2011 and 2012 Budgets


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2011 and 2012 Budgets

  • 2011 and 2012 Budgets

  • Employment & Jobs

  • Deficit Reduction

  • Health Care Reform

    • Repeal and Replace?
    • Amend and Improve?
  • “Doc Fix” Redux

    • The one “must pass” piece of legislation this year (aside from debt ceiling bill)


Announced February 14, 2011

  • Announced February 14, 2011

  • Require Prepayment Review for All Power Wheelchairs

    • $240 million over 10 years.
  • Reduce State Medicaid Program DME rates Based on Medicare Competitive Bidding Program

    • Would tie Medicaid reimbursement rates for HME to the results of the Medicare “competitive” bidding program in the state.
    • $6.4 billion over 10 years.


“The Path to Prosperity”

  • “The Path to Prosperity”

  • Would save more than $6 trillion over 10 years

  • Federal share of Medicaid funding into block grants

  • Transform Medicare into a voucher program

    • Starting in 2022 for those under 55
    • Seniors would get a credit to buy coverage from private insurers
  • Repeal the health care law (counting $1.4 trillion in savings over 10 years) — but keep the Affordable Care Act's Medicare cuts and retain those savings to keep Medicare solvent



New Health Reform Law



Patient Protection and Accountable Care Act (PPACA/ACA)

  • Patient Protection and Accountable Care Act (PPACA/ACA)

  • Device Manufacturer Excise Tax

  • Power Wheelchair Provisions

  • Competitive Bidding Provisions

  • Payment Reductions

  • Fraud & Abuse Provisions

  • Medicare Commission



$20B over 10 years

  • $20B over 10 years

  • 2.3% excise tax

  • Exempts contacts, eyeglasses, hearing aids

  • Exempts devices generally purchased by the public at retail

    • Secretary of Treasury must determine what devices meet the exemption
  • Effective sales starting January 1, 2013

  • Tax deductible

  • IRS Guidance (draft?) later this year

  • Bills to Repeal

    • H.R. 436 - Paulsen – 147 co-sponsors
    • H.R. 488 (Gerlach PA +12) & H.R.734 (Bilbray CA +4)
    • S. 17 - Hatch – +15 co-sponsors
    • S. 262 Scott Brown +2 co-sponsors


Eliminated first month purchase option for standard power

  • Eliminated first month purchase option for standard power

  • Does not impact complex chairs

  • Maintains the option for Group 3 and above

  • Payment in months 1- 3 = 15% of purchase price; & is 6% for remaining 10 months

  • K0813-K0829

  • Effective January 1, 2011

  • Does not impact Round 1 of the bid program

    • First month purchase option intact for Round 1


    • Accelerates bidding program by adding 21 more MSAs to Round 2
    • By 2016, HHS must bid nationwide OR apply bid rates in non-bid areas


Elimination of Additional 2% Payment in 2014

  • Elimination of Additional 2% Payment in 2014

  • Productivity Adjustment

    • Starts in CY 2011, goes forever
    • Estimated impact: -1% per year
    • Per CMS Final Medicare Physician Payment rule: CY 2011 -1.2%
    • CPI is 1.1% for CY 2011
    • Therefore – 2011 DMEPOS fee schedules got -.1% “update” (reduction)


CMS implemented exemption

  • CMS implemented exemption

  • “Small” pharmacies exempt from mandatory accreditation requirement

  • “Small” = <5% of revenues from DMEPOS

  • Until Secretary develops pharmacy-specific standards

  • Must:

    • Have had Medicare billing number for 5 years
    • No final adverse actions in 5 years
    • Agree to submit documentation required during random audits


Secretary has authority to increase bond amount commensurate with volume of billing, up to $500,000 and, if necessary, impose moratoria on the enrollment of certain groups of new providers or suppliers to prevent fraud.

  • Secretary has authority to increase bond amount commensurate with volume of billing, up to $500,000 and, if necessary, impose moratoria on the enrollment of certain groups of new providers or suppliers to prevent fraud.

    • CMS has implemented
  • Secretary could also increase the bond amount for “at risk” suppliers

  • 2011 Bills already introduced to increase surety bond for DMEs

    • e.g., Rep. Cliff Stearns (up to $500,000)


“Face-to-Face” Exam for All DME

  • “Face-to-Face” Exam for All DME

  • Requires a physician “face-to-face” exam for all DME prescriptions

  • Exam must be within 6 months of physician order

  • Secretary can apply the requirement to state Medicaid programs

  • No Effective Date in law

  • CMS implementing HHA requirement April 1, 2011

  • CMS to issue proposed rule to implement DME provision – When?



Mandatory compliance programs for DME suppliers.

  • Mandatory compliance programs for DME suppliers.

  • New enrollment process for providers and suppliers, including an application fee ($505); data matching and data sharing across federal health care programs; increased CMPs; increased authority to suspend payment during creditable investigations of fraud; and new procedures to disclose and repay overpayments.

  • Enrollment Disclosure Requirements: must disclose affiliations with any enrolled entity that has uncollected Medicare or Medicaid debt; Secretary would be authorized to deny enrollment in Medicare if these affiliations pose an undue risk to the program.

  • OIG/CMS Final Rule Effective March 25, 2011



Issued February 2, 2011, effective March 25, 2011

  • Issued February 2, 2011, effective March 25, 2011

  • Implementing PPACA fraud and abuse provisions

  • Additional provider screening – 3 levels

    • High (fingerprints) – new enrollees
    • Moderate (unscheduled site visits)
    • Limited (verification of Medicare requirements, licensure, database checks)
    • Newly enrolling suppliers – high
  • Guidance for states re termination of providers from Medicaid & CHIP if terminated by Medicare or another state Medicaid or CHIP

  • New application fees ($505)



Temporary moratoria on supplier enrollment

  • Temporary moratoria on supplier enrollment

    • Rule has criteria CMS will use to impose temporary 6 month moratorium on enrollment by provider type
  • Requirements for suspension of payments

    • How CMS will suspend payment, in consultation with OIG when there is a pending investigation of credible fraud allegation
      • Fraud hotline complaints, claims data mining, patterns identified through audits, false claim cases, and investigations
      • Allegations are considered to be credible when they have indicia of reliability
  • Compliance programs

    • CMS/OIG to do separate rulemaking
  • Guidance re termination from Medicare if terminated by a state Medicaid program



Payment: maximum period for submission of Medicare claims reduced from 36 months to not more than 12 months. Also, the Secretary, in consultation with the HHS OIG and CMS, can suspend payments pending an investigation of credible allegations of fraud.

  • Payment: maximum period for submission of Medicare claims reduced from 36 months to not more than 12 months. Also, the Secretary, in consultation with the HHS OIG and CMS, can suspend payments pending an investigation of credible allegations of fraud.

  • Overpayments: The 60 days providers and suppliers have to repay Medicare overpayments is modified to either 60 days after the date on which the overpayment was made or the date the corresponding cost report is due.

  • Providers and suppliers required to repay any Medicare or Medicaid overpayment identified through an internal compliance audit.



Section 6406 – Requirement for Physicians to Provide Documentation on Referrals to Programs at High Risk of Waste and Abuse - allows the Secretary to revoke enrollment for a period of not more than one year for each act for a physician or supplier who fails to maintain or does not provide access to documentation relating to written orders of requests for payment for DME (also applies to home health services). Effective July 6, 2010

  • Section 6406 – Requirement for Physicians to Provide Documentation on Referrals to Programs at High Risk of Waste and Abuse - allows the Secretary to revoke enrollment for a period of not more than one year for each act for a physician or supplier who fails to maintain or does not provide access to documentation relating to written orders of requests for payment for DME (also applies to home health services). Effective July 6, 2010

  • 90-day period of Enhanced Oversight for Initial Claims of DME Suppliers. Effective January 1, 2011

  • Allows HHS to withhold payment for 90 days and conduct enhanced oversight in cases where the HHS Secretary identifies a significant risk of fraud among initial claims of DME suppliers.



  • Current – on indefinite hold, although has loose deadline of July 2011



  • 15-member commission of appointees

  • Beginning in 2014, will identify cuts to Medicare, if the plan exceeds a preset rate for growth.

  • Congress would have an opportunity to amend the proposal or pass an alternative proposal with an equivalent amount of budgetary savings.



  • If Congress does not pass an alternative measure, the HHS Secretary will be required to implement the provisions included in the original IMAC proposal.

  • Key Republican priority to repeal.



CMS Proposed Rule March 31, 2011, ACOs begin January 1, 2012 – 3 year period

    • CMS Proposed Rule March 31, 2011, ACOs begin January 1, 2012 – 3 year period
    • Goal: Improve Care, Lower Costs via Integrated Delivery Systems
    • ACO shares in cost savings
    • Minimum 5000 beneficiaries
      • Assigned retrospectively based on where/whom received care from
      • Can choose to receive care from non-ACO providers
      • Spending benchmark based on beneficiaries historical expenditures
    • Have become very controversial (AHA, MGMA)






ZPIC pre-payment

  • ZPIC pre-payment

  • ZPIC post-payment

  • DME MACs

  • RACs

  • PSCs

  • State Medicaids, Etc.

  • Increased funding and authorities from PPACA

  • Some upcoming congressional oversight







Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

  • Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

  • Washington-Arlington-Alexandria, DC-VA-MD-WV

  • Boston-Cambridge-Quincy, MA-NH

  • Phoenix-Mesa-Scottsdale, AZ

  • Seattle-Tacoma-Bellevue, WA

  • St. Louis, MO-IL

  • Baltimore-Towson, MD

  • Portland-Vancouver-Beaverton, OR-WA

  • Providence-New Bedford-Fall River, RI-MA













  • “This collection of problems suggests that the program over time may degenerate into a “race to the bottom” in which suppliers become increasingly unreliable, product and service quality deteriorates, and supply shortages become common. Contract enforcement would become increasingly difficult and fraud and abuse would grow.”

  • “Implementation of the current design will result in a failed government program.”





257 Co-sponsors

  • 257 Co-sponsors

  • Bill provided some “pay fors”:

    • Eliminates current CPI increases in 2010-12 and replace with .25% payment cut
    • 2014 – eliminate current 2% CPI bump
    • 2015 - .5% payment cut
    • Complex rehab excluded from cuts
    • Some “taken” by health care law
  • CA – 14 signed on last year

    • Joe Baca (D-43), Brian Bilbray (R-50), Mary Bono (R-45), Ken Calvert (R-44), Susan David (D-53), Sam Farr (D-17), Bob Filner (D-51), Jerry Lewis (R-41), Buck McKeon (R-25), Devin Nunes (R-21), Linda Sanchez (D-39), Adam Schiff (D-29), Mike Thompson (D-1), Diane Watson (33),


Fairness in Medicare Bidding Act

  • Fairness in Medicare Bidding Act

  • Introduced March 11, 2011 by Reps. Glenn Thompson (R-PA) & Jason Altmire (D-PA)

  • 107 co-sponsors

    • None from CA!
  • WQs YOUR Member signed on?

    • Go to www. http://thomas.loc.gov/
    • Search by bill number: H.R. 1040
  • Offset of $20B through rescission of unspent federal funds

  • Senate companion bill coming soon



CMS Briefings early May

  • CMS Briefings early May

    • Senate Finance Committee
    • House Ways & Means Health Subcommittee
    • House Energy & Commerce Health Subcommittee
  • March 1 Staff Briefing

  • March 15 Press Conference

    • HR 1041 primary sponsors Reps. Thompson & Altmire
  • May 24 House & Senate Staff Briefings

    • Dr. Peter Cramton


House

  • House

    • 60 Staff attended
  • Senate

    • 40 Senate offices attended
  • Dr. Peter Cramton

    • CMS design is fatally flawed
    • There is complete consensus among auction experts
    • Median pricing + non-binding bids = low-ball bids
    • Lack of transparency allows CMS to manipulate prices
    • Result is a government administrative pricing system that bears no relationship to providers costs


AARC

  • AARC

  • The ALS Association

  • American Association for People with Disabilities

  • American Foundation for the Blind

  • Christopher & Dana Reeve Foundation

  • International Ventilators Users Network

  • Muscular Dystrophy Association

  • National Council on Independent Living

  • National Emphysema/COPD Association

  • National Spinal Cord Injury Association

  • RetireSafe

  • Post-Polio Health International

  • United Spinal Association



Dobson DaVanzo Consumer Impact Report:

  • Dobson DaVanzo Consumer Impact Report:

  • “unsustainable price erosion”

  • “eroding competition”

  • “a range of unintended consequences….medical complication, increasing use of hospital, ER, and physician care, and losing their ability to live independently….”





Posted November 2, 2010 on CMS web site, effective January 1, 2011.

  • Posted November 2, 2010 on CMS web site, effective January 1, 2011.

  • New appeals process for contracts terminated under the bid program.

  • National bid program for mail order diabetic supplies.

  • 21 additional MSAs plus subdividing New York, Chicago and Los Angeles.

  • Addition of Off-the-Shelf Orthotics to Bid Program Exemption if Furnished by Physician.

  • Continuing CMS consideration of payment rules for oxygen and capped rental items for transitioning patients.



Proposed but not finalized policies:

  • Proposed but not finalized policies:

  • CMS was reconsidering the minimum 10 months of rental payments for oxygen under the competitive bid program.

  • CMS also sought comments on whether contract suppliers should get fewer than 13 months of payment for CR items.

  • In Final Rule posted November 2, CMS said it will take comments into account in future rulemaking…

  • Factors:



Report on Competitive Bidding for Manufacturers

  • Report on Competitive Bidding for Manufacturers

  • Identify types of DME and supplies that would be appropriate for bidding under such a program.

  • Recommendations on how to structure to promote fiscal responsibility while also ensuring beneficiary access to high quality equipment and supplies.

  • Recommendations on a program could be phased-in and on what geographic level would bidding be most appropriate.

  • In addition to price, recommendations on criteria that could be factored into the bidding process.



Report on Competitive Bidding for Manufacturers

  • Report on Competitive Bidding for Manufacturers

  • Recommendations on how suppliers could be compensated for furnishing and servicing equipment and supplies.

  • Compare the program to the current competitive bidding program under Medicare for DME, as well as any other similar Federal acquisition programs, such as the General Services Administration’s vehicle purchasing program.

  • Any other consideration relevant to the acquisition, supply, and service of DME that is deemed appropriate.





CMS Proposed Medicare Physician Payment Rule, Federal Register, 7-16-10

  • CMS Proposed Medicare Physician Payment Rule, Federal Register, 7-16-10

  • Proposes to revise the payment rules for oxygen to address situations where beneficiaries relocate outside the service area of a supplier during the 36-month rental payment cap period

  • Proposes to change the regulation to require the supplier that furnishes the oxygen equipment and receives payment for month 18 or later to either furnish the equipment for the remainder of the 36-month rental payment period or, if the beneficiary has relocated outside the service area of the supplier, make arrangements for furnishing the oxygen equipment with another supplier for the remainder of the 36-month rental payment period. The supplier that is required to furnish the equipment on the basis of this requirement would also have to furnish the equipment after the 36-month rental payment period.



According to CMS, “only 38 percent” of beneficiaries are still on oxygen by the 18th month.

  • According to CMS, “only 38 percent” of beneficiaries are still on oxygen by the 18th month.

  • “relocation between the 18th to the 36th month is not a common occurrence. Such relocation happens with less than 0.5 percent of the beneficiaries using oxygen equipment.”

  • “between the 32nd and 35th month, relocation happens with the beneficiaries in about 0.06 percent of the time on average.”

  • Good News – in November 2, 2010 CMS Final Rule on Physician Payment – CMS abandoned proposal – but states it will monitor beneficiaries traveling outside service area in months 18-36..



MLN Article – MM7213

  • MLN Article – MM7213

  • New useful life policy for oxygen

  • The “reasonable useful life” (RUL) of the stationary component governs the RUL of the portable

  • Whether portable is provided with, before or after

  • Effective May 8, 2011



Released Feb. 14, 2011

  • Released Feb. 14, 2011

  • Requested by Chairmen of House Ways & Means and House Energy & Commerce Committees.

  • Objective: Compare Medicare payment for home oxygen with other payors.

  • Recommendation: Medicare can reduce home oxygen rates

  • Compares: private insurers, VA,





AAHomecare, NCART, NRRTS & RESNA

  • AAHomecare, NCART, NRRTS & RESNA

  • Clinicians & Consumers

  • Why?

    • To improve and protect access
  • Issues & Challenges

    • Coverage barriers to access
    • Regulatory challenges (e.g., documentation)
    • Inadequacy of HCPCS codes
    • Payment problems
    • Lack of upfront verification process
    • Quality Standards


Goal

  • Goal

    • Bills introduced in House and Senate
    • CMS regulations
  • Outcomes/Objectives

    • Clearer and more consistent coverage policies
    • Tighter provider standards
    • Recognition of depth of services required
    • Payment stability
    • Improved model for Medicaid and other payors


“Why Health Care is Going Home,” Stephen H. Landers, MD, MPH (NEJM.com, Oct 20, 2010)

  • “Why Health Care is Going Home,” Stephen H. Landers, MD, MPH (NEJM.com, Oct 20, 2010)

  • Aging of the US population

    • By 2030, over 70M > 65
  • Epidemics of chronic diseases

    • 90% of 65+ have 1, 70% have 2 or more
  • Technological advances

    • Diagnostic & info technologies, remote monitoring
  • Health care consumerism

  • Rapidly escalating health care costs

    • Less costly


www.cms.hhs.gov/Partnerships/03_DMEPOS_Toolkit.asp

  • www.cms.hhs.gov/Partnerships/03_DMEPOS_Toolkit.asp

  • www.cms.hhs.gov/center/dme.asp

  • www.cms.hhs.gov/dmeposcompetitivebid

  • www.cms.hhs.gov/competitiveacqfordmepos/

  • www.dmecompetitivebid.com

  • www.cms.hhs.gov/medicareprovidersupenroll

  • www.invacare.com

      • Policy & Funding, Hot Buttons – Regular updates
      • COMPETITIVE BIDDING RESOURCE CENTER


Cara C. Bachenheimer

  • Cara C. Bachenheimer

  • Sr. Vice President Government Relations

  • Invacare Corporation

  • cbachenheimer@invacare.com

  • 440-329-6226

  • www.invacare.com




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