Washington Report – September 2018(Covers activity between 9/1/18 and 9/30/18)

Bill Finerfrock, Matt Reiter, and Carolyn Bounds

HBMA Recommends Improvements to the CMS Targeted Probe and Educate ProcessCMS Makes Major Updates to LCD Development ProcessCMS Issues MIPS Payment Adjustment CorrectionsCongress Passes FY 2019 Government Funding BillsSenator Introduces Bill to Limit Surprise Bills for Emergency Care CAQH CORE Publishes Updates to CARC/RARC Code CombinationsCongress Passes Sweeping Legislation to Address Opioid CrisisCMS Proposes Technical Changes to Appeals Process to Improve Procedural ConsistencyHigh MA Appeal Overturn Rate Implies Improper Denial PracticesCMS Improves Online Medicare Enrollment for BeneficiariesHouse Passes Medicare Smart Card Demonstration BillCMS Issues Report on RAC Performance in 2016 Social Security Number Removal Initiative UpdateCMS Transmittals

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HBMA Recommends Improvements to the CMS Targeted Probe and Educate Process HBMA submitted a letter to CMS recommending improvements to the TPE process. Our main recommendation is for CMS to send TPE communication’s to the practice’s

correspondence address instead of its practice address. This will be especially beneficial for hospital-based practices.

HBMA also advocated for more options for submitting additional documentation request responses to MACs.

The Healthcare Business Management Association (HBMA) has submitted a letter to the Centers for Medicare and Medicaid Services (CMS) recommending improvements to the Targeted Probe and Educate (TPE) initiative. The letter reinforces ideas expressed to CMS during the HBMA Government Relations Committee’s meetings with CMS during the Committee’s annual meetings with CMS.

TPE is an initiative of the CMS Provider Compliance Group (PCG) that is intended to educate providers about their incorrect Medicare billing practices before taking program integrity action. Under this initiative, Medicare Administrative Contractors (MAC) will select a random sample of 20-40 claims from providers in their jurisdiction. MACs will analyze the selected claims and identify billing errors and offer education to the provider on how to correct their billing errors. MACs will make several rounds of TPE education available to providers before they can refer providers to Medicare program integrity contractors.

HBMA supports efforts such as TPE to reduce good actors getting caught up in the burdensome program integrity audit process. CMS also wants to target its limited resources on the truly bad

actors who are deliberately trying to defraud the Medicare program. TPE is a commonsense approach to analyze provider billing practices and provide them with education and an opportunity to correct their mistakes before subject them to the burdens of a program integrity audit.

The main recommendation in HBMA’s letter would improve how MACs communicate TPE information to hospital-based practices. MACs currently use the provider’s practice address, as listed in PECOS. This results in TPE correspondence being sent to a hospital’s main address for many hospital-based practices. This can cause delivery of the letters to be delayed or lost.

HBMA suggests that MACs should send TPE communications to the practice’s correspondence address that is listed in PECOS. This should reduce the likelihood that TPE correspondence is not received by a practice. CMS has been receptive to this idea when HBMA made this recommendation in meetings.

HBMA also recommended that CMS can build additional layers of TPE communication such as the use of Remittance Advice Remark Codes (RARC) to indicate that claims have been selected for TPE reviews.

HBMA also included a recommendation to require that MACs provide greater flexibility in how they accept additional documentation request (ADR) submissions from providers. Many MACs require providers to respond through the MAC’s online portal. Many of these portals cannot accept multiple documents at a time which adds to the burden on provider offices that are responding to the ADRs.

The letter is available to read on the HBMA website. HBMA believes these recommendations fall well within CMS’ stated priority of reducing administrative burdens on providers. The HBMA GR Committee will update the HBMA members if CMS responds to this letter or takes action on our recommendations.

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CMS Makes Major Updates to LCD Development Process CMS is making significant changes to the Medicare Program Integrity Manual’s Chapter

13. This Chapter describes the process MACs follow to develop LCDs. These updates are intended to improve transparency for the LCD development process.

These revisions to Chapter 13 mirror legislation passed in August by the House of Representatives. HBMA supported this legislation and also asked Congress to reconsider the need for LCDs at all.

The changes to the LCD process take effect on January 8, 2019.

On October 3, 2018, the Centers for Medicare and Medicaid Services announced changes to the Medicare Program Integrity Manual Chapter 13 – Local Coverage Determinations. The purpose of these changes is to improve transparency with how Medicare Administrative Contractors (MAC) make Local Coverage Determinations (LCD).

These updates mirror changes required by a bill passed by the House of Representatives. CMS is making these changes despite this legislation not being passed into law.

HBMA wrote a letter to the Chairs and Ranking Members of the House Ways and Means Committee and House Energy and Commerce Committee endorsing the bill while urging Congress to reconsider the need for LCDs in any capacity. This letter is available on the HBMA website.

The full list of changes to Chapter 13 is available online via: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R829PI.pdf.

These changes are not being made via rulemaking which means there is no proposed version followed by a final version. CMS is affirmatively making these changes to the Medicare Manual. These updates will take effect on January 8, 2019.

Under the revision, all proposed LCDs will be required to consist of consultation, publication of proposed LCD, open meeting concerning the proposed policy, opportunity for public comment in writing, publication of a final LCD that includes a response to public comments received and notice to public of new policy 45 days in advance of the effective date.

CMS is also revising the process for reconsidering existing LCDs. MACs will be required to add information on the LCD Reconsideration process to their websites and will be required to consider all reconsideration requests they receive from beneficiaries, providers or other “interested parties doing business” in its jurisdiction.

Other revisions to the LCD process include:

Current Procedure Terminology (CPT) codes or International Classification of Diseases-Tenth Revision-Clinical Modification (ICD-10-CM) codes will no longer be included in the LCDs. All CPT and ICD-10-CM codes shall be removed from LCDs and placed in billing & coding articles or Policy Articles that are to be published to the Medicare Coverage Database (MCD) and related to the LCD. CMS will provide additional instructions on the date upon which this change will be effective.

In every proposed and final LCD, the MAC must summarize the evidence that supports coverage, limited coverage, maintenance of existing coverage in cases of LCD reconsideration or non-coverage.

Creating more opportunities for interested parties to request informal meetings with MACs to discuss LCDs.

The opportunity for interested parties in a MAC’s jurisdiction to request a new LCD. Standardizing the summary of clinical evidence supporting LCD decisions and a MAC

coverage determination rationale.  Updates to Contractor Advisory Committees (CAC), which provide advice to MACs on

the evidence used to develop an LCD to: o Make CAC meetings open to the public.

o Allow healthcare professionals other than physicians to participate in a CAC. o CACs would be required to have a beneficiary representative

Proposed LCDs that are not finalized within one year of the original posting date would be retired.

CMS invites interested stakeholders to submit feedback on their experiences with the revised LCD process. CMS will collect feedback via submissions to LCDmanual@cms.hhs.gov and will consider additional revisions based on the feedback.

The HBMA Government Relations Committee intends to respond to CMS with comments on the LCD process. The HBMA Government Relations Committee

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CMS Issues MIPS Payment Adjustment Corrections CMS notified MIPS-eligible clinicians (EC) that it has miscalculated some payment

adjustments for the 2019 payment year. The errors were identified through CMS’ Targeted Review process which allows ECs to

appeal their scores. ECs can view their updated MIPS scores and payment adjustments via the QPP website.

In July, the Centers for Medicare and Medicaid Services (CMS) published feedback reports for the Merit-based Incentive Payment System (MIPS) 2017 reporting year/2019 payment adjustment year. Every MIPS-eligible clinician (EC) was able to view their final MIPS performance score for data reported in 2017 and how that score translated into a payment adjustment for the 2019 payment year. As part of this process, CMS allows ECs to request that CMS performs a targeted review of their data if they believe their performance feedback and payment adjustments were incorrect.

As a result of several targeted reviews, CMS discovered it had made some errors in how it calculated the payment adjustments for some ECs. Correcting these errors also meant that additional payment adjustments were necessary to maintain budget neutrality.

According to CMS’s announcement about the corrections, the errors included:

The application of the 2017 Advancing Care Information (ACI) and Extreme and Uncontrollable Circumstances hardship exceptions,

The awarding of Improvement Activity credit for successful participation in the Improvement Activities (IA) Burden Reduction Study, and

The addition of the All-Cause Readmission (ACR) measure to the MIPS final score.

Based on the targeted review requests for these issues, CMS discovered errors in its scoring logic for these issues and implemented solutions. CMS adjusted the scores of affected ECs and made slight adjustments to overall MIPS scores for many other ECs to maintain budget neutrality.

These revisions were made to the performance feedback on the Quality Payment Program (QPP) website on September 13, 2018.

CMS is encouraging ECs to sign-in to the QPP website to review their updated performance feedback. CMS is also extending the deadline for ECs to file a targeted review request. ECs who still believe there is an error with their feedback can request a targeted review until October 15, 2018.

In its announcement, CMS emphasized that the targeted review process worked as intended, as the incoming requests quickly alerted the agency to these issues and allowed CMS to take quick action to remedy the identified errors.

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Congress Passes FY 2019 Government Funding Bills Congress passed legislation funding most of the government for the 2019 Fiscal Year.

This bill included a short-term funding extension for some federal agencies. This spending package includes a full year of funding for the Department of Health and

Human Services and its sub agencies such as the Centers for Medicare and Medicaid Services.

Just as February is often associated with Valentine’s Day and July with backyard barbeques, September in Washington, D.C. is typically associated with passing government funding bills ahead of the expiration of the fiscal year at the end of the month. August is usually reserved for Congress to escape Washington to spend extended time back in their districts. However, this can lead to a busy September if Congress has not passed a bill to fund the government for the new fiscal year that begins on October 1st.

Congress indeed spent the month of September finalizing its government spending bills. In fact, Congress had one of its most productive efforts to fund the government in recent history.

The process for passing this legislation can be difficult. Both the House and Senate must pass 12 individual appropriations bills, each of which funds a number of federal agencies. The two Chambers often pass their own versions of each appropriations bill which requires a conference committee to reconcile the differences into a unified version of the bill that both Chambers vote on for final passage.

Passing the appropriations bills can be a heavy lift for each chamber depending on how many amendments their colleagues want to attach to the measure. Compared to recent years, each Chamber was relatively successful in passing their appropriations bills, The Conference Committee negotiations also were fairly productive. There also were no controversial amendments that sometimes add drama to the government funding process.

Specifically, Congress consolidated the 12 appropriations bills into a few “omnibus” packages of appropriations bills. Both Chambers approved the conference report for two omnibus bills but

ran out of time to pass the third and final omnibus. This required a short-term Continuing Resolution (CR) to extend funding for the agencies funded by the Interior-Environment, Financial Services, Transportation-HUD, and Agriculture-FDA appropriations bills until December.

Congress did pass a bill that funds the Department of Health and Human Services (HHS) and its sub-agencies such as the Centers for Medicare and Medicaid Services (CMS) for the 2019 Fiscal Year (October 1, 2018 – September 30, 2019). President Trump signed this bill into law.

HHS received a total of $90.5 billion in discretionary spending which represents about $2 billion increase from last year. Most of this increase was allocated to the National Institutes of Health (NIH).

The bill formally allocates about $866 billion in mandatory spending which pays for Medicare and Medicaid benefits among other things.

Failure to have passed legislation funding the government beyond the September 30th deadline would have resulted in a government shutdown.

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Senator Introduces Bill to Limit Surprise Bills for Emergency Care “Surprise” medical bills for out-of-network healthcare has been receiving increasing

attention on Capitol Hill. Senator Bill Cassidy (R-LA) introduced legislation that would protect patients from

surprise emergency care bills.

The topic of “surprise” or unexpected medical bills is receiving increased attention in Congress and the media. In response to many stories of patients receiving unexpected bills for out-of-network care despite thinking the care was in-network, one Senator has introduced legislation that would provide a nuanced protection for patients for surprise bills for emergency situations.

Senator Bill Cassidy (R-LA), a physician who has been proactive on a range of healthcare issues, introduced the bill, the Protecting Patients from Surprise Medical Bills Act. Surprise bills are generally regulated at the state level. Many states have some type of surprise bill protection in place but the substance and breadth of state laws varies.

Sen. Cassidy’s bill protects patients from out-of-network charges when they receive emergency care from an out-of-network provider regardless if the hospital is in- or out-of-network.

Patient cost-sharing would be limited to their health insurance plan’s in-network cost-sharing obligation. The hospital and provider would not be able to balance bill the patient for the difference but they can seek additional reimbursement from the patient’s health plan.

The bill would limit this reimbursement to what is allowed under state law but establishes a federal limitation for states that do not have such a law.

This federal limitation would be the greater of:

The geographic average payment, defined as median in-network amount negotiated by health plans and health insurers for the service provided by a provider in the same or similar specialty and provided in the same geographical area, or

The “usual, customary and reasonable” rate which is defined for purposes of this bill as 125 percent of the average allowed amount for all private health plans and health insurance issuers for the service provided by a provider in the same or similar specialty and provided in the same geographical area.

Once the patient is stabilized and before subsequent services are furnished, the facility would be required to provide a written notification to the patient explaining that the patient is in an out-of-network hospital and could, therefore, incur higher out-of-pocket spending than if they were in an in-network facility. The notification would provide patients with an option to transfer to an in-network facility. Patients would have to sign the document to acknowledge receiving this notification.

The bill does not address other common scenarios that result in surprise medical bills such as an anesthesiologist for an elective surgery being out-of-network despite the surgeon and the facility being in-network.

Sen. Cassidy does not expect that the bill will be passed into law before this Congress adjourns at the end of the year. If this is the case, he intends to reintroduce the bill in January when the new Congress is sworn into office.

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CAQH CORE Publishes Updates to CARC/RARC Code Combinations CAQH, the entity responsible for maintaining the list of CARC/RARC combinations, has

published a revision to its most current edition of code combinations.

The Council for Affordable Quality Healthcare, Inc. (CAQH) Committee on Operating Rules for Information Exchange (CORE) has published its regular revisions and updates to the current version of the code combination list it maintains for Claim Adjustment Reason Codes (CARC) and Remittance Advice Remark Codes (RARC).

The CORE Code Combinations v3.5.1 October 2018 includes Compliance-based Adjustments as a result of code list updates published on July 1st. A marked-up version of the CORE Code Combinations v3.5.1 October 2018 showing the adjustments between v3.5.0 and v3.5.1 is also available for download.

CAQH is authorized to maintain and simplify the CARC/RARC code combination list. Since 2013, CAQH says the CORE Code Combinations Maintenance Process has reduced the universe of over 300,000 CARC/RARC combinations into ~1,600 key code combinations

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Congress Passes Sweeping Legislation to Address Opioid Crisis Addressing the opioid crisis has been a top priority for Congress. After months of

working on legislation in each Chamber, Congress passed a unified version that was sent to the President for his signature.

This bill will have an impact on the ability of providers to prescribe opioids to patients.

After several months of negotiations, the House and Senate passed a large package of bills to address the opioid crisis. Each Chamber had been working on its own version of bipartisan legislation to combat the opioid crisis. After passing their own versions of the bill, a Conference Committee reconciled the differences and produced a final version that was passed by both Chambers and sent to the President for his signature. President Trump is expected to sign this bill into law. A section by section summary of the entire bill is available online through the Senate Finance Committee.

Addressing the opioid crisis is perhaps the political issue with the most bipartisan support in Washington. Despite some small disagreements between Republicans and Democrats, legislators from both parties have been productively working together on legislation to address the issue for months.

The bill is a compilation of many individual bills put forward by Congressional committees from both the House and Senate. Many of these provisions provide additional federal resources to states and federal agencies. A number of provisions will affect the ability of providers to prescribe opioids to their patients.

Among the more controversial provisions that had to be worked out between the two Chambers was over Medicaid coverage for inpatient treatment for addiction and substance abuse disorders in “institutions for mental disease (IMD).” The Federal Government does not provide Medicaid matching funds for inpatient services provided in IMD with more than 16 beds. Congress temporarily lifted the IMD exclusion for fiscal years 2020 – 2023 for addition and abuse treatments at IMDs for up to 30-days per year per beneficiary.

The bill also will require providers to use a prescription drug monitoring program (PDMP) to check a patient’s prescription drug history before prescribing opioids. PDMPs are software programs that track a patient’s prescription history which will help prevent patients from seeking prescriptions from multiple providers for the same condition.

Also, beginning on January 1, 2021, prescription orders to pharmacies for opioids and other controlled substances will be required to be transmitted electronically. The Centers for Medicare

and Medicaid Services (CMS) will also have to establish a prior authorization system for opioid prescriptions covered under Medicare Part D plans by this date.

Within two years of the bill’s enactment, CMS will be required to begin notifying prescribers if they are outlier prescribers of opioids compared to other prescribers in their specialty in their geographic area. CMS will not include beneficiaries receiving hospice care or beneficiaries diagnosed with cancer in its outlier calculations.

The bill makes it easier for providers to provide telehealth services for addiction and substance abuse disorders beginning on July 1, 2019. The bill eliminates certain statutory originating site requirements for telehealth services provided to Medicare beneficiaries for substance abuse and related conditions.

Healthcare providers will be required to review a Medicare beneficiary’s opioid prescriptions and screen for potential substance abuse disorders in the “Welcome to Medicare” or annual wellness visit. The Medicare & You handbook provided to Medicare beneficiaries will be updated to include resources on opioid abuse and pain management alternatives.

The bill creates a new Medicare Bundled Payment Model for medication-assisted treatment (MAT). Medicare does not currently cover MAT. It also provides funding for training providers to furnish MAT and other treatment techniques.

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CMS Proposes Technical Changes to Appeals Process to Improve Procedural Consistency CMS issued a proposed rule to remove differences among the requirements for the

various levels of Medicare claim appeals. These technical fixes aim to reduce burden by making the appeals process more

consistent across the various appeals levels.

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule that seeks to achieve greater consistency among the regulations that govern the various phases of the Medicare claims appeals process.

There are currently five levels of appeals for Medicare claim determinations. 1. Request for redetermination by the Medicare Administrative Contractor (MAC) or by a

Qualified Improvement Organization,2. Qualified Independent Contractor Reconsideration,3. Office of Medicare Hearings and Appeals,4. Medicare Appeals Council,5. Federal district Court.

CMS has identified a number nuanced differences between the regulations for each appeal level. The proposed rule seeks to update its regulations so that procedures for requesting an appeal is

more uniform across the various levels. In addition to a number of technical corrections and clarifications to existing regulations, CMS is proposing to:

Remove the requirement that the appellant must sign their appeal request for Council-level appeals. OMHA appeals do not require a signature. This proposal will reduce confusion by creating consistency for the signature requirements for appeal forms.

Change the definition of certain deadlines from six months to 180 days. This is intended to compensate for the fact that certain months have fewer days than others. Changing the definition from months to calendar days will more accurately reflect the intended duration for the deadline. This change is specifically proposed for the timeline for vacating a dismissal of an appeal request.

Update the appeal documents to replace references to the Health Insurance Claim Number (HICN) with Medicare Beneficiary Identifier (MBI). This will support the Social Security Number Removal Initiative (SSNRI) to issue all Medicare beneficiaries new beneficiary cards that replace the HICN with the new MBI.

Change the timeline for appealing an OMHA decision to the Council so that the 30-day window to submit said appeal begins on the date the decision is received. The existing regulation for Council-level appeals states that the 30-day window begins on the date the decision is issued. This is not consistent with how other appeals are regulated. Other types of appeals begin on the date the decision is received, which sometimes occurs shortly after the date the decision is issued. CMS is proposing to change the regulations for Council-level appeals to be consistent with those for other types of appeals.

This proposed rule is intended to reduce the administrative burdens associated with the appeals process. Comments on this proposed rule must be submitted to CMS by December 3rd.

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High MA Appeal Overturn Rate Implies Improper Denial Practices According to the HHS Office of Inspector General, 75 percent of claims denied by

Medicare Advantage plans were overturned on appeal. OIG recommended more CMS audits of MA plans and better oversight of MA plans.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) is out with a report analyzing the rate Medicare Advantage plan claim denials are successfully appealed. According to the OIG, over 75 percent of appealed denials are successfully overturned.

According to OIG, the “high numbers of overturned denials upon appeal, and persistent performance problems identified by CMS audits, raise concerns that some beneficiaries and providers may not be getting services and payment that MAOs are required to provide.”

Specifically, the OIG found that when Medicare beneficiaries or providers appealed preauthorization and payment denials, Medicare Advantage Organizations (MAOs) overturned

75 percent of their own denials during 2014–16, overturning approximately 216,000 denials each year.

Seventy percent of appeals were fully successful and five percent were partially successful. The remaining 25 percent were unsuccessful.

The OIG went on to describe how these findings are “especially concerning because beneficiaries and providers rarely used the appeals process designed to ensure access to care and payment, appealing only 1 percent of denials during 201416.”

Further, OIG found that this trend continued beyond the MAO level of appeals. The report found that “during the same period, independent reviewers at higher levels of the appeals process overturned additional denials in favor of beneficiaries and providers. The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided.” Independent reviewers overturned an additional 80,000 denials in favor of beneficiaries and providers, which equates to approximately 27,000 per year.

The appeals were successful for several common reasons. CMS cited some MAOs for making the wrong clinical decision based on the information submitted by the provider or beneficiary. CMS also cited MAOs for not conducting appropriate outreach before making clinical decisions, meaning that the MAO did not have all of the information needed to make a decision and did not take appropriate steps to gather information from the provider or beneficiary.

The OIG recommended that CMS:

1. Enhance its oversight of MAO contracts, including those with extremely high overturn rates and/or low appeal rates, and take corrective action as appropriate;

2. Address persistent problems related to inappropriate denials and insufficient denial letters in Medicare Advantage; and

3. Provide beneficiaries with clear, easily accessible information about serious violations by MAOs.

CMS concurred with all three recommendations.

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CMS Improves Online Medicare Enrollment for Beneficiaries CMS is rolling our new online tools to help Medicare beneficiaries compare and choose

MA and Part D drug plans. Other tools include an out-of-pocket cost calculator and an improved web chat assistance

function.

Ahead of the beginning of Medicare Open Enrollment on October 15th, the Centers for Medicare and Medicaid Services (CMS) has announced a set of new online tools for Medicare beneficiaries looking to enroll in a Medicare plan.

This new effort titled the “eMedicare” initiative will help beneficiaries compare traditional Medicare, Medicare Advantage (MA) plans, Medigap plans, and Medicare prescription drug plans to help patients make an informed choice about their coverage. The website also provides patients with an out of pocket cost calculator and includes an online web chat function to connect beneficiaries with someone who can help them choose an MA Plan. CMS also simplified the login process for its Medicare Plan Finder tool.

Earlier this year, CMS informed HBMA that it is also in the early stages of improving online Medicare enrollment for providers. CMS is in the beginning phase of a redesign of the PECOS website with the goal of launching “PECOS 2.0” by the end of 2019.

This new version will allow users to track a provider’s Medicare enrollment in real time. It will also include a “correspondence center” that will house all letters relating to revocation, revalidation, etc. which will eliminate the need to obtain these documents from the MACs. PECOS 2.0 will also include the functionality to handle Medicaid enrollment. Medicaid programs will not be required to use PECOS but version 2.0 will give states the option to use it if they choose. The redesign is in the very early stages. CMS will release additional information on the redesign in the future.

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House Passes Medicare Smart Card Demonstration Bill The House of Representatives passed legislation that would create a demonstration

program to test “smart” beneficiary cards. Smart Cards use chip technology to help prevent identity theft and fraud. It is not clear if the Senate will act on this bill.

The House of Representatives passed H.R. 6690, the Fighting Fraud to Protect Care for Seniors Act of 2018 by a voice vote. This bill creates a Medicare demonstration project to test “smart” Medicare beneficiary cards that utilize chip technology to store patient information. The purpose of this demonstration is to prevent identity theft and fraud techniques highlighted in a Government Accountability Office (GAO) report.

The House Ways and Means Committee approved this bill in August.

The bill would establish the pilot program in at least three geographic areas. The program would run for three years. Medicare beneficiaries in the selected areas will receive a “smart” card. Providers in those areas would be issued machines capable of reading the smart card chip.

The bill fully defines “smart cards” as a machine-readable, tamper-resistant that includes an embedded integrated circuit chip with a secure micro-controller that enables the verification and

secure, electronic authentication of the identity of a Medicare beneficiary at the point of service through a combination of the smart card and a personal identification number known by or associated with such beneficiary.

This bill is separate from the Medicare Social Security Number Removal Initiative (SSNRI) which requires CMS to issue all Medicare beneficiaries new beneficiary cards that replaced their Social Security Numbers with a new, unique alpha-numeric identification number.

The bill now goes to the Senate where no similar measure exists. There is no indication whether the Senate will consider the House-passed bill.

The House also passed H.R. 3635, the Local Coverage Determination Clarification Act, which would require Medicare Administrative Contractors to be more transparent in how it develops and issues Local Coverage Determinations (LCD). Even though this bill has not been passed by the Senate, the Centers for Medicare and Medicaid Services moved forward with implementing the changes to the LCD process in this bill on its own.

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CMS Issues Report on RAC Performance in 2016 CMS published its review of the RAC program’s performance in FY 2016. RACs corrected $473.93 million in improper payments, resulting in $214 million being

returned to the Medicare program.

The Centers for Medicare and Medicaid Services (CMS) has issued its annual report assessing the performance of its Recovery Audit Contractor (RAC) program. This year’s report analyzes RAC recovery activities for the 2016 fiscal year.

RACs perform post-payment reviews of Medicare fee-for-service (FFS) claims and have the authority to correct overpayments and underpayments. RACs are entitled to collect a percentage of the overpayments they recover on behalf of the Medicare program. This fee structure has prompted aggressive claim review practices by RACs, particularly for inpatient claims that should have been submitted as outpatient observation claims.

Aggressive RAC practices has led to a massive backlog of appeals of the RAC determinations and a slight curtailing of RAC authorities. RACs now have greater limitations on the documentation they can request, the types of claims they can review and have their contingency fees tied to the accuracy of their reviews. These reforms have resulted in almost a $2 billion reduction of RAC recoveries between FY 2014 and FY 2016.

According to the report, in FY 2016, RACs collectively identified and corrected 380,229 claims with improper payments that resulted in $473.92 million in improper payments being corrected. The total corrections identified include $404.46 million in overpayments collected and $69.46 million in underpayments repaid to providers. This represents a 7.5 percent increase from

program corrections in FY 2015, which were $440.69 million. RAC’s recovered $2.3 billion in FY 2014.

A total of $214 million was returned to the Medicare program after accounting for program costs and expenditures. This is a significant increase from the $141.8 million recovered the previous fiscal year.

The report found that the RAC program had an overall accuracy of 91 percent.

CMS has been taking steps to educate providers about their billing practices and afford them an opportunity to improve before subjecting providers to RAC audits. The Targeted Probe and Educate (TPE) initiative is the main program for educating providers before subjecting them to program integrity audits. Under TPE, Medicare Administrative Contractors (MAC) will select a random sample of 20-40 claims to review for accuracy. MACs will offer education to providers on the billing issues they identify. Providers will receive several rounds of TPE before the MAC can refer to them to program integrity contractors such as RACs.

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Social Security Number Removal Initiative Update CMS is in the sixth out of seven mailing waves of new Medicare Cards that replace the

HICN with an MBI. Providers can submit either the HICN or MBI on claims through the end of 2019 but will

only be able to submit claims with an MBI beginning in 2020. CMS is returning both the MBI and the HICN on remittance advice for claims submitted

with a HICN.

The Centers for Medicare and Medicaid Services (CMS) is in the penultimate phase of its effort to replace Medicare beneficiary cards with a card that displays a new beneficiary number. Congress required CMS to replace the Social Security Number (SSN)-based Health Insurance Claim Number (HICN) with a unique, alpha-numeric Medicare Beneficiary Identifier (MBI). Replacing the SSN is intended to reduce identity theft and fraud.

In April, CMS began issuing cards with an MBI to all new Medicare beneficiaries. CMS also began issuing replacement cards to current beneficiaries several states at a time over seven “waves.” CMS is now mailing replacement cards to beneficiaries in Wave 6 states which are Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Texas, Utah, Washington and Wyoming.

Wave 5 mailings are ongoing and CMS finished mailing cards to beneficiaries who live in Waves 1, 2, 3, and now Wave 4 states and territories.

The seventh and final Wave begins in October and will send replacement cards to beneficiaries in Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Puerto Rico, Tennessee, Virgin Islands.

CMS is accepting either the HICN or MBI on Medicare claims through the end of 2019. Beginning on January 1, 2020, CMS will only accept claims with the MBI.

To help providers transition to the new MBIs, beginning on October 1st, CMS will return both the MBI and the HICN on remittance advice for submitted claims with a valid and active HICN. Providers can also use an MBI lookup tool available through their Medicare Administrative Contractor (MAC) website.

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CMS Transmittals

The following transmittals were issued by CMS in September.

Transmittal Number Subject Effective

Date

R478PR1

Table 30 to update the Medicare Payment Rates for routine SNF-type services by swing-bed hospitals during calendar year 2019. These rates should be used to carve out swing-bed costs on the hospital cost report.

  N/A

R182SOMA Revisions to State Operation Manual (SOM), Appendix B - Guidance to Surveyors for Home Health Agencies 2018-09-28

R8285PI Guidance Regarding the Use of Statistical Sampling for Overpayment Estimation 2019-01-02

R4140CP Updates to Chapter 1 Payer Only Codes in the Medicare Claims Processing Manual 2018-10-29

R4139CP Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2019 2019-01-07

R4138CP Confirmation of "Pickle Hospital" Status 2018-10-18

R2143OTNImplementation of the Award for the Jurisdiction F (J-F) Part A and Part B Medicare Administrative Contractor (JF A/B MAC)

  N/A

R4142CP 2019 Annual Update for the Health Professional Shortage Area (HPSA) Bonus Payments 2019-01-07

R4141CP Quarterly Influenza Virus Vaccine Code Update - January 2019 2019-01-07

R181SOMA Revisions to State Operations Manual, Chapter 2, Certification Process 2018-09-21

R4137CP New Waived Tests 2019-01-07

R825PI Credentials of Reviewers (This Change Request (CR) Rescinds and Fully Replaces CR 10157.) 2018-10-22

R826PI Update to Chapter 4, Section 4.18.1.4 and Exhibit 16 in Publication (Pub.) 100-08 2018-10-22

R827PI Updates to Chapter 4 of Publication (Pub.) 100-08 2018-10-22

R2141OTNImplementing the Insertion of a Sheet of Paper Promoting the Electronic Medicare Summary Notices (eMSNs) into Mailed Medicare Summary Notices (MSNs)

2019-01-02

R2140OTN Redesign of Flu Vaccines in Fiscal Intermediary Shared System (FISS)   N/A

R4130CP Update to the Medicare Claims Processing Manual, Chapter 23, Section 60.3 2018-10-15

R4131CP Updates to Chapter 23 Fee File Instructions 2018-12-17

R4132CPInstructions for Retrieving the January 2019 Medicare Physician Fee Schedule Database (MPFSDB) Files Through the CMS Mainframe Telecommunications System

2019-01-07

R246BPManual Updates Related to Payment Policy Changes Affecting the Hospice Aggregate Cap Calculation and the Designation of Hospice Attending Physicians

2018-12-17

R2139OTN

Monthly Status Report (MSR) Excel Data Template Updates and Implementation of Medicare Administrative Contractor (MAC)/Centers for Medicare & Medicaid Services (CMS) Data Exchange (MDX) Portal System - This CR Rescinds and Fully Replaces CR 10399.

  N/A

R4134CPQuarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes - October 2018 Update

2018-10-01

R2138OTNInternational Classification of Diseases, Tenth Revision (ICD-10) and Other Coding Revisions to National Coverage Determinations (NCDs)

  N/A

R4128CP Annual Clotting Factor Furnishing Fee Update 2019 2019-01-07R2137OTN National Correct Coding Initiative (NCCI) Add-on Codes 2018-04-02

for Non-Outpatient Prospective Payment System (OPPS) Institutional Providers Implementation

R824PI Update to Chapter 15 of Publication (Pub.) 100-08, Certification Statement Policies 2018-10-01

R4127CP Quarterly Influenza Virus Vaccine Code Update - January 2019 2019-01-07

R2136OTN

Standardization of Case File Transmittal and Provider Information Processes, Bankruptcy, Payment Hold, and Cancellation Reporting Between the Medicare Administrative Contractors (MAC) and the Recovery Audit Contractor (RAC)

2018-10-01

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