CMS

Federal bill would link Medicare hospital pay to quality

Anne Zieger — Wed, 26 Nov 2008 03:18:40 -0500

Now here's a bill that would scare me a bit if I were a hospital administrator--even if it was inevitable (and it is) that such a measure would be written. Sens. Max Baucus (D-MT) and Chuck Grassley (R-IA) have drafted legislation that would link Medicare reimbursement for inpatient hospital care to the quality of that care rather than the number of services provided.

Yes, this is the way things have been going for some time, between the drive to bundle care--as Geisinger has done with some procedures--and quality incentives, but this definitely takes things a step further in the direction of so-called "value-based purchasing." (Value-based purchasing: now there's a concept that's a million times easier to talk about than to actually realize.)

The bill would kick off the new policy in fiscal 2012 and be phased in over four years through FY 2016. Medicare reimbursement levels would be based on quality standards from a list of measures from several groups, including the National Quality Forum.

To learn more about this bill:
- read this Kaiser Daily Health Policy Report article

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CMS reports lower claims error rate for 2008

Anne Zieger — Wed, 19 Nov 2008 10:12:08 -0500

Maybe having Recovery Audit Contractors in the news frequently has had some effect on provider claims practices. CMS has reported that the 2008 error rate for Medicare fee-for-service payments has decreased to 3.6 percent. Last year, improper payments for fee-for-service amounted to 3.9 percent of the total payments.

In one new wrinkle, the CMS also reported its first Medicare Advantage improper payment rate this year, of 10.6 percent. That amounted to $6.8 billion, in payments made in calendar year 2006. These errors came mostly from mistakes providers made in documenting members' diagnoses.

Also, the agency for the first time report the fiscal 2007 national composite error rates for Medicaid and the State Children's Health Insurance Program. The CMS reported $32.7 billion in improper payments to Medicaid, of which the federal share was $18.6 billion, and $1.2 billion to SCHIP, with a federal share of $800 million.

The CMS estimates that it has saved as much as $400 million over the last fiscal year. Officials emphasized that most of these errors are from incorrectly coded or medically unnecessary claims, not actual fraud.

To learn more about the figures CMS released:
- read this Modern Healthcare piece (reg. req.)

CMS struggling to roll out new no-pay policy

Anne Zieger — Wed, 22 Oct 2008 13:38:47 -0400

For about a year now, the hospital industry has been struggling to prepare for the rollout of Medicare's strict reimbursement policy. Under the policy the Medicare won't pay for some hospital-acquired conditions. Now, it appears that even CMS is having a hard time dealing with the rollout of the new policy.

Managing and tracking coding issues, and deciding which conditions are "reasonably preventable," are proving to be difficult problems, admits Thomas Valuck, a physician who serves as medical officer and senior adviser in the CMS Center for Medicare Management. For example, CMS execs aren't sure how to detect when a condition that's coded as present on admission--a requirement under current Medicare rules--gets moved up into a higher payment group.

CMS is also working to improve its store of research on evidence-based guidelines, as execs aren't sure their definitions of no-pay conditions are precise enough, Valuck said.

To learn more about the status of CMS's no-pay policy:
- read this Modern Healthcare piece (reg. req.)

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CMS sets plans for RAC contractor expansion

Anne Zieger — Tue, 07 Oct 2008 02:32:16 -0400

In an inevitable, but still widely feared, next step, CMS has taken the first steps in phasing in its Recovery Audit Contractor (RAC) program, announcing the four new contractors that will administer the program. The contractors will be responsible for auditing provider reimbursement requests to find overpayments and underpayments, with each taking about one-quarter of the country.

The contractors are Diversified Collection Services of Livermore, CA, CGI Technologies and Solutions of Fairfax, VA, Connolly Consulting Assoc. of Wilton, CT and HealthDataInsights of Las Vegas.

Medicare is moving ahead with the RAC program, initially pilot-tested in several states, after it reportedly recovered $1 billion in improper payments made since 2005, resulting in a $693.6 million to the government. HHS is required by law to make the RAC program a permanent, national one in all 50 states by Jan. 1, 2010. However, some observers--including Reps John Dingell (D-MI) and Charles Rangell (D-NY)--are concerned that the program's design still isn't fair. Expect more fireworks here in coming months.

To learn more about CMS's plans:
- read this Modern Healthcare piece (reg. req.)

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Study: 40 percent of hospitals expect to owe money to Medicare under RAC

Anne Zieger — Wed, 03 Sep 2008 11:20:59 -0400

It seems like people aren't very optimistic about their chances of escaping a Recovery Audit Contractor review unscathed, according to a new study. The study, done on behalf of Wolters Kluwer Health, concluded that 40 percent of hospital HIT directors expect to owe funds for Medicare overpayments if audited. The survey found that only 5 percent of HIT directors surveyed think that RAC audits will lead to repayment of funds from Medicare underpayments. Forty-eight percent expect their facility to come out more or less even.

Of the total, 81 percent of the HIT directors said their facilities were working to improve Medicare claims accuracy, including conducting internal audits (77 percent), implementing a documentation improvement plan (66 percent) or creating a special task force to examine documentation, coding and billing practices (57 percent). Meanwhile, 33 percent of hospitals preparing for RAC have installed new software to better capture the right documentation, coding and billing.

To learn more about the study:
- read this Healthcare Finance News piece

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CMS pays $16.7M to groups in P4P demo, but few get big bucks

Anne Zieger — Wed, 20 Aug 2008 02:26:08 -0400

You've gotta love it when CMS gives out money above and beyond the usual reimbursement rates--and it's even better when the bonuses work out for pretty much everyone involved. That's the cheery story being told about the results of the second year of CMS's pay-for-performance demonstration project, under which 10 physician groups earned a total of $16.7 million in incentive payments. The thing is, only a few groups actually received quality bonuses, despite significant improvements, leaving them to share much smaller quality data reporting incentives.

Under the terms of the demonstration project, which addresses the quality of care for heart patients and diabetics, physician groups were asked not only to improve outcomes for Medicare patients, but also to coordinate their care. The groups involved were strikingly successful at meeting CMS's goals. All of the groups involved in the Physician Group Practice Demonstration met performance goals on at least 25 of 27 quality markers for patients with diabetes, coronary artery disease and congestive heart failure. Five of the groups, including Forsyth Medical Group, Geisinger Clinic, Marshfield Clinic, St. John's Health System and the University of Michigan Faculty Group Practice--achieved all 27 performance goals.

However, groups involved didn't necessarily get much of a financial reward. In fact, while all shared in the $2.9 million pot for the Physician Quality Reporting Initiative, when it came to the more substantial bonuses, only four groups got a large payment. Dartmouth-Hitchcock Clinic, Everett Clinic, Marshfield Clinic and University of Michigan Faculty Group Practice divided up the $13.8 million of the payout related specifically to P4P, despite the fact that the other six met quality targets. Groups like the Billings Clinic didn't get a share of the $13.8 million because they didn't meet financial performance criteria, participants said. These groups are suggesting that CMS should change their criteria in future iterations of its P4P programs.

To learn more about the P4P payouts:
- read this Modern Healthcare piece (reg. req.) or this Modern Healthcare piece (reg. req.)

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CMS: Providers lose almost 70 percent of RAC appeals

Anne Zieger — Tue, 15 Jul 2008 22:55:43 -0400

CMS has released a new report stating that Medicare has recovered more than $1 billion through the Recovery Audit Contractor program since 2005, with 85 percent of the money having been taken back from hospitals. When the costs of collecting the money were taken into account--along with the small number of refunds made to providers--CMS was able to return $693.6 million to the Medicare trust fund. Along the way, the agency reported that about one-third of of those providers who appeal RAC decisions actually win the fight.

In its analysis, CMS said that most of the improper payments made to providers occurred due to billing and coding errors, frequently when one procedure was billed repeatedly. Other problems discovered by RACs included incorrect procedure codes and submission of duplicate claims that both got paid.

When the RACs challenged Medicare reimbursements, 14 percent of providers appealed. Of those decisions that were appealed, 33.3 percent were eventually overturned. (Bear in mind that this means that almost 70 percent of providers lost their appeal--and those were the ones who felt they had a strong enough case to go through the appeals process!) Not surprisingly, CMS acting administrator Kerry Weems called the results a success.

That being said, the report also notes that CMS has made some significant changes to the program over time. For example, the agency changed the amount of time a RAC could look back into old provider records from a four-year window to three years. Still, providers and Congressional legislators continue to criticize the RAC program, which HHS is required to make a permanent, national effort by Jan. 1, 2010.

To learn more about the report:
- read this Modern Healthcare article (reg. req.)

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Medicare may allow payment for electronic consults

Anne Zieger — Wed, 02 Jul 2008 00:02:38 -0400

CMS has proposed new regulations that, as of 2009, would allow physicians to bill Medicare for follow-up inpatient consultations, along with adding 56 new measures to the Physician Quality Reporting Initiative. CMS projects that under the new rule, it would pay $54 billion to 980,000 physicians and other providers next year. If the rules are approved, they'd represent a major moment in the progress of "e-visits," few of which are reimbursed by insurers to date.

Under the proposed rule, CMS would add new codes to its list that would designate consultations done electronically with a patient's attending physician when the consulting doctor wasn't available for an in-person discussion. To make sure hospitals don't worry about using the codes, the rule would give hospitals a safe harbor from self-referral limits. The exception falls under rules allowing payments from hospitals to medical staff members under programs rewarding quality care, such as value-based purchasing programs.

To learn more about the proposal:
- read this Modern Healthcare article (reg. req.)

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CMS now says NPI must match IRS data

Anne Zieger — Wed, 18 Jun 2008 00:40:09 -0400

Providers have been going through some serious headaches already working to make sure they use their National Provider Identifier number properly to avoid getting claims bounced by Medicare. Now, CMS has raised the stakes again. In a move that surprised most observers, the agency announced that doctors will have to reconcile their NPI data with their IRS legal name data if they want to get their Medicare claims paid.

This is an extremely stringent requirement that should prove quite difficult to meet, experts say. Every aspect of a doctor's data must match in both databases, including exact name spellings, use of initials and even any blank spaces in the data. This new requirement only makes things worse for providers, many of whom continue to have trouble getting CMS to tell them why their claims are bouncing. All CMS will tell most physicians with NPI troubles is to start again with a new NPI enrollment, which could take months to process. Now, with the new and unexpected demand to match IRS data, providers could be faced with yet another reason for getting another NPI number.

To find out more about the new requirement:
- read this Healthcare Finance News article

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