In its recent notice of proposed rulemaking setting policy for Medicare Advantage (MA) and the Prescription Drug Program (PDP) for calendar year 2020, CMS announced that it would establish extrapolation as a method to be used in risk adjustment validation (RADV) audits, and further, that it would not make any adjustments to account for errors in Medicare fee for service data in determining recovery amounts.

CMS uses a risk adjustment process to modify MA plan payments to better reflect the relative risk of each plan’s enrollees. Payments to each MA plan are adjusted based on risk scores that reflect enrollees’ health status (categorized into Hierarchical Condition Categories (HCCs)) and demographic characteristics derived from member claims data. To counteract incentives that a plan might have to over-report enrollee diagnoses, CMS emphasizes that all diagnoses submitted to enhance risk must be documented in a medical record, and uses RADV audits to ensure that medical record documentation exists, and thus, that payments to MAOs accurately reflect the level of risk assumed. Continue Reading CMS Announces and Solicits Comments on Expanded RADV Audit Methodology

In the most recent technical changes made to Part C and Part D plans for 2019, CMS codified the star ratings methodology in regulations. Now, CMS is proposing changes to these regulations, such as new definitions to clarify the meaning of terminology used in describing the star ratings methodology. In addition, CMS is proposing several changes to improve program quality and accessibility of the Medicare Advantage (MA) and Part D Prescription Drug Program (PDP) Plan Quality Rating for measures other than Consumer Assessment of Healthcare Providers and Systems (CAHPS).

Continue Reading MA/PDP Star Ratings: Proposed Technical Changes for 2020

Building on momentum from Administrator Seema Verma’s announcement of the MyHealtheData initiative at HIMSS 2018, CMS has published more clues as to future action to liberate health information for patients.

In the CY 2019 call letter to Medicare Advantage organizations and Part D programs, CMS describes the Blue Button 2.0 project and its use of the interoperable application programming interface (API) standard Fast Healthcare Interoperability Resources (FHIR). CMS encourages Medicare Advantage plans to adopt “data release platforms” that either meet or exceed the capabilities of Blue Button 2.0, and makes it clear that the agency intends to pursue rulemaking requiring such adoption for 2020.

The FHIR standard is also discussed, although not required, in the 2015 Edition Health IT Certification Criteria for API access, regulations promulgated by the Office of the National Coordinator for Health IT (ONC) that set the rules for functionality and interoperability of electronic health record systems. It seems likely that ONC further promote FHIR for API-based patient access in their upcoming rulemaking updating the certification program, expected this summer.

This move from CMS arrives alongside increased Congressional interest in patient access to information about the cost of healthcare services. This includes a recent Senate price transparency initiative led by Senator Bill Cassidy. Almost 1000 pages of feedback have already been received by Senate staffers, describing why and how payers and providers can make healthcare price and cost information more accessible for individual patients.

Health plans that wish to get ahead of the future regulatory action can check out the developer resources for Blue Button 2.0 to see how CMS envisions API access working for payer data. Plans can also participate in an ongoing ONC Tech Lab project to learn more about on how these standard resources can be used for health plan-specific information and influence standards development.

On November 2, President Obama signed the Bipartisan Budget Act of 2015. As an offset for near-term increases in federal spending, the new law extends by one year – to 2025 – two-percent sequestration reductions in federal spending for mandatory federal programs including Medicare.  The end result is that Medicare Advantage Organizations (MAOs) can expect their capitated payments from Centers for Medicare and Medicaid Services (“CMS”) to continue to be reduced, and Medicare fee-for-service providers can also expect to have sequestration reductions on their CMS reimbursements until at least 2025.

First established by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), “sequestration” is a process of automatic, largely across-the-board reductions enacted to constrain federal spending. Sequestration in its current form began on March 1, 2013, when President Obama, pursuant to the Budget Control Act of 2011, ordered cuts to federal spending effective April 1, 2013, after Congress and the President failed to reach a budget compromise.

Under the Budget Control Act of 2011, the size of reductions to the Medicare program is limited to two-percent. As required by President Obama’s sequestration executive order, on March 8, 2013, CMS notified providers that a “2 percent reduction in Medicare payment[s]” would apply to “Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013.” In other words, due to sequestration, as of April 1, 2013, CMS reduced the amount it pays to providers for fee-for-service Medicare claims by two-percent.

Continue Reading Sequestration Extended to 2025 in Federal Budget Deal

On April 17th, Crowell & Moring’s Government Affairs and Health Care Groups hosted speakers from Capitol Hill, federal agencies, and national trade groups during a thought-provoking half-day Long Term Care Policy Update forum (“LTC Forum”).  The LTC Forum was spearheaded by James Flood and Scott Douglas, who recently joined the firm from the Government Affairs division at Omnicare, a leader in the long-term pharmacy industry. 

The LTC Forum focused on overall policy affecting the long-term care industry, which the Centers for Medicare & Medicaid Services (CMS), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), Congress, and other government agencies have consistently scrutinized.  Throughout the day, LTC Forum participants discussed the challenges and opportunities present in the long-term care industry that will only increase as payment reforms become the norm in Medicare. 

Of note, Sarah Johnson, the Legislative Assistant for U.S. Senator Rob Portman (R-OH) gave a timely overview of the negotiations that led up to the ultimate passage and signing of the Medicare Access and CHIP Reauthorization Act (MACRA).  MACRA repealed the Sustainable Growth Rate (SGR) formula for Medicare payments to physicians and phases in a new Merit-Based Incentive Payment System and other alternative payment models over the next ten years.  But MACRA partially funds these payment reforms with reductions to market basket updates for post-acute care providers, which creates increased concern from the industry about sustainability of long-term care providers under health reform initiatives.  According to one audience comment, there is concern that “in the long-term care industry, [stakeholders] are going to lose sight of overall health care industry shifts.”  

Continue Reading Crowell’s Long-Term Care Policy Update—Recapping the Discussions and Debates

This year Crowell & Moring’s Healthcare Ounce of Prevention Seminar, (HOOPS), will focus on important legal and regulatory developments and their impact on the healthcare industry. Join us on October 27th and October 28th in Washington, DC as our healthcare attorneys and outside speakers share their perspectives on the latest developments in areas of interest including:

  • Providers becoming Payors and Payors becoming Providers – Key Legal Considerations
  • False Claims Act and Government Investigations: How to Survive a CID
  • Hot Issues in Payor/Provider Litigation
  • Changing Landscape of Healthcare: A Panel Discussion
  • Focus on Fraud, Waste and Abuse: Audits, Enrollment and Certification
  • Key Issues in Advertising and Marketing in the Healthcare Industry
  • Medicare Advantage/Prescription Drug Plan Developments and Changes
  • “Don’t Sign that Yet”: Tools and Tips for Identifying and Avoiding Common Traps in Commercial Contracting.
  • Exchanges, Mental Health Parity and Addiction Equity Act and More
  • Antitrust in an Era of Healthcare Reform
  • New Liability Trends in Data Privacy and Security
  • Recovery Action Scene

HOOPS 2014 is a complimentary event.

Please click here to register and to see the complete agenda.

The Office of Inspector General, Department of Health and Human Services, has recently issued guidance for those of its contractors seeking to self-disclose reportable conduct under the Federal Acquisition Regulations (“FAR”). Under federal regulations governing relationships between the federal government and its contractors, any contractors with credible evidence of a potential violation of the False Claims Act or federal criminal law involving fraud, bribery, gratuity, or conflict of interest must make a timely disclosure of such violations to the Office of Inspector General for the agency with which they contract. Failure to timely self-report these potential violations can result in the suspension of contracts or the debarment of the contractor. This requirement applies only to contractors whose contracts are governed by the FAR and which are valued at over $5,000,000.

The guidance details the information required to be included on the disclosure form, including the date the issue was discovered, detailed descriptions of any internal investigation undertaken, and a quantification of the financial harm to the government and any potential overpayments. In addition to the guidance, issued in April of 2014, OIG has provided FAQs for contractors covered by the FAR who may be considering a disclosure.

Continue Reading OIG Issues Self-Disclosure Guidance for Contractors

Managed Care Lawsuit Watch is Crowell & Moring’s summary of key litigation affecting managed care. The latest issue covers a broad range of lawsuits, including: Medicare’s preemption of state common law negligence claims; arbitration clauses in provider agreements; the right of a Medicare Advantage plan to assert a lien on a deceased beneficiary’s negligence settlement; preemption under the Federal Employees Health Benefits Program; and mental health parity. For a full summary of the cases in this issue, please click here.

Continuing the national trend toward marriage equality, the Obama Administration announced that it will allow same-sex married couples to qualify for Medicare benefits just like opposite-sex married couples. Following last June’s landmark Supreme Court decision in U.S. v. Windsor, which held that Section 3 of the Defense of Marriage Act (DOMA) is an unconstitutional deprivation of equal liberty protected by the Fifth Amendment, the Department of Health and Human Services explained that DOMA no longer bars Medicare from recognizing same-sex marriage. The Social Security Administration is now processing Medicare enrollments for same-sex spouses. An FAQ is available here.

In a March 10, 2014 letter to Congress, CMS Administrator Marilyn Tavenner indicated that—based on concerns from Congress and the public—CMS shall not finalize the Proposed Rules’ proposals that would have:

  • Removed the protected class definition for immunosuppressant drugs used in transplant patients, antidepressants, and antipsychotic medicines used to treat schizophrenia and certain related disorders (79 Fed. Reg. 1942 – 44);
  • Imposed a minimum level of savings over the costs available at retail cost-sharing rates and limitations on how broadly cost sharing should be applied to a Part D sponsor’s formulary Part D plans’ participation in preferred pharmacy networks (79 Fed. Reg. 1974 – 77);
  • Reduced the number of Part D plans a single PDP sponsor in the same region may offer (79 Fed. Reg. 1961 – 64); and
  • “Clarified” the non-interference provisions of § 1860D-11(i), which provides that: “In order to promote competition under this part and in carrying out this part, the Secretary: (1) may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors; and (2) may not require a particular formulary or institute a price structure for the reimbursement of covered [MA-PD] drugs.” (79 Fed. Reg. 1969 – 72).

CMS’s forbearance on these issues was announced shortly before a House vote to block the proposed changes to the definition of protected drug classes and amidst significant concern from industry and the public alike over both that and the other proposed changes. The letter goes on to state that CMS shall, “engage in further stakeholder input before advancing some or all of the changes in future years.”