Medicare

Published on: February 19, 2021

A Primer on Assignment of Payment

Many Medicare practitioners, providers, and suppliers do not directly bill for the services they supply and similarly do not directly receive reimbursement. Billing and reimbursement may occur through an employment or independent contractor relationship, through a billing company, or through another arrangement. However, each of these arrangements must comply with the Medicare assignment of payment rules that dictate how and to whom the practitioner, provider, or supplier may assign their right to receive reimbursement from Medicare.

The general rule is that Medicare will pay assigned benefits only to the physician, practitioner, or supplier who furnished the service, and not to another person or entity. To reassign payment to another person or entity, an arrangement must meet one of several enumerated exceptions. The most common exceptions are:

Payment to Agent: Medicare may make payment, in the name of the provider, to an agent who furnishes billing or collection services. In general, the agent or billing company may not have a financial interest in the dollar amount billed or the actual collection of payment, and the agent must act under payment disposition instructions which the provider may modify or revoke at any time. Different provisions may apply if the agent merely prepares bills and does not receive payment for the provider or supplier.

Published on: February 3, 2021

A Primer on Medicare Targeted Probe and Educate Reviews

by Wachler & Associates, P.C.

Targeted Probe and Educate (TPE) reviews are a popular audit tool for Medicare Administrative Contractors (MACs) to assess a healthcare provider or supplier’s compliance with Medicare billing requirements. A TPE review consists of up to three rounds of claims review, with education to the provider after each round. A provider or supplier navigating a TPE review should take care to comply with the program’s requirements and timelines and should be aware of the potential consequences of a review.

The Centers for Medicare & Medicaid Services (CMS) initially introduced TPE reviews as a pilot program in only a few jurisdictions. In 2017, CMS expanded the program nationwide and has continued to update and refine the program since its introduction.

A provider who is placed on a TPE review will first receive a Notice of Review letter. This letter will describe the reason that the provider has been placed on TPE review and will provide a brief outline of the process. This letter will not request medical records but will generally indicate that medical records requests will be forthcoming. This letter will likely warn that, if a provider/supplier fails to improve the accuracy of its claims after three rounds, the MAC will refer the provider/supplier to CMS for additional action, such as prepayment review, extrapolation of overpayments, referral to a RAC, or other disciplinary action. Providers should be aware that a TPE can lead to revocation of Medicare billing privileges and placement on the CMS Preclusion List.

Published on: February 1, 2021

CMS Codifies Definition of “Reasonable and Necessary” in Medicare Coverage Determinations

by Wachler & Associates, P.C.

On January 14, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a final rule codifying a definition for “reasonable and necessary” coverage under Medicare Part A and Part B. CMS hopes codifying the meaning of “reasonable and necessary” will provide clarity and consistency to the current process of coverage determination for items and services under Part A and Part B. The final rule takes effect on March 15, 2021.

The definition of “reasonable and necessary” has three components: an item or service is required to be 1) safe and effective, 2) not experimental or investigational, and 3) appropriate for Medicare patients. Whether an item or service is appropriate for Medicare patients will be based on the duration and frequency deemed appropriate for the item or service and whether the item or service:

Is provided in accordance with accepted standards of medical practice

Published on: January 21, 2021

CMS Implements New Prior Authorization Changes

by Wachler & Associates, P.C.

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized the agency’s “CMS Interoperability and Prior Authorization” rule to improve the prior authorization process and give patients more control in accessing and understanding their health data. Under the rule, certain payers, such as Medicaid and CHIP managed care plans, state Medicaid and CHIP fee-for-service programs (FFS) and those that issue individual market Qualified Health Plans (QHPs) on the federally-facilitated exchanges (FFEs)) must create and utilize technology known as application programing interfaces (APIs). APIs are commonly used in smartphone applications, and when incorporated into electronic health records (EHR), can enable simple and immediate access to health data for providers.

Each payer obligated under this rule must build a documentation search program driven by an API, and make the program public, allowing providers to access health documentation and prior authorization requirements from various EHR platforms. Once a provider determines what each prior authorization requires, the authorization can then be submitted electronically. Moreover, the payers are required to implement, under the already established Patient Access API, laboratory results and other claims and encounter data, as well as information regarding a patient’s pending and active prior authorizations.

Payers must also communicate this data with a patient’s provider if asked, and with other payers, should a patient’s coverage or provider change. This will allow patients, providers, and payers to have all the necessary data when needed, automating the process and reducing the administrative burden on providers. As a result, providers will be less likely to work with incomplete health information and the likelihood of repeat prior authorization requests will decrease, resulting in more time the provider has to spend with the patient. Notably, Medicare Advantage plans are not included in this new rule and not subject to its requirements; however, CMS is continuing to consider whether Medicare Advantage plans should be included.

Published on: January 18, 2021

CMS Finalizes Changes to Medicare Advantage and Part D Prescription Drug Programs

by Wachler & Associates, P.C.

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized a rule to help strengthen and streamline the Medicare Advantage and Part D prescription drug programs, with the goal to decrease enrollee cost sharing on expensive prescription drugs. Effective for the 2022 plan year, enrollees will be able to have advance notice and thus compare out-of-pocket costs for various prescription drugs. CMS estimates the final rule will result in $75.4 million in savings to the federal government over ten years.

According to CMS, the rule will provide drug cost transparency regarding out-of-pocket costs, especially for senior citizens, who may be unaware of prescription drug prices, changes in pricing, and on a fixed income. Additionally, Part D plans will have more power to negotiate lower prescription drug prices with drug manufacturers. Under the final rule, Part D plans must offer a real time benefit comparison tool for enrollees to receive information about lower cost alternatives under their plan. Using the tool, which must be offered by Part D plans by January 1, 2023, enrollees can compare cost sharing to find the best priced prescription drugs based on their health requirements. For example, if an enrollee’s provider recommends a certain prescription drug, the enrollee can search and see what the co-pay would be, and see if any similar drugs are more cost effective, allowing the individual to know exactly what he or she will pay before reaching the pharmacy.

Currently, in the Medicare Part D program, enrollees select the plan that best suits their health needs. Plans typically categorize prescription drugs into different tiers. All prescription drugs that fall into a plan’s specialty tier, the tier with the most expensive drugs, have equivalent cost sharing. With the final rule, Part D plans will have the ability to create a “preferred”, specialty tier of more expensive prescription drugs, that have lower cost sharing compared to the other specialty tier. This change will allow Part D plans to negotiate lower prices on the more expensive drugs, resulting in reduced out-of-pocket expenses for enrollees, if the plan categorizes these drugs on the “preferred” specialty tier.

Published on: January 15, 2021

HHS Increases Fairness and Notice in Civil and Administrative Proceedings

by Wachler & Associates, P.C.

On January 12, 2021, the Department of Health and Human Services (HHS) issued sweeping new directives regarding the procedures the Department will follow when relying on guidance documents, initiating enforcement actions, making jurisdictional determinations, and allowing prior notice and opportunity to be heard on agency determinations. These directives apply to civil and administrative enforcement proceedings and adjudications and take effect immediately.

First, HHS directed that the Department may not use guidance documents to impose binding requirements or prohibitions on persons outside of the executive branch except as authorized by law or expressly incorporated into a contract. That is, noncompliance with a standard or practice found only in a guidance document will not constitute a violation of the applicable statute or regulation. Further, the Department may refer to a guidance document in a civil enforcement action only if it has notified the public of the guidance in advance.

Second, HHS directed that the Department will only apply standards and practices, including in initiating a civil enforcement action or making an agency decision, that have been publicly stated in a way that would not cause unfair surprise. Of note, HHS defined “unfair surprise” to include when the Department initiates litigation following a lengthy period of conspicuous inaction.

Published on: January 5, 2021

CMS Releases New Measures Under Consideration Focusing on Increasing Data Innovation and Reducing Provider Burden

by Wachler & Associates, P.C.

On December 22, 2020, Centers for Medicare & Medicaid Services (CMS) released the 2020 list of Measures Under Consideration (MUC). The MUC is a list of quality and efficiency measures, based on data collected from providers, under consideration for adoption as rules under Medicare. The 2020 measures focus on reducing the administrative burden on providers, prioritizing health outcomes, and encouraging digital innovation, particularly regarding data collection and evaluation.

In accordance with the Meaningful Measures Initiative of 2017, digital innovation remains a top priority for CMS in developing quality measures. The Meaningful Measures Initiative was created to reduce the regulatory and reporting burden on providers and focuses on identifying the highest priority areas for quality improvement and measurement to improve patient outcomes. Since its launch, the Meaningful Measures Initiative has provided better quality metrics that are relevant to various providers. The 2020 MUC follow the Meaningful Measures Initiative by focusing on goals such as creating trackable and measurable outcomes, reducing healthcare disparities, cost efficiency, the modernization of reporting mechanisms, and reducing administrative obstacles for providers so they can better focus on quality care for patients, rather than paperwork. A majority of the measures utilize digital collection of data, rather than requiring providers to use traditional pen-and-paper data collection.

The 2020 MUC include:

Published on: December 18, 2020

HHS Increases Phase 3 of Provider Relief Fund and Will Begin Distribution

by Wachler & Associates, P.C.

On December 16, 2020, the Department of Health and Human Services (“HHS”) announced that it would begin Phase 3 of general distributions under the Provider Relief Fund (“PRF”) and that Phase 3 would be larger than initially planned. The PRF is a $175 billion fund created Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. The PRF is administered by HHS through the Health Resource Services Administration (“HRSA”). HHS has subdivided the PRF into various general and targeted distributions.

Earlier in 2020, HHS had made two general distributions under the PRF. The Phase 1 general distribution consisted of $50 billion in financial payments, released in two successive tranches of $30 billion and $20 billion, to healthcare providers based to providers who billed Medicare. The Phase 2 general distribution consisted of an additional $18 billion in financial payments to providers that billed Medicaid, dentists, assisted living facilities, and providers that were not eligible under the terms of Phase 1 due to a change in ownership.

On October 1, 2020, HHS announced the Phase 3 general distribution. The Phase 3 general distribution was initially planned to consist of $20 billion on financial payments to providers who were either excluded from the initial two phases, or who were eligible under the first two phases but required additional funding to cover ongoing financial losses accrued during the pandemic. The following providers are eligible for Phase 3 General Distribution funding: (1) Providers who have previously received, rejected, or accepted a General Distribution PRF payment; (2) behavioral health providers, including those that have previously received funding; and (3) healthcare providers that began practicing January 1, 2020 through March 31, 2020. All providers who receive payments must attest to receiving the payment and accept the associated Terms and Conditions.

Published on: December 16, 2020

CMS Expands Telehealth Services and Flexibility for Non-Physician Providers

by Wachler & Associates, P.C.

On Tuesday, December 1, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released the 2021 Physician Fee Schedule (PFS) final rule, confirming an expansion to telehealth coverage and the scope of non-physician providers. The use of telehealth services increased substantially during the COVID-19 public health emergency. Under the final rule, certain telehealth services will be covered when the COVID-19 public health emergency ends. In addition, the rule reduces administrative barriers to non-physician practitioners, allowing them to focus on providing quality healthcare and less on paperwork.

Prior to the COVID-19 pandemic, CMS estimates that 15,000 fee-for-service Medicare beneficiaries received a Medicare telemedicine visit each week. To address the increased need for healthcare services during the COVID-19 pandemic, CMS added 144 Medicare covered telehealth services. CMS estimates that between March and October 2020, 24.5 million beneficiaries and enrollees received a Medicare telemedicine service. Under the final rule, CMS added more than 60 telehealth services that will permanently be covered under Medicare. Although Medicare does not currently have legal authority to cover telehealth services for beneficiaries who are not located in rural areas, or permit telehealth services to be received in the home, these now permanently covered telehealth services will allow beneficiaries in rural areas, to continue to receive high quality health care and have more convenient access to care.

The final rule also seeks to reduce administrative obstacles for non-physician providers. This will increase efficiency, quality of care, and overall improve the healthcare experience for beneficiaries. The PFS final rule will make certain non-physician provider flexibilities that were established during the COVID-19 pandemic permanent so they may continue to provide care without additional Medicare restrictions. CMS finalized three main changes for non-physician practitioners:

Published on: December 9, 2020

CMS Finalizes 2021 OPPS Rule, Officially Phasing Out the Inpatient Only List

by Wachler & Associates, P.C.

On December 2, 2020, The Centers for Medicare & Medicaid Services (CMS) released the 2021 Outpatient Prospective System (OPPS) Final Rule. The main goals of the rule are to (1) provide patients more choice in where they can receive affordable, quality health care, and (2) reduce their out-of-pocket costs. The new rule furthers CMS’s recent goal to expand patient choice by increasing the locations that accept Medicare payment for newly added services.

The rule finalizes the proposal to eliminate the Inpatient Only List (IPO),—giving beneficiaries more choice in where they can receive care. The IPO designated specific surgical procedures that necessitate inpatient care due to the nature of the procedure. Therefore, the procedures on the IPO were not covered by Medicare through the OPPS. By phasing out the list, these procedures will now be eligible for Medicare reimbursement in an inpatient setting as well as a hospital outpatient environment, if appropriate, based on the determination of the provider. The phase out of the IPO will occur over three years, beginning with 300 musculoskeletal services, and complete removal of the list by CY 2024. The rule also finalizes other provisions to offer beneficiaries additional choice in their healthcare options, including adding 11 procedures to the Ambulatory Service Center (ASC) Covered Procedures List (CPL).

Furthermore, the rule continues the current 340B purchased drugs payment policy. Under Section 340B of the Public Health Service Act, participating hospitals and other providers can purchase specific outpatient covered drugs directly from the manufacturer at a lower price. The 2018 OPPS Final Rule adopted a policy that Medicare will pay an adjusted Average Sales Price (ASP) less 22.5 percent for separately payable drugs purchased through the 340B program. According to CMS, keeping this current policy will be necessary to maintain stable payment during the COVID-19 public health emergency. Rural community hospitals, children’s hospitals, and Prospective Payment System (PPS) cancer hospitals will remain exempt from the 340B payment policy. These hospitals will continue to report a modifier for drugs acquired through the 340B program and be paid the ASP plus 6 percent.