Medicaid

Article Dean Dorton

As of January 12, 2018, Kentucky became the first state to require many of its Medicaid recipients to work in order to receive coverage. This new provision is effective beginning in July 2018.

The new rule states that one must complete 80 hours per month of “community engagement” and applies to able-bodied individuals between the ages of 19 and 64 (not applicable if you are pregnant, medically frail, a full-time student, or a primary caregiver of dependents).

Community engagement includes the individual:

Obtaining a job,Attending school,Participating in a job training course, and/orPerforming community service.

If one does not submit proper proof of participation after one month, the individual will receive a notice. That person is then given one more month to reverse their violation. After the second month, benefits will terminate until they can prove they have begun following the guidelines.

Kentuckians will be required to pay a small monthly premium ($1 to $15 per month, dependent on income) for Medicaid insurance. Incentives will be offered to purchase additional benefits (such as dental and vision) through a rewards program. Activities to obtain rewards include getting an annual physical, completing a diabetes or weight management class, partaking in an anti-smoking program, et cetera. Those who are above the federal poverty line, who fail to pay the required premiums or do not reapply in time to determine if they remain eligible, can be locked out of the program for six months. Individuals can also be penalized for not promptly reporting a change in their income.

According to Governor Matt Bevin, this new plan should save taxpayers more than $300 million over the next five years. It is estimated that nearly 95,000 people will lose their Medicaid coverage by not fulfilling the requirements or by finding jobs which push them out of the low-income tax bracket.

Article Dean Dorton

The House’s latest Medicare extenders bill, proposed by Rep. Kevin Brady, chairman of the Ways and Means Committee, would extend several Medicare payment provisions sought by rural hospitals. Medicare payment programs such as the Medicare Dependent Hospital Program, the Low-Volume Adjustment Programs, and payments for Ground Ambulance Add-Ons and the Home Health rural add-on services, which are key aspects of rural healthcare, would be extended. But the detrimental cut to at least partially pay for all the extensions will be the swing bed payments used by many critical access hospitals (CAH). The proposal aims to cut swing bed payments to the lower Skilled Nursing Facility Prospective Payment System rates. Swing bed services are currently paid at the 101% of reasonable costs at CAHs.

This proposal, however, is not new. It was an issue in 2010 when the Office of Inspector General (OIG) recommended the same cut to swing bed services at CAHs. The recommendation was met with great opposition from CMS due to concerns with the OIG’s findings on the availability of skilled nursing services at nearby facilities and OIG’s calculations of potential savings appeared inflated, especially with the additional costs of transportation of moving a patient to an alternative facility.

The current bill is also met with opposition by organizations such as the American Hospital Association (AHA) and the Critical Access Hospital Coalition. Thomas Nickels, executive vice president of the AHA, stated that the AHA strongly opposed the cuts to CAHs to pay for the Medicare extensions as “CAHs are often the only source of healthcare in their communities and swing bed services allow seniors to stay close to home to receive care, rather than being transferred to another facility. This is the time when Congress should be looking to stabilize access to care, rather than reducing payments for critical healthcare services in our most vulnerable rural communities.”

The Critical Access Hospital Coalition wants its member hospitals to call on state representatives to protect swing bed payments rates.

Questions?

Dan Schoenbaechler | dschoen@ddafhealthcare.com | 502.566.1097
Shawn Stevison | sstevison@ddafhealthcare.com | 502.566.1066

Article Dean Dorton

As expected, much of Presidential debate involved healthcare issues and, specifically, Trump’s wish to repeal the Affordable Care Act (ACA). But what will be the effect of repealing the ACA?

Rand Corp reports that all of Trump’s proposals decrease the number of insured and increase out-of-pocket spending for consumers enrolled in individual market plans. Repealing the ACA is also expected to raise the federal deficit compared to the ACA, as the ACA has provisions that reduce spending and generate revenue, such as changes to Medicare payment policy, taxes and fees levied on insurers, medical devices, and branded prescription drugs(1).

The Center for Health and Economy’s estimates, however, are much different than Rand’s estimates as it estimates 18 million fewer insured in the first year, but, the federal deficit will decrease $583 billion between 2017 and 2026(2).

It’s quite evident that the ACA won’t stay in its current form under Trump’s presidency and the Republican Congress, but the implications of repealing or even modifying the ACA are still unclear. Whatever happens, most of Trump’s wishes require an act of Congress.

For hospitals, economics firm Dobson DaVanzo report the repeal will equate to an estimated negative impact of $165.8 billion from 2018 to 2026, which is less than the ACA’s Medicare reductions to hospitals of $289.5 billion from reductions in their inflation updates(3).

Medicaid Changes

Only 19 states opted against Medicaid expansion. Repealing the ACA will put about 20 million people to uninsured status again, but Trump has pointed to a successor plan that includes the allowance to fully deduct all health insurance premiums, allowing insurance plans to be sold across state lines, ensuring price transparency for medical procedures and other health care costs, expanding access to health savings accounts that are tax free, and turning Medicaid into block grants to states, and allowing medications to be imported in an attempt to increase competition in drug pricing(2).

Trump’s wish for use of Medicaid block grants differs greatly from the entitlement program that currently exists. Under the block grant, the government will give states a lump sum of money to use at their own discretion. Many supporters of this idea believe block grants will entice states to reduce waste. The hope is that Republicans at the state levels use these block grants for their intended purpose. Another hope is that the block grants are enough to sustain the Medicaid program for each state, but hospitals and clinics should fear the loss of millions of dollars in revenue and resulting in staff reductions and scaling back services at hospitals.

As expected, much of Presidential debate involved healthcare issues and, specifically, Trump’s wish to repeal the Affordable Care Act (ACA). But what will be the effect of repealing the ACA?

Rand Corp reports that all of Trump’s proposals decrease the number of insured and increase out-of-pocket spending for consumers enrolled in individual market plans. Repealing the ACA is also expected to raise the federal deficit compared to the ACA, as the ACA has provisions that reduce spending and generate revenue, such as changes to Medicare payment policy, taxes and fees levied on insurers, medical devices, and branded prescription drugs(1).

The Center for Health and Economy’s estimates, however, are much different than Rand’s estimates as it estimates 18 million fewer insured in the first year, but, the federal deficit will decrease $583 billion between 2017 and 2026(2).

It’s quite evident that the ACA won’t stay in its current form under Trump’s presidency and the Republican Congress, but the implications of repealing or even modifying the ACA are still unclear. Whatever happens, most of Trump’s wishes require an act of Congress.

For hospitals, economics firm Dobson DaVanzo report the repeal will equate to an estimated negative impact of $165.8 billion from 2018 to 2026, which is less than the ACA’s Medicare reductions to hospitals of $289.5 billion from reductions in their inflation updates(3).

Medicare Changes

Trump promised to leave Medicare alone during his campaign. But with his choice of Rep. Tom Price to head the Department of Health and Human Services, changes to “modernize” Medicare may be looming. Medicare has been stable for more than 50 years, but Price agrees with House Speaker Paul Ryan in his approach to replace the traditional Medicare program with a system of vouchers that beneficiaries can use to purchase coverage through private plans. While many believe Medicare is financially unsustainable, others believe a voucher system is unsustainable and much less efficient than Medicare. Price and Trump have recently favored health savings accounts to help individuals pay for health insurance, but Trump has recently been quoted to not wanting to abolish Medicare. While the affluent may stay in the traditional Medicare program, the average American may opt to accept the higher deductible plans through private insurance which creates cost shifting.

One area in which both a majority of Democrats and Republicans agree is in allowing Medicare to negotiate drug prices. Trump claims to be able to save Medicare $300 billion by negotiating the purchases of drugs from major pharmaceutical companies(4).

More recently, in a December 6 letter sent to Trump and Congressional leaders, the American Hospital Association and the Federation of American Hospitals both urged Congress, under the prospective repeal, to include legislation for the restoration of the Medicare hospital inflation updates and the disproportionate share hospital payments that were cut to offset coverage gains under the ACA(3).

If you have any questions or would like to learn more, contact:

Adam Shewmaker ashewmaker@ddafhealthcare.com
Dan Schoenbaechler dschoen@ddafhealthcare.com

 

Sources:

  1. Estimating the Impacts of the trump and Clinton Health Plans; Rand
  2. The Ultimate Q&A about Health Care under a Trump Presidency; Washington Post
  3. Hospitals warn of job losses, billions in cuts if trump repeals ACA; Modern Healthcare
  4. Trump: Make Medicare Great Again; US News

Article Dean Dorton

The 2017 OIG Work Plan was issued by the Office of Inspector General on November 15, 2016. Historically, we have seen the Medicare Part A & B Work Plan focus primarily on hospitals with a few items for skilled nursing, home health, and hospice. This fiscal year, a total of 24 new items were added, with five focused on nursing/skilled nursing facilities and three focused on hospice or hospice home health. The remaining 16 items are a mix of outpatient services, durable medical equipment, care management/quality of care, and inpatient rehabilitation.

The Medicare Part C & D Work Plan includes a focus on payments for service dates after a date of death, denials by Medicare Advantage Plans, Part D rebates on drugs dispensed by 340B Pharmacies, and questionable billing for compounded topical drugs.

In the Medicaid arena, the OIG focus impacting providers will be on personal care services.

The following is a list of the OIG focus for each of the new topics, and items you, as a provider or supplier, may want to consider.

As a provider, you may consider running a report of diagnoses of the patients receiving services. Verify that each diagnosis meets one of the 15 covered conditions for reimbursement. Review your medical documentation against the National Coverage Determination requirements and verify you have all the required information documented, and lastly, make sure that patients are not exceeding the medical necessity thresholds for treatments (i.e. continued treatment with hyperbaric oxygen therapy is not covered if measurable signs of healing have not been demonstrated within any 30-day period of treatment).You may wish to consider reviewing your reported Medicaid patient days, specifically to ensure that reported Medicaid days do not include S-CHIP and ARCH recipients from calculation of Medicaid patient days.Consider reviewing all inpatient psychiatric stays that resulted in outlier payments to determine if documentation and coverage requirements were met in accordance with the federal guidelines.Review all patients who are not suited for or have not received at least the minimum amount of therapy required (i.e. at least three hours of therapy, five out of seven days of the week). Determine if their admission to inpatient rehabilitation is appropriate based upon their medical condition and ability to participate.If you, as a provider, received an immediate jeopardy on a nursing home complaint, review the issues from that complaint and verify that corrective actions are still in place and functioning as intended. If a follow-up visit did not occur from the state agency, be prepared for a visit from them on the issue.Skill nursing facility (SNF) providers should review all grievances and reported incidents to determine if any of the incidents were not investigated or reported to the required agencies. If identified, providers should immediately remediate the identified incidents.SNF providers should review all patients in high therapy resource utilization groups (RUGs) to determine if the documentation in the medical record by nursing and therapy align with data as reported on the minimum data set (MDS). Areas of inconsistency should be further investigated to determine if the data reported on the MDS was appropriate or if claims should be re-filed.The OIG will be issuing this tool in FY2017 for use by all SNFs to utilize upon release. SNFs should be looking for this tool and immediately implement the tool upon release.The OIG will issue a summary fraud alert highlighting key recommendations for protecting beneficiaries and improving the Hospice program in FY2017. Facilities should review the guidance and assess whether any vulnerabilities exist relative to the reported payment, compliance oversight, and quality of care concerns.Hospice providers should review the medical record documentation for a sample of patients with long-term illness diagnoses which may not have an immediate decline (e.g. Alzheimer’s, COPD, et cetera) to verify that the medical documentation supports the appropriateness of hospice care in accordance with federal guidelines.Hospice providers of in-home care should review scheduled supervising nurse visits on admitted patients to verify that the supervising nurse is visiting at least once every 14 days to assess the quality of care and services provided. These visits should be clearly documented in the patient’s medical record.Suppliers of durable medical equipment, prosthetic, orthotic, and supplies (DMEPOS) equipment to patients in SNFs should review supporting documentation for the therapy and supplies which were provided and billed under Medicare Part B. Verify that all documentation supporting the medical necessity of the supplies are present in the file and that all claims are supported by appropriate orders.Providers of the diabetic testing strips should be aware that OIG is investigating market shares relative to the three-month period preceding the implementation of the National Mail Order Recompete, as well as two additional three-month periods to assess shifts in the market.Suppliers of items such as PAP machines, mask, tubing, headgear, and filters should review shipping and billing patterns to verify that these items are only being shipped upon a refill request from the beneficiary or caregivers, and are not automatically shipping without orders for refills and/or requests for refills from the beneficiary.Clinical diagnostic laboratories should be aware that the OIG will be looking at the top 25 laboratory tests by Medicare payments and will be assessing the market-base system payments associated with those tests.Physician practices should assess whether they appropriately filed for payments for transitional care management, and appropriately excluded filing for chronic care management, end-stage renal disease, and prolonged services without direct patient contact during the same service period.Physicians should review patients for whom chronic care management was billed to verify that the following were not also billed during that time period: transitional care management, home health care supervision/hospice care, or certain end-stage renal services.Physicians should be aware that CMS and OIG will be reviewing their prescribing patterns as it relates to drugs and orthotics for those vendors who have reported a financial relationship with the physicians to determine if there is evidence of skewing of practice patterns toward those manufacturers or group purchasing organizations.Providers of power mobility devices should be aware that an alert will be issued by OIG in FY2017 which will include recommendations to reduce vulnerabilities of medically unnecessary payments. Providers should review this document and adjust practice patterns accordingly.Providers should review documentation on wasting of single use vials to ensure that the documentation is appropriate, and to verify that the JW modifier is being utilized in an appropriate manner. The OIG will be looking a vial sizes wasted and the ability to purchase the drugs in a smaller vial to reduce the amount of waste.The OIG is focusing on the amount of savings possible if inflation-indexed rebates were required under Medicare Part B. There is no direct impact at this time to providers or manufacturers, but both entities should keep an eye on the developments from this review for potential future impacts.Providers should review their claim edit system to verify an edit is in place to catch any dates of service dated after the date of a patient’s death. If no edit is in place, providers should review any claims filed for deceased patients to verify no dates of service after the date of death were inadvertently included on the claim.This summary being prepared by the OIG and issued in FY2017 will provide a summary of the key challenges and vulnerabilities which may exist as CMS begins to implement MACRA, MIPS, and AAPMs.Medicare Advantage Plans should be aware that OIG will be looking at patterns of denials, appeals, and overturned denials to determine the extent to which the Medicare Advantage Plans are inappropriately denying services. Future work will occur, and may include medical record reviews.The OIG will be looking at the upper bound of what could be saved if pharmaceutical manufacturers paid rebates for drugs dispensed through the Medicare Part D program at 340B covered entities and contract pharmacies. Manufacturers may consider running calculations to determine the future revenue impact of a shift in coverage toward requiring rebates in order to plan for future impacts.Compounding pharmacies should review their patterns of compounding and associated relationships with the prescribers. The OIG will be targeting selected pharmacies for questionable Part D billing patterns.Medicaid managed care organizations (MCOs) should review capitation payments made to providers to determine if the reimbursement includes reimbursement for drugs which are not included on the Medicaid drug tape as provided by CMS.Providers of personal care services should be looking for the issuance of this data brief in FY2017. Upon issuance, providers should review the key data regarding investigations, patient abuse and neglect, and ensure that provider practices are designed to mitigate or eliminate the noted practices, in alignment with the practice recommendations which will be included in the data brief.Individual states will be reviewed for compliance to federal and state requirements when incentive payments were made to providers. Providers should be aware of this audit and the potential for recoupment as result of any findings.Selected accountable care organization (ACO) models in Medicaid will be reviewed for compliance with relevant state and federal requirements. ACOs should assess their level of compliance with state and federal requirements and adjust practices as necessary to ensure compliance.This review will be focused at the state level but may impact providers due to recoupments. Providers should assess policies and procedures around verification of third-party payers to ensure that Medicaid is billed as the payer of last resort.The focus in this review will be on whether states recouped required amounts from providers and properly remitted the recoupments to CMS. Providers subject to recoupment as the result of prior audits or reviews should be prepared for the recoupment to occur if it has not already been remitted to the state as required.The focus will be on states’ assignment of Medicaid-only providers to federally-designated risk categories during screening processes for fraud, waste, and abuse. Providers who have not yet been through the screening process should be prepared to participate in the process as states verify completeness.States which tax MCOs will be the focus. The focus will be on whether the tax programs meet federal hold-harmless requirements, and may impact Medicaid MCOs down the road based upon the outcome of the review.Medicaid MCOs will be targeted to determine if they continue to pay providers for inpatient hospital services related to treating certain preventable conditions. Both Medicaid MCOs and providers should be aware of this review. MCOs may want to review the provider-preventable conditions and verify they have appropriate edits in place. Providers may want to review claims filed to Medicaid or Medicaid MCOs to determine if any included the preventable conditions and calculate the amount of money owed back.

The summary above includes only those items new to the Work Plan this fiscal year. In addition, the OIG has revised 12 previously existing projects, and continues to carry forward other items from prior work plans that have on-going activity. Providers should continue to review and assess work plan areas for applicability to their operations.

If you have any questions, contact:

Adam Shewmaker: ashewmaker@ddafhealthcare.com
Shawn Stevison: sstevison@ddafhealthcare.com

Article Dean Dorton

With MACRA set to begin on January 1, 2017, the Centers for Medicare & Medicaid Services (CMS) announced this week more flexibility for physicians as it relates to complying with the physician quality payment program.

The update announced this week now allows for some easing into the program that the original rules did not include:

  • Option 1: Physicians following the MIPS pathway can now test the program and submit some data to the program and avoid a negative payment adjustment. This option allows physicians to ensure their systems are working for compliance in future years 2018 and 2019. Physicians choosing this option would avoid a negative payment adjustment.
  • Option 2: Physicians following the MIPS pathway can participate for a partial year. A slight positive payment adjustment could be awarded for physician data submitted after January 1, 2017.
  • Option 3: Participate in the MIPS pathway for the full calendar year and physicians may receive a more modest positive payment adjustment. Many physician practices have been preparing for these new quality measures and may be ready to participate fully on January 1, 2017.
  • Option 4: For those physicians participating in an Alternative Payment Model (APM), the update allows for participation in an Advanced APM such as Medicare Shared Savings Track 2 or 3 in 2017 instead of reporting quality data and other information under the MIPS pathway.

The four options will be described in more detail in the final rule to be issued by November 1, 2016; however, this announcement only affects reporting requirements for the program’s first year. Physician practices should continue to plan towards a full implementation of MACRA reporting guidelines and make sure processes are in place ahead of time to allow for an easier transition.

For more information, contact your Dean Dorton advisor or:

Adam Shewmaker, ashewmaker@ddafhealthcare.comView Adam Shewmaker’s BioPorter Roberts, proberts@deandorton.comView Porter Roberts’ Bio

Article Dean Dorton

The healthcare industry continues to experience the push toward shorter hospital length of stays, increased outpatient services, and ongoing staffing challenges. Centers for Medicare & Medicaid Services (CMS) surveyors are taking note. Recent CMS surveyor activity in the state of Kentucky has focused on staffing levels in various departments of the hospital.

Based on Kentucky data from CMS for 2015, the highest volume of citations fell into three main categories:

  • Patient rights (14)
  • Nursing services (13)
  • Emergency Medical Treatment & Active Labor Act (EMTALA) compliance (10)

Many of these citations included a component relative to staffing levels and/or use of contracted employees which contributed to the incidents that resulted in the citations. Healthcare providers should consider the areas below as you monitor compliance with CMS guidelines and as you develop your annual risk assessment. When hospitals begin a risk assessment for the targeted areas, the staffing levels and methodology should be included.

The risk assessment process for each of these items will differ slightly, due to differing requirements. The items that are consistent for each area include:

  • Policies and Procedures
    • When was the last time the policies and procedures were matched up with the conditions of participation and CMS and The Joint Commission (TJC) guidelines?
    • Do the policies and procedures align with actual day-to-day operational functions?
    • Are the policies and procedures reviewed at least annually?
  • Training and Education
    • When did formal training on policies and procedures last occur?
    • Who was included in the training program? Did it include contracted staff?
    • How frequently is the training updated? When policies and procedures are updated, are staff educated on what changed and how it impacts their jobs (tailored to the audience)?
  • Monitoring
    • Have procedures for monitoring performance relative to policies and procedures been developed?
    • If developed, what types of issues has the monitoring uncovered?
    • How were deficiencies handled? Were action plans implemented?
    • Are deficiencies identified in the monitoring being reported to the appropriate levels of management?

Risk specific considerations may include the following:

  • Patient Rights
    • Are nursing staff fully aware of all the elements within the patient rights?
    • Have nursing staff been trained on how to communicate the rights to the patients they are working with?
    • Have staff been trained on what constitutes a violation of a patient right and to whom and when those violations must be reported?
    • If a patient or family member reports a concern to staff, do staff understand when to consider the concern a grievance? Do they know the process for providing feedback to the patient’s family member?
  • Nursing Services
    • Are staffing levels being maintained at an appropriate level based on the census?
    • Does the staffing level include the appropriate mix of RNs, LPNS, and CNAs?
    • Do RNs have the appropriate balance between direct patient care and supervision of the LPNs and CNAs as required?
    • How is compliance with the patient nursing care plan monitored, with deviations reported to the attending physician?
    • Have evidence-based practices been implemented to address key patient safety areas such as CAUTI, CLABSI, falls, restraints/seclusions, pressure ulcers, etc.?
    • If evidence based practices have not been implemented, has the facility looked at consistency of practices between units?
  • Emergency Medical Treatment & Active Labor Act (EMTALA)
    • Has all staff, including contracted staff, been educated on requirements under EMTALA?
    • Has the education been tailored to the roles of the individuals?
    • When are all patients logged into the central log? Is the process designed to log them upon presentation to the ED, even if the patient has not been triaged or received an MSE?
    • Has required signage been posted in all locations where patients may access emergency services (including ambulance bays)?
    • When does the hospital ask for insurance information from patients presenting to the ED? Note that it should not occur until after the patient has received a medical screening exam and stabilizing treatment.
    • What specialties does the hospital advertise? For those advertised, is there a specialist on-call to the emergency department at all times?
    • Has the hospital documented their transfer policy?
    • Does the hospital conduct monitoring of transfer documentation to verify it aligns to the policy and CMS requirements specific to EMTALA?

The above list is not intended to be all-inclusive. Each facility may have additional risks that are unique to their location and size. Management should customize the risk assessment to meet their needs based on past surveyor reviews, existing practices and results of internal audits. Consider including Quality Managers and Compliance in risk assessments to obtain best results.

Contact your Dean Dorton advisor or a member of our Healthcare Industry Team for more information.

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