the doctors' money. To fund them, the bill relies largely on trimming outlays for the private insurers' version of Medicare, known as Medicare Advantage plans.

The White House has threatened to veto the bill, largely over new limits it would impose on one particular type of Medicare Advantage plan known as private fee-for-service. Such plans are offered by companies including Humana Inc., WellPoint Inc. and UnitedHealth Group Inc.

Despite the veto threat, the House passed the bill last month, 355-59. But in the week before Congress's holiday recess, it fell one vote short of the 60 needed to move forward in the Senate.

Senate Democrats have vowed to bring the bill up again this week. So the spotlight will be on a handful of Republican senators who could potentially switch votes. The American Medical Association, which backs the bill and says many of its members would be reluctant to see new Medicare patients if the cut remains in effect, ran ads last week targeting 10 Republican senators in their home states.

They include Pennsylvania Sen. Arlen Specter, New Hampshire Sen. John Sununu and Mississippi Sen. Roger Wicker. Texas Sen. John Cornyn, who, like Sens. Sununu and Wicker, is up for reelection this fall, saw the political arm of the Texas Medical Association withdraw its endorsement of him. "I think they don't understand the fury out there," said AMA President Nancy Nielsen. "It's galvanized doctors."

On the other side, America's Health Insurance Plans, the main lobbying group for the industry, ran its own ads, defending the Medicare Advantage plans. "What we'd like to see is the physician-fee issue addressed without the significant reliance all the bills propose placing on Medicare Advantage beneficiaries," said Karen Ignagni, chief executive of the group.

Even if the bill wins 60 votes in the Senate this week, it would not be enough to overcome a veto if the White House refuses to back down. That would throw the issue back to Congress with even less time left on the clock before the cuts take full effect. Democrats would then face more pressure to accept a compromise measure, likely more narrowly crafted, that does not go after the private fee-for-service plans.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

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On June 30, 2008, the Centers for Medicare and Medicaid Services (CMS) posted at the Office of Federal Register its Proposed 2009 Medicare Physician Fee Schedule rule. The rule is scheduled to be published in the July 7, 2008, edition of the Federal Register, but was placed on display at the Office of Federal Register.

As with any proposed physician fee schedule update, this proposed rule is full of interesting and significant changes to Medicare Part B payment policies, including pieces impacting the Stark Law and the purchased diagnostic test (PDT) rule. In particular, the proposed rule:

• Includes annual updates to relative value units (RVUs) used to calculate physician payment.
• Proposes to create a new series of HCPCS codes for follow-up inpatient telehealth consultations.
• Proposes changes to the methodology used to calculate the Average Sales Price (ASP) of certain covered Part B drugs effective April 1, 2008, and proposes changes to the Competitive Acquisition Program (CAP) for Part B drugs.
• Proposes changes to the IDTF enrollment requirements including: (1) proposed requirements that physician and nonphysician practitioner entities enroll and meet certain IDTF requirements; (2) proposed requirements that mobile entities furnishing diagnostic tests bill directly for the mobile diagnostic services that they furnish, regardless of where the services are performed; and (3) proposed limits regarding how long an IDTF can submit claims for services furnished prior to any effective date of IDTF revocation.
• Includes significant clarification and proposed changes to the PDT or anti-markup rule including: (1) changes that would conform aspects of this payment limitation rule to the federal physician self-referral or Stark law by modifying the current definition of "office of the billing physician" to include diagnostic services furnished in the same building (even if furnished on different floors of the building provided applicable supervision requirements can be met); (2) changes that would clarify that physician supervision—not the employment relationship of the technician—is the key factor for application of the payment rule provisions; (3) changes that would exempt diagnostic services furnished by certain multi-specialty practices in locations where only some of the ordering physicians of the physician organization work; and (4) a proposed exemption for certain non-compliant relationships where an ordering physician in a physician organization does not have any owners who have a right to receive profit distributions.
• CMS solicits numerous comments regarding these proposed changes including: (1) alternatives to the proposals it offers; (2) whether the term "net charge" should include any overhead or other costs of the billing physician when the PDT applies; and (3) whether the effective date of the PDT clarifications should be extended beyond January 1, 2009. CMS does not, however, back away from its view in the final 2008 Medicare Physician Fee Schedule that the PDT rule will apply in situations that could qualify under the "centralized building" component of the in-office ancillary services exception under the Stark law.
• Proposes a new and permanent Stark exemption for certain incentive payment and shared savings programs offered by hospitals.
• Proposes revisions to the physician and non-physician practitioner enrollment requirements.
• Proposes revisions to the appeals process rules where CMS or a contractor determines that a provider or supplier fails to meet the requirements for Medicare billing privileges.
• Proposes to change the DMEPOS supplier standards to prohibit payment to a supplier for furnishing a CPAP device to a beneficiary if the supplier also "directly or indirectly" provided the diagnostic sleep study or furnished the sleep test device used in the study.
• Proposes changes to the Physician Quality Reporting Initiative (PQRI) reporting requirements.

Comments on this proposed rule are due by August 29, 2008, with the final rule expected in November for implementation effective as of
January 1, 2009.

*We would like to thank Barry Alexander (Nelson, Mullins, Riley & Scarborough, LLP Raleigh, North Carolina) and Alex M. Hendler (Washington, DC) for providing this email alert.

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The Questions and Answers below apply to the recent decision by the Centers for Medicare & Medicare Services to hold for up to 10 business days claims paid under the Medicare physician fee schedule (MPFS) that contain July 2008 dates of service.

Q1.      Will claims containing services paid under the MPFS be held that contain both June and July dates of service?

A1.      Yes, your local contractor will hold the entire claim for 10 business days.

Q2.      Will claims be held that contain both services paid under the MPFS and services paid under a separate fee schedule?

A2.      Yes, claims that contain both services paid and not paid under the MPFS will be held. For example, a claim with a July date containing an Evaluation and Management code and a drug code would be held.

Q3.      Does the holding of claims paid under the MPFS also include anesthesia and purchased diagnostic services?

A3.      Yes, contractors will hold all claims with dates of service July 1, 2008, and after that contain services paid under the MPFS, including anesthesia and purchased diagnostic services.

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Senate fails to postpone Medicare payment cut.

In continuing coverage from previous editions of Health and Life Sciences Law Daily, the New York Times (6/27, Pear) reports that physicians now "face a 10 percent cut in Medicare payments next week, following the Senate's failure on Thursday to take up legislation that would have averted the cuts." By a vote of 58 to 40 on Thursday, "Republican senators blocked" the bill, which "would cancel the 10 percent cut scheduled to occur on Tuesday and would increase Medicare payments to doctors by 1.1 percent in January." Dr. Nancy H. Nielsen, president of the American Medical Association, warned that "the cuts would force many doctors to 'limit the number of new Medicare patients they treat.'"

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The Medicare rules for the physician fee schedule (RB-RVS) would have mandated a 10% reduction for 2008 pursuant to the sustainable growth rate (SGR) formula. Congress postponed that for the first 6 months of 2008, but he 2nd 6 months is looming. Without actionmt he postmenement ends and the automatic 10.1% reduction kicks in automatically. The House has approved another reprieve. Quick Senate action is expected. Excerpts form the WSJ report follow.

Expect the current elected officials to enact the reprieve for the next 6 months and pass this problem on to the new administration.

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Highmark Blue Cross/Blue Shield announced in the April 2008 PRN that the reduction for technical component reimbursement for multiple procedures, originally intended to be effective as of July 1, 2008, will be postponed until September 1, 2008.  A copy of that announcement is contained in the link below.

www.medlawblog.com/PRN Article.pdf

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Lawmakers concerned about Medicare's competitive bidding program.

The Wall Street Journal (5/6, A4, Mathews) reports that on Tuesday, the U.S. House Ways and Means Health Subcommittee will hold a hearing on the Centers for Medicare and Medicaid Services' (CMS) proposed "plan to use competitive bidding for products such as wheelchairs and walkers." Rep. Pete Stark (D-Calif.) and other members of Congress have expressed concern about the program. Opponents "in Congress and elsewhere say service for the elderly will suffer if the bidding system drives some operators out of business." Under the current system, "companies receive a government-set fee to distribute such equipment for patients' home use." However, under the proposed "competitive system, companies bid on how low a fee they would be willing to accept. Medicare then limits distribution rights for a particular geographic area to several low bidders."

Lobbyists seek to exempt certain medical equipment from Medicare competitive bidding program. The Hill (5/6, Young) reports, "Influential corporate interests, especially wheelchair and oxygen suppliers like Invacare, are furiously working to get Congress to postpone the program." Representatives from the medical-equipment industry allege that the CMS "is mishandling the program, that the pay rates are too low to cover the cost of providing the supplies, and that patients are going to be stuck with poor service from suppliers that low-balled their bids to win market share."

But, CMS Acting Administrator Kerry Weems "said Monday that complaints about flaws in the bidding process were unfounded, and that he sent three CMS employees to review the work of the contractor that conducted the selection process for the competitive bidding program," Congressional Quarterly (5/6, Carey) notes. Weems said that no problems could be found "[i]n a review of a sample of the 100 cases in which allegations were made."

As reported by AHLA News.

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On April 21, 2008 the Centers for Medicare and Medicaid Services ("CMS") released a proposed rule regarding the Fiscal Year 2009 Inpatient Rehabilitation Facility Prospective Payment System. The proposed rule discusses changes to the 75% rule and requires a freeze on inpatient rehabilitation facility rates from April 1, 2008 through September 30, 2009. The proposed rule also discusses lowering the compliance threshold for certain cost reporting periods. Comments to CMS are being accepted through June 20, 2008. Under the Social Security Act, the final rule will be published on or before August 1. The proposed rule can be found in its entirety at http://www.cms.hhs.gov/InpatientRehabFacPPS/downloads/cms-1554-p-display.pdf

Paul J. Welk
412-594-5536
pwelk@tuckerlaw.com

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Gainsharing is generally defined as an arrangement between physicians and hospitals to share cost reductions, which can be narrowly targeted projects such as standardization of hospital equipment and supplies or broadly targeted projects such as average cost per case. Gainsharing is an attempt to align financial incentives in an environment where the existing incentives are actually opposite, i.e. physicians are typically paid on a fee for service basis and hospitals generally have DRG or case rate restrictions.

The alignment strategies are complicated by the statutes prohibiting certain financial arrangements, as follows:

1.          The Stark Act prohibits referrals by physicians to financial entities with which those physicians have financial relationships, and a gainsharing arrangement can easily be a financial relationship triggering the application of the Act;

2.          The Civil Money Penalty Act, i.e. Sections 1128A(b)(1) and (b)(2) prohibit hospital payments to physicians to reduce care; and

3.          The pervasive Anti-Kickback Statute (AKS). i.e. Social Security Act Section 1128, prohibits any type of payments in exchange for referrals of covered services. 

Although the OIG has a history of being wary of gainsharing arrangements, there is also a stream of OIG advisory opinions allowing gainsharing arrangements that typically require safeguards in the following areas:

1.          Transparent arrangements providing accountability for the parties;

2.          Adequate quality control;

3.          Control and monitoring of any payments that can be received as a payments for  referrals.

MedPac recommended in a 2005 report that gainsharing be permitted. CMS has also established a number of demonstration projects regarding gainsharing arrangements.

CMS recognizes the potential effectiveness of gainsharing arrangements in the healthcare reimbursement environment and is soliciting comments on a proposal to establish guidelines for gainsharing arrangements. CMS stated in the recent proposed Inpatient Prospective Payment System Rules, issued on April 14, 2008, as follows:

"Notwithstanding our general concern with arrangements that involve the use of a percentage based compensation formula (other than payment to a physician for work personally performed by the physician), we recognize the value to the Medicare program and its beneficiaries where the alignment of hospital and physician incentives result in improvements in quality of care. Therefore, we are considering whether to issue an exception specific to gainsharing

arrangements. . . At this time, we decline to issue a specific proposal concerning an exception for gainsharing arrangements, but rather are soliciting comments as to whether we should establish an exception to gainsharing arrangements, and, if so, what safeguards should be included in the exceptions. Specifically, we are interested in receiving comments on:

(1)        What types of requirements and safeguards should be included in any exception for gainsharing arrangements; and

(2)        Whether certain services, clinical protocols, or other arrangements should not qualify for the exception."

The text of the regulations are posted in the Healthcare Links section of the Blog.

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CMS has proposed new Stark regulations as part of the hospital in-patient perspective payment system rules for Fiscal Year 2009. 

On April 14, 2008, CMS proposed new IPPS rules which contain proposed Stark regulations with respect to alternative solutions for the "stand in the shoes" provisions which were first proposed in the Stark Phase III rules and solicits new comments on a proposed exception for gain sharing. 

The proposed rules have been posted on the MedLaw Blog and can also be accessed through the link below.

http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1390-P.pdf

We will be posting summaries of the "Stand in the Shoes" and "Gain Sharing" proposals written the next several days.

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Pittsburgh MSA Included in DMEPOS Medicare Competitive Bidding Program

Medicare will begin implementation of a Competitive Bidding Program for DMEPOS effective July 1, 2008. This program will affect patients in ten competitive bidding areas (CBAs) that align with the ten metropolitan statistical areas (MSAs) selected for the first phase of this program and includes ten product care categories of DMEPOS. 

The ten MSAs include Pittsburgh. 

Ten product categories include oxygen supplies, standard power wheelchairs and scooters, complex rehabilitative power wheelchairs, mail order diabetic supplies, enter nutrients, continuous positive airway pressure (CPAP) and respiratory assist devices, hospital beds, negative pressure wound therapy, walkers and related accessories, and support services (Group 2 mattresses). See the attached MLN Matters link from CMS for additional information. 

http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0805.pdf

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Highmark Medicare Local Coverage Determinations (LCDs)

Highmark Medicare Services has published the initial draft set of LCDs as part of its plans to fulfill CMS requirements to consolidate ICEs by July 1, 2008. Highmark's instructions for submitting comments for the proposed Local Coverage Determinations (LCDs) and the proposed LCDs are included in the attached link. The following LCDs are included:

• Approved Drugs and Biologicals
• Blepharoplasty/Blepharoptosis
• Blood Glucose Monitoring in a Skilled Nursing Facility (SNF)
• Botulinum Toxin Type A and B
• Cancer Chemotherapeutic Agents
• Cardiovascular Stress Testing
• Cataract Surgery
• Chiropractic Services
• Co-Management of Surgical Procedures
• Complex Cataract Extraction
• Computed Tomographic Angiography of the Chest
• Consultations
• Coverage of Services and Procedures in Nursing Facilities
• Routine Foot Care
• Debridement of Mycotic Nails
• Diagnostic Laryngoscopy
• Monitored Anesthesia Care (MAC)
• Electrocardiography
• End - Diagnostic Pneumatic Compression Therapy
• Erythropoiesis Stimulating Agents (ESAs)
• Evaluation and Management Services in a Nursing Facility
• Fluorescein and Indocyanine Green Angiography
• Fundus Photography
• Intraoperative Neurophysiological Testing
• Luteinizing Hormone-Releasing (LHRH) Analogs
• Magnetic Pelvic Floor Stimulation (MPFS)
• Magnetic Resonance Imaging (MRI) of the Breast
• Moh's Micrographic Surgery (MMS)
• Non-Invasive Cerebrovascular Arterial Studies
• Non-Invasive Peripheral Venous Studies
• Ophthalmic A and B scans
• Ophthalmic Biometry for Intraocular Leans (IOL) Power Calculation
• Ophthalmoscopy Extended
• Parathormone (Parathyroid Hormone)
• Paravertebral Facet Joint Nerve Block and Sacroiliac Joint Injections
• Physical Medicine and Rehabilitation Services, PT and OT
• Psychiatric Therapeutic Procedures
• Radiation Therapy Services
• Radiologic Examination of the Chest (CXR)
• Real-Time, Outpatient Cardiac Monitoring
• Removal of Benign or Premalignant Skin Lesions
• Removal of Impacted Cerumen
• Scanning Computerized Ophthalmic Diagnostic Imaging
• Sleep Disorder Testing
• Speech-Language Pathology (SLP) Services
• Surgical Treatment of Nails
• Surveillance of Implantable Cardioverter-Defibrillator (ICD), Office, Internet or Non-Internet Based
• Thermotherapies (Minimally Invasive Surgical Techniques [MISTs] for Benign Prostatic Hypertrophy (BPH))
• Transesopageal Echocardiography (TEE)
• Transthoracic Echocardiography (TTE)
• Treatment of Dysphagia (Swallowing Disorders), General; Includes VitalStim® Therapy
• Treatment of Varicose Veins of the Lower Extremities
• Trigger Point Injections
• Visual Fields
• Wound Care
• Acute Care: Inpatient, Observation, and Treatment Room Services
• Human Skin Equivalents (HSE) - Use in the Treatment of Chronic Cutaneous Ulcer Wounds

http://www.highmarkmedicareservices.com/transition/j12/lcd.html

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CMS has decided to make no change to Section 220.1 of the existing National Coverage Determination Manual titled “Computed Tomography” (PUB 100-3, 220.1). The link to the CMS announcement is:

https://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=206

The summary of the decision is as follows:

Conclusions

In summary, there is uncertainty regarding any potential health benefits or patient management alterations from including coronary CTA in the diagnostic workup of patients who may have CAD. No adequately powered study has established

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The Medicare Appeals Process: Five Levels to Protect Providers, Physicians and Other Suppliers brochure has been updated and is now available to order print copies or as a downloadable PDF file. To view the PDF file, go to http://www.cms.hhs.gov/MLNProducts/downloads/MedicareAppealsProcess.pdf or to order hard copies, please visit the MLN Product Ordering Page at http://cms.meridianksi.com/kc/main/kc_frame.asp?kc_ident=kc0001&loc=5 on the CMS website.

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CMS PUBLISHES CORRECTED 2008
AMBULATORYSURGERYCENTER FEE SCHEDULE

On February 22, 2008, CMS published corrections to the 2008 payment rates for ambulatory surgery centers. Following is the link to the corrected final rule.

http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/08-671.pdf

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SIMPLE CMS EXPLANATION OF MEDICARE PHYSICIAN FEE SCHEDULE

CMS issued a relatively simple explanation of the Medicare Physician Fee Schedule on February 19, 2008. The release is entitled The Revised Medicare Physician Fee Schedule Fact Sheet for January 2008. It explains the following:

1.     the work, practice expense, and malpractice expense components of the RVU formula;

2.     the conversion factor process, the six month reprieve of the SGR reductions so that the conversion factor for the first six months of 2008 will be $38.0870;

3.     the fact that the conversion factor will revert back to $34.0682 as of July 1, 2008.

http://www.cms.hhs.gov/MLNProducts/downloads/MedcrePhysFeeSchedfctsht.pdf

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On January 25, 2008 CMS published a proposed rule which clarifies and expands the current enrollment requirements that durable medical equipment and prosthetics, orthotics and supplies ("DMEPOS") suppliers must meet to establish and continue to have billing privileges in the Medicare Program. These provisions may affect the ability of physical therapists to provide DMEPOS to their patients. The proposed rule is available at: http://a257.g.akamaitech.net/7/257/2422/25jan20081800/edocket.access.gpo.gov/2008/pdf/E8-1346.pdf and comments can be submitted until March 25, 2008. 

Paul Welk
412-594-5536
pwelk@tuckerlaw.com

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CORF SERVICES

I.          INTRODUCTION

CORF Services may consist of physician services, physical and occupational therapy services, speech pathology services, respiratory services, prosthetic or orthotic devices and related services, social and psychological services, drugs and biologicals, vaccines and supplies, appliances and equipment. Any of these services may be provided provided a physician first certifies the medical necessity of skilled rehabilitation services and establishes a plan of treatment in accordance with 42 CFR §410.105. The 2008 Regulations are intended to do the following:

1.          Distinguish the types of physician services which are comprehensive outpatient rehabilitation facility (CORF) services provided by a physician and, therefore, included within the CORF reimbursement, from physician services which are separate medical or surgical physician services and therefore not included within CORF reimbursement but are separately billable;

2.          Coordinate the regulations with the existing fee schedule reimbursement structure;

3.          Revise the conditions for coverage; and

4.          Clarify the coverage of nursing services, drugs and biologicals, and vaccines.

 II.         PHYSICIAN SERVICES

1.          Statute: The distinction is based upon the statutory language of 42 USC §1395x(cc)(1)(2), which defines CORF services and CORF. The definition of services includes physician services but is not intended to cover typical outpatient or inpatient physician services.

2.         Regulations: The 2008 Regulations distinguish between types of services. 42 CFR §414.100(a) specifically provides that CORF physician services are administrative in nature and that diagnostic and therapeutic physician services are not CORF services, but (if otherwise covered) would be separately reimbursable under part 414.

a.         Physician Services are defined in 42 USC §1395x(q) as surgical and medical or consultative services. 

b.         CORF services are defined in 42 USC §1395x(cc) to exclude any services which would not be covered if provided to an inpatient at a hospital facility.

c.         42 USC §1395x(b)(4) defines hospital inpatient services and specifically excludes medical or surgical services provided by physicians (including residents or interns) certified nurse midwives, certified registered nurse anesthetists, and psychologists.

III.         REIMBURSEMENT

42 CFR §414.1105 defines the payment mechanism for CORF services, which has been in effect since 1999 when CORF reimbursement was changed from cost-based reimbursement to physician fee schedule reimbursement. 

1.         Section 414.1105(b) specifically states that there will be no separate payment for physician services that are CORF services (physician/administration services).

2.         All other services are paid pursuant to the physician fee schedule pursuant to Section 414.1105(a) which states, that CORF services will be paid at the lesser of 80% of the following:

            a.         The actual charge for the item or services; or

b.         The non-facility amount determined under the physician fee schedule established under Section 1848(b) of the act for the item or service.

That reference is to Section 1848 of the Social Security Act, i.e., 42 USC

§1395w-4, which established the Medicare RB-RVS physician fee schedule in 1992.

3.          Supplies and durable medical equipment that are CORF services under 42 CFR §410.100(f), orthotic devices that are CORF services under 42 CFR §410.100(g), and drugs and biologicals that are CORF services at the lesser of eighty percent (80%) of either (1) actual charge or (2) the DMEPOS fee schedule.

a.         Prosthetic devices are devices that replace all or part of an organ or body member but exclude dental and renal dialysis machines.

b.         Orthotic devices include orthopedic devices and services reasonably necessary to effectuate their use.

c.         Drugs and biologicals are those prescribed by a physician and not otherwise excluded from Part B coverage.

IV.        COVERAGE REQUIREMENTS.   

CMS has revised the coverage requirements of 42 CFR §410.105 to clarify that all services provided must be necessary for the rehabilitation of the patient, allows certain home services, and extends the review period to 90 days instead of 60 days, except for respiratory services. 42 CFR §410.105(c)(1)(ii) now requires that treatment plan to:

1.        Indicate the diagnosis and rehabilitation goals;

2.        Prescribe the type, amount, frequency and duration of the skilled rehabilitation services, including PT, OT, speech and respiratory therapy; and

3.        Indicate the other CORF services to be furnished that relate directly to such rehabilitation goals. 

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REPORTING OF CARDIAC REHABILITATION SERVICES

Cardiac rehab services were being reported as CPT 93797 (physician services for outpatient cardiac rehabilitation without continuous ECG monitoring) and CPT 93798 (physician services for outpatient cardiac rehabilitation with continuing ECG monitoring). CMS proposed to establish two new HCPCs codes to report cardiac rehab services, i.e., GXXX 1 (physician services for outpatient cardiac rehabilitation without continuous ECG monitoring per hour) and GXXX 2 (physician services for outpatient cardiac rehabilitation with continuous ECG monitoring per hour).

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On November 1, 2007, the Centers for Medicare and Medicaid Services ("CMS") released its final Medicare Physician Fee Schedule Rule for calendar year 2008. In addition to announcing CMS' payment rates for 2008, the final rule includes a new definition of physical therapist assistant and sets forth certain personnel standards for the provision of physical therapy services. 

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U.S. House approves Medicare physician reimbursement, SCHIP extension bill.

In continuing coverage from yesterday's briefing, Bloomberg (12/20, Goldstein, Johnston) reports that a "scheduled cut in Medicare payments to doctors will be postponed," and the State Children's Health Insurance Program (SCHIP) "will be extended at its current enrollment under legislation the U.S. House sent to the President" on Wednesday. By a vote of 411 to 3, the House passed the bill, which the Senate approved unanimously on Tuesday. According to press secretary Dana Perino, "President George W. Bush is expected to sign the compromise legislation." Under this bill, physicians who treat Medicare patients will "get a 0.5 percent increase through June 30, rather than a 10.1 percent cut on Jan. 1."

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Conrgress is working on an unusual solution to the yearly Medicare update. The SGR formula mandates a fee decresase, projected to be about 10%. In past years, Congress has overidden the fee reduction with a modest increase. Of course, since the sustainable growth reate formula is never changed, the chasm gorws every year. This year, instead of an override, Congress is merely proposing a 6 month delay in the decrease. Below id the report from the Kaiser Daily Health Policy Report. 

Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) on Monday agreed on a Medicare package that would delay for six months a scheduled 10% reduction in Medicare physician fees, a Republican committee aide said, CQ Today reports. The fee cut is scheduled to take effect on Jan. 1, 2008. The lawmakers previously called for a one- or two-year fix of the physician fee cut, but "difficulty in finding ways to pay for the legislation, along with Senate Republican leadership's demand that the package be able to pass by unanimous consent, forced them to scale back their ambitions," according to CQ Today (Armstrong, CQ Today, 12/17).

The package would cost about $6 billion, but lawmakers, looking to attract Republican support and avoid a presidential veto, will not propose "anything close to the billions of dollars in cuts in payments to Medicare Advantage insurers that many Democrats have backed," the Wall Street Journal reports (Lueck, Wall Street Journal, 12/18).

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A.        Refinement of Work Relative Value Units.

            Since the physician fee schedule is first established in 1992, it has been composed of three categories of relative value units, i.e., work, malpractice expense, and overhead. Each of these units is assigned a value and the sum of those units is multiplied by the dollar conversion factor to establish the Medicare reimbursement for each particular CPT code. The system includes a process for refining the work relative value units, i.e., a re-evaluation of the value of the work units assigned to each CPT code. CMS uses a standard five year review cycle based upon input by the AMA/Specialty Society Relative Scale Update Committee (RUC). For 2008, CMS has revised the work units for comprehensive hearing tests (92557), visual audiometry (92579), doppler color flow (93325), and 14 home visit codes (99336 through 99350). The values, which are contained in Table 14 of the proposed physician fee schedule, is attached below at the link entitled Table 14: Work RVU Revisions.

www.medlawblog.com/Table 14 Work RVU Revisions(1).pdf

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The 2008 Medicare Physician Fee Schedule also includes revised performance standards for Independent Diagnostic Testing Facilities (IDTFs). The revisions are promulgated via 42 CFR § 410.33. The link below is the text of the regulations with the new provisions "boxed" for easy identification. Following is a description of these new IDTF performance standards beginning January 1, 2008:  

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The Medicare Anti-Markup provisions for diagnostic tests, which will be effective as of January 1, 2008, are intended to prevent physicians or other medical suppliers from purchasing either the professional component (PC) or technical component (TC) of any diagnostic test (excluding clinical laboratory tests subject to separate restrictions) and profiting or marking up the acquisition cost by billing globally in accordance with the fee schedule.

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The 2008 Medicare Physician Fee Schedule (MPFS) Final Rule, effective for services on or after January 1, 2008, is on display in the Federal Register and will be published on November 27, 2007. The rule identifies 119 measures CMS has selected for eligible professionals to use to report quality-of-care information under the 2008 PQRI. The rule can be found at: (

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HIGHMARK  ANNOUNCES AMBULATORY SURGERY  CENTER

ACCREDITATION REQUIREMENTS

In the October 2007 PRN, Highmark announced that, as of January 2008, it will require freestanding ambulatory surgery centers (ASC) to be accredited by one of three accrediting bodies, i.e., the Joint Commission, the Accreditation Association for Ambulatory Healthcare ("AAAHC"), or the American Association for Accreditation of Ambulatory Surgery Facilities ("AAASF"). The text of the PRN article appears below. Note that newly formed ASCs, i.e., those practicing for less than a year, may apply for network participation and have 18 months to complete Highmark accreditation requirements. Existing ASCs which already participate in Highmark's network have an 18-month compliance window. However, ASCs have been in existence for more than a year, but which do not currently participate in Highmark's network, must receive accreditation before they are eligible to apply for network participation.

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2008 Medicare Physician Fee Schedule

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=2585&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date

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MEDICARE PUBLISHES PART B SPECIALTY GUIDES

Highmark Medicare Services has developed specialty guides to explain and provide hot links to source material for the following specialties or issues:

·        Ambulance

·        Ambulatory surgery centers

·        Anesthesia

·        Clinical laboratories

·        Podiatry

·        Physical therapy

The link below lead you to the Medicare Part B Specialty Guides website at Highmark Medicare Services:

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ASC PAYMENT REGS RELEASED

The Medicare Ambulatory Surgical Center (ASC) payment system final rule was published in the Federal Register by HHS on August 2, 2007. The link below is to the text of the regulations. The new payment rates will be effective for Medicare 2008, although the first impact will not be fully phased in until 2011, as follows:

                                    2008   -   25%

                                    2009   -   50%

                                    2010   -   75%

                                    2011   - 100%

The new system will increase the number of covered procedures from 2,571 5o 3,300. ASC groups expect payment reduction to a schedule that pays about 65% of hospital outpatient department payment rates.

Modern Healthcare reports in its July 23, 2007 issue that "ACS's Can't Drive at 65". The final rule established only policies and formulas for CMS to use in calculating payment rates, and the 65% is an estimate.

http://www.cms.hhs.gov/snfpps/downloads/CMS-1545-F-display.pdf

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PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

24.       The authority citation for part 414 is revised to read as follows:

Authority:       Secs. 1102, 1871, and 1881(b)(1) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1)).

Subpart B--Physicians and Other Practitioners

25.       Section 414.50 is revised to read as follows:

§414.50 Physician billing for purchased diagnostic tests.

(a)        General rule.  (1) For services covered under section 1861(s)(3) of the Act and paid for under part 414 of this chapter (other than clinical diagnostic laboratory tests paid under section 1833(a)(2)(D) of the Act, which are subject to the special rules set forth in section 1833(h)(5)(A) of the Act), if a physician or medical group bills for the technical or professional component of a diagnostic test that was performed by an outside supplier, the payment to the physician or the medical group (less the applicable deductibles and coinsurance) for the technical or professional component of the test may not exceed the lowest of the following amounts:

(i)         The supplier's net charge to the physician or medical group.

(ii)        The physician's or medical group's actual charge.

(iii)       The fee schedule amount for the test that would be allowed if the supplier billed directly.

(2)        This provision applies regardless of whether the test or its interpretation was purchased by the physician or medical group billing for the test or the interpretation, or whether the right to bill for the test or its interpretation was reassigned to the physician or medical group billing for the test or the interpretation.

(3)        For purposes of paragraph (a) of this section--

(i)         The physician's or other supplier's net charge must be determined without regard to any charge that is intended to reflect the cost of equipment or space leased to the outside supplier by or through the billing physician or medical group.

(ii)        An outside supplier is someone other than a full-time employee of the billing physician or medical group.

(b)        Restriction on payment. (1)  The physician or medical group must identify the supplier and indicate the supplier's net charge for the test. If the physician or medical group fails to provide this information, CMS makes no payment to the physician or medical group and the

physician or medical group may not bill the beneficiary.

(2)        Physicians and medical groups that accept Medicare assignment may bill beneficiaries for only the applicable deductibles and co-insurance.

(3)        Physicians and medical groups that do not accept Medicare assignment may not bill the beneficiary more than the payment amount described in paragraph (a) of this section.

26.       Section 414.65 is amended by revising paragraph (a)(1) to read as follows:

§414.65 Payment for telehealth services.

(a) *   *   *

(1)        The Medicare payment amount for office or other outpatient visits, consultation, individual psychotherapy, psychiatric diagnostic interview examination, pharmacologic management, end stage renal disease related services included in the monthly capitation payment (except for one visit per month to examine the access site), individual medical nutrition therapy, and neurobehavioral status exam furnished via an interactive telecommunications system is equal to the current fee schedule amount applicable for the service of the physician or practitioner.

            *          *          *          *          *

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The text of both of the discussions of the Independent Diagnostic Testing Facility (IDTF) regulations and of the specific regulations themselves are posted below in full. The fundamental changes from the earlier proposals are as follows:

1.      IDTF must maintain comprehensive general professional liability insurance in the amount of $300,000 per location.

2.      There will no longer be retroactive enrollment. The enrollment date will be the later of the completion of the application or the date the IDTF actually begins services, and enrollments will be processed through an online application.

3.      The IDTF will be required to provide updated information regarding any changes contained in the enrollment application regarding ownership, location, general supervision or adverse legal actions within 30 days of occurrence.

4.      The IDTF must have a documented complaint process. 

5.      The physician responsible for general supervision will not be ultimately responsible for the operations of the IDTF. The regulations will clarify that these responsibilities remain the responsibilities of the owners/shareholders.

6.      A physician may be responsible for only three IDTF sites, whether they be fixed or mobile. The responsibility clarification will not change the existing requirements for direct or personal supervision of tests.

7.      The sharing of facilities at fixed sites will be prohibited.

The specific requirements regarding these changes are listed in the proposed regulations and discussed in the comments below.

 Download file

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2008 MEDICARE CHANGES:

PHYSICIAN BILLING FOR PURCHASED DIAGNOSTIC TESTS

CMS is proposing to revise the rules on prohibited mark-ups for purchased diagnostic tests. Revised proposed Section 414.50 will state that “if the physician or medical group bills for the technical or professional component of a diagnostic test that was performed by an outside supplier, the payment to the physician or the medical group (less the applicable deductible and coinsurance) for the technical or professional component of the test may not exceed the lowest of the following amounts:

            (i)         The supplier’s net charge to the physician or medical group.

(ii)        The physician’s or medical group’s actual charge.

(iii)       The fee schedule amount for the test that would be allowed if the supplier billed directly.

This provision applies regardless of whether the test or its interpretation was purchased by the physician or medical group billing for the test or the interpretation, or the right to bill for the test or its interpretation was reassigned to the physician or medical group billing for the test or the interpretation.

For purposes of this provision, the physicians’ or other suppliers’ net charge must be determined without regard to any charge that is intended to reflect the cost of equipment or space leased to the outside supplier, buyer or through the billing physician or medical group, and an outside supplier is somewhat other than the full-time employee of the billing physician or medical group.

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CMS PROPOSES MEDICARE CHANGES FOR 2008

The Centers for Medicare and Medicaid Services (CMS) has issued its proposed rules to revise the Medicare Physician Fee Schedule (MPFS) for 2008. Links to both the CMS press release announcing the proposed rules and to the proposed rules themselves are contained below:

·        Press Release:

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=2239&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date

·        Medicare Proposed Rule:

http://www.cms.hhs.gov/physicianfeesched/downloads/CMS-1385-P.pdf?agree=yes&next=Accept

The proposed rule implements the update procedure required by the sustainable growth rate (SGR) methodology, which result in a negative 9.9% update, i.e., a decrease, in Medicare payments. CMS notes that Congress has intervened to eliminate the negative update or decrease for each of the last five years.

Med Law Blog will post an article on what we believe to be the items of most interest to physicians over the next several weeks regarding the following items: proposals to close the perceived Stark loopholes, revisions in the enrollment process for independent diagnostic testing facilities (IDTF), and establishment of mark-up prohibitions for both the technical and professional component of diagnostic tests. Following is a description of the provisions in the proposed rule by CMS:

·        Updating the Geographic Practice Cost Indices (GPCI) to reflect more recent data.

·        Revising certain physician payment localities according to one of three proposed options

·        Using the Physician Assistance and Quality Initiative Fund (PAQI), created by TRHCA that provides $1.35 billion for physician payment and quality improvement initiatives, to extend voluntary quality reporting bonus payments into 2008.

·        Requiring that persons furnishing physical and occupational therapy services to people with Medicare meet licensing, registration, or certification requirements in the state in which they practice, and that they complete an approved educational program for the services they are furnishing. The proposed rule would also change the time frames for certifying a plan of care.

·        Updating regulations governing payment of certain services furnished in Comprehensive Outpatient Rehabilitation Facilities (CORF's), to reflect payment under the MPFS. This conforms to a statutory mandate.

·        Adding neurobehavioral status exams to the list of telemedicine services eligible for Medicare payment.

·        Adding certain ophthalmologic imaging procedures to the list of procedures that would be subject to the Deficit Reduction Act of 2005 (DRA) provision that caps payment for the technical component of imaging procedures at the payment amount under the hospital outpatient prospective payment system.

·        Modifying the requirements under the competitive acquisition program (CAP) for Part B drugs for verifying that a drug ordered by a physician has been administered.

·        Requiring the reporting of hemoglobin or hematocrit data on claims for drugs used to treat anemia secondary to anticancer treatment.

·        Modifying a number of physician self-referral provisions to close loopholes that have made the Medicare program vulnerable to abuse.

·        Modifying enrollment standards for Independent Diagnostic Testing Facilities (IDTFs).

·        Eliminating the exemption for computer-generated faxes from the e-prescribing standards.

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Following is the text of a post from Alan Goldberg  identifying the CMS hospital report card. My thanks to Alan.

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KEY FACTS: PHYSICIAN QUALITY REPORTING INITIATIVE (PQRI)

PQRI is a precursor to Medicare pay for performance (P4P) or quality incentives established by the Tax Relief and Healthcare Act of 2006 (TRHCA). The first quality reporting period will be July 1, 2007 through December 31, 2007.

Payment Amount: Congress budgeted $1.35 billion but the payment amount per provider is;

(1)        Subject to the number of participating/reporting physicians;

(2)        Limited to no more than 1.5% of the total allowed charges for covered services provided during the reporting period, i.e., 7/1/07 - 12/31/07;

(3)        Will be paid in a single consolidated payment in “mid 2008.”

Eligible Providers: Doctors, Dentists, Chiropractors, Podiatrists, Optometrists, PT, OT, PA, CRNA, CNS, NM, Psychologist, Dietician.  

Eligible Services: CMS has identified 74 measures for 2007 PQRI; eligible services for 2008 are being developed.

Procedure and Reporting Thresholds: Providers should select services applicable to their patient panels. In order to “successfully report” and receive the bonus payments, certain reporting thresholds must be met:

(1)        When 3 or fewer measures are selected, providers must report in at least 80% of the potential cases.

(2)        When more than 3 measures are selected, the 80% threshold must be satisfied for at least 3 measures.

Sample instructions for 4 measures follows:

2007 Physician Quality Reporting Initiative (PQRI)Measure Specifications

DESCRIPTION:

Percentage of patients aged 18 through 75 years with diabetes (type 1 or type 2) who had most recent hemoglobin Al c greater than 9.0%

INSTRUCTIONS:

This measure is to be reported a minimum of once per reporting period for patients seen during the reporting period. The performance period for this measure is 12 months. The most recent quality code submitted will be used for performance calculation. It is anticipated that clinicians who provide services for the primary management of diabetes mellitus will submit this measure.

This measure can be reported using CPT Category II codes:

ICD-9 diagnosis codes, CPT E/M service codes, G-codes, and patient demographics (age, gender, etc..) are used to identify patients who are included in the measure's denominator. CPT Category II codes are used to report the numerator of the measure.

When reporting the measure, submit the listed ICD-9 diagnosis codes, CPT E/M service codes or G-codes, and the appropriate CPT Category II code OR the CPT Category II code with the modifier. The reporting modifier allowed for this measure is: 8P- reasons not otherwise specified. There are no allowable performance exclusions for this measure.

NUMERATOR:

Patients with most recent hemoglobin Alc level > 9.0%

Numerator Instructions: This is a poor control measure. A lower rate indicates better performance (e.g., low rates of poor control indicate better care)

Numerator Coding:

Most Recent Hemoglobin Al c Performed

CPT II 3046F: Most recent hemoglobin Alc level > 9.0% OR

CPT II 3044F: Most recent hemoglobin Alc level < 7.0% OR

CPT II 3045F: Most recent hemoglobin Alc level 7.0% to 9.0%

OR

Hemoglobin Al c not Performed, Reason Not Specified

Append a reporting modifier (8P) to CPT Category II code 3046F to report circumstances when the action described in the numerator is not performed and the reason is not otherwise speci