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Federal Register – CMS-3244-F; FR 5/16/12 – Final rules

The Centers for Medicare and Medicaid Services (CMS) May 10 issued a final rule, “Reform of Hospital and Critical Access Hospital Conditions of Participation” (CoPs). The revisions to the CoPs are part of the government’s response to Executive Order 13563, “Improving Regulations and Regulatory Review.” The changes include:

• One governing body will be allowed to oversee multiple hospitals in a multi-hospital system, and a member or members of the hospital’s medical staff must be included on the governing body;
• Hospitals will have the flexibility to include other practitioners as eligible candidates for the medical staff with hospital privileges to practice in the hospital in accordance with state law;
• Elimination of the requirement for authentication of verbal orders within 48 hours; authentication timeframes will be established according to state law; and
• All orders, including verbal orders, must be dated, timed, and authenticated by either the ordering practitioner or another practitioner who is responsible for the care of the patient.

CMS Issues Final Rules on Hospital Conditions of Participation

Federal Register – CMS-1588-P; FR 5/11/12 – Proposed rules

The proposed rules were officially released today for Inpatient Acute PPS services in FY 2013 (10/1/12 – 9/30/13).  Today marks the 45 day window for hospitals to request withdrawal of a wage index reclassification that is determined to be lower than their native CBSA. 

Unfortunately, the proposed rules are based on the wage information published in February 2012 and that does not contain complete information or all of the finalized wage data.  CMS posted the final wage index file updated through May 4, 2012 that will be used in the final rules issuance.  Hospitals have one more chance to review this information to confirm that data has been posted accurately.  Any errors found in this data must be reported to CMS by June 4, 2012.

We are in the process of creating an updated wage index file using the May 4^th data and will make this available in a future news you need to know distribution.

Below are links to other summaries recently released summarizing the FY 2013 proposed rules:

Powers Pyles Sutter & Verville PC – 5/4/12

King & Spalding – Hospital Medicare Update – 5/9/12

Proposed Rules – IP PPS Acute Rules FY 2013

Federal Register – CMS-1588-P; Filed 4/24/12; FR date 5/11/12 – Proposed rules CMS filed the proposed rules on Tuesday 4/24 for FFY 2013.  I have included several links below concerning this 1,313 page document and related tables.  CMS is proposing a net increase of 2.1%  (3.0% market basket less .9% ACA required reductions) for providers that report the required quality measure information and .1% for providers that do not.  After consideration of coding adjustments related to FFY 2008 – 2010, the adjusted PPS rate increase is 2.23% as compared to FFY 2012.  Overall Capital PPS rates increased .71% compared to FFY 2012.
Included below is a table summarizing the changes to the PPS rates:

Preliminary wage index information changed significantly in California.  The rural statewide average index increased 3% from 1.1950 in FFY 2012 to 1.2321 in the preliminary FFY 2013 rules.  Santa Cruz has the highest wage index in the Country at 1.7326, topping the 1.7 level for the first time that I am aware of.  The San Francisco wage index increased slightly below 6% to 1.6344. We have been informed that there appears to be an error in this index as the Occupational Mix adjustment had not been properly applied.  Included below is a 3 year comparison of the wage index for California, Minnesota, Nevada and Washington.

There are two significant reimbursement additions of note for FFY 2013 related to the Hospital Readmission Reduction program and implementation of the Value Based Purchasing (VBP).   Both of these programs are requirements of ACA.

Hospital Readmission Reduction Program

• Effective October 1, 2012
• Hospital Specific in its application.  New CMS Table 15 contains the adjustment factor to be applied to each Hospital
• Factor will be used to adjust the PPS base rate
• The maximum reduction in FFY 2013 is 1%.  This adjustment factor maximum will be increased to 2% in FFY 2014 and 3% in FFY 2015.
• The adjustment is derived from an analysis of the readmission rates for the following 3 procedures:
• Pneumonia
• Heart Failure
• Acute Myocardial Infarction
• CMS is proposing to expand the readmission analysis to 4 procedures in FFY 2015
• CMS Table 15 contains the hospital specific impact based on services covering 7/1/07 – 6/30/10.  The final rules will use updated information covering 7/1/08 – 6/30/11.

Hospital Value Based Purchasing Program

• Effective October 1, 2012
• Hospital Specific in its application.  New CMS Table 16 contains the adjustment
  factor to be applied to each Hospital.
• Factor will be used to adjust the PPS base
  rate.  Implementation of this is
  projected to take place on January 1, 2013. Inpatient service claims will
  be reprocessed back to October 1, 2012.
• The Value Based Purchasing pool increases over the
  next 5 years:
• FFY 2013 – 1.00%
• FFY 2014 – 1.25%
• FFY 2015 – 1.50%
• FFY 2016 – 1.75%
• FFY 2017 – 2.0%

• CMS Table 16 contains the net adjustment factor that will be applied to the PPS base rate.  The 1% PPS rate reduction is included in this overall factor.  The table in  the proposed rule will be updated in the final rule that will include data  covering 7/1/11 – 3/31/12.

Other
Changes of Note

• Outlier threshold increases to $27,425 for FFY 2013  from $23,375 in FFY 2012
• Medicare Dependent Hospitals (MDH) program will end on September 30, 2012.  CMS has  proposed rules related to the timing of those MDH’s that will be submitting requests to become a Sole Community Hospital.
• The Low Volume Adjustment additional two year (FFY 2012 -2012) reimbursement formula change implemented by ACA will revert to the original methodology on October 1, 2012.
• Available Bed Days used for Medicare DSH and IME will be modified to include Labor and Delivery bed days consistent with their treatment of observation, swing-bed and hospice days.  This provision would be effective for cost reporting periods beginning on or after October 1, 2012.
• New teaching programs establishment of the residency cap are proposed to be developed over a five year window instead of the current three year window.  This is proposed to be effective on or after October 1, 2012.

This is simply our first pass of these proposed rules. Other important items discovered will be shared with you in a future e-mail.

CMS links related to the proposed rules:

• Inpatient PPS Fact Sheet
• Proposed Rule Tables
• Proposed Rule Data & Impact Files

See more: Inpatient PPS FY 2013 Rates for Acute Hospitals

Federal Register – 2/16/12

Both HFMA and AHA have prepared comments concerning the proposed rules issued by CMS on
February 16, 2012.  I have included excerpts of the HFMA and AHA responses as well as a link to the full letter to CMS.

HFMA Comments Re: CMS-6037-P

Date: April 16, 2012

Letter Highlights

HFMA believes the proposed rule needs, “…clarification and change…in the following areas:”

• Duplicative and/or conflicting procedures and requirements
• Burdensome reporting and record keeping
• Change in application of the False Claims Act

AHA Comments Re: CMS-60037-P

Date: April 16, 2012

Letter Highlights

“We have significant concerns about the proposed rule and the negative effect it will have on hospitals.”

“…The AHA has advocated for a clear and efficient process for the return of overpayments that result from mistakes.  We viewed this provision in the ACA, and Congress intended it, as a means to correct mistakes.  Instead, the law is being contorted by this proposed rule to create another confusing, onerous, and legally risky set of expectations for hospitals: confusing because there is no acknowledgment or consideration of the overlap, inconsistency and contradictions with the already existing world of Medicare billing processes and the program’s many and varied post-payment audits and reviews; onerous because the proposal would require the diversion of resources – staff time, dollars and information technology (IT) systems – to make needed changes to try and meet the unreasonable and often impossible timeframes and to conduct sweeping and unfounded reviews of current, past and long-past records and submissions; and legally risky because the proposed rule is attempting (without legal authority) to wrap all of these unreasonable and impractical expectations in the cloak of False Claims Act liability….”

Read more: Proposed Rules – CMS Reporting & Returning of Overpayments – Industry Comments

Medicaid Program; Eligibility Changes under the ACA of 2010

Final Rule; Interim Final Rule; CMS-2349-F;  Filed 3/16/12; FR Publication 3/23/12

CMS Summary

This final rule implements several provisions of the Patient Protection and

Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act). The Affordable Care Act expands access to health insurance coverage through improvements to the Medicaid and Children’s Health Insurance (CHIP) programs, the establishment of Affordable Insurance Exchanges (“Exchanges”), and the assurance of coordination between Medicaid, CHIP, and Exchanges. This final rule codifies policy and procedural changes to the Medicaid and CHIP programs related to eligibility, enrollment, renewals, public availability of program information and coordination across insurance affordability programs.

Medicare & Medicaid EHR Incentive Program – Stage 2

Proposed Rules CMS-0044-P; Filed 2/23/12; FR Publication 3/7/12

CMS Summary:

This proposed rule would specify the Stage 2 criteria that eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) must meet in order to qualify for Medicare and/or Medicaid electronic health record (EHR) incentive payments. In addition, it would specify payment adjustments under Medicare for covered professional services and hospital services provided by EPs, eligible hospitals, and CAHs failing to demonstrate meaningful use of certified EHR technology and other program participation requirements. This proposed rule would also revise certain Stage 1 criteria, as well as criteria that apply regardless of Stage, as finalized in the final rule titled Medicare and Medicaid Programs; Electronic Health Record Incentive Program published on July 28, 2010 in the Federal Register. The provisions included in the

Medicaid section of this proposed rule (which relate to calculations of patient volume and hospital eligibility) would take effect shortly after finalization of this rule, not subject to the proposed 1 year delay for Stage 2 of meaningful use of certified EHR technology.

CMS-0044-P 2 Changes to Stage 1 of meaningful use would take effect for 2013, but most would be optional until 2014.

Medicaid Program; Review & Approval Process for Section 1115 Demonstrations

Final Rules CMS-2325-F; Filed 2/22/12; FR Publication 2/27/12

CMS Summary:

This final rule will implement provisions of section 10201(i) of the Patient

Protection and Affordable Care Act of 2010 that set forth transparency and public notice

procedures for experimental, pilot, and demonstration projects approved under section 1115 of the Social Security Act relating to Medicaid and the Children’s Health Insurance Program (CHIP). This final rule will increase the degree to which information about Medicaid and CHIP demonstration applications and approved demonstration projects is publicly available and promote greater transparency in the review and approval of demonstrations. It will also codify existing statutory requirements pertaining to seeking advice from Indian health care providers and urban Indian organizations for section 1115 demonstration projects, and for the first time impose as regulatory requirements tribal consultation standards that were previously only published as guidance documents.

Medicare Program; Reporting & Returning of Overpayments

Proposed Rule – CMS-6037-P; FR 2/16/12

CMS Summary:

This proposed rule would require providers and suppliers receiving funds under the Medicare program to report and return overpayments by the later of the date which is 60 days after the date on which the overpayment was identified; or any

corresponding cost report is due, if applicable.

Click here to view an article written by Hooper, Lundy & Bookman, PC describing the challenges that providers will face should this proposed rule be enacted.

From: Federal Register – 2/1/12

CMS issued corrections to the Final FFY 2012 rules on February 1, 2012.  The changes were very minor in nature.

Summary from Federal Register

This document corrects technical errors that occurred in the Addendum of the final rule entitled “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates” which appeared in the August 18, 2011 Federal Register.

From: Federal Register – 1/18/2012

Federal Register Summary:

This proposed rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under the Social Security Act. Under this limitation, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or “have no health insurance (or other source of third party coverage) for the services furnished during the year.” This rule would provide that the quoted phrase would refer in context to a lack of coverage on a service-specific basis, so that the calculation of uncompensated care for purposes of the hospital specific DSH limit would include the cost of each service furnished to an individual who had no health insurance or other source of third party coverage for that service.