Practice Manager Insider

Medicare To Beneficiaries: Here’s How to Reimburse Us

The Centers for Medicare & Medicaid Services (CMS) mistakenly issued refund checks to about 230,000 Medicare beneficiaries in August, and is now trying to get the word out about how to repay the government. Refunds occurred due to a computer glitch and totaled $50 million, according to the San Francisco Chronicle. The average individual refund was $215. The checks were erroneously repaying beneficiaries for their drug plan or Medicare Advantage plan premium. Beneficiaries received the refunds along with their Social Security benefit checks or direct deposits. Persons who received the refunds will not lose coverage, according to CMS.

Those affected will receive a letter from Medicare in early September explaining the error and the procedure for returning the money. Beneficiaries can call a toll-free number for information about repayment options (866-292-8080). CMS has asked those who have already returned their overpayment to call this number and let Medicare know that.

For more information about this error, call 1-800-MEDICARE (1-800-633-4227).

http://www.cms.hhs.gov/partnerships/downloads/PremiumWithholdRefundIssue.pdf

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/08/28/national/w142209D63.DTL&type=politics

ACCC Criticizes Proposed Changes to RVUs

The Association of Community Cancer Centers (ACCC) has expressed concern about the Centers for Medicare & Medicaid Services (CMS) proposed changes to the work relative value units (RVUs) under the physician fee schedule, and to the practice expense methodology. These were published in the Federal Register on June 29, 2006 and covered in Practice Manager Insider on July 5. They are scheduled to take effect on January 1, 2007 and would be phased in over 4 years.

ACCC expressed concern that the proposals would reduce beneficiary access to quality cancer care. It recommended that CMS:

Postpone any changes to the RVUs that would reduce reimbursement for drug administration services, including administration of radioimmunotherapies, until CMS can ensure that beneficiary access to care will not be reduced. The proposed method for calculating practice expense RVUs would reduce RVUs for many drug administration services by 2% to 8% in 2007, according to ACCC. When fully implemented, RVUs for many drug administration services would fall by 4% to 33%.

Postpone reductions to RVUs for imaging services until CMS has measured effects of the payment decrease for certain multiple imaging services. CMS in 2006 reduced payment for the technical component of multiple imaging procedures on contiguous body parts by 25%. It also has separately proposed limiting payment for multiple imaging procedures to the amount paid when those services are performed in hospital outpatient departments.

Finalize the proposed work RVUs for radiation oncology services, delay changes in assumptions regarding equipment utilization, and review the proposed practice expense RVUs for medical physics services in radiation oncology. ACCC notes that CMS has proposed reducing practice expense RVUs drastically for medical physicists’ services – eg, by nearly 77% over 3 years in the case of the CPT code for “set radiation therapy field.”

http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-5665.pdf

http://www.accc-cancer.org/PUBPOL/pdf/pubpol_PFScomments.pdf

CMS Warned Organ Transplant Programs Failing to Meet Standards

The Centers for Medicare & Medicaid Services (CMS) funds the majority of US transplant centers and requires them to achieve certain benchmarks. The Los Angeles Times reported in June that 20% of the 236 federally funded heart, liver, and lung transplant programs do not meet minimum CMS standards for the number of procedures performed and for survival rates. A total of 9 lung transplant programs and 36 heart transplant programs did not meet CMS standards. Those programs accounted for 71 more deaths than expected under normal conditions, based upon a government analysis of survival rates. CMS can revoke the certification of transplant programs that do not meet its standards.

The Los Angeles Times reported earlier this month that CMS sent warning letters to about 35 programs that have failed to meet its standards, offering them a last chance before taking enforcement action. That action could include loss of federal funding. The failing transplantation centers have not been identified publicly.

CMS plans to issue revised standards for transplantation programs before the end of 2006, rather than in 2007 as previously planned.

http://www.latimes.com/news/local/la-me-transplant4aug04,1,3858771.story?ctrack=1&cset=true

CMS Plans to Propose a 5.1% Cut in 2007 Physician Rates

Medicare payments to physicians are governed by a statutory formula. The Centers for Medicare & Medicaid Services (CMS) has recently recalculated the projected reimbursement rate to be proposed for 2007, and arrived at the -5.1% figure. The proposed fee schedule is expected to be published in the Federal Register on August 22 as part of a proposed rule including other suggested policy changes. Comments will be accepted until October 10, and a final rule will be published in the fall.

Other proposals put forth by the CMS include:

• Exempting the colorectal cancer screening benefit from the Part B deductible, eliminating a potential financial barrier to using this benefit.


• Changes in how to consider the bundling of drug discounts and other parameters in calculation of the average sales price on which Part B reimbursement is based.


• Maintain a 25% reduction in payment for the technical component of multiple imaging procedures on contiguous body parts. CMS has indicated that it would increase the reduction to 50% in 2007 but is not proposing to do that at this time.


• Cap payment for multiple imaging procedures to the amount paid when those services are performed in hospital outpatient departments.


• Propose assigning work relative value units to medical nutrition therapy services (CPT codes 97802, 97603, and 97804, and HCPCS codes G0270 and G0271).

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1939

http://www.accc-cancer.org/MEDIA/media_newsfeed.asp

CMS to Require More Data for Claims Payment

Providers sometimes will need to submit more patient data for claims payment so that the Centers for Medicare & Medicaid Services (CMS) can collect data for its Coverage with Evidence Development (CED) program. The revisions are part of changes to the National Coverage Determinations (NCDs). These modifications are now official, having been posted in draft form for comments on April 7, 2005. CMS made revisions based on public comments received before releasing this official CED guidance document.

The CED program generates data about the utilization and impact of the item or service so that Medicare can document the appropriateness of the item or service’s use, consider future coverage changes, and obtain clinical information to improve the evidence base upon which providers base their recommendations to patients. CED collects data in part to document outcomes of various services and items.

According to the official document, CMS may issue an NCD requiring that data be sent to a centralized database or registry. CMS also created 2 categories of CED – Coverage with Appropriateness Determination (CAD) and Coverage with Study Participation (CSP). A CAD is applicable when the item or service in question is deemed qualified for coverage but additional clinical data is needed to ensure that the item/service is provided appropriately. CSP allows coverage of certain items or services for which there is inadequate evidence to support reimbursement—if CMS determines that data-gathering in a clinical practice situation would yield important information about how the service or item affects beneficiaries’ health.

CMS already conditions Medicare coverage upon registry participation in 6 circumstances: PET for Alzheimer’s, PET for brain, cervical, ovarian, pancreatic, small-cell lung, and testicular cancers, implantable cardiodefibrillators, cochlear implants, an NIH colorectal cancer trial, and an NIH home oxygen trial. The CMS website lists more information about these requirements.

How Are Your Peers Coping With Medicare? COA Reports

Nearly 50% of practices submitting data to the Community Oncology Alliance (COA) reported sending at least 6 patients per week to a hospital for chemotherapy due to changes in Medicare reimbursement. This is one of several findings from data that COA has collected since February 2006.

COA posted a short survey on its website about 5 months ago and invited members to complete it weekly to document the impact of Medicare reimbursement policies on access to cancer care. A total of 139 practices in 37 states submitted responses at some point during the 5 months or so that data collection has occurred. Findings as of June 30 appear on the COA website and include the following:

• About 45% (62) of practices submitting data reported experience delays in scheduling patients for chemotherapy at other facilities.
• About 62% (86) of practices reported pre-certifying Part D medication; the others do not.
• About 37% (51) of practices reported patients being denied medication through Medicare Part D. Another 23% (32/139) are unsure; the rest report no denials.
• Most (86%; 119/139) practices have hospitals in their communities to which they can refer Medicare patients for chemotherapy. Practices in rural areas commonly do not have hospitals to which they can refer patients.
• Virtually all practices reporting to COA still accept Medicare patients (137/139). About 16% (23/139) do not accept Medicare patients without secondary or Medigap insurance.

OIG to CMS: Cut Payment for 5 Part B Cancer Drugs

Medicare could save up to $67 million this year by lowering the reimbursement rate for 5 Part B oncology drugs, according to a report by the Department of Health and Human Services Office of the Inspector General (OIG). This is the third time this year that the OIG has told the Centers for Medicare & Medicaid Services (CMS) that it is overpaying for Part B drugs. This report specifically focused on 9 oncology medications.

CMS reimburses physician practices for most Part B drugs at 106% of the volume-weighted average sales price (ASP) for the code corresponding to each medication. The law requires that the OIG compare ASPs to the widely available market price in order to identify medications for which the ASP exceeds the market price by at least 5%. For any such medications, the Department of Health and Human Services (DHHS) can reimburse based upon 103% of the average manufacturer price (AMP) rather than 106% of the ASP. The OIG did this in April and found that volume-weighted ASPs exceeded volume-weighted AMPs for 34 of 364 Healthcare Common Procedure Coding System (HCPCS) codes.

The June 28 OIG report focused on HCPCS codes for 9 oncology Part B medications. For 5 of these codes, the difference between the ASP and the widely available market price ranged from 17% (granisetron HCl) to 185% (carboplatin). Paying the AMP rather than the ASP for these drugs could save as much as $67 million this year, according to the OIG report. The other 3 drugs for which ASP exceeded market pricing by at least 5% according to the OIG are vinorelbine tartrate, dolasetron mesylate, and dexamethasone sodium phosphate.

As with the April OIG report, CMS disputed these findings. This is because the OIG analysis focused on fourth-quarter 2005 reimbursement amounts and therefore does not reflect the subsequent downward trend in drug pricing and Medicare reimbursement for some drugs. Medicare payment rate for carboplatin has declined by 60% in the 2 quarters since the OIG examination. This is the drug for which the OIG found the largest difference between ASP and market pricing.

CMS Posts Third Quarter Medicare Part B ASPs

The average sales price (ASP) used to calculate what Medicare pays providers for Part B drugs has been posted on the Centers for Medicare & Medicaid (CMS) website. The ASP is recalculated each quarter based on sales and price data from pharmaceutical manufacturers. The July ASP pricing file is available on the CMS website.

CMS reports that a comparison of the third quarter 2006 with the prior quarter reveals that most drug prices remained stable. Payment amounts across all drugs and across the top physician-administered drugs increased on average by slightly more than .5%. For 28 of the top 50 higher-volume drugs, payment amounts change 2% or less. Payment amounts for 30 of the top 50 drugs increased; payment for 3 remained the same.

Payment for intravenous immune globulin (IVIG) is increasing -- by 11.9% for the powdered lyphilized form and by 3.5% for liquid IVIG. Advocacy groups and providers had expressed concern about inadequacy of Medicare payment amounts for this substance.

MedPAC Agrees with CMS: Reduce Physician Payment for 2007

The Centers for Medicare & Medicaid Services (CMS) has estimated that it will reduce physician payment by 4.6% for 2007, the maximum cut allowed according to a formula in the law. In a recent report, the Medicare Payment Advisory Commission (MedPAC) concurred with this CMS estimate. MedPAC noted that this is the third estimate of such a large so-called “negative update” but no such reduction has occurred since 2002 because Congress has overridden the formula.

To calculate the update, CMS estimated that the volume of physician services grew by 7.5% in 2005. This follows a growth of 8% in 2004. Volume growth exceeding growth in the economy is an important factor leading to payment cuts. MedPAC is preparing a report for release next year reviewing alternatives to the current update formula.

MedPAC Suggests Ways to Improve Medicare Quality and Value

Medicare needs to improve provider accountability for quality and cost of care, and increase the accuracy of its method for calculating practice expense payments. These were 2 of several recommendations from the Medicare Payment Advisory Commission (MedPAC) to Congress in a recent report.

Regarding practice expenses, MedPAC noted that at least some of the data sources that the Centers for Medicare & Medicaid Services (CMS) uses to calculate these are outdated or otherwise inaccurate. It suggests that Congress fund collection of updated practice cost data as this would improve the accuracy of Medicare payments.

For example, CMS calculates the per-service cost of medical equipment assuming that the equipment is operated 50% of the time. MedPAC’s survey of imaging providers in 6 markets found that MRI machines are used >90% of the time; computed tomography equipment is used >70% of the time. CMS’ incorrect assumption could result in overpaying for this service.

Measuring physician resource use is the next step toward increased physician accountability, according to the report. MedPAC examined the use of commercially available episode groupers to assess physician resource use. This method links all care that a beneficiary receives related to a particular episode of illness and adjusts for patient characteristics. The commission plans to address in a future report the question of whether a physician should be held accountable for episode resource use and quality.

MedPAC discussed 2 strategies for coordination of fee-for-service care of chronically ill beneficiaries. One would include a care manager who usually would be a nurse in a group practice; the other would involve an information system operated by a management organization. MedPAC suggested that CMS could pay a beneficiary’s primary physician or group for time spent with the care manager. In both models, the care managers would agree initially to guarantee some level of cost savings as a condition of payment.