HBMA Washington Report – November Issue

Washington Report –November 2018
(Covers activity between 11/1/18 and 11/30/18)
Bill Finerfrock, Matt Reiter, and Carolyn Bounds

Download: Washington Report November Issue

  • MIPS Performance Results Available Online
  • New Leaders Chosen for Congressional Leadership Positions and Health Policy Committees 
  • Partial Government Funding Fight on the Horizon
  • CMS Proposed Rule on Drug Prices Will Affect Part B Drugs
  • Online Tool Compares Price of Medicare Outpatient Services 
  • Provider Enrollment Application Fee Updated for 2019
  • CMS Report Details Increase in Telehealth Services Utilization 
  • ACA Enrollment Update
  • CMS Proposes Rule to Give States More Medicaid Managed Care Authorities 
  • Beneficiaries in Final States Receive New Medicare Cards 
  • CMS Publishes Four Recommended ACA Waiver Concepts
  • House Passes Bill to Codify Healthcare Fraud Prevention Partnership’s Authority
  • CMS Transmittals


HBMA Washington Report – October Issue

Washington Report – October 2018
(Covers activity between 10/1/18 and 10/31/18)
Bill Finerfrock, Matt Reiter, and Carolyn Bounds

Download: Washington Report October Issue

  • 2019 Medicare Physician Fee Schedule Final Rule Scales Back Proposed E/M Coding Changes
  • Medicare Physician Fee Schedule Finalizes Many Provisions from Proposed Rule
  • CMS Finalizes 2019 MIPS Requirements
  • Open Enrollment Begins for ACA Exchanges
  • OPPS Final Rule Expands Site-Neutral Payment Policy
  • Senators Introduce New Surprise Billing Legislation
  • Trump Administration Revises Guidelines for ACA Section 1332 Waivers
  • Trump Administration Announces Proposed Overhaul Part B Drug Payment Methodology
  • CMS to Host National Provider Enrollment Conference in March
  • Trump Administration Targets Drug Prices in Series of Actions
  • CMS Announces 2019 Medicare Premiums and Deductibles
  • CMS Transmittals


HBMA Washington Report – September Issue

Washington Report – September 2018
(Covers activity between 9/1/18 and 9/30/18)
Bill Finerfrock, Matt Reiter, and Carolyn Bounds

Download: Washington Report September Issue

  • HBMA Recommends Improvements to the CMS Targeted Probe and Educate Process
  • CMS Makes Major Updates to LCD Development Process
  • CMS Issues MIPS Payment Adjustment Corrections
  • Congress Passes FY 2019 Government Funding Bills
  • Senator Introduces Bill to Limit Surprise Bills for Emergency Care
  • CAQH CORE Publishes Updates to CARC/RARC Code Combinations
  • Congress Passes Sweeping Legislation to Address Opioid Crisis
  • CMS Proposes Technical Changes to Appeals Process to Improve Procedural Consistency
  • High MA Appeal Overturn Rate Implies Improper Denial Practices
  • CMS Improves Online Medicare Enrollment for Beneficiaries
  • House Passes Medicare Smart Card Demonstration Bill
  • CMS Issues Report on RAC Performance in 2016
  • Social Security Number Removal Initiative Update
  • CMS Transmittals


HBMA Washington Report – August Issue

Washington Report – August 2018
(Covers activity between 8/1/18 and 8/31/18)
Bill Finerfrock, Matt Reifer, and Carolyn Bounds

Download: Washington Report August Issue

  • Medicare Inpatient Payment Final Rule Indicates Changes Coming to Physician Reimbursements
  • House Ways and Means Committee Advances Bills on Medicare Smart Cards and LCD Transparency
  • CDC Survey Shows Decline in Uninsured Rate
  • House Ways and Means Committee Recommends Regulatory Relief Actions to CMS
  • HHS Making Progress in Reducing Backlog of Appealed Claims
  • Senate Passes HHS Spending Bill Setting up Negotiations on Final Version with House
  • Social Security Number Removal Initiative Update
  • CMS Publishes 2017 ACO Performance Data
  • CMS Transmittals


HBMA Washington Report – July Issue

Washington Report – July, 2018
(Covers activity between 7/1/18 and 7/31/18)
Bill Finerfrock, Matt Reiter, and Carolyn Bounds

Download: Washington Report July Issue

  • CMS Releases 2019 Medicare Physician Fee Schedule Proposed Rule
  • Administration Proposes Major Changes to Evaluation and Management Coding
  • CMS Proposes 2019 MIPS Reporting Year Requirements
  • CMS Soliciting Public Feedback on Price Transparency and EHR Interoperability
  • CMS Extends Deadline for Requesting Appeal of 2017 MIPS Performance Score
  • House of Representatives Passes Package of Healthcare Bills
  • CMS Proposes Expanding Site Neutral Payments for Hospital Outpatient Services
  • PFS Includes Demonstration for Medicare Advantage MIPS Exemption
  • Despite Proposed MIPS Changes, Stakeholders Say More Improvements are Needed
  • Social Security Number Removal Initiative Update
  • CMS Transmittals

HBMA Washington Report – May Issue

Washington Report – May, 2018
(Covers activity between 5/1/18 and 5/31/18)
Bill Finerfrock, Matt Reiter, Sarah Wilson and Carolyn Bounds

Washington Report – May Issue

  • HBMA Participates in NCVHS Healthcare Transaction Forum
  • CMS Publishes 2019 ICD-10 PCS Updates
  • CAQH CORE Releases Newest CARC and RARC Combinations
  • Congress Passes VA Choice Program Reform Bill
  • 91 Percent of Eligible Clinicians Participated in QPP in 2017
  • GAO Recommends that CMS Continue its Prior Authorization Initiatives
  • HHS Releases List of Upcoming Regulations
  • Five New MedPAC Commissioners Selected
  • CMS Announces New Rural Health Strategy
  • White House Unveils Plan to Address Rising Prescription Drug Prices
  • GAO Report Finds Limited Success for New Medicare Payment Models
  • CMS Rejects Lifetime Caps for Medicaid
  • GAO Study of State Laws on Medical Record Transfer Fees
  • CMS Transmittals

HBMA Washington Report – April Issue

Washington Report – April, 2018
(Covers activity between 4/1/18 and 4/30/18)
Bill Finerfrock, Matt Reiter, Nathan Baugh, Ryan Mash, and Carolyn Bounds

Washington Report – April Issue

  • CMS Mails First Phase of New Medicare Cards
  • Administration Issues Final Rule Giving States Increased Flexibility in Implementing ACA
  • CMS Creates Hardship Exemption from ACA Coverage
  • 2018 MIPS Eligibility Tool Now Available on QPP Website
  • Trump Administration Outlines Proactive Approach to Health IT
  • CMS Interested in Requiring Hospitals to Post Prices Online
  • CMS Considering Testing Direct Contracting Model
  • House E&C Health Subcommittee Approves 57 Bills to Address Opioid Crisis
  • CMS Considering Updates to the HIPAA Administrative Simplification Complaint Form
  • OIG Estimates $3.7 Million in Improper Medicare Telehealth Payments
  • CBO Analysis Indicates Medicare Will Significantly Contribute to Federal Deficit
  • Healthcare Fraud and Abuse Control Program 2017 Annual Report
  • CMS Transmittals

HBMA Washington Report – February Issue

Washington Report – February, 2018
(Covers activity between 2/1/18 and 2/28/18)
Bill Finerfrock, Matt Reiter, Nathan Baugh, Ryan Mash and Carolyn Bounds

Washington Report – February Issue

  • Short-Term Government Funding Bill Includes Many Medicare Policy Changes
  • White House Releases President’s FY 2019 Budget Request to Congress
  • Administration Proposes Requiring Registration/Enrollment of Medical Billing
    Companies with Medicare
  • MIPS Quality Performance Data Now Available on QPP Website but ECs Still Have Time to Report
  • CMS Will Begin Including QMB Status in Remittance Advice on July 1st
  • Trump Administration Proposes Rule to Expand Short-Term Insurance Plans
  • CMS Announces Opportunity for Eligible Clinicians to Participate in MIPS Burden Reduction Study
  • Deadline to Express Interest in a Low Volume Appeal Settlement March 9th or 12th Depending on NPI
  • GAO Studies Ways to Redesign Medicare Cost-Sharing
  • Administration’s Burden Reduction Initiatives Continue to Take Shape
  • CMS Office of the Actuary Releases National Health Expenditures Projections
  • CMS Transmittals

HBMA Washington Report – Jaunary Issue

Washington Report – January, 2018
(Covers activity between 1/1/18 and 1/31/17)
Bill Finerfrock, Matt Reiter, Nathan Baugh, Ryan Mash and Carolyn Bounds


Three-day Government Shutdown Leads to Six Year CHIP Reauthorization, Delay of ACA Taxes

Due to the failure of Congress to pass any of the 12 bills necessary to fund all agencies of the federal government, there was a government-wide “shutdown” on January 20th. The government “reopened” after funding was temporarily restored three days later. The bill that allowed the government to reopen also included language reauthorizing the Children’s Health Insurance Program (CHIP) and delayed several ACA related taxes that were scheduled to take effect in 2019.

Every year, Congress is supposed to pass 12 separate appropriations bills that fund the agencies that make up the Federal Government. These appropriations bills normally cover the entire federal Fiscal Year (October 1 to September 30). If, for some reason, Congress is unable to pass those bills before the new fiscal year begins, they will pass what is known as a Continuing Resolution (CR) which extends the federal fiscal year to whatever “new” date is included in the CR. This allows agencies to keep spending at the previously approved spending level.

The 2018 Fiscal Year began on October 1, 2017. Because Congress was unable to complete the appropriations process ahead of that date, all federal agencies have been relying on a series of short-term CRs to keep the government up-and-running since October 1.

On December 22, 2017, President Trump signed into law a CR that funded the Federal Government through January 19, 2018. However, the Senate and House failed to reach agreement on another extension before January 20th causing the Federal Government to “shut down” for three days until funding was restored by Congress on January 22nd. Two of the three days were the weekend which mitigated the effect of the shutdown.

In these situations, it is not unusual for Congress to attach unrelated provisions, known as “policy riders,” to the Continuing Resolution. These “riders” are often necessary to secure the votes needed to pass the underlying legislation. A bill such as a CR is an attractive vehicle for policy riders because of its “must pass” nature.

Initially, brinksmanship from both parties is the order of the day. Each side establishes “ironclad” demands that must be met “or else”. Eventually, cooler heads prevail – as was the case with this CR – and Congress votes to reopen government with each side trying to declare some victory – Pyrrhic or otherwise.

On Monday, January 22nd, a new CR was passed and the government shutdown ended. This CR expires on February 8th. Included in the CR was a six-year reauthorization for CHIP funding. The CR also further delays several taxes that were created under Affordable Care Act (ACA). The medical device tax is delayed until 2020, the excise tax on expensive employer-provided health insurance (sometimes referred to as the “Cadillac Tax”) is delayed until 2021 and a tax on health insurers is delayed until 2020.

At the time this article was being written, it is unclear if another shutdown will occur at 12:01 AM, February 9th. A new CR was introduced in the House to extend funding into March. This CR also would fund the Department of Defense for the entire year; reauthorize funding for Community Health Centers (CHC) for two years, extend several temporary Medicare policies that expired at the end of the year and adopt changes in other Medicare programs that enjoyed bi-partisan support.

It is important to note that during a government shutdown, the Centers for Medicare and Medicaid Services (CMS) will largely operate without significant disruption. Claims will be paid and other important services such as provider enrollment activities would also continue.

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CMS Creates New, Centralized MIPS Reporting Tool

The Merit-based Incentive Payment System (MIPS) offers participating clinicians several options for reporting data for all four reporting components of the program. These submission methods include claims reporting, EHR reporting and reporting through registries.

The Centers for Medicare and Medicaid Services (CMS) is now offering a single, streamlined reporting method through the Quality Payment Program (QPP) website (www.qpp.cms.gov) to submit data, and satisfy all MIPS reporting requirements for the 2017 reporting year.

Eligible Clinicians (ECs) have until March 31, 2018, to submit 2017 MIPS data. It should be noted that CMS Web Interface users (groups with 25 or more clinicians, including APM entities) have until March 16, 2018, to report data.

ECs can upload data manually to this system or through their EHR if it supports that functionality.

ECs who use this new CMS submission tool can also view their performance data in real time.

ECs only need to achieve a MIPS Composite Performance Score (CPS) of three points to avoid negative payment adjustments in 2019 based on 2017 data reporting. Submitting data on one quality measure for one patient for any period of time would achieve the minimum CPS of three points. This benchmark CPS increases from three points to 15 points for the 2018 reporting year.

Questions about this new reporting system can be directed to the CMS QPP Help Desk, qpp@cms.hhs.gov.

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CMS Will Begin Processing Claims Affected by Expiration of Medicare “Extenders”

Every year or two, Congress has taken action to temporarily extend certain short-term Medicare coverage policies which are aptly referred to as “Medicare extenders.” These policies include exceptions to the outpatient therapy caps, the Medicare physician work geographic adjustment floor, add-on payments for rural ambulance services and rural home health services, payments for low volume hospitals, and payments for Medicare dependent hospitals.

For a variety of reasons, Congress failed to pass a bill that extended these policies before they expired at the end of 2017. The Centers for Medicare and Medicaid Services (CMS) is therefore bound by law to begin processing claims without the extenders payment policies in place.

CMS has taken steps to mitigate the effects of the expired extenders, specifically with regard to the expired exceptions to the outpatient therapy caps.

Beginning on January 1st, when the expiration of the extenders took effect, CMS held claims affected by the therapy caps exceptions process expiration. Medicare caps how much it pays for occupational therapy services at $2,010. It also caps what it pays for combined physical therapy and speech-language pathology at that same amount. The expired extenders provision provided an exceptions process to allow for payments that exceed the caps.

Only therapy claims containing the KX modifier were held. Claims submitted with the KX modifier indicate that the cap has been met but the service meets the exception criteria for payment consideration. During this short period of time, claims that were submitted without the KX modifier were paid if the beneficiary had not exceeded the cap but were denied if the beneficiary exceeded the cap.

According to CMS:

Starting January 25, 2018, CMS will immediately release for processing held therapy claims with the KX modifier with dates of receipt beginning from January 1-10, 2018.  Then, starting January 31, 2018, CMS will release for processing the held claims one day at a time based on the date the claim was received, i.e., on a first-in, first-out basis. At the same time, CMS will hold all newly received therapy claims with the KX modifier and implement a “rolling hold” of 20 days of claims to help minimize the number of claims requiring reprocessing and minimize the impact on beneficiaries if legislation regarding therapy caps is enacted.

As of the time this article was written, Congress was considering a Continuing Resolution (CR) that extends funding for the Federal Government beyond February 9th. The CR includes Medicare extenders language. This package would temporarily extend many of these policies but would permanently eliminate the therapy caps described above. A more detailed summary of these provisions will be provided to HBMA members once a bill with extenders language is officially passed into law.

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HHS Secretary Confirmed, CDC Director Resigns

On January 24th, the Senate voted 55-43 to confirm Alex Azar as the Secretary of Health and Human Services (HHS). Azar replaces Rep. Tom Price (R-GA) who stepped down as HHS Secretary in 2017 after it was uncovered that he frequently used expensive private charter flights. Cabinet secretaries generally fly commercial under most circumstances. Azar was sworn in as Secretary on January 29th.

Azar served as the Deputy Secretary of HHS under President George W. Bush. Azar also served as the President of pharmaceutical giant Eli Lilly & Co.’s U.S. operations for five years but left that position in 2017.

Similar to Secretary Price, Azar has been a vocal critic of the Affordable Care Act (ACA) and will likely use his executive authority to make changes to the way the law is implemented.

Azar is supportive of the transition to value-based payments in Medicare and, like his predecessor, he is also committed to reducing the burdens these models place on providers.

As a former pharmaceutical executive, Azar will bring a different perspective to HHS than Secretary Price. Secretary Price’s background as a physician (orthopedic surgeon) led him to focus on the concerns of the physician community. He sought to ease the burdens of many HHS policies on physicians such as quality reporting and mandatory alternative payment models.

While Azar also subscribes to this “burden reduction” philosophy, his background leading Eli Lilly & Co. could lead to a shift in HHS’ focus towards prescription drug issues. Prescription drug prices has been a nationally prominent issue for several years. President Trump re-emphasized the importance of addressing rising prescription drug prices in his State of the Union Address.

Two days after Azar was sworn in as Secretary, the Director of the Centers for Disease Control and Prevention (CDC), Brenda Fitzgerald, announced she would resign her position over lingering financial conflicts of interest.

These conflicts of interest were disclosed before her confirmation. She attempted to divest from these conflicts but ultimately she was unable to divest from some of her holdings in healthcare companies. This has required her to recuse herself from several notable areas of the CDC’s work such as cancer prevention and testifying at congressional hearings on public health threats.

Fitzgerald then came under greater scrutiny after it was reported that she purchased stock in a tobacco company while she was CDC Director.

Fitzgerald, who is also a physician, has been the CDC Director since July. She was previously the Commissioner of the Georgia Department of Public Health. The CDC’s Principal Deputy Director, Anne Schuchat, will serve as Acting Director until a replacement is nominated by the President and confirmed by the Senate.

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CMS Will Begin Mailing New Medicare Cards In April

Beginning in April, Medicare beneficiaries residing in certain states and territories will begin receiving new Medicare cards in the mail. These cards will include the new Medicare Beneficiary Identifier (MBI) that replaces the Social Security Number (SSN)-based Health Insurance Claim Number (HICN).

CMS is phasing in the distribution of the new Medicare cards in seven “waves.” States in the first two waves will receive their new Medicare cards between April and June of 2018 with states in the remaining five waves receiving their new cards “after June 2018.”

Wave one includes Delaware, the District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia.

Wave two includes Alaska, American Samoa, California, Guam, Hawaii, Northern Mariana Islands and Oregon.

According to CMS, starting in April 2018 Medicare beneficiaries will be able to check the status of card mailings in their area on Medicare.gov.

Beginning in October 2018, when providers submit a claim using a patient’s valid and active HICN, CMS will return both the HICN and the MBI on every remittance advice. CMS has begun providing examples of what this will look like via its website.

CMS will accept claims with either the HICN or MBI from April 1, 2018, through December 31, 2019. Beginning on January 1, 2020, CMS will only accept claims with the MBI.

In addition to claims submission, CMS will allow providers to use the HICN or MBI for other transactions such as:

  • Appeals – Providers can use either the HICN or the MBI for claims appeals and related forms.
  • Claim status query – Providers can use either the HICN or MBI to check the status of a claim (276 transactions) if the earliest date of service on the claim is before January 1, 2020.  If a provider is checking the status of a claim with a date of service on or after January 1, 2020, they will have to use the MBI.
  • Span-date claims – Providers can use the HICN for 11X-Inpatient Hospital, 32X-Home Health (home health claims & Request for Anticipated Payments (RAPs)), and 41X-Religious Non-Medical Health Care Institution claims if the “From Date” is before the end of the transition period (12/31/2019).  Providers can submit claims received between April 1, 2018, and December 31, 2019, using the HICN or the MBI.  If a patient starts getting services in an inpatient hospital, home health, or religious non-medical health care institution before December 31, 2019, but stops getting those services after December 31, 2019, they may submit a claim using either the HICN or the MBI, even if they submit it after December 31, 2019.
  • Incoming premium payments – People with Medicare who don’t get SSA or RRB benefits and submit premium payments should use the MBI on incoming premium remittances.  But, CMS will accept the HICN on incoming premium remittances after the transition period.  (Part A premiums, Part B premiums, Part D income related monthly adjustment amounts, etc.)

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States Begin to Adopt Medicaid Work Requirements

The Centers for Medicare and Medicaid Services (CMS) has begun issuing waivers to states allowing them to impose limited work requirements for able bodied adults who are enrolled in Medicaid. Kentucky and Indiana are the first two states to receive this authority from CMS.

On January 11th, CMS released a letter to State Medicaid Directors which provided guidance on how CMS will use its section 1115 waiver authority to review proposals that would add work requirements as an eligibility condition for Medicaid.

Beneficiaries will be required to verify their status in approved activities, such as employee job search, job training programs, or other means of demonstrating they are working or actively looking for work. The waiver requires that the able-bodied adult recipients participate in at least 80 hours/month of “employment activities.”

The work requirements would apply to able-bodied, non-elderly adults who are currently not working for a non-exemptible reason. Exemptions for this program include not working due to illness or disability, school attendance, and being the primary caregiver (limited to one per household).

In its guidelines, CMS is clear in saying that states must provide assistance to beneficiaries in meeting the work requirements, while also stating that they are not permitted to use federal Medicaid funding to do so.

Several other states (AR, AZ, KS, ME, NH, UT, and WI) have applied for the waiver and are awaiting a decision from CMS.

This policy has already been challenged in court by Kentucky Medicaid beneficiaries.

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Trump Administration Issues Proposed Rule for Expanding Access to Association Health Plans

The Department of Labor (DOL) has issued a proposed rule that changes the definition of “Employer” under the Employee Retirement Income Security Act (ERISA) to expand the definition in a way that allows associations to offer health insurance plans for their members similar to how employers offer health insurance to their employees.

In October 2017, President Trump issued an Executive Order (EO) titled “Promoting Healthcare Choice and Competition Across the United States.” This EO was intended to offer consumers alternative options to the Affordable Care Act (ACA) for obtaining health insurance. The EO also directed certain federal agencies (HHS and Treasury) to issue proposed regulations that would expand the availability of Short-Term, Limited Duration Insurance (STLDI) products and expand the availability and permitted uses of health reimbursement arrangements (HRA).

Under the EO the DOL was directed to expand the conditions that would satisfy the “commonality-of-interest” requirements the Department of Labor uses to define an “employer” under the Employee Retirement Income Security Act (ERISA), the law that regulates insurance provided by large employers that operate in multiple states. The DOL has proposed changing this definition so that associations would be able to provide health insurance the same way that employers provide health insurance.

The goal of expanding access to AHPs is to increase access to the “large group” market for individuals and small businesses who are largely relegated to the individual/small group insurance market. ACA plans sold in the “individual” and “small group” markets are separated from the large group market into their own risk pool. The ACA markets are smaller and more volatile than the larger and insurance products sold on these markets tend to be more expensive.

Plans sold on the large group market are exempt from the ACA benefit mandates.

In theory, expanding access to AHPs, and therefore expanding access to the lower-cost and more stable large group market, may provide cost relief to individuals and businesses that are currently in the individual or small group markets. Advocates for expansion of the AHP market also believe that Association members can get price relief through expanded purchasing power. Plans sold on the large group market are exempt from many of the ACA benefit regulations which could reduce their price.

AHP critics argue that this option will undermine the actuarial stability of the already unstable individual and small group markets which will result in increased prices for anyone who remains in the ACA markets.

The proposed rule would also allow employers to form their own association for purposes of offering an AHP. Associations must be formed on the basis of geography or industry. A plan could serve employers in a state, city, county, or a multi-state metro area, or it could serve all the businesses in a particular industry nationwide.

Under the AHP proposal, hypothetically, an individual who works as a freelance website designer and currently receives health insurance through the individual ACA Exchange, would be able to purchase health insurance through a trade association for website designers the individual belongs to, should that Association seek authority to establish an AHP. The individual would join together with hundreds of other freelance website designers as a group rather than each going into the insurance market as individuals.

Similar to ACA plans, AHPs would not be able to charge members higher premiums based on their health status or refuse to admit members to a plan because of health factors.

However, AHPs would not be subject to other ACA plan requirements such as the requirement to cover a list of essential health benefits. AHPs would also be exempt from the ACA’s medical loss ratio that requires plans to spend at least 80 percent of premiums on benefits.

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2018 Value Modifier Results Now Available

The Centers for Medicare and Medicaid Services (CMS) has published data on the payment adjustments for the 2018 Value Modifier (VM) payment year from data reported in 2016. The 2018 Value Modifier results and the payment adjustment factor are available on the 2016 QRUR and 2018 Value Modifier webpage.

According to CMS, in 2018, 1.8 percent of eligible providers (about 20,000 clinicians) will receive an increase of 6.6% to 19.9% on their Medicare physician fee schedule payments as a result of their high performance on quality and cost measures in 2016. The overwhelming majority of eligible clinicians received neutral payment adjustments. About 25 percent of eligible clinicians will receive a negative payment adjustment for failing to meet the reporting requirements of the VM program.

On September 18, 2017, CMS made available the 2016 Annual Quality and Resource Use Reports (QRURs) to every eligible provider in the VM program. The 2016 Annual QRURs show how eligible providers performed in 2016 on the quality and cost measures used to calculate the 2018 VM and payment adjustment.

2018 is the final year that providers will receive payment adjustments under the VM program. Beginning in 2019, providers will have their payments adjusted based on their participation in the Merit-based Incentive Payment System (MIPS) for which 2017 was the first reporting year.

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CMS Provides MIPS Reporting Leeway for ECs Affected by Natural Disasters in 2017

The Centers for Medicare and Medicaid Services (CMS) is updating its Extreme and Uncontrollable Circumstances Policy for the Merit-based Incentive Payment System (MIPS) to ease the reporting burdens on eligible clinicians (EC) in geographic areas that were affected by natural disasters in 2017. CMS issued an Interim Final Rule in 2017 that that addresses extreme and uncontrollable circumstances MIPS ECs could face as a result of natural disasters that occurred in 2017.

In its announcement, CMS stated that it understands living in an area where these disasters occurred may impact an EC’s resources to collect or submit data on time.

ECs in Federal Emergency Management Agency (FEMA) designated areas affected by Northern California wildfires and Hurricanes Harvey, Irma, Maria and Nate will be automatically identified. No action is required by the EC.

Under this policy, CMS is lessening the reporting requirements for ECs in these designated areas and automatically providing affected ECs with a neutral MIPS payment adjustment. However, affected ECs can voluntarily submit data for two or more MIPS performance categories by the submission deadline for 2017. Voluntarily participating affected ECs will be scored on each performance category, according to normal existing MIPS scoring policies.

CMS announced an expansion to the list of geographic areas that will be covered under this policy. MIPS eligible clinicians in these newly identified designated areas for Hurricane Nate and the California Wildfires are now covered by the Extreme and Uncontrollable Circumstances policy:

  • Alabama: Autauga, Baldwin, Choctaw, Clarke, Dallas, Macon, Mobile, and Washington
  • Mississippi: George, Greene, Hancock, Harrison, Jackson, and Stone
  • California: Butte, Lake, Mendocino, Napa, Nevada, Orange, Santa Barbara, Solano, Sonoma, Ventura, and Yuba

ECs have until March 31, 2018, to submit MIPS data for the 2017 reporting year. Questions on this policy can be directed to the QPP help desk: QPP@cms.hhs.gov.

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President Trump Focuses on Opioids and Veteran Health in State of the Union Address

In the hour and twenty minute State of the Union Address given by President Donald Trump on January 30th, only a few minutes were dedicate to healthcare issues. The State of the Union Address generally addresses issues in broad terms, however the speech is one of the strongest indications of what the President’s priorities will be for the year ahead.

As expected, the President used the speech to highlight that Congress eliminated the Affordable Care Act’s (ACA) individual mandate penalty beginning in 2019. However, he did not use the speech to urge Congress to make a renewed attempt at repealing and replacing the ACA after Congress was unable to do so in 2017.

Addressing opioid abuse and addiction has been a main priority for Congress and the Administration. The President’s address shows that it will continue to be a priority in 2018.

President Trump used his speech to call attention to the fact that every day, 174 people die from opioid overdose. He advocated for a tougher law enforcement approach to crack down on drug dealers as a key strategy for addressing this problem.

He also highlighted the issue of rising prescription drug prices as an area his administration intends to focus in the coming year.

President Trump used the speech to call attention to the need to improve healthcare for our nation’s veterans. He voiced support for veteran access to increased choices in their healthcare options. This is likely a reference to the Veterans Choice program which allows veterans to see private health care providers outside of the VA system under certain circumstances.

President Trump also expressed support for patients “right to try” experimental drugs and treatments. Right to try is of particular interest of Vice President Pence.

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CBO Analysis Compares Healthcare Prices for Commercial and Government Payers

The Congressional Budget Office (CBO) is out with a white paper analyzing the price of healthcare across different payers. The CBO is a non-partisan agency of Congress that provides estimates of the impact major legislation will have on the federal budget and also analysis of the economy at large.

The CBO conducted its analysis, using claims data from 2014, to gather information and compare the prices of the 20 most common and expensive physicians’ services paid for by Aetna, Humana, and UnitedHealthcare to those of Medicare’s fee-for-service (FFS) program and Medicare Advantage (MA).

The analysis done by the CBO suggests that private insurers tend to pay much more for medical services than Medicare FFS and MA plans pay for the same services. It also shows a similarity between Medicare FFS and MA payment rates.

Of the 20 services analyzed, the CBO found that commercial prices were between 11 and 139 percent higher than Medicare FFS prices. CBO also found that the ratios of commercial prices to Medicare FFS prices varied substantially across and within metropolitan statistical areas. MA price ratios did not vary in this sense.

For half of the 20 services CBO studied, there was at least a twofold difference in the average ratios of commercial to Medicare FFS prices across geographic areas.

Compared to in- and out-of-network services, commercial prices were up to 300 percent higher out-of-network than in, while MA services were at most 20 percent higher out-of-network.

Geographic location plays a large role in determining prices the CBO found. According to the CBO, “the average ratios of commercial prices to Medicare FFS prices in the costliest metropolitan areas were at least 70 percent higher than the average price ratios in the least costly areas for all services.” CBO goes on to describe how, “For 10 of the 20 services, the most costly areas were twice as expensive as the least costly. Similar variation was observed among providers within areas. For all 20 services, the most expensive providers were paid 50 percent more than the least expensive in at least half of all metropolitan areas.” About one third of price disparities among providers could be explained due to geographic differences.

The CBO found that commercial prices lack a benchmark that is typically found in Medicare’s FFS program. In the 20 services studied, price ratios at the 90th percentile of a service were double those in the 10th percentile. Compared to MA which at the maximum, was 54 percent more expensive at those same percentiles.

According to the CBO, depending on the service, between 42 percent and 63 percent of the MA claims studied were priced within one percentage point of the Medicare FFS price. In contrast, fewer than three percent of commercial claim observations were within a percentage point of the Medicare FFS price.

It is generally common knowledge among the healthcare RCM community that commercial payers reimburse at higher rates than government payers such as Medicare and Medicaid. However, this analysis by CBO offers quantifiable insight into how large of a price disparity exists.

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Amazon, JP Morgan Chase, and Berkshire Hathaway Announce Plans to Disrupt the Healthcare Industry

On January 30, 2018, three of America’s largest corporations, Amazon, JP Morgan Chase, and Berkshire Hathaway announced in a joint statement that they will be developing a new healthcare entity that will cover their employees for cheaper prices and promote more efficient practices. Specifically, the companies are “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs.”

The statement did not offer many details on what exactly this partnership will entail.

“The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.

Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.”

Speculation on what this program will look like varies based on who you ask, but predictions have ranged from a self-insured plan for their employees to the companies creating their own closed network of providers to serve the employees of those three companies.

Their combination of technological capability, online infrastructure, and investment experience leads many to believe that they have a chance to succeed in this policy arena.

Other possibilities could be that they would use their combined size to create a negotiating network for their employees to apply downward pressure on costs. The companies said that their system would be “free of profit making incentives and constraints” which led to speculation on just how involved they will be in the distribution of the healthcare services themselves.

The sheer size of these three companies, as well as their notoriety as some of the most well-known companies in the world, have led to many observers viewing this announcement as something more significant than the normal corporate partnership. As always, the devil lies in the details. However, it is clear that this partnership certainly has the potential to disrupt the healthcare system in some way.

The announcement concludes by assuring us that more details will be released in the future.

In similar news, four large health systems announced they are making their own attempt at an industry shakeup. Intermountain Healthcare, SSM Health, Ascension and Trinity Health announced that they will seek to create their own generic drug manufacturing company. Rising prescription drug prices have been affecting the bottom line for hospitals across the country. These companies believe that creating their own, not-for-profit drug company will give them access to cheaper drugs. This venture will be a partnership with the Veterans Administration (VA).

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Veterans Affairs and HHS Partner to Reduce Waste and Fraud

The Department of Veterans Affairs (VA), the Department of Health and Human Services (HHS) and Center for Medicare and Medicaid Services (CMS) announced an inter-department partnership to share data, analytic tools, and other means to help identify waste, fraud, and abuse.

Since Congress allowed veterans to go outside of the VA for care under certain circumstances, the VA has faced a greater program integrity challenges. CMS has more experience in this area and can help the VA. Under this arrangement, CMS will share some of the fraud prevention resources it has developed with the VA.

Information sharing will also be a key component of this partnership. Sharing program integrity information between the two agencies will help both Agencies identify providers who are trying to defraud the system.

An example of a resource the VA could receive includes CMS’ predictive analytics software, the Fraud Prevention System (FPS). The FPS is used to “flag” providers who are engaging in suspicious billing activities which helps CMS target its efforts. CMS has also been implementing other strategies such as its Targeted Probe and Educate (TPE) program which is intended to educate providers on how to correct billing errors before applying fraud prevention strategies.

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CMS Proposes Opioid Prescribing Limits for certain Medicare Enrollees

In its annual Call Letter that outlines the requirements for Medicare Part C and Part D plans for the upcoming plan year, the Centers for Medicare and Medicaid Services (CMS) proposed opioid prescribing limits for Medicare Part D plans to help address the growing issue of opioid addiction and abuse.

Under the proposal, Medicare Part D plans will have a safety limit of both length of prescriptions and strength. CMS is proposing to implement a supply limit for initial fills of prescription opioids of seven days for the treatment of acute pain with or without a daily dose maximum. CMS would also limit each seven-day supply to 90 morphine milligram equivalent (MME) unless overridden by the plan for special circumstances.

CMS is also considering measures on the simultaneous use of opioids and benzodiazepines.

This proposal comes on the heels of the President promising to address opioid addiction and abuse during his State of the Union Address. This is also part of a larger effort in general to ensure that the Part D program is responsible about not overprescribing opioids.

Attorney General, Jeff Sessions, indicated in a speech that the Department of Justice (DOJ) and the Drug Enforcement Administration (DEA) will increase its scrutiny of healthcare providers and pharmacies with unusual prescribing and distribution practices for opioids, respectively.

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CMS Transmittals

The following Transmittals were released by CMS during the month of January.

Transmittal Number Subject Effective Date
R1998OTN HIGLAS Enhancement Required for Implementation of Overpayment based Denials 2018-04-02
R1996OTN Analyze Common Working File (CWF) System and Identify Layouts with Minimum FILLER Areas Available 2018-04-02
R1997OTN Enhancement to the Recovery Audit Contractor (RAC) Mass Adjustment Input File 2018-07-02
R3945CP New Waived Tests 2018-04-02
R3946CP File Conversions Related to the Spanish Translation of the Healthcare Common Procedure Coding System (HCPCS) Descriptions 2018-04-02
R3947CP April 2018 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files 2018-04-02
R3948CP Ensuring Correct Processing of Home Health Disaster Related Claims and Claims for Denial 2018-07-02
R765PI Medicare Diabetes Prevention Program (MDPP) Enrollment Process 2018-01-19
R1999OTN Implementation of the Transitional Drug Add-On Payment Adjustment 2018-01-02
R477PR1 Medicare Provider Reimbursement Manual Part 1, Chapter 14, Reasonable Cost of Therapy and Other Services Furnished by Outside Suppliers 2018-01-12
R2000OTN MCS Proof of Concept to Convert Existing MCSDT Window to Utilize API Technology 2018-07-02
R3949CP Healthcare Common Procedure Coding System (HCPCS) Codes Subject to and Excluded from Clinical Laboratory Improvement Amendments (CLIA) Edits 2018-04-02
R3950CP 2018 Durable Medical Equipment Prosthetics, Orthotics, and Supplies Healthcare Common Procedure Coding System (HCPCS) Code Jurisdiction List 2018-02-13
R297FM Notice of New Interest Rate for Medicare Overpayments and Underpayments -2nd Qtr Notification for FY 2018 2018-01-19
R476PR1 Medicare Provider Reimbursement Manual Part 1, Chapter 9, Compensation of Owners 2018-01-12
R2005OTN ICD-10 and Other Coding Revisions to National Coverage Determinations (NCDs) N/A
R240BP Internet Only Manual (IOM) Update to Pub. 100-02, Chapter 11 – End Stage Renal Disease (ESRD), Section 100 2018-02-20
R2006OTN Monthly Status Report (MSR) Excel Data Template Updates and Implementation of MAC/CMS Data Exchange (MDX) Portal System 2018-02-20
R3953CP Revisions to the Claims Processing for Grandfathered Oxygen Claims that Span Competitive Bidding Rounds 2018-07-02
R2008OTN Shared System Enhancement 2015: Identify Inactive Medicare Demonstration Projects Within the Common Working File (CWF) 2018-07-02
R2022OTN Modifications to the National Coordination of Benefits Agreement (COBA) Crossover Process 2018-02-18
R239BP Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC) Medicare Benefit Policy Manual Chapter 13 Update 2018-01-22
R2021OTN Shared System Enhancement 2014: Implementation of Fiscal Intermediary Shared System (FISS) Obsolete Financial Reports – Phase 2 2018-07-02
R2019OTN Redesign of Flu Vaccines in Fiscal Intermediary Shared System (FISS) N/A
R2018OTN Shared System Enhancement 2014: Implementation of Fiscal Intermediary Shared System (FISS) Obsolete Core Reports – Phase 2 2018-07-02
R2017OTN Updates to Common Working File (CWF) Edits for Acute Kidney Injury (AKI) Claims 2018-07-02
R2016OTN Part B Detail Line Expansion – VMS 2018-01-26
R2010OTN Analysis Only: Procedures to Handle Foreign (non US) Addresses 2018-07-02
R2011OTN Shared System Enhancement 2015: Identify Inactive Medicare Demonstration Codes 46, 48, and 49 within the Fiscal Intermediary Shared System (FISS) 2018-07-02
R2012OTN Analysis of Reject Responses for Prior Authorization/Pre-Claim Review Requests (PA/PCR) via the Electronic Submission of Medical Documentation (esMD) System and Usage of Standardized Review Reason Codes and Statements 2018-07-02
R2013OTN Global Surgical Days for Critical Access Hospital (CAH) Method II 2018-01-26
R2014OTN Identifying Prior Hospice Days When Calculating Hospice Routine Home Care Payments After a Transfer 2018-07-02
R2015OTN Updates to the Common Working File (CWF) to Allow Entry Code 9 Durable Medical Equipment (DME) Claims to Process Correctly 2018-01-26
R177SOMA Revisions to State Operations Manual (SOM) Appendix G, Guidance for Surveyors: Rural Health Clinics 2018-01-26
R13P240 By reissuing transmittal 12 as transmittal 13, in order to revise the effective date from cost reporting periods ending on or after August 31, 2017 to cost reporting periods ending on or after September 30, 2017. No other revisions are made in this transmittal. N/A

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HBMA Washington Report – December Issue

Washington Report – December, 2017
(Covers activity between 12/1/17 and 12/31/17)
Bill Finerfrock, Matt Reiter, Nathan Baugh and Carolyn Bounds

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Second MIPS Reporting Year Has Begun
On December 31st, about one-million people flocked to Times Square in New York City to watch a 12-foot ball drop which marks the beginning of the new reporting year for the Merit-based Incentive Payment System (MIPS). Perhaps the New Year’s impact on Medicare payment policy was not truly the reason most of those people chose to brave below freezing temperatures, but regardless of their reason for attending, the second MIPS reporting year began on January 1st.

Data reported in 2018 will affect Medicare Part B payments in 2020. Eligible Clinicians (i.e. those physicians, PAs and NPs who are not otherwise exempt from MIPS) who fail to achieve the minimum benchmark score of 15 points will have their Medicare fee-for-service (FFS) payments reduced by five percent in 2020. Eligible Clinicians (ECs) can earn up to five percent in positive payment adjustments depending on their reporting performance.

ECs were able to avoid negative payment adjustments in 2017 by reporting any amount of data for any amount of patients (at least one patient). This threshold score was increased for 2018 but should still be relatively achievable. There is a separate pot of bonus money that is available for the highest performing ECs.

Eligible clinicians (EC) should be aware of several important changes to the MIPS reporting requirements for the new reporting year. In fact, one of these changes results in over half of ECs being exempt from MIPS reporting.

Specifically, the Centers for Medicare and Medicaid Services (CMS) increased the low-volume threshold to ECs who bill $90,000 or less in Medicare Part B allowed charges or 200 or fewer Medicare patients. ECs who fall below the threshold are exempt from MIPS reporting and there is no option for exempt ECs to voluntarily participate. The low-volume provider threshold in 2017 was $30,000 or less in Medicare Part B allowed charges or 100 or fewer patients.

ECs can also be exempt from MIPS if they qualify as a partial or full participant in Advanced Alternative Payment Models (Advanced APM). There are also circumstances which result in reduced MIPS reporting requirements such as ECs who are non-patient facing and ECs who are hospital-based.

ECs can check their participation status using their NPI number on the Quality Payment Program website (www.qpp.cms.gov).

Individual ECs and small practices can also form virtual groups in 2018. Virtual groups allow smaller practices to pool their resources to report (and receive payment adjustments) as a single entity.

As a reminder, those providers who qualify for MIPS participation will be evaluated on four factors which will make up the ECs Composite Performance Score (CPS). These are:

Category Percent of Total CPS score
Quality Measure Performance 50%
Resource Use 10%
Advancing Care Information 25%
Clinical Practice Improvement 15%

Resource Use was excluded from MIPS scores in 2017 but CMS still collected data and provided feedback reports to ECs based on their performance in this category. Beginning in 2018, Resource Use will now be included in the ECs overall MIPS score.

ECs should note that the quality and cost categories will measure performance across the entire 2018 performance year while other categories such as the Advancing Care Information (ACI) category will only require a 90-consecutive-day reporting period to satisfy the reporting requirement.

For 2018, small practices will be eligible for a five point bonus to their MIPS score. CMS is also allowing improvement to factor into an EC’s CPS. CMS is also providing up to a five point adjustment for ECs who treat a significant number of complex patients.

Eligible clinicians have until March 31, 2018 to submit data for the 2017 reporting year, unless they are part of a group reporting via the newly announced CMS Web Interface in which case they must report by March 16th.

Additional resources on MIPS are available for HBMA members on the association’s website.

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Historic Tax Overhaul Signed Into Law
On December 22nd, President Trump signed into law the massive tax overhaul bill, passed by Congress just days earlier. Final passage of the Conference Report by Congress never seemed in doubt during the lead-up to the party-line vote. No Democrats in either chamber voted for the final version while a handful of House Republicans voted against the bill due to the elimination of certain tax exemptions which were popular in their districts.

The final version is the result of negotiations by the Conference Committee made up of a bipartisan group of lawmakers from both Chambers who were appointed to reconcile the differences between the House and Senate versions of the bill. The Conference Committee produces a Conference Report which includes a description of the differing provisions and an explanation for the decision that was made regarding each provision.

This bill has far reaching effects for both the individuals and businesses. The non-partisan Congressional Budget Office (CBO) estimates that the bill could reduce federal revenues by about $1.4 trillion over ten years. However proponents of the legislation believe that as a result of the new economic growth that they believe will occur as a result of this legislation, federal revenues will be considerably higher than what CBO projects.

Most of the bill’s provisions are effective beginning with the 2018 tax year.

Although the bill does not technically repeal the Affordable Care Act’s individual mandate, the tax bill does eliminate the individual mandate’s penalty for not maintaining qualified health insurance. Beginning January 1, 2019, the ACA penalty for failure by an individual to demonstrate coverage by a qualified health plan will be $0.

The bill maintains seven individual tax brackets but adjusts the tax percentages and income thresholds for each bracket. It also lowers the corporate tax rate from 35 percent to 21 percent beginning in 2018.

In addition to reducing the tax rates, a major goal of the Congress and President was to reform the tax code by eliminating or reducing many of the itemized deductions that individuals can claim on their tax returns. It is estimated that for 2017, approximately 80 percent of taxpayers will file a simple tax return and 20 percent will file an itemized tax return.

As a result of the simplification and raising of the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for joint filers the number of individuals filing an itemized return is expected to drop to 10% in 2018.

Trying to assess the impact of the tax reform plan on those taxpayers who do itemize is more difficult because it is impossible to know what tax deductions a taxpayer might take on their itemized return. Most of the more popular tax deductions were retained in the new law but there were some significant modifications. For example, the new law lowers the cap on the home mortgage interest deduction for NEW homebuyers from $1 million to $750,000 in mortgage.  Existing homeowners will continue to have the $1 million cap. The bill also caps the state and local tax deduction at $10,000 per year.

In addition to eliminating or modifying some existing deductions, the bill also raises or expands some popular tax incentives. For example, the child tax credit was increased to $2,000 per child with no limit on the number of children for whom you can claim the credit. The credit is also made “refundable” – up to $1,400 per child – meaning that even families who have no tax liability against which the credit can be claimed can get a refund in the amount of the credit up to the cap.

Finally, the new tax law expands the medical expense deduction by lowering the qualifying threshold for medical expenses from medical expenses that exceed 10 percent of income to medical expenses that exceed 7.5 percent of income.

The final version of the bill does not include several controversial provisions from previous iterations of the bill such as a provision that would have eliminated the student loan interest deduction.

With regard to some business-related provisions, the bill ends the corporate alternative minimum tax (AMT). It also changes how executive compensation in the form of stock options and performance-based pay are taxed. It also lowers the pass-through tax deduction.

HBMA has made a summary of some of the key individual tax provisions available to members on the website.

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Update to HBMA Members on CMS Social Security Number Removal Initiative
Beginning in April 2018, the Centers for Medicare and Medicaid Services (CMS) will begin issuing new Medicare ID cards to beneficiaries as part of a congressionally mandated initiative to replace the Health Insurance Claim Number (HICN) with a new Medicare Beneficiary Identifier (MBI). The HICN, which is the beneficiary’s Social Security Number (SSN), was viewed by Congress as a threat to program integrity and exposed Medicare beneficiaries to identity theft that could give criminals access to a wide-range of personal information linked to the individual’s SSN.

Congress therefore included a provision in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requiring CMS to remove and replace SSNs on Medicare cards with a new, alphanumeric MBI similar to what commercial insurance cards use. These MBIs will not be “smart” numbers meaning that there is no information embedded in the ID number. Individuals will be discouraged from using this number for anything other than the Medicare program. The MBI will be a randomly generated number assigned to the individual.

During an initial transition period, CMS will accept claims that use either the HICN or the MBI from April 2018 until the end of 2019. CMS has asked that HBMA make our members aware that CMS will begin including the new MBI on remittance advice. Beginning on January 1, 2020, CMS will only accept the new MBI.

Eligibility transaction responses

Beginning in April 2018, through the end of the transition period, if you submit a HICN on the 270 eligibility transaction request, we’ll tell you in the message field on the 271 response when we’ve mailed a new Medicare card to each individual with Medicare. The message will say, “CMS mailed a Medicare card with a new Medicare Beneficiary Identifier (MBI) to this beneficiary.  Medicare providers, please get the new MBI from your patient and save it in your system(s).”

271 Loop 2110C, Segment MSG

Your eligibility service provider can give you this information. Beginning on January 1, 2020, you must use the MBI to get a valid response.

Beginning in April 2018 through the end of the transition period, you can also submit either a HICN or MBI through the Common Working File (CWF) eligibility transaction request to get information; we’re aligning all primary eligibility search criteria, regardless of the system you use to request information as required by the X12 standard. Beginning on January 1, 2020, you must use the MBI to get a valid eligibility response.

We won’t send you the MBI in eligibility transaction responses when you give us a HICN. We’re aware some providers find the HICN by using a combination of the Social Security Number and Beneficiary Identification Code until they find a match; returning the MBI when providers submit a HICN gives a higher risk of medical identity theft. Therefore, beginning in October 2018, through the transition period, we’ll also return the MBI only through the remittance advice in the same place you get the “changed HICN”, “Corrected Patient/Insured Name, Identification Code” field, for all claims you submit with a valid and active HICN. This is consistent with our policies to reduce medical identity theft.

HBMA has expressed to CMS that this transition poses operational challenges to the healthcare revenue cycle management (RCM) process. CMS has been engaging with stakeholders such as HBMA to provide education and obtain feedback on how it will effectively implement the transition.

Beginning in April 2018, Medicare beneficiaries will be able to look up their new MBI numbers and in June 2018, providers will also be able to look up their patients’ new MBI numbers through secure web interfaces that will support quick access to the MBI. These web interfaces will be available through each Medicare Administrative Contractor’s (MAC) secure portal.

HBMA will continue to work with CMS to make the transition to the new MBI as smooth as possible for the healthcare RCM industry.

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Congress Punts on Reauthorizing CHIP Funding and Avoids Medicare Cuts in Short-Term Spending Bill
Right before leaving Washington for the holidays, Congress passed another short-term Continuing Resolution (CR) which funds the federal government through January 19th. Failure to pass the CR would have resulted in a government shutdown.

Congress often includes provisions that are unrelated to government spending in must-pass spending bills. This CR was seen as an opportunity to reauthorize funding for the popular Children’s Health Insurance Program (CHIP) which technically expired at the end of September, 2017. Both parties are eager to reauthorize this funding. However, there remains significant disagreement between Democrats and Republicans over how to pay for the reauthorization.

Republicans control both Chambers of Congress and are therefore in the driver seat for making determinations on funding mechanisms. However, Democratic votes will be necessary to pass the bill in the Senate. Senate Democrats have been withholding their support for a CHIP reauthorization bill until they get a funding mechanisms more to their liking.

The GOP wants to offset the cost of CHIP reauthorization by reallocating money from a fund established by the Affordable Care Act and by raising Medicare premiums on high-income beneficiaries. Democrats want the program funded through a dedicated funding stream to prevent future disruptions.

Given that neither side wants to see the CHIP program run out of money, some sort of compromise will have to be made for CHIP reauthorization. Congress did not have enough time to negotiate such a compromise before the previous CR was set to expire which resulted in another short-term funding patch for CHIP.

Although the new federal money to operate the CHIP program ended on September 30th, most states had built up reserves of unspent CHIP money that could carry them through the end of December. The short-term funding for CHIP included in the CR should be sufficient to sustain the program through the end of March, 2018.

Congress also used the must-pass CR as an opportunity to waive the so-called “Pay-as-you go” or “Paygo” requirement enacted a few years ago. Under Paygo, any legislation that results in reduced revenue or higher spending that raises the federal deficit must be offset by cuts in federal spending. These mandatory cuts can be avoided if Congress votes to “waive” the Paygo requirement – as they have now done. Absent a waiver, Congress would have been required to offset a portion of the cost of the recently enacted tax reform legislation through cuts in mandatory spending programs such as Medicare. With the Paygo waiver now in place, no mandatory cuts to Medicare spending will be necessary.

Congress now has until January 19th to pass legislation that either funds the government for the remainder of the fiscal year or adopt another short-term CR. Should a deal on long-term CHIP funding be reached, the next CR will also be a likely legislative vehicle for this compromise.

Finally, there are also a number of Medicare “Extenders” that need to be enacted in order to continue payments for various provider services.  Members from both political parties have expressed support for the Medicare Extenders package but as with CHIP, identifying spending offsets that enjoy bipartisan support has been elusive.

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2018 ACA Enrollment at 8.7 Million
The ACA open enrollment period for the 2018 ended on December 15, 2017. Preliminary reports indicate that 8.7 million people enrolled in Qualified Health Plans (QHP) for 2018. This is slightly lower than last year’s enrollment number of 9.2 million.

Of the 8.7 million total, about 2.4 million were new consumers while about 6.3 million were consumers who renewed coverage. However, this also means that roughly 2.9 million people who purchased insurance in 2017 did not purchase insurance for the 2018 plan year through the federal exchanges.

It is not known officially what happened to the 2.9 million people who had ACA insurance in 2017 who did not sign up for coverage for 2018 but it is widely believed that many of these individuals may have gotten health insurance coverage through another means such as from an employer or Medicaid.

Thirty-nine states use the federal exchange (healthcare.gov) while the remaining 11 states facilitate their own exchanges. The state-run exchanges can set their own enrollment periods and not all are aligned with the federal exchange. Data on state exchange enrollment likely will not be available for a few months.

Based on trends from previous years, the 8.7 million number is expected to decrease over the course of the year as people choose not to maintain coverage.

As previously reported, Congress eliminated the individual mandate penalty beginning in 2019 as part of the 2017 tax overhaul bill. Some fear that this could lead to additional drops in coverage in 2018.

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CMS Creates New Program to Settle Low Volume Claims Appeals
The Department of Health and Human Services (HHS) Office of Medicare Hearings and Appeals (OMHA) is currently mired in a massive backlog of appealed claims at the administrative law judge level. Many of these appealed claims are Medicare Part A (inpatient) claims that were challenged by Recovery Audit Contractors (RAC) that believed these claims should have been submitted as Medicare Part B (outpatient) claims. Hospitals have been appealing the RAC determinations and OMHA does not have the resources to adjudicate the number of appealed claims in a timely manner.

Plenty of non-inpatient vs. outpatient determination claims have been caught up in this backlog. To reduce the number of appeals cases, HHS is offering settlements to providers for many of these claims.

HHS recently announced that the Centers for Medicare and Medicaid Services (CMS) will make available a new settlement option for providers and suppliers (appellants) with appeals pending at OMHA and the Medicare Appeals Council (the Council) at the Departmental Appeals Board. The new “low volume appeals settlement option (LVA)” will be limited to appellants with a low volume of appeals pending at OMHA and the Council.

Specifically, appellants with fewer than 500 Medicare Part A or Part B claim appeals pending at OMHA and the Council, combined, as of November 3, 2017, with a total billed amount of $9,000 or less per appeal could potentially be eligible, if certain other conditions are met. CMS will settle eligible appeals at 62 percent of the net allowed amount.

Separately, OMHA will be expanding the Settlement Conference Facilitation Process for certain appellants that are not eligible for the LVA option. More information will be available on the OMHA website.

CMS will be holding a national provider call on the LVA on January 9th from 1:30 – 2:30 p.m. ET. Questions can be submitted in advance to MedicareSettlementFAQs@cms.hhs.gov.

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Finance Committee Chairman Orrin Hatch to Retire from Senate
Senator Orrin Hatch (R-UT), who chairs the powerful Senate Finance Committee, announced that he will not seek reelection when his current term expires at the end of this year. First elected in 1976, Senator Hatch, who is 83 years old, is currently the longest-serving Senator and is the longest-serving Republican senator in history.

The Senate Finance Committee has jurisdiction over the Medicare and Medicaid programs as well as tax policy in the Senate. The vacancy as the leader of this powerful Committee will be among the most sought-after position in the Senate but it is too early to say who will succeed Hatch atop the Finance Committee.

Hatch will leave behind a legacy as a healthcare policy leader. He is known as a conservative Republican who at times “digs in” on conservative positions but also has a history of reaching across the aisle to work with Democrats to pass bipartisan legislation. He is known for collaborating with the late Senator Ted Kennedy (D-MA) to lead the legislative efforts to create the Children’s Health Insurance Program (CHIP) and pass the Americans with Disabilities Act.

Although a number of potential Democratic and Republican candidates to replace Senator Hatch may emerge over the next few months, the most interesting name being mentioned is that of Mitt Romney, the former Governor of Massachusetts and the 2008 Republican presidential nominee. Ever since rumors of Senator Hatch’s potential retirement began surfacing a few months ago, Romney has been the most consistently named person as a potential successor.

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Total National Health Spending Growth Decelerated in 2016
The total overall spending by patients and payers on healthcare grew at a slower pace in 2016, according to an annual report from the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary (OACT). In 2016, national health expenditures grew by 4.3 percent, which is less than the 5.8 percent growth seen in 2015.

This data represents spending by commercial and government payers on reimbursements for healthcare services as well as spending by individuals on health insurance premiums, out-of-pocket healthcare costs and prescription drugs. The data is further explained and analyzed in a Health Affairs post.

According to the report, healthcare spending grew 1.5 percentage points faster than the overall economy in 2016, resulting in a 0.2 percentage-point increase in the health spending share of the economy – from 17.7 percent in 2015 to 17.9 percent in 2016.

In 2016, the federal government and households accounted for the largest shares of spending (28 percent each) followed by private businesses (20 percent), state and local governments (17 percent), and other private revenue (7 percent).

As has been previously reported by OACT, Medicare spending growth slowed in 2016 from about five percent growth in 2014 and 2015 to 3.6 percent growth in 2016. Medicare spent a total of $672.1 billion in 2016.

However, Medicaid spending grew at a faster rate in 2016. State and local spending on Medicaid increased by 3.2 percent while the federal share of Medicaid spending grew by 4.4 percent in 2016 translating to total Medicaid spending of $565.5 billion.

Perhaps the most significant spending trend change was for retail prescription drugs which only increased by 1.3 percent in 2016 after 12.4 percent growth in 2014 and 8.9 percent growth in 2015. Total retail prescription drug spending was $328.6 billion in 2016. According to OACT, this slowdown in spending was due to fewer new drug approvals, slower growth in brand-name drug spending and a decline in spending for generic drugs as price growth slowed. Additionally, there was a decline in spending on expensive drugs such as the new treatment for hepatitis C.

Out-of-pocket spending by consumers grew 3.9 percent to $352.5 billion in 2016, faster than the 2.8 percent growth in 2015. Private health insurance spending on benefits increased 5.1 percent to $1.1 trillion in 2016, which was slower than the 6.9 percent growth in 2015.

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HHS ONC Creates Patient Demographic Data Collection Best Practices Framework
The Department of Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) has developed a framework of best practices for healthcare provider organizations to use to improve the collection of patient demographic information. ONC hopes that healthcare provider organizations will use this framework to assess their patient demographic collection processes to identify strengths and areas for improvement.

ONC, the office responsible for most health IT policy within HHS, collaborated with the CMMI Institute (no relationship to the Center for Medicare and Medicaid Innovation within CMS), to develop this framework called the Patient Demographic Data Quality (PDDQ).

According to ONC, “The goal of the PDDQ Framework is to help organizations ensure that the formulation, agreement, approval, and implementation of adopted standards and processes will be effective and sustainable and support the minimization of the number of duplicate records across the industry, ultimately improving patient safety.”

This framework was developed in reaction to issues such as those identified in a 2016 National Patient Misidentification Report, released by the Ponemon Institute which found that 86 percent of healthcare providers surveyed are aware of medical errors caused by patient misidentification.

According to ONC, “Accurately and consistently matching patient data both within and across organizations is pivotal to ensuring safe and effective care to patients. When patient data is not accurately matched, treatment and diagnosis decisions are made in the absence of valuable information, and patients could be subject to adverse events and significant harm.”

The PDDQ Framework is intended to help organizations evaluate themselves against key questions designed to understand how effective their patient demographic information processes are compared to what ONC believe should be the benchmark. It is also intended to help stakeholders improve.

Similar to how most HHS frameworks of this nature are structured, the PDDQ includes five primary categories, each with their own process areas. The five primary categories are data governance, data quality, data operations, platform & standards, and supporting processes. There are a total of 19 process areas across these five categories.

The framework includes a point scoring system for each category that is meant to show a participant’s current state and help identify where improvements are needed.

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GAO Assesses CMS Program Integrity Efforts
In a December report, the Government Accountability Office (GAO) conducted an assessment of the Centers for Medicare and Medicaid Services (CMS) program integrity efforts. The GAO specifically examined CMS’ adherence to the GAO’s Fraud Risk Framework. The report concludes that CMS is making progress but could be doing a better job in certain areas.

The GAO considers the Medicare and Medicaid programs to be at particularly high risk for fraud and improper payments. In FY 2016, GAO estimated improper payment for these programs totaled about $95 billion. Improper payments include payments for incorrectly coded claims and claims for excessive or unnecessary services. Improper payments can be unintentional billing mistakes or intentionally fraudulent billing practices.

CMS has been working to educate providers on proper billing practices so that the unintentional mistakes can be fixed and CMS can better focus anti-fraud resources on those bad actors who are intentionally defrauding the programs.

GAO first issued the Fraud Risk Framework in July 2015 as a way to provide a comprehensive set of key components and leading practices that could serve as a guide for federal agencies to use when developing efforts to combat fraud. The Fraud Risk Framework describes best practices in four components: commit, assess, design and implement, and evaluate and adapt. GAO believes CMS is doing well on some of these components but could be doing better on others.

GAO believes that CMS has met the commit component in part by establishing a dedicated entity—the Center for Program Integrity—to lead anti-fraud efforts. Furthermore, CMS is offering and requiring anti-fraud training for stakeholder groups such as providers, beneficiaries, and health-insurance plans.

However, the report criticizes CMS for not requiring fraud-awareness training on a regular basis for employees and feels that there is room for improvement within the assess, design and implement, and evaluate and adapt components of the framework.

GAO made three recommendations on how to improve fraud prevention. HHS agreed with all three recommendations. The recommendations are for CMS to:

  1. provide and require fraud-awareness training to its employees,
  2. conduct fraud risk assessments, and
  3. create an antifraud strategy for Medicare and Medicaid, including an approach for evaluation.

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CMS Transmittals
The following Transmittals were released by CMS during the month of December.

Transmittal Number Subject Effective Date
R3936CP Updated Editing of Always Therapy Services – MCS 2018-01-02
R1991OTN Method of Cost Settlement for Inpatient Services for Rural Hospitals Participating Under the Rural Community Hospital Demonstration 2018-01-29
R176SOMA Revisions to State Operations Manual (SOM) Appendix A – Survey Protocol, Regulations and Interpretive Guidelines for Hospitals 2017-12-29
R1993OTN Analyze the Common Working File (CWF) System and Identify Customer Information Control System (CICS) Screens Requiring Expansion 2018-04-02
R762PI Update to Chapter 15 of Pub. 100-08 2018-01-29
R1994OTN Suppression of the Standard Paper Remittance Advice (SPR) in 45 Days if Also Receiving Electronic Remittance Advice (ERA) 2018-01-02
R175SOMA Revisions to State Operations Manual (SOM) Appendix J, Part II – Interpretive Guidelines – Responsibilities of Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IID) 2017-12-22
R3943CP Correction to Prevent Payment on Inpatient Information Only Claims for Beneficiaries Enrolled in Medicare Advantage Plans 2018-04-02
R3940CP January 2018 Integrated Outpatient Code Editor (I/OCE) Specifications Version 19.0 2018-01-02
R3941CP January 2018 Update of the Hospital Outpatient Prospective Payment System (OPPS) 2018-01-02
R3938CP Summary of Policies in the Calendar Year (CY) 2018 Medicare Physician Fee Schedule (MPFS) Final Rule, Telehealth Originating Site Facility Fee Payment Amount and Telehealth Services List, and CT Modifier Reduction List 2018-01-02
R3942CP Clinical Laboratory Fee Schedule – Medicare Travel Allowance Fees for Collection of Specimens 2018-01-22
R3939CP January 2018 Update of the Ambulatory Surgical Center (ASC) Payment System 2018-01-02
R3937CP Changes to the Laboratory National Coverage Determination (NCD) Edit Software for April 2018 2018-04-02
R1990OTN Suppression of the Standard Paper Remittance Advice (SPR) in 45 Days if Also Receiving Electronic Remittance Advice (ERA) 2018-01-01
R1989OTN Fiscal Intermediary Shared Systems (FISS) Enhancements to the Mass Adjustment of Process Recovery Audit Contractor (RAC) Claims 2018-04-02
R3935CP Instructions for Retrieving the 2018 Pricing and HCPCS Data Files through CMS’ Mainframe Telecommunications Systems 2018-01-02
R1988OTN National Provider Identification Crosswalk System (NPICS) Retirement Analysis Only – Engage Shared Systems Maintainers (SSMs) and Medicare Administrative Contractors (MACs) in Meetings and Correspondence Related to the NPICS Retirement with the Integrated Data Repository (IDR) Team 2018-01-02
R1987OTN Archiving National Provider Identifier Crosswalk System (NPICS) System Logic in the Durable Medical Equipment (DME) Claims Processing System 2018-07-02
R3934CP Calendar Year (CY) 2018 Annual Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment 2018-01-02
R1985OTN Analysis Only- Medicare Reporting on the Return of Self-Identified Overpayments 2018-07-02
R174SOMA Revisions to the State Operations Manual (SOM) Appendix P 2017-12-08
R3933CP Revisions to the Home Health Pricer to Support Value-Based Purchasing and Payment Standardization 2018-01-02
R111GI Update to Medicare Deductible, Coinsurance and Premium Rates for 2018 2018-01-02
R3932CP Special Requirements for Immunosuppressive Drugs 2018-03-09
R1983OTN Shared System Enhancement 2015: Identify Inactive Medicare Demonstration Projects within the Fiscal Intermediary Shared System – (Removing/Archiving demonstration codes 38, 42 and 43) 2018-04-02
R3930CP Hospice Manual Update Only for Section 30.3 2018-03-01
R1982OTN Line Level versus Claim Level Reporting – Analysis Only 2018-01-01
R3931CP CY 2018 Update for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule 2018-01-02
R1981OTN Fiscal Year (FY) 2014 and 2015 Worksheet S-10 Revisions: Further Extension for All Inpatient Prospective Payment System (IPPS) Hospitals 2018-01-02

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