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CMS to Create New Office for Regulatory Reform

In 2019 the Centers for Medicare & Medicaid Services intends to create a new office to address regulatory reform.

CMS administrator Seema Verma recently announced her intention to create this office, but other than saying its priority would be to reduce regulatory burden, offered no details.

See a brief notice about the new office here.

Feds Urge States to Do More for Dually Eligible

In a formal guidance letter to state Medicaid directors, the Centers for Medicare & Medicaid Services has outlined ten ways that states can better serve individuals who are enrolled in both Medicare and Medicaid.

Noting that such dually eligible individuals represent 20 percent of Medicare enrollees but 34 percent of Medicare spending while also constituting 15 percent of Medicaid beneficiaries but 33 percent of Medicaid spending, the letter from CMS administrator Seema Verma to state Medicaid directors explains that

This letter describes ten opportunities – none of which require complex demonstrations or Medicare waivers – to better serve individuals dually eligible for Medicare and Medicaid, including through new developments in managed care, using Medicare data to inform care coordination and program integrity initiatives, and reducing administrative burden for dually  eligible individuals and the providers who serve them. A number of these opportunities are newly available to states through Medicare rulemaking or other CMS burden reduction efforts. We are happy to engage with you and your staff on one, many, or all of the items described in this letter. The CMS Medicare-Medicaid Coordination Office (MMCO) works across CMS and with states to better serve dually eligible individuals, including through efforts to better align the Medicare and Medicaid programs and demonstrations to test new approaches to integrated service delivery and financing.

Those ten ways are:

  • state contracting with dual eligible special needs plans (D-SNPs)
  • default enrollment into a D-SNP
  • passive enrollment to preserve continuity of integrated care
  • integrating care through the Program of All-inclusive Care (PACE)
  • reducing the administrative burden in accessing Medicare data for use in care coordination
  • program integrity opportunities
  • Medicare Modernization Act of 2003 file timing
  • state buy-in file data exchange
  • improving Medicare Part A buy-in
  • opportunities to simplify eligible and enrollment

Private safety-net hospitals serve especially large numbers of dually eligible, Medicare-Medicaid patients and will be interested to see whether CMS’s recommendations translate into action at the state level.

To see the entire letter, including additional information about these ten opportunities, go here.

Verma Speaks at Medicaid Managed Care Summit

Centers for Medicare & Medicaid Services administrator Seema Verma recently addressed the Medicaid Managed Care Summit, which was held in Washington, D.C.

Ms. Verma’s speech focused on four major areas:

  • Empowering states to function as laboratories for innovation by giving them the flexibility to introduce changes that work best for their own citizens.
  • Developing Medicaid and CHIP scorecards that present data on health outcomes, quality metrics, and CMS’s administrative performance.
  • Improving Medicaid program integrity, including through “…targeted audits to ensure that provider claims for actual health care spending match what the [Medicaid managed care] health plans are reporting financially.”
  • Strengthening CMS’s use of data in Medicaid oversight.

See Ms. Verma’s complete remarks here.

New Reg Pushes Medicare Toward Site-Neutral Outpatient Payments

Medicare would make more payments for outpatient services on a site-neutral basis under a newly proposed regulation just released by the Centers for Medicare & Medicaid Services.

The 2019 Medicare outpatient prospective payment system regulation, published in proposal form, calls for:

  • paying physician fee schedule rates rather than hospital outpatient rates at excepted off-campus provider-based departments;
  • slashing payments for office visits;
  • extending this year’s 340B prescription drug discount payments, already cut nearly 30 percent this year, to additional providers; and
  • raising ambulatory surgical center rates and expanding the list of procedures that can be performed in such facilities so they can compete with hospitals for outpatient services.

The proposed regulation also calls for reducing quality reporting requirements and giving providers financial incentives to prescribe non-opioid pain medicine for surgery patients.

The regulation, which would affect provider payments beginning on January 1, 2019, was published in proposed form and will be finalized later in the year.  Stakeholders have until September 24 to submit comments to CMS.  For further information about what CMS has proposed, see this CMS fact sheet outlining the proposed regulation and the 761-page proposed regulation itself.

CMS Rejects Bid to Impose Lifetime Limit on Medicaid Services

The Centers for Medicare & Medicaid Services has denied a request from the state of Kansas to impose a lifetime limit on the Medicaid benefits individuals may receive.

In a move that the agency appeared to signal last week and that appears to have national implications, CMS administrator Seema Verma explained that

 We have determined that we will not approve Kansas’ recent request to place a lifetime limit on Medicaid benefits for some beneficiaries…We seek to create a pathway out of poverty, but we also understand that people’s circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them.

Medicaid advocates feared that benefit limits would follow in the footsteps of the recent efforts of some states to impose work requirements on many Medicaid participants – efforts that, in some cases, have proven successful.

Such a decision, if it becomes policy, would be beneficial for private safety-net hospitals.  These hospitals serve more Medicaid patients than the typical hospital and would therefore be more likely to encounter patients whose eligibility would be jeopardized by a limit on lifetime Medicaid benefits.

Learn more about Medicaid lifetime benefit limits and the CMS decision in this article in the online publication The Hill.

CMS Proposes Changes in Inpatient Rates, Medicare DSH, and Wage Index

Last week the Centers for Medicare & Medicaid Services published a proposal detailing how it envisions paying for Medicare services in FY 2019 under its inpatient prospective payment system.

Yesterday this space features a summary of the proposed regulation, with an emphasis on aspects of the rule of greatest importance to private safety-net hospitals.

Today, we address Medicare inpatient rates, Medicare disproportionate share payments (Medicare DSH) and the Medicare cost report’s S-10 worksheet, and the Medicare area wage index.

Inpatient Rates

CMS proposes increasing Medicare inpatient rates 1.75 percent in FY 2019.  This reflects the projected hospital market basket update of 2.8 percent reduced by a 0.8 percentage point productivity adjustment, increased by a 0.5 percentage point adjustment required by legislation, and reduced 0.75 percentage points as required by the Affordable Care Act.

Medicare DSH Uncompensated Care Payments and the S-10

CMS proposes distributing $8.25 billion in Medicare DSH uncompensated care payments in FY 2019, a $1.5 billion increase from FY 2018, citing as its reason for this increase both an increase in the CMS Office of the Actuary’s estimate of payments that would otherwise be made for Medicare DSH and an updated estimate of the change in the percentage of uninsured individuals since 2014 based on the latest available data.

CMS also proposes continuing its phase-in of the use of S-10 data in the calculation of Medicare DSH uncompensated care payments.  FY 2019 would be year two of this phase-in, and CMS proposes using S-10 data from FY 2014 and FY 2015 cost reports, in combination with insured low-income days data from FY 2013 cost reports, to determine the distribution of Medicare DSH uncompensated care payments.

CMS is engaged in limited review of some of the uncompensated care data hospitals report on their S-10 form.  According to the proposed rule, these efforts have focused on three types of problems:  unreasonably high cost-to-charge ratios, significant increases in charity care from FY 2014 to FY 2015, and hospitals that report uncompensated care that exceeds 50 percent of their operating costs.

 Medicare Area Wage Index

Every three years CMS updates the wage index to reflect more recent data it collects from the occupational mix survey.  FY 2019 is the first year of a new three-year period for using updated data, and this will result in greater changes in wage indexes than might otherwise be expected from year to year.

CMS proposes changing the deadline for when a hospital that reclassifies from urban to rural will have that reclassification considered in the development of the wage index for a fiscal year.  This proposal would change the threshold from being based on the application’s date of submission to the application’s date of approval.

CMS also proposes changes that would address certain situations arising from lags between when wage index data is reported and when that data is evaluated for reclassification purposes.  These changes would address lag issues for new remote locations of hospitals located in counties participating in group reclassifications and for single-hospital MSAs where new hospitals have opened but that have no data in the wage index files for that MSA.

FY 2019 will mark the first year in which the imputed rural floor (which exists in states where there are no rural areas) will be eliminated.  CMS announced this in last year’s rule.  The only states to which the imputed rural floor applied were Delaware, New Jersey, and Rhode Island and this change will actually only affect hospitals in Rhode Island.

Wage Index Invitation to Comment

The proposed rule describes past efforts to revise the wage index, including past proposals from MedPAC and others.  It invites interested parties to submit comments on regulatory and policy improvements related to the wage index.

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Tomorrow we will look at multi-campus hospitals, the Medicare and Medicaid electronic health record (EHR) incentive programs, and the Medicare hospital readmissions reduction program.  On Thursday we will examine the Medicare value-based purchasing program, the hospital inpatient quality reporting program, electronic clinical quality measures, and price transparency.

You also can learn more by reviewing the entire proposed 1883-page rule here or reading the CMS fact sheet here.

 

CMS Proposes Easing Medicaid Access Requirement

Under a new regulation proposed by the Centers for Medicare & Medicaid Services, some states would no longer need to analyze access to care for their Medicaid population.

In a newly proposed regulation, CMS calls for eliminating the need for such a review in states with a high degree of Medicaid managed care penetration – 85 percent or more – and under certain circumstances when they reduce payments to providers.

According to CMS, existing regulations already enforce access requirements for Medicaid managed care plans, making a separate state obligation duplicative and unnecessary.

A CMS news release accompanying publication of the proposed rule quotes CMS administrator Seema Verma explaining that

These new policies do not mean that we aren’t interested in beneficiary access, but are intended to relieve unnecessary regulatory burden on states, avoid increasing administrative costs for taxpayers, and refocus time and resources on improving the health outcomes of Medicaid beneficiaries.

Learn more about the proposed regulation in this CMS news release and go here to see the proposed regulation itself.

Administration Slows Movement Toward Medicare Quality Payments

The Trump administration is slowing Medicare’s movement toward making greater use of quality in its payment system.

The Obama administration’s goal of having 50 percent of Medicare payments made through a quality or alternative payment model by the end of 2018 now appears to be out of sight.  Instead, the Centers for Medicare & Medicaid Services has partially canceled two bundled payment programs – one for joint replacement and another for cardiac rehabilitation programs – and announced that before introducing new programs it wants to take a closer look at the successes and failures of the alternative payment model programs that have been implemented in recent years.

The Washington Post’s “The Health 202” feature offers an in-depth look at CMS’s current approach to Medicare quality programs and reimbursement system changes.  See it here.

CMS Shares Vision for Medicaid

Medicaid is about to undergo major changes, CMS administrator Seema Verma outlined in a news release yesterday and in a speech to state Medicaid directors.

According to the news release, those changes include:

  • re-establishing a state-federal partnership that Verma believes has become too much federal and not enough state
  • giving states greater freedom to innovate
  • offering new guidelines for how states can align their individual programs with federal Medicaid objectives
  • new guidance on section 1115 waivers
  • longer section 1115 waivers with simpler review processes
  • CMS willingness to consider proposals to impose work requirements on Medicaid beneficiaries
  • Medicaid and CHIP “scorecards” that track and publish state and federal Medicaid and CHIP outcomes

Urban safety-net hospitals serve more Medicaid patients than the typical hospital and would therefore be affected more by any major changes in how Medicaid operates.

Go here to see CMS administrator Verma’s full new release and to find links to relevant documents, web sites, and Ms. Verma’s speech about the changes.  Go here to read a Washington Post report on Ms. Verma’s speech and here to see a Kaiser Health News report.

CMS Announces Drive to Reduce Paperwork

The Centers for Medicare & Medicaid Services is launching a new “Meaningful Measures” initiative that will seek to reduce the regulatory burden on health care providers.

According to a CMS news release, Meaningful Measures

…will involve only assessing those core issues that are most vital to providing high-quality care and improving patient outcomes.  The agency aims to focus on outcome-based measures going forward, as opposed to trying to micromanage processes..

In a speech at the Health Care Payment Learning and Action Network, CMS administrator Seema Verma explained that this project will include moving the Center for Medicare and Medicaid Innovation in a new direction that promotes greater flexibility and patient engagement and implementing the Medicare Access and CHIP Reauthorization Act (MACRA) in ways that minimize the burden and cost of complying with the law’s requirements.

To learn more about this new CMS initiative, see this CMS news release or go here to read Ms. Verma’s remarks.