Latest News

CMS 2010 SSI Data File Posting/Removal – Sloppy Oversight

From: Toyon Associates – 5/4/12

As reported to you in a separate e-mail on Wednesday (5/2), CMS temporarily released the 2010 SSI file for use in the calculation of the Medicare DSH reimbursements.  After review of the data released, it was clear that something was seriously wrong with the file, as matched SSI days declined by 30% over FY 2009.

Prior to the March 2012 release of the SSI data for FYE 2006 – 2009, the Provider community had been waiting for over two years for SSI information.  This delay has backed up the finalization of tens of thousands of Hospital cost reports. 

What is disturbing about the temporary post on Wednesday is the utter lack of reasonableness testing of the 2010 file.  A quick summary of the past 4 years would clearly point out that something didn’t work in the 2010 match.  Check this summary that was put together as we were analyzing the released data in total:

 A simple check of the files prepared for the previous three years would have clearly demonstrated that something was wrong.  If CMS would be so careless in releasing this type of data, what else have they been allowing out that has not had appropriate review for reasonableness?

The impact of this CMS release was jaw dropping.  Those hospitals and hospital systems that pulled the data Wednesday morning were already reporting to their senior management the devastating financial impact of the new percentages.  Given the long delay in SSI issuance, the financial impact of the SSI is projected for multiple years.  Nationally, this erroneous SSI file impacted billions of dollars in Medicare DSH entitlements.

I believe the Provider community has every reason to expect better and more careful analysis by CMS of the data they release.  Hopefully, this is a bit of a wake-up call for CMS. 

Disruptions seen for Medicare provider payments if Supreme Court strikes down health care law

From: The Washington Post – 5/3/12

Article Excerpt:

WASHINGTON — Medicare’s payment system, the unseen but vital network that handles 100 million monthly claims, could freeze up if President Barack Obama’s health care law is summarily overturned, the administration has quietly informed the courts.

Although Obama’s overhaul made significant cuts to providers and improved prescription and preventive benefits, Medicare was overlooked in Supreme Court arguments that focused on the law’s controversial requirement that individuals carry health insurance. 

Yet havoc for Medicare could have repercussions as both parties avidly court seniors in this election year and as hospitals and doctors increasingly complain the program doesn’t pay enough.

In papers filed with the Supreme Court, administration lawyers have warned of “extraordinary disruption” if Medicare is forced to unwind countless transactions that are based on payment changes required by more than 20 separate sections of the Affordable Care Act.

Opponents say the whole law must go. The administration counters that even if it strikes down the insurance mandate, the court should preserve most of the rest of the legislation. That would leave in place its changes to Medicare as well as a major expansion of Medicaid coverage.

Last year, in a lower court filing on the case, Justice Department lawyers said reversing the Medicare payment changes “would impose staggering administrative burdens” on the government and “could cause major delays and errors” in claims payment.

Read more…

U.S. charges more than 100 for Medicare fraud schemes

From: Reuters – 5/2/12

Article Excerpt:

U.S. authorities have charged 107 people, including doctors and nurses, for trying to defraud the federal Medicare healthcare program for the elderly and disabled of about $452 million, the biggest Medicare fraud sweep to date, the Obama administration said on Wednesday.

At least 91 people were arrested in Miami; Houston; Baton Rouge, Louisiana, and four other cities on a variety of charges: from submitting false billing for home healthcare, mental health services, HIV infusions and physical therapy to money laundering and receiving kickbacks.

Justice Department and Health and Human Services Department officials were unable to say how much Medicare actually paid out, but a review of 34 complaints and indictments found that authorities were seeking to recover at least $59.5 million of allegedly ill-gotten gains.

“These fraud schemes were committed by people up and down the chain of healthcare providers – from doctors, nurses, and licensed clinical social workers, to office managers and patient recruiters,” said Lanny Breuer, assistant attorney general for the Justice Department’s criminal division.

President Barack Obama’s administration has been pushing to squeeze out fraud from federal programs like Medicare as part of a broader attempt to stem soaring healthcare costs, arguing fraud can contribute to rising prices for services.

Breuer said that it is the single largest Medicare billing fraud sweep by the Justice Department’s special task force in its five-year history. In September, the Obama administration charged 91 people in connection with a variety of schemes aimed at bilking Medicare out of $295 million.

Read more…

CMS posted the 2010 SSI ratios earlier today on their website. In review of the ratios in this file, we found that over 90% of hospitals had a decrease in the SSI% compared to 2009. For our clients, the reductions averaged 27%.

After performing further analysis of the file and comparing the results to prior years, we found that total 2010 SSI-matched days were 30% lower than 2009.   The 2009 SSI days were reasonably close to the days for both 2007 and 2008. We concluded that there is clearly something wrong with the 2010 data.

We were able to reach CMS this afternoon and in a conversation with Tzvi Hefter, he acknowledged that there was something wrong with the data. Tzvi stated that the 2010 data file will be removed from the website.  The 2010 SSI file should therefore be disregarded, as CMS will be working on correcting this file. For those of you that pulled the file earlier today, you can now breathe a little easier given the drastic reductions that would have taken place to your allowable DSH entitlements.

If you have any questions, please contact me at 925-685-9312.

Ron Knapp

Executive Vice
President

From: The Hill’s Healthcare Blog – 4/25/12

Article Excerpt: 

Hospitals criticized the Medicare agency Wednesday for a payment policy that doesn’t account for automatic, across-the-board cuts scheduled to take effect in January. Lawmakers are looking for ways to replace the sequestration cuts. But if they don’t find one, doctors and hospitals will see a 2 percent drop in their Medicare payments beginning next year.

The Centers for Medicare and Medicaid Services (CMS) didn’t factor in the sequester when it set next year’s payment rates, the American Hospital Association said. CMS proposed its payment rates Tuesday.

Read more…
Hospitals say Medicare agency overlooked looming cuts

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

From: Kaiser Health News – 4/23/12

Article Excerpt:

Trustees of the Medicare program today forecast increased financial troubles as a result of an aging population and rising health care costs, increasing the visibility of an issue that is already proving divisive in the 2012 presidential and Congressional campaigns.

“Both programs took a turn for the worse this year,” trustee Charles Blahous III, a senior
research fellow at George Mason University in Virginia, said of Medicare and Social Security.

Overall, the outlook for the Medicare program which covers nearly 50 million elderly and disabled people was only slightly worse than findings from last year. Once again, trustees forecast that Medicare’s hospital fund would begin to run out of money beginning in
2024, but many experts place little importance on the trustees’ projection since the program’s insolvency has been forecast from as little as two years away to as many as 28 years since 1970.

Today’s report emphasized that Medicare costs in both the short term and long term would rise higher than previously reported, but that these costs would be offset by 2 percent cuts to
the program agreed to in last year’s deficit reduction agreement, unless Congress passes an alternative cost-cutting plan.

Read more…

HHS Files Petition to Supreme court on Equitable Tolling Issue
From: King & Spalding 4/23/12

Note: Toyon Associates is pursuing this equitable tolling issue for several of our clients.

Article Excerpt:
On April 13, 2012, Health and Human Services Secretary Kathleen Sebelius filed a petition for writ of certiorari with the U.S. Supreme Court requesting that the Court overturn the D.C. Circuit’s ruling that equitable tolling applies to the 180-day time limit for providers to file administrative appeals of final Medicare cost report payment determinations. Sebelius v. Auburn Regional Medical Center, U.S., No. 11-1231, petition for cert. filed Apr. 13, 2012.

At issue is the June 2011 decision, whereby the D.C. Circuit’s three-judge panel ruled that equitable tolling is available for Medicare cost report appeals because a claim for Medicare payment is analogous to a contract claim. Auburn Regional Medical Center, et al. v. Sebelius, 642 F.3d 1145 (D.C. Cir. 2011). By way of background, the equitable tolling issue arose in the context of provider appeals of the SSI Ratio component of the disproportionate share hospital (DSH) adjustment for fiscal years 1987-1994. The providers did not appeal the SSI Ratio issue to the Provider Reimbursement Review Board (PRRB) until they learned of the issue in 2006 (as a result of the Baystate litigation), more than a decade after the 180-day window for appealing their Medicare cost reports had passed.
Read more…

Click here to view the Supreme Court petition submitted by HHS.

From: The Atlanta Journal- Constitution – 4/18/12

Article Excerpt:

Personal and health information for about 315,000
patients is missing, Emory Healthcare announced Wednesday. The hospital system
has been unable to find 10 computer discs containing the data.  The missing discs held information on all
patients who had surgery at Emory University Hospital, Emory University
Hospital Midtown and The Emory Clinic Ambulatory Surgery Center between
September 1990 and April 2007. The discs contained protected health
information, including patient names, along with the diagnosis, the name of the
surgical procedure and the surgeon. Approximately 228,000 of the patient
records also included Social Security numbers.

“We sincerely regret
that this incident has occurred and we want to assure our patients that we are
committed to safeguarding their personal information,” John T. Fox,
president and CEO of Emory Healthcare, said at a press conference.

Emory has no evidence that
any information contained on the discs has been misused. Emory is sending
letters to affected patients and offering them free identity protection and
credit monitoring services. An investigation is ongoing to try to determine
what happened to the discs. It’s not certain that the information was stolen,
Fox said. It could simply have been misplaced. The discs were removed
sometime between February 7 and February 20, the investigation has determined.

Read more…
Patient Data Missing for 315,000 Emory Patients

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