As a result of the American Recovery and Reinvestment Act of 2009, the Centers for Medicare and Medicaid Services (CMS) mandates that payment adjustments be applied to Medicare-eligible hospitals and critical access hospitals (CAHs) that are not meaningful users of certified electronic health record (EHR) technology under the EHR Incentive Programs (now called the Promoting Interoperability (PI) Programs).

Eligible hospitals and CAHs may be exempt from Medicare penalties if they can show that demonstrating meaningful use would result in a significant hardship. To be considered for an exemption and avoid a payment adjustment, health care providers must complete a hardship exception application and provide proof of hardship. If approved, the hardship exception is valid for only one payment year.

Hardship Exception Application Details

The deadline for eligible hospitals to submit the 2019 Eligible Hospital Hardship Exception Application...

On December 12 from 2:00 to 3:00 p.m. (ET), the Centers for Medicare and Medicaid Services (CMS) will host a webinar for critical access hospitals (CAHs) covering the New Medicare Card Project, implementation of new Medicare numbers, the format of the new number, timeline & milestones, the transition period, outreach & education and what you need to know to get ready for the new number. To register, visit https://events-cms.webex.com/events-cms/onstage/g.php?MTID=ebf0437f7bcf95893626354a3ab14c717.

CGS has just issued a clarification regarding its mandate for sleep centers to hold specific accreditation. Under the clarification, sleep centers (hospital-based and freestanding) will have 90 days to apply for accreditation from one of the three approved entities, and one year to actually undergo the survey and receive accreditation. This is welcome news for Kentucky hospitals with sleep labs. On April 28, KHA sent a letter to CGS requesting additional time for hospitals to obtain accreditation and requesting grandfathered status for Joint Commission-accredited hospitals until their next survey. KHA is pleased that CGS is willing to provide additional time for hospitals to gain accreditation so that beneficiary access to care is not harmed.

The Joint Commission will work with all Kentucky Joint Commission- accredited hospitals and critical access hospitals (CAHs) on scheduling the ambulatory accreditation of their sleep center based upon when they are due for their next triennial hospital...

KHA is hosting a two-part educational webinar program on CMS Quality Based Payment Reform Programs for acute hospitals with content provided by KHA data analytics partner, DataGen. In order to participate in the webinars, you must register in advance using the links below.

Tuesday April 12 3:00 - 4:00 p.m. (ET) DataGen Review of Medicare’s Value-Based Purchasing Program for Kentucky Hospitals https://datagen.webex.com/datagen/onstage/g.php?MTID=ec1dae3260357942e49e688b7b7ed22cb Tuesday April 26 3:00 - 4:00 p.m. (ET) DataGen Review of Medicare’s Readmission Reduction & HAC Programs for Kentucky Hospitals https://datagen.webex.com/datagen/onstage/g.php?MTID=ea3de65d771dfe6dce2ae3e4329f020f0...

Last week, the Medicare Payment Advisory Commission (MedPAC) approved a multi-layered recommendation that would grant hospitals a full payment update for 2017, as well as cutting payments for 340B drugs and redirecting some of the savings into uncompensted care funds that the Commission stated would benefit more hospitals under a new Medicare-based calculation than the current one based on Medicaid days. Three Commissioners opposed the recommendation.

Commission Chairman Francis Crosson noted hospitals would gain $3 billion in payments, while Medicare beneficiaries would gain some out-of-pocket savings on drug costs directly and others could benefit later if Medigap insurers pass savings along by lowering premiums. Opponents stated the policy recommendation could hurt some providers and strayed beyond MedPAC's competency in addressing the 340B program.

What You Need to Know

MedPAC voted to give hospitals a full 2017 Medicare payment update currently projected at 1.75 percentage points....

The Medicare Payment Advisory Commission (MedPAC) unanimously approved seven recommendations on payment systems last week. The recommendations approved were:

Recommendation 1: Physicians and other health professionals The Congress should increase payment rates for physician and other health professional services by the amount specified in current law for calendar year 2017.

Recommendation 2: Ambulatory Surgical Centers The Congress should eliminate the update to the payment rates for ambulatory surgical centers for 2017. The Congress should also require ambulatory surgical centers to submit cost data.

Recommendation 3: Dialysis Facilities The Congress should increase the outpatient dialysis payment rate by the update specified in current law for calendar year 2017.

Recommendation 4: Skilled Nursing Facilities The Congress should eliminate the market basket for 2017 and 2018 and direct the Secretary to revise the prospective payment system (PPS) for skilled...

On Monday, October 26, the Kentucky Chapter of the American College of Healthcare Executives (ACHE) and the Kentucky Chapter of the Healthcare Financial Management Association (HFMA) will host Living on Medicare Rates: a Senior Leader Margin Improvement Planning Program at the University of Louisville Shelby Campus.

Chip Caldwell, Jr., chairman of Caldwell Butler and Associations LLC, will discuss how to implement plans to successfully manage reimbursement declines. Attendees will earn six ACHE face-to-fact credits.

View the flyer for additional information. To register, visit https://hfmaky.starchapter.com/meet-reg1.php?id=107.

Gene Dodaro, Comptroller General of the United States at the Government Accountability Office (GAO), testified before the Senate Finance Committee on Thursday during a hearing on improper payments in federal programs. He stated that the improper payment estimate, attributable to 124 programs across 22 agencies in fiscal year 2014 was $124.7 billion, up from $105.8 billion in fiscal year 2013. Dodaro continued that the almost $19 billion increase was primarily due to the Medicare, Medicaid and Earned Income Tax Credit (EITC) programs, which account for over 75 percent of the government-wide improper payment estimate. (Medicare accounted for $60 billion, and Medicaid for $17.5 billion in 2014.) The Department of Defense does not report improper payments however, as Senator Tom Carper (D-Delaware) pointed out, so these statistics are actually higher.

Improper payments are defined in statute by Congress. They include any payment that should not have been made or that was made in an incorrect amount (including...

On September 25, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would revise the Medicare payment system for clinical diagnostic laboratory tests and implement other changes required by section 216 of the Protecting Access to Medicare Act of 2014. Under the proposed rule, certain “applicable” laboratories would be required to report private payer rate and volume data if they receive at least $50,000 in Medicare revenues from laboratory services and more than 50% of their Medicare revenues from laboratory and physician services. Laboratories would collect private payer data from July 1, 2015 through Dec. 31, 2015 and report it to CMS by March 31, 2016. CMS would post the new Medicare rates by Nov. 1, 2016 for lab tests beginning Jan. 1, 2017. In a factsheet...

Payment adjustments for eligible professionals that did not successfully participate in the Medicare Electronic Health Records (EHR) Incentive Program in 2014 will begin on January 1, 2016. Medicare-eligible professionals can avoid the 2016 payment adjustment by taking action by July 1 and applying for a 2016 hardship exception.

The hardship exception applications and instructions for an individual...

Payment adjustments for eligible hospitals that did not successfully participate in the Medicare Electronic Health Record (EHR) Incentive Program in 2014 will begin on October 1, 2015. Medicare-eligible hospitals can avoid the 2016 payment adjustment by taking action by April 1 and applying for a 2016 hardship exception.

The hardship exception application and instructions for Medicare-eligible hospitals are available on the EHR Incentive Programs website, and outline the specific types of circumstances that the centers for Medicare and Medicaid Services (CMS) considers to be barriers to achieving meaningful use, and how to apply.

To file a hardship exception, Medicare-eligible hospitals must:

Show proof of a circumstance beyond the hospital’s control. Explicitly outline how the circumstance significantly impaired the hospital’s ability to meet meaningful use. Supporting documentation must also be provided. CMS will review applications to determine...

Eligible professionals now have until 11:59 p.m. (ET) on March 20 to attest to meaningful use for the Medicare Electronic Health Record (EHR) Incentive Program 2014 reporting year.

The Centers for Medicare and Medicaid Services (CMS) extended the deadline to allow providers extra time to submit their meaningful use data. CMS continues to urge providers to begin attesting for 2014 as soon as they can.

This extension also allows eligible professionals, who have not already used their one “switch,” to switch programs (from Medicare to Medicaid, or vice versa) for the 2014 payment year until 11:59 p.m. (ET) on March 20. After that time, eligible professionals will no longer be able to switch programs.

Medicare eligible professionals must attest to meaningful use every year to receive an incentive and avoid a payment adjustment. Providers who successfully attest for the 2014 program year will:

Receive an incentive payment Avoid the Medicare payment adjustment,...

Medicare has announced the list of hospitals that will receive payment penalties under the Hospital Readmissions Reduction Program. Medicare will apply the penalties to payments for patient stays between October 1, 2014, and September 30, 2015. This is the third year of the penalty program where the maximum penalty will be a 3 percent reduction in Medicare payments.

There will be 2,610 hospitals receiving a readmissions penalty, but only 39 hospitals will receive the full 3 percent penalty. In Kentucky, 66 percent of all hospitals will receive a penalty, with the average penalty being a 1.21 percent reduction in payment. However, Kentucky has a disproportionate share of hospitals receiving the maximum penalty, with nine hospitals, representing 23 percent of the total. As expected, these facilities are located in some of the most impoverished areas in the nation where many factors associated with poverty and poor health influence hospital readmission rates, which are not accounted for in Medicare’s...

Don’t miss an opportunity to receive incentive payments for the Medicare Electronic Health Record (EHR) Incentive Program. The last day to begin a 2014 reporting period for first-year Medicare eligible professionals (EPs) is October 3. Medicare EPs must attest to demonstrating meaningful use every year to receive an incentive and avoid a payment adjustment. A few key points for EPs who have not yet started participation in the Medicare EHR Incentive Program: Earning Incentives

October 3 is the last day to start the 90-day reporting period in 2014 for the Medicare EHR Incentive Program. If you start participation by October 3, you will have the opportunity to receive an incentive for 2014, and if you continue to achieve meaningful use, can earn incentive payments for 2015 and 2016 participation. If you wait and start participation in 2015, you will not be eligible to receive incentive payments, but can avoid payment adjustments. Avoiding Adjustments You will not avoid the payment adjustment in 2015,...

On September 9, the Centers for Medicare and Medicaid (CMS) held a National Provider Call to discuss its recent offer to settle outstanding Medicare hospital claims that were denied because of patient status issues. Slides for the call are available at http://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2014-09-09-Hospital-Settlement-Presentation.pdf. The slides also include links to documents and instructions that will be needed by eligible hospitals, predominately Inpatient Prospective Payment System (IPPS) and Critical Access Hospital (CAH) providers, that decide to pursue the claims settlement. Settlement requests are due to CMS by...

The Departments of Treasury, Labor and Health and Human Services (HHS) and the Social Security Administration (as well as two Public Trustees, Robert Reischaur and Chuck Blahous) have released the 2014 Social Security and Medicare Trustees’ Report. HHS Secretary Sylvia Burwell stated in a press conference that the life of the Medicare hospital insurance trust fund has been extended by four years until 2030; the growth in per-Medicare-beneficiary spending is slower than the overall economy’s growth; and Part B premium growth is flat for 2015 at $104.90 (the same as 2014 and 2013). Public Trustee Reischaur noted that one element that was different this year is that the baseline assumes Congress will not allow the cuts due to the sustainable growth rate (SGR) to go into effect, thus making the Part B estimates more reliable.

Highlights of the report include

Hospital insurance (HI) trust fund solvency extended by 4 years since 2013 report and by 13 years since the passage of the Affordable...

The Centers for Medicare and Medicaid Services (CMS) made the following announcement on Thursday, May 22. Please note, prior authorization is expanding in Kentucky for more durable medical equipment for Medicare patients. Links for additional information are available at the bottom of the announcement from CMS.

CMS has announced plans to expand a successful demonstration for prior authorization for power mobility devices, test prior authorization in additional services in two new demonstration programs, and propose regulation for prior authorization for certain durable medical equipment, prosthetics, orthotics and supplies. Prior authorization supports the administration’s ongoing efforts to safeguard beneficiaries’ access to medically necessary items and services, while reducing improper Medicare billing and payments. The proposed rule is estimated to reduce Medicare spending by $100 to $740 million over the next ten years.

“With prior authorization, Medicare beneficiaries will have greater confidence...

For the Medicare Fee-for-Service (FFS) program, claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will continue to incur a 2 percent reduction in Medicare payment through March 31, 2015, due to "Sequestration." Claims for durable medical equipment (DME), prosthetics, orthotics and supplies, including claims under the DME Competitive Bidding Program, will continue to be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

The claims payment adjustment will continue to be applied to all claims after determining coinsurance, any applicable deductible and any applicable Medicare Secondary Payment adjustments. Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction. The Centers for Medicare and Medicaid Services (CMS) is encouraging...

On March 26, U.S. House leaders filed a revised bill that would stave off scheduled cuts to Medicare physician payments through April 1, 2015. The House could vote on the bill as soon as Thursday, March 27, and Senate action is expected to follow. Medicare physician payments are scheduled to be cut by 24 percent on April 1 without congressional action.

In a Special Bulletin, AHA outlined the hospital-related highlights:

 Medicare extenders – The bill would extend the Medicare-Dependent Hospital (MDH) Program, low-volume adjustment and ambulance add-on payments through April 1, 2015. Two-midnight rule – The bill would extend the delay in enforcement of the Centers for Medicare & Medicaid Services’ (CMS) two-midnight policy for an additional six months, through March 31, 2015. This provision would prohibit recovery audit contractors (RACs) from auditing inpatient claims spanning less than two midnights for the six-month period and extend the “probe and educate” program for auditing...

With Congress on recess this week, the deadline is fast approaching to "fix" the physician sustainable growth rate formula (SGR). The House has approved a measure (see March 19 edition of KHA Health e-News for reference to a Modern Healthcare article on this measure). The Senate has introduced its version. With respect to the SGR portion, both appear to be the same. It's in the pay-for and additional items that the bills are different.

For an analysis and commentary on the physician SGR "fix," view the Washington Perspectives article from KHA Washington liaison Larry Goldberg.