Centers for Medicare & Medicaid Services Archives

OIG Releases Special Fraud Alert About Suspect Payments in Marketing Arrangements Related to Medicare Advantage and Providers

On December 11, 2024, the Office of Inspector General for the U.S. Department of Health and Human Services (“OIG”) issued a special fraud alert warning about certain marketing schemes that involve questionable payments and referrals between Medicare Advantage (“MA”) health plans, health care professionals, and third-party marketers (e.g., agents and brokers) and that can mislead MA enrollees into choosing specific health plans or providers that may not be in the MA enrollees’ best interests or meet their needs (“MA Marketing Alert”). As we have previously advised, special fraud alerts are few and far between—OIG has only issued six in the past 20 years. The importance of the MA Marketing Alert, like its predecessors, should not be taken for granted because it may be instructive as to subsequent enforcement action taken by OIG and/or the U.S. Department of Justice (“DOJ”).

In the MA space, historical enforcement actions taken by both OIG, under their administrative authorities, and DOJ, under the False Claims Act (“FCA”), have related to alleged MA risk adjustment payment inflation schemes. See, e.g., DaVita, Sutter Health, Beaver Medical, Martin’s Point, and Cigna. While allegations of this nature continue to be a focus area (e.g., in OIG’s work plans), a light is also now being shone on inappropriate marketing schemes that could violate the Federal anti-kickback statute (“AKS”). And, based on historical empirical data connecting DOJ’s enforcement actions taken subsequent to OIG’s issuance of special fraud alerts, that light may broaden and brighten.

For example, in July 2022, OIG issued a special fraud alert about arrangements involving telemedicine companies. In a footnote, OIG provided three enforcement actions resolved under the FCA as examples of allegedly problematic arrangements. After providing the footnote examples, OIG described bullet-pointed “Suspect Characteristics” that tracked the allegedly inappropriate characteristics of the footnote examples. Since the alert’s issuance, DOJ has recovered millions under the FCA and also criminally charged and convicted many individuals and entities for allegedly submitting or causing the submission of more than $3.1 billion (in 2023 and 2024 pursuant to DOJ’s nationwide takedowns) in allegedly fraudulent Medicare claims resulting from telemedicine schemes.

While the MA Marketing Alert provides footnotes of only two enforcement actions resolved under the FCA as examples of allegedly problematic arrangements, the bullet point list of “Suspect Characteristics” is broader than and reaches beyond the footnote examples. This may signal OIG’s awareness of and current investigations into allegedly inappropriate arrangements relating to “Suspect Characteristics” that have yet to be settled or resolved.

It is possible that there may be forthcoming enforcement actions in these areas. And they may follow the same trend of enforcement actions taken by DOJ relating to telemedicine schemes after OIG’s July 2022 special fraud alert. We also note that the MA Marketing Alert aligns with the Centers for Medicare & Medicaid Services’ recently finalized regulatory updates relating to MA health plan marketing arrangements with agents, brokers, and Third-Party Marketing Organizations, which will be effective January 1, 2025, and prohibit such parties from creating direct or indirect incentives “that would reasonably be expected to inhibit an agent or broker’s ability to objectively assess and recommend which plan best fits the health care needs of a beneficiary.” Proskauer’s Health Care Group will continue to monitor these developments in and provide updates about these areas of scrutiny and enforcement.

Telehealth Update: DEA/HHS Temporary Rule, Medicare Coverage of Telehealth Services, Potential for Increased Oversight, and What to Watch For in 2025

Telehealth companies and other industry stakeholders have had a watchful eye towards the end of 2024 and the impending “telehealth cliff” as COVID-era Drug Enforcement Agency (DEA) flexibilities and Medicare expanded telehealth coverage are set to expire. Although a recent temporary joint rule from the DEA and the Department of Health and Human Services (HHS) along with the 2025 Medicare Physician Fee Schedule final rule has provided some hope, questions regarding telehealth access in 2025 and under a new Administration remain unclear. Further, calls continue for increased oversight of telehealth services. Below, we breakdown recent updates for the telehealth industry.

DEA Telehealth Flexibilities

Providing some good news, late last month the DEA and HHS jointly issued a temporary rule (the Temporary Rule) extending the COVID-era flexibilities for prescribing controlled substances via telehealth through the end of 2025. The flexibilities, which previously were twice extended and set to expire December 31, 2024, temporarily waive the in-person requirements for prescribing under the Controlled Substances Act.

The DEA and HHS issued the Temporary Rule to ensure that providers and patients who have come to rely on telehealth services are able to smoothly transition to the new requirements, which as previously covered, are likely to significantly limit providers’ ability to prescribe controlled substances without an in-person interaction. The Temporary Rule also acknowledges that the DEA and HHS continue to work with relevant stakeholders and will use the additional time to promulgate proposed and final regulations that “effectively expand access to telemedicine” in a manner that is consistent with public health and safety, while mitigating the risk of diversion. The agencies also note that the limited time period of the extension is aimed at avoiding investment in new telemedicine companies that may encourage or enable problematic prescribing practices.

The Temporary Rule effectively allows all DEA-registered providers to prescribe Schedule II-V controlled substances via telehealth through the end of 2025, regardless of when the provider-patient relationship was formed. Consistent with the prior temporary rules, the following requirements continue to apply:

The prescription must be issued for a legitimate medical purpose by a practitioner acting in the usual course of professional practice.
The prescription must be issued pursuant to a telehealth interaction using two-way, real-time audio-visual technology, or for prescriptions to treat a mental health disorder, a two-way, real-time audio-only communication if the patient is not capable of, or does not consent to, the use of video technology.
The practitioner must be authorized under their DEA registration to prescribe the basic class of controlled medication specified on the prescription or be exempt from obtaining a registration to dispense controlled substances.
The prescription must meet all other requirements of the DEA regulations.

Providers should also be cognizant of applicable state laws that may place additional restrictions on the ability to prescribe certain medications or otherwise provide treatment via telehealth.

Medicare Coverage of Telehealth Services

Unlike the DEA flexibilities, many of the COVID-era flexibilities for traditional Medicare coverage of telehealth services will end on December 31, 2024. Despite bipartisan support, congressional action is required to extend broad coverage for certain telehealth services existing since March 2020. Most notably, unless Congress acts, beginning January 1, 2025 expiring flexibilities include waiving the originating site requirements to allow beneficiaries to receive services in their homes and expanding the list of Medicare-enrolled providers who can furnish telehealth services.

Further, beginning January 1, 2025, Medicare coverage of telehealth services for beneficiaries outside of rural health care settings will be limited to:

Monthly End-Stage Renal Disease visits for home dialysis;
Services for diagnosis, evaluation, or treatment of symptoms of an acute stroke;
Treatment of substance use disorder or a co-occurring mental health disorder, or for the diagnosis, evaluation or treatment of a mental health disorder;
Behavioral health services;
Diabetes self-management training; and
Nutrition therapy.

For its part, the Centers for Medicare & Medicaid Services (CMS) recently issued its 2025 Medicare Physician Fee Schedule Final Rule (the MPFS Final Rule) extending and making permanent certain telehealth flexibilities within its authority. In particular, through December 31, 2025, practitioners may continue to utilize live video to meet certain Medicare direct supervision requirements and reference their currently enrolled practice when providing telehealth services from their home. The MPFS Final Rule continues to remove frequency limitations for certain hospital inpatient/observation care, skilled nursing facility visits, and critical care consultation services furnished via telehealth. Additionally, the MPFS Final Rule makes permanent the utilization of audio-only telehealth for any Medicare-covered telehealth service.

Increased Telehealth Oversight

Recent months also have seen renewed calls for increased oversight of telehealth services. In September, the HHS Office for Inspector General (OIG) issued a report (the OIG Report) recommending increased oversight of Medicare coverage of remote patient monitoring. As a basis for its findings, the OIG Report cites the dramatic increased utilization of and payments for remote patient monitoring from 2019 to 2022, the fact that over 40% of Medicare beneficiaries receiving remote patient monitoring did not receive all three components of the service (i.e., education and setup, device supply, and treatment management), and the observation that Medicare lacks key information regarding the data being collected and the types of monitoring devices utilized. Notably, OIG conducted its review in part because of the potential for significant expansion of remote patient monitoring in the Medicare population.

Given these factors, the OIG Report recommends that CMS:

Implement additional safeguards to ensure that remote patient monitoring is used and billed appropriately in Medicare.
Require that remote patient monitoring be ordered and that information about the ordering provider be included on claims and encounter data for remote patient monitoring.
Develop methods to identify what health data are being monitored.
Conduct provider education about billing of remote patient monitoring.
Identify and monitor companies that bill for remote patient monitoring.

Separately, concerns also have been raised regarding the recent emergence of direct-to-consumer telehealth platforms sponsored by pharmaceutical companies. In this model, patients seeking specific medications are linked to a health care provider who can virtually prescribe the requested medication. In October, U.S. Senate Majority Whip Dick Durbin (D-IL), joined by Senators Bernie Sanders (I-VT), Peter Welch (D-VT), and Elizabeth Warren (D-MA) sent letters to several pharmaceutical companies requesting written response to questions regarding these platforms including the cost of direct-to-consumer advertising, the arrangements between the telehealth providers and the pharmaceutical companies, and whether the virtual consultation comply with the standard of care.

Conclusion

Despite attempts to preserve and expand telehealth access and affordability, effective January 1, 2025, many Medicare beneficiaries will be cut off from certain telehealth services unless one of the bills currently pending in Congress is passed. Crucially, bipartisan support for increased access to telehealth services is likely to continue in both chambers of Congress. Although the incoming Administration has not detailed its plans regarding telehealth access on a permanent, or even temporary basis, telehealth will continue to play an important role in the United States health care system through 2025 and beyond. As telehealth continues to play an important role in increasing access to care, increased oversight and enforcement is almost certain, even if future oversight priorities are unclear. As always, we will continue to monitor and report on important telehealth developments.

CMS Issues Calendar Year 2023 Home Health Final Rule

On November 4, 2022, the Centers for Medicare & Medicaid Services (CMS) published the calendar year 2023 Home Health Prospective Payment System Rate final rule, which updates Medicare payment policies and rates for home health agencies. Some of the key changes implemented by the final rule are summarized below.

Home Health Payment Rates. Instead of imposing a significant rate cut, as was included in the proposed rule released earlier this year, CMS has increased calendar year 2023 Medicare payments to home health agencies by 0.7 percent or $125 million in comparison to calendar year 2022.

Patient-Driven Groupings Model and Behavioral Changes. A -3.925 percent permanent adjustment to the 30-day payment rate has been implemented for calendar year 2023. The purpose of this adjustment is to ensure that aggregate expenditures under the new patient-driven groupings model payment system are equal to what they would have been under the old payment system. Additional permanent adjustments are expected to be proposed in future rulemaking.

Permanent Cap on Wage Index Decreases. The rule finalizes a permanent 5 percent cap on negative wage index changes for home health agencies.

Recalibration of Patient-Driven Groupings Model Case-Mix Weights. CMS has finalized the recalibration of the case-mix weights, including the functional levels and co-morbidity adjustment subgroups and the low utilization payment adjustment thresholds, using calendar year 2021 data in an effort to more accurately pay for the types of patients home health agencies are serving.

Telehealth. CMS plans to begin collecting data on the use of telecommunications technology under the home health benefit on a voluntary basis beginning on January 1, 2023, and on a mandatory basis beginning on July 1, 2023. Further program instruction for reporting this information on home health claims is expected to be issued in January of 2023.

Home Infusion Therapy Benefit. The Consumer Price Index for all urban consumers for June 2022 is 9.1 percent and the corresponding productivity adjustment is a reduction of 0.4 percent. Therefore, the final home infusion therapy payment rate update for calendar year 2023 is an increase of 8.7 percent. The standardization factor, the final geographic adjustment factors, national home infusion therapy payment rates, and locality-adjusted home infusion therapy payment rates will be posted on CMS’ Home Infusion Therapy Services webpage once the rates are finalized.

Finalization of All-Payer Policy for the Home Health Quality Reporting Program. CMS has ended the temporary suspension of Outcome and Assessment Information Set (OASIS) data collection on non-Medicare/non-Medicaid home health agency patients. Beginning in calendar year 2027, home health agencies will be required to submit all-payer OASIS data, with two quarters of data required for program year 2027. A phase-in period will occur from January 1, 2025 through June 30, 2025, and during that time the failure to submit the data will not result in a penalty.

Health Equity Request for Information. The comments received from stakeholders providing feedback on health equity measure development for the Home Health Quality Reporting Program and the potential future application of health equity in the Home Health Value-Based Purchasing Expanded Model’s scoring and payment methodologies are summarized in the final rule.

Baseline Years in the Expanded Home Health Value-Based Purchasing (HHVBP) Model. For the Expanded Home Health Value-Based Purchasing Expanded Model, CMS is: updating definitions, changing the home health agency baseline calendar year (from 2019 to 2022 for existing home health agencies with a Medicare certification date prior to January 1, 2019, and from 2021 to 2022 for home health agencies with a Medicare certification date prior to January 1, 2022); and changing the model baseline calendar year from 2019 to 2022 starting in 2023.

For more Health Care legal news, click here to visit the National Law Review.

CMS Issues Final Regulations For Hospital Price Transparency

On November 15, 2019, the U.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) announced final regulations implementing greater price transparency requirements for hospitals. Issued on the heels of a Trump Administration Executive Order directing HHS to propose regulations on increased price transparency, the new regulations modify and finalize CMS’ earlier guidance implementing section 2718(e) of the Public Health Service Act, to further expand price transparency requirements for hospitals. (See our previous analysis of the Executive Order here.) Effective January 1, 2021, the new regulations will be located at 45 C.F.R. 180.00 et. seq. and will require hospitals to make accessible specific “standard charge” pricing data for all “items and services” provided. Furthermore, the regulations include special requirements for posting pricing information about “shoppable services.” Key details are summarized below:

Important Definitions (45 CFR 180.20)

Hospital. The regulations apply to any institution licensed as a hospital under applicable state law.
Items and Services. The regulations require pricing data on all items and services “including individual items and services and service packages, that could be provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge.”
Shoppable Service. The regulations define a shoppable service as a service that a consumer can schedule in advance.
Standard Charge. Hospitals must post the following five standard charges:
1. Gross charge – The price on the hospital’s chargemaster with no discounts.
2. Payer-specific negotiated charge – The charge negotiated with a third-party payer.
3. De-identified minimum negotiated charge – The lowest charge the hospital has negotiated with all third-party payers for an item or service.
4. De-identified maximum negotiated charge – The highest charge the hospital has negotiated with all third-party payers for an item or service.
5. Discounted cash price – The charge for an individual who pays cash for an item or service.

Substantive Requirements (45 CFR 180.40-180.60)

All hospitals must now make public two items related to pricing; (a) a machine-readable file containing a list of all standard charges for all items and services, and (b) a consumer-friendly list of standard charges for a limited set of shoppable services. Each of these components are described in more detail below.

All Items and Services. Each hospital must establish a list of standard charges for all items and services they provide. This list must include a description of each item or service, the five standard charges (applicable to both inpatient and outpatient services), and any common identifier billing or accounting code used by the hospital. This information must be published on a publicly accessible website in a single searchable digital file without any barriers to access. The posting requirement will apply to each hospital location operating under the same license if the location has different standard charges.

Shoppable Services. Each hospital must establish a list of standard charges for 300 shoppable services. This list must include any of the 70 CMS-specified shoppable services the hospital provides and as many additional shoppable services determined by the hospital as needed to reach the 300-service threshold (unless the hospital does not provide 300, then all must be published). The list must include a plain language description of the service, indicators of CMS shoppable services that are not offered, the standard charges – except for the gross charge – for all shoppable services (the gross charge only needs to be posted if the hospital does not offer a discounted cash price), the locations where the shoppable service is provided and any location-specific pricing, and any common identifier billing or accounting code used by the hospital. The hospital may choose the format of publication, but it must be on the internet, accessible without barriers, and prominently located. Compliance with this requirement can occur if a hospital maintains an internet-based price estimator tool for the relevant services.

Enforcement (45 CFR 180.70-180.90)

CMS will monitor compliance by fielding complaints about hospitals, reviewing individuals’ or entities’ analysis of noncompliance, and auditing hospital websites. If noncompliance is detected, CMS will have the authority to issue warning letters, request a corrective action plan, and potentially impose civil monetary penalties up to a maximum of $300 per day.

The regulations go into effect January 1, 2021, giving hospitals a little more than a year to develop a plan for compliance.

ARTICLE BY Anna Gurevich of Robinson & Cole LLP.

More on CMS & HHS regulations on the National Law Review Health Law & Managed Care page.

CMS’s Request for Information Provides Additional Signal That AI Will Revolutionize Healthcare

On October 22, 2019, the Centers for Medicare and Medicaid Services (“CMS”) issued a Request for Information (“RFI”) to obtain input on how CMS can utilize Artificial Intelligence (“AI”) and other new technologies to improve its operations. CMS’ objectives to leverage AI chiefly include identifying and preventing fraud, waste, and abuse. The RFI specifically states CMS’ aim “to ensure proper claims payment, reduce provider burden, and overall, conduct program integrity activities in a more efficient manner.” The RFI follows last month’s White House Summit on Artificial Intelligence in Government, where over 175 government leaders and industry experts gathered to discuss how the Federal government can adopt AI “to achieve its mission and improve services to the American people.”

Advances in AI technologies have made the possibility of automated fraud detection at exponentially greater speed and scale a reality. A 2018 study by consulting firm McKinsey & Company estimated that machine learning could help US health insurance companies reduce fraud, waste, and abuse by $20-30 billion. Indeed, in 2018 alone, improper payments accounted for roughly $31 billion of Medicare’s net costs. CMS is now looking to AI to prevent improper payments, rather than the current “pay and chase” approach to detection.

CMS currently relies on its records system to detect fraud. Currently, humans remain the predominant detectors of fraud in the CMS system. This has resulted in inefficient detection capabilities, and these traditional fraud detection approaches have been decreasingly successful in light of the changing health care landscape. This problem is particularly prevalent as CMS transitions to value-based payment arrangements. In a recent blog post, CMS Administrator, Seema Verma, revealed that reliance on humans to detect fraud resulted in reviews of less than one-percent of medical records associated with items and services billed to Medicare. This lack of scale and speed arguably allows many improper payments to go undetected.

Fortunately, AI manufacturers and developers have been leveraging AI to detect fraud for some time in various industries. For example, the financial and insurance industries already leverage AI to detect fraudulent patterns. However, leveraging AI technology involves more than simply obtaining the technology. Before AI can be used for fraud detection, the time-consuming process of amassing large quantities of high quality, interoperable data must occur. Further, AI algorithms need to be optimized through iterative human quality reviews. Finally, testing the accuracy of the trained AI is crucial before it can be relied upon in a production system.

In the RFI, CMS poses many questions to AI vendors, healthcare providers and suppliers that likely would be addressed by regulation. Before the Federal government relies on AI to detect fraud, CMS must gain assurances that AI technologies will not return inaccurate or incorrect outputs that could negatively impact providers and patients. One key question raised involves how to assess the effectiveness of AI technology and how to measure and maintain its accuracy. The answer to this question should factor heavily into the risk calculation of CMS using AI in its fraud detection activities. Interestingly, companies seeking to automate revenue cycle management processes using AI have to grapple with the same concerns. Without adequate compliance mechanisms in place around the development, implementation and use of AI tools for these purposes, companies could be subject to high risk of legal liability under Federal False Claims Act or similar fraud and abuse laws and regulations.

In addition to fraud detection, the RFI is seeking advice as to whether new technology could help CMS identify “potentially problematic affiliations” in terms of business ownership and registration. Similarly, CMS is interested to gain feedback on whether AI and machine learning could speed up current expensive and time-consuming Medicare claim review processes and Medicare Advantage audits.

It is likely that this RFI is one of many signals that AI will revolutionize how healthcare is covered and paid for moving forward. We encourage you to weigh in on this on-going debate to help shape this new world.

Comments are due to CMS by November 20, 2019.

ARTICLE BY Alaap B. Shah and Audrey Davis of Epstein Becker & Green, P.C.

For more CMS activities, see the National Law Review Health Law & Managed Care page.

CMS Proposes to Overhaul the Medicare Shared Savings Program

On August 9, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to overhaul the Medicare Shared Savings Program (MSSP). The proposal, titled “Pathways to Success,” would make significant changes to the accountable care organization (ACO) model at the heart of the program. The proposed changes include a restructuring of the current ACO risk tracks, updating spending benchmarks, increased ACO flexibility to provide care, as well as changes to the electronic health records requirements for ACO practitioners.

Background

There are currently 561 Shared Savings Program ACOs serving over 10.5 million Medicare fee-for-service (FFS) beneficiaries. Under the MSSP, ACOs are assessed based on quality and outcome measures, and by comparing their overall health care spending to a historical benchmark. ACOs receive a share of any savings under the historical benchmark if they meet the quality performance requirements.

Currently, the MSSP allows ACOs to participate in one of three “tracks.” Track 1 is a “one-sided” model, meaning that participating ACOs share in their savings, but are not required to pay back spending over the historical benchmark. Track 2 and Track 3 are “two-sided” models, meaning that participating ACOs share in a larger portion of any savings under their benchmark, but may also be required to share losses if spending exceeds the benchmark. Currently, the vast majority of ACOs participate in Track 1.

Restructuring the Tracks

CMS proposes retiring Track 1 and Track 2, creating a BASIC track, and renaming Track 3 the ENHANCED Track. CMS describes the BASIC track as a “glide path” that will help ACOs transition to higher levels of risk and potential reward. To that end, the BASIC track contains five levels that ACOs would transition through over the course of a five year contract period, spending a maximum of one year at each level. The first two years would involve upside-only risk, with a transition to increasing levels of financial risk in the remaining three years. Current Track 1 ACOs will be limited to one-year of upside-only participation before taking on downside risk. This is a substantial acceleration from the current Track 1 Model, which permits ACOs to avoid downside risk for up to six years.

Finally, the proposed rule draws a distinction between low revenue ACOs and high revenue ACOs. Low revenue ACOs (typically composed of rural ACOs and physician practices) would be permitted to spend two 5-year contract periods on the BASIC track. High revenue ACOs (typically composed of hospitals) would be permitted only one 5-year contract period on the Basic track.

Source: Proposed Rule: Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations–Pathways to Success

Updating the Historical Spending Benchmarks

Every year, an ACO’s spending is comparing to its historical benchmark to determine the ACO’s participation in any shared savings or losses. Under the proposed rule, the benchmark methodology will incorporate regional FFS expenditures beginning in the first contract period. Also, the historical benchmark will be rebased at the beginning of each 5-year contract period. Adjustments to the benchmark related to regional expenditures will be capped at 5% of the national Medicare FFS per capita expenditure. According to CMS, these changes will improve the predictability of historical benchmark setting and increase the opportunity for ACOs to achieve savings against the historical benchmark.

Expanding ACO Flexibility in Beneficiary Care

The proposed rule contains several changes to the MSSP aimed at increasing the flexibility of ACOs to provide cost-effective care to their assigned beneficiaries. For example, to support the ACO’s coordination of care across health care settings, ACOs will be eligible to receive payment for telehealth services furnished to prospectively assigned beneficiaries even when they would otherwise be prohibited based on geographic prerequisites. The proposed rule also expands the Skilled Nursing Facility (SNF) 3-Day Rule Waiver to all ACOs in two-sided models. This waiver permits Medicare coverage of certain SNF services that are not preceded by a qualifying 3-day inpatient hospital stay.

Finally, the proposed rule permits ACOs in two-sided models to reward beneficiaries with incentive payments of up to $20 for primary care services received from ACO professionals, Federally Qualified Health Centers, or Rural Health Clinics.

Changing Electronic Health Record Requirements

Currently, one of the quality measures for which ACOs are assessed relates to the percentage of participating primary care providers that successfully demonstrate meaningful use of an electronic health records system for each year of participation in the program. The proposed rule eliminates this measure. Instead, CMS proposes to adopt an “interoperability criterion” that assesses the use of certified electronic health record technology for initial program participation and as part of each ACO’s annual certification of compliance with program requirements.

Commentary

CMS’s proposal is not surprising in light of CMS Administrator Seema Verma’s recent comments about upside-only ACOs. At an American Hospital Association annual membership meeting this past spring, Administrator Verma is quoted as saying:

[T]he majority of ACOs, while receiving many waivers of federal rules and requirements, have yet to move to any downside risk. And even more concerning, these ACOs are increasing Medicare spending, and the presence of these ‘upside-only’ tracks may be encouraging consolidation in the market place, reducing competition and choice for our beneficiaries. While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results.

Though the rule is only a proposal at this time, the above comments illustrate that CMS is serious about requiring providers to be more financially accountable for the care of their patients. And the agency is clear-eyed about the short-term impact of the proposal, estimating that more than 100 ACOs will exit the MSSP over the next 10 years if the proposal is finalized. The agency nevertheless believes that the new program would be attractive to providers due to its simplicity (as compared to the current program) and the new opportunity it offers clinicians to qualify as participating in an Advanced Alternative Payment Model (APM) when they reach year 5 of the BASIC track. APMs are an important concept under the Quality Payment Program (QPP) that was ushered in by the Medicare Access and CHIP Reauthorization Act of 2015. Clinicians participating in an Advanced APM are exempt from reporting under the QPP’s Merit-based Incentive Payment System (MIPS) and are eligible for certain financial incentives. The fates of the MSSP and the QPP are thus intertwined, and the co-evolution of the programs is at a critical stage, especially in light of CMS’s July release of a proposed rule modifying the QPP. We will continue to report on the developments of both of these programs.

ARTICLE BY

Daryl M. Berke

Jordan T. Cohen

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Center Medicare and Medicaid Services (CMS), Office of Inspector General (OIG) Extend Electronic Health Records (EHR) Stark Law Exception, Anti-Kickback Safe Harbor Through 2021

On December 27, 2013, the Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) will publish final rules that extend through December 31, 2021 the existing Stark Law Exception (42 CFR 411.357(w)) and Anti-Kickback Statute Safe Harbor (42 CFR 1001.952(y)) applicable to the donation of electronic health records (EHR) items and services. December 31, 2021 is the last year of the Medicaid Meaningful Use incentive payments.

In the Final Rule, CMS and OIG also:

Update the provisions under which EHR software is deemed interoperable;
Remove the requirement relating to e-prescribing from the Exception and Safe Harbor
Limit the scope of protected donors to exclude laboratory companies; and
Clarify the condition that prohibits a donor from limiting or restricting the use, compatibility or interoperability of donated EMR items and services.

Interoperability

The final rules require the donated EHR technology to be “interoperable” as of the date it is donated. Such technology will be deemed to be interoperable if it has been certified by a certification body authorized by the Office of the National Coordinator for Health Information Technology (ONC) to an edition of the EHR certification criteria identified in the then-applicable 45 CFR part 170 (i.e., the HITECH Act’s definition of “Certified EHR”). This will require donated software to be “as interoperable as feasible given the prevailing state of technology at the time they are provided to the recipient.” For example, in 2013, the HITECH Act’s definition of “Certified EHR” permits certification pursuant to either the 2011 or 2014 editions of the EHR certification requirements; in 2014, the HITECH Act requires certification pursuant to the 2014 edition only.

E-prescribing

CMS and OIG have concluded that there are sufficient alternative policies driving the adoption of electronic prescribing such that it need not be included in the Exception and Safe Harbor. Thus, under the final rules, an EHR is no longer required to have electronic prescribing capability in order to be subsidized.

Permissible Donors

In the proposed rules, CMS and OIG identified concerns of potentially abusive practices stemming from the donation of EHR software that seemed to provide for the interoperable exchange of information, but instead led to data and referral “lock-in” between the donor and the referral source. OIG and CMS specifically referred to EHR items and services donated by ancillary service providers and suppliers, i.e., those do not have a direct primary patient care relationship, as subject to this concern. In the proposed rules, CMS and OIG sought comments on whether to limit the list of permissible donors of EHR items and services to hospitals, group practices, Prescription Drug Plan sponsors and Medicare Advantage organizations – or others with front-line patient care responsibilities. In light of the comments received, in the final rules, CMS and OIG specifically exclude laboratories from the list of permissible donors. Otherwise, the universe of protected donors remains the same.

Restrictions

In the proposed rules, CMS and OIG also requested comments on “new and modified conditions” that would prevent EHR donations from becoming a method for locking-in referrals (generally, to the donor), and instead encourage the free exchange of data. CMS and OIG do not adopt any such additional conditions in the final rules, but clarify that neither a donor “nor any person on the donor’s behalf may take any action to limit or restrict the use, compatibility or interoperability of the donated items or services with other electronic prescribing or other EHR systems, including but not limited to health information technology applications, products or services.” This expanded language is meant to clarify that neither donors nor recipients may limit interoperability and that donated EHRs must be interoperable both with other EHRs and with health information exchanges and other forms of technology.

To view the CMS final rule, click here. To view the OIG final rule, click here.

Article by:

Jennifer R. Breuer

Jeffrey T. Ganiban

Of:

Drinker Biddle & Reath LLP

Thirty-Two Health Care Organizations to Participate in Pioneer ACO Program

Barnes & Thornburg LLP‘s Heather Fesko Delgado recently posted in the National Law Review an article about 32 health care organizations from around the country will participate in the Pioneer Accountable Care Organization (ACO) program.

According to a U.S. Department of Health & Human Services media release that was issued earlier today, 32 health care organizations from around the country will participate in the Pioneer Accountable Care Organization (ACO) program.

Under the program, which is operated by the Centers for Medicare & Medicaid Services (CMS) Innovation Center, groups of health care providers that have formed ACOs will be rewarded by Medicare based on how well they are able to both improve the health of their Medicare patients and lower their health care costs. HHS hopes the program will save up to $1.1 billion over the next five years by encouraging health care specialists “to provide better, more coordinated care for people with Medicare.”

The 32 Pioneer ACOs were selected from a pool of over 80 applicants. According to the media release, “selected Pioneer ACOs include physician-led organizations and health systems, urban and rural organizations, and organizations in various geographic regions of the country, representing 18 states and the opportunity to improve care for 860,000 Medicare beneficiaries.”

The first performance period of the Pioneer ACO Model will begin Jan. 1, 2012.

Additional information on the Pioneer ACO model can be accessed by downloading the CMS Fact Sheet here.

Tag: Centers for Medicare & Medicaid Services

OIG Releases Special Fraud Alert About Suspect Payments in Marketing Arrangements Related to Medicare Advantage and Providers

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