Tag: Medicare

Medicare and the 2020 Election

Now that the campaign for President appears to be down to two candidates, we need to address the health care questions that both will face. In this blog, we will talk about Medicare and in a later blog, we will talk about the public option.

A question which has faced not just these two individuals, President Trump and Presidential Candidate Biden, but has faced the country for the last 10-15 years, is the projected deficit in the Medicare program as it is now configured.  In an attempt to respond to and ameliorate this deficit, various steps have been taken in the past which have delayed the impact of the deficit but have not eliminated it.  Past steps that have been taken include the elimination of the cap on W-2 earnings for purposes of calculating the Medicare tax, the application of the Medicare tax to non-W-2 earnings for individuals whose taxable income is above a certain level, calculation of Medicare Part B monthly premiums based upon income (the higher the income, the higher the premium that needs to be paid by the beneficiary), and the attempt to both explicitly and implicitly limit the payments being made by the Medicare program for services provided to Medicare beneficiaries.  The explicit attempt was the development of the Sustainable Growth Rate (SGR), which was never effectively implemented and ultimately repealed.  The implicit attempt is ongoing and has resulted in the necessity for beneficiaries with private insurance to subsidize the care being provided to the Medicare (that’s correct, not Medicaid, but Medicare) beneficiaries.

This “subsidy” by private insurance to health care providers to cover the costs of providing care to the Medicare beneficiaries is slowly having an impact on the care delivery system. It has resulted in a few prior Medicare providers now refusing to render care to Medicare patients in the non-hospital setting.  It is also encouraging physicians only to take Medicare patients who have previously been their private patients when that individual had private insurance so that the continuity of care to those individuals is not being disrupted.

As this subsidy increases, it becomes more and more likely that fewer providers will be providing care to Medicare beneficiaries, to the extent that they can legally opt out.

The next issue raised in the campaign is the extension of the Medicare program proposed by Presidential Candidate Biden to individuals from the ages of 60-65. Unlike the Social Security program, which attempted to resolve its deficit problems by extending the retirement age from age 65 over a period of time to age 67, the proposal by Presidential Candidate Biden is the opposite and that is to reduce the eligibility age for Medicare from 65 to 60.

The questions that need to be answered are:

  1. How much is it going to cost?
  2. The proposal recognizes that the current Medicare program (currently facing a shortfall) cannot pay for the services provided to these new Medicare beneficiaries and proposes that the government pay the costs–which means the taxpayer. The question then is what changes will be made to the tax code and whose taxes will be increased–of course this raises the questions always associated with tax increases.
  3. It appears that all aspects of the Medicare program – Parts A, B, C, and D – will be available to the age cohort 60 to 65. Will the copays, deductibles and premiums, as applied to current Medicare beneficiaries, be applicable to this cohort?
  4. Will the same payments be made to the providers for care rendered to this cohort of new Medicare beneficiaries? Will this adversely impact the willingness of some providers to continue to participate in providing care to Medicare beneficiaries?

When answers to these questions become clear, to the extent that it does become clear, we will analyze these questions in a subsequent blog. Otherwise at this point in time, it is speculation as to the impact.

© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved

HHS Proposes to Revise Discount Safe Harbor Protection for Drug Rebates

On January 31, 2019, the Department of Health and Human Services (HHS) released a notice of proposed rulemaking (the Proposed Rule) as part of ongoing administration drug pricing reform efforts. The Proposed Rule would modify a regulatory provision that had previously protected certain pharmaceutical manufacturer rebates from criminal prosecution and financial penalties under the federal Anti-Kickback Statute.

Specifically, the Proposed Rule would exclude from “safe harbor” protection rebates and other discounts on prescription pharmaceutical products offered by pharmaceutical manufacturers to Medicare Part D plan sponsors or Medicaid Managed Care Organizations (MCOs), unless the price reduction is required by law (such as rebates required under the Medicaid Drug Rebate Program). The proposed exclusion would apply to rebates offered directly to Part D plan sponsors and Medicaid MCOs, as well as those negotiated by or paid through a pharmacy benefit manager (PBM). HHS stated that it does not intend for the revisions in this Proposed Rule to negatively impact protection of prescription pharmaceutical product discounts offered to other entities such as wholesalers, hospitals, physicians, pharmacies and third-party payors in other federal health care programs. The proposed effective date of this regulatory modification is January 1, 2020, although HHS has sought comments regarding whether this allows sufficient time for parties to restructure existing arrangements.

In addition, the Proposed Rule would add two new regulatory safe harbors for:

  • Certain price reductions that are fully passed through to the dispensing pharmacy and applied to the price charged to the member at the point-of-sale; and

  • Fixed fee payments from manufacturers to PBMs for the services that PBMs provide those manufacturers. In order to be protected, the fees would have to be for services that relate to the PBM’s arrangements with health plans (e.g., services that rely on data collected from health plan customers).

These new safe harbors would become effective 60 days after HHS publishes a final rule.

The potential implications of the Proposed Rule extend beyond the context of federal Anti-Kickback Statute compliance to drug reimbursement in the United States more broadly. The proposals will likely be subject to significant public debate and legal scrutiny.

The Proposed Rule is scheduled to be published in the Federal Register on February 6, 2019, and public comments on the proposals would be due 60 days later. The Proposed Rule can be found here and the HHS Factsheet is available here.

 

© 2019 McDermott Will & Emery

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.

 

©1994-2018 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Telehealth Gets a Boost in Proposed Physician Fee Schedule

Some very good news for the telehealth community can be found amidst the more than 1,400 pages of the proposed Medicare Physician Fee Schedule for 2019 (“Proposed Rule”) issued by CMS yesterday.  Finally, CMS acknowledges just how far behind Medicare has lagged in recognizing and paying for physician services furnished via communications technology.

Virtual Check-In

The longstanding barriers to Medicare payment for telehealth visits based on the location of the patient and the technology utilized could soon give way to payment for brief check-in services using technology that will evaluate whether or not an office visit or other service is warranted.  CMS proposes to establish a new code to pay providers for a virtual check in. For many telehealth providers, the payment proposal will not go far enough since the new code can only be used for established patients. CMS notes that the telehealth practitioner should have some basic knowledge of the patients’ medical condition and needs that can only be gained by having an existing relationship with the patient.

Store and Forward

In other good news, the Proposed Rule creates a specific payment code for the remote professional evaluation of patient-transmitted information conducted via pre-recorded “store and forward” video or image technology.  CMS recognizes that the progression of technology and its impact on the practice of medicine in recent years will result in increased access to services for Medicare beneficiaries. CMS is seeking comment as to whether these type of telehealth services could be deployed for new patients as well as existing patients.

The Bipartisan Budget Act of 2018

The Proposed Rule also implements important expansions of telehealth services included in the Bipartisan Budget Act of 2018 (“BBA of 2018”) passed last winter. The BBA of 2018 made way for end-stage renal disease patients to receive certain clinical assessments via telehealth beginning in January 2019.  Under the Proposed Rule, CMS proposes to amend its regulations to add in the home of the patient as the “originating site.” Under existing Medicare rules, the patient’s home is not an appropriate “originating site” for a telehealth visit.

Comments on the Proposed Rule are due by September 10, 2018.

 

©1994-2018 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

CBO Greenlights Telehealth Provisions in Senate’s CHRONIC Care Act

Last week, the Congressional Budget Office (CBO) concluded that a key piece of telehealth legislation, the CHRONIC Care Act of 2017, would not, overall, increase or decrease Medicare spending. This score is significant as it marks the first time that CBO has concluded that providing enhanced Medicare coverage for telehealth services would be budget neutral and clears the path for Congress to pass the legislation in a tough political climate.

american health care actThe CHRONIC Care Act was developed by the Senate Finance Committee’s Bipartisan Chronic Care Working Group. If enacted, the bill would expand Medicare coverage of telehealth services in four ways:

  • Nationwide Coverage for Telestroke – Currently, Medicare will pay a physician for consulting on a patient experiencing acute stroke symptoms via telehealth only if the hospital where the patient is located is in a rural Health Professional Shortage Area (HPSA) or a county outside a Metropolitan Statistical Area (MSA). Under the CHRONIC Care Act, beginning in 2019, the geographic restriction would be eliminated and physicians would receive payment for telestroke consultations regardless of the hospital location.
  • Home Remote Patient Monitoring for Dialysis Therapy – Medicare requires that beneficiaries receiving home dialysis treatments have a monthly clinical assessment from their health care provider. Under current law, beneficiaries can only use telehealth to satisfy the clinical assessment requirement if the patient is at an authorized originating site (e.g., a physician office) located in a rural HPSA or a county outside an MSA. Beginning in 2019, beneficiaries could receive the required monthly clinical assessment from a freestanding dialysis facility or the patient’s home without geographic restriction.
  • Enhanced Telehealth Coverage for ACOs – The CHRONIC Care Act would apply the Next Generation ACO telehealth waiver criterion to the Medicare Shared Savings Program (MSSP) Track II, MSSP Track III, and the Pioneer ACO program. Specifically, the legislation would (i) eliminate the geographic component of the originating site requirement, and (ii) allow beneficiaries assigned to the approved MSSP and ACO programs to receive telehealth services in the home.
  • Increased Flexibility for Telehealth Coverage under Medicare Advantage Plans – Under current law, a Medicare Advantage (MA) plan may provide telehealth benefits beyond those that are currently reimbursed by Medicare. However, these enhanced telehealth services are not separately paid for by Medicare and MA plans must use their rebate dollars to pay for those services as a supplemental benefit. The CHRONIC Care Act would allow an MA plan to offer additional, clinically appropriate, telehealth benefits in its annual bid amount beginning in 2020.

The CHRONIC Care Act has been widely heralded by health care providers as a first step in removing barriers to providing telehealth services to Medicare beneficiaries. In a recent Senate Finance Committee hearing, health care providers voiced their support for greater coverage of telemedicine services. The Senate Finance Committee is in the process of marking up the bill.

This post was written by Carrie Roll of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Take Note: Social Security and Medicare Benefits Changing in 2016

Claiming Social Security Twice is Eliminated

Prior to 2016, some married individuals who were 62 or older had claimed Social Security retirement benefits twice. Previously, a person whose spouse was at full retirement age and was herself or himself at an early retirement age, age 62 to 65, could claim spousal payments and then switch to payments based on their own work, which would then be higher because they were claiming it at an older age.

As of this year, however, workers who turn 62 in 2016 or later will not be able to claim both types of payments, but instead one or the other. However, the younger spouse can still claim spousal benefits when he or she turns 66, and those individuals will continue to contribute to their own Social Security Retirement benefit until age 70, thereby receiving a higher benefit when they begin to receive their full retirement benefits 4 years later.

Stricter Rules for Suspended Payment of Benefits

In May 2016, the rules have changed for suspending your Social Security Retirement benefits until a later date when they would be higher, and this process will no longer be permitted. Previously, spouses and dependent children could claim payments based on your work record while your benefits were suspended and continued to grow.

This option is no longer available, however, as of May 2016. You will no longer be allowed to “file and suspend.” If the retired worker’s benefits are suspended, spousal and dependent benefits will not be paid.

Higher Medicare Part B Premiums for some Social Security Recipients

Most Social Security recipients will pay the same Medicare Part B premium in 2016, as they did in 2015. That amount is $104.90 per month. Increases in Medicare Part B premiums are tied to increases in Social Security benefits due to cost-of-living adjustments which did not occur this year. However, those individuals who are enrolling for the first time in Medicare Part B this year will pay a higher premium of $121.80 per month.

Article By Leslie A. Mitnick of Stark & Stark

COPYRIGHT © 2016, STARK & STARK

 

Budget Deal Alters Reimbursement to Off-Campus Hospital-Owned Facilities

detailed illustration of a compass with medicare text, eps10 vectorOn November 2, 2015, President Obama signed into law H.R. 1314, the Bipartisan Budget Act of 2015 (the “Act”), which significantly changes Medicare reimbursement for off-campus hospital services. The Act, which Congress passed late last week, will alter Medicare reimbursement for new off-campus hospital-owned facilities that have heretofore been treated as “hospital-based.” Off-campus facilities for which a hospital was not billing as “hospital-based” as of the date of the enactment of the Act will not be treated as “hospital-based,” and the physician or other provider’s fee schedule rate, instead of the hospital outpatient rate, will apply.

Prior to the Act, covered out-patient department (“OPD”) services included services provided by facilities meeting the complex hospital-based rules, even if the facility was not physically-located on the campus of the hospital. Subject to the grandfather provision discussed below, the Act adds a specific exclusion to the definition of covered OPD services, making services furnished by an off-campus outpatient department of a hospital ineligible. The Act provides that a facility is “off-campus” if it is not within 250 yards of the hospital’s main buildings (including for this purpose, a “remote location of a hospital,” meaning a separate in-patient campus of the hospital, which is a helpful clarification in an otherwise problematic law). Facilities deemed “off-campus” are ineligible for Medicare reimbursement at the hospital outpatient rate.

The inclusion of a grandfather provision will mitigate some of the Act’s impact, as facilities currently treated as “hospital-based” will not be impacted by the change in law. Only facilities that are not billing as “hospital-based” as of the date of enactment will be ineligible for reimbursement at the hospital outpatient rate. It is unclear whether a conveyance of an off-campus grandfathered facility would eliminate the grandfathered status and the ability of the buyer to bill for the services as “hospital-based.” The Congressional Budget Office (“CBO”) forecasts that the government will reap significant cost savings from the lower rates that will apply; an October 28, 2015 analysis from the CBO projects that the change in reimbursement policy will provide $9.3 billion in relief by 2025.

Article By Edward S. Kornreich, Roger A. Cohen & Julia B Bienstock of Proskauer Rose LLP

© 2015 Proskauer Rose LLP.

Four Ways Medicare and Medicaid Have Changed the Health Care Industry

It’s a bizarre program that is absolutely essential to American healthcare.

That is the opinion of Theodore Marmor, professor of public policy at Yale and author of the book, The Politics of Medicare. Whether you agree with him or not, it is difficult to deny the influence of Medicare and Medicaid on the health care industry. To mark the 50th anniversary of Medicare and Medicaid, signed into law by President Lyndon Johnson on July 30, 1965, we have identified four ways these programs have shaped the health care industry.

  1. There is no stopping the health care juggernaut. In a March 2014 presentation during the conference of National Health Care Journalists, Rosemary Gibson (senior advisor with The Hastings Center) brought the point home with this statistic: In 1965, there were no health care companies listed in the Fortune 100. By 2013, there were 15. 

  2. The federal government is now the largest purchaser of health care in the United States. In its Primer on Medicare, The Kaiser Family Foundation estimates that 14% of the $3.5 trillion spent by the federal government in 2014 was spent on Medicare (approximately $505 billion total), making it the largest purchaser of health care in the United States. Its spending power means CMS and Medicare will continue to hold sway in the industry.

  3. Medicare and Medicaid is driving innovation, but have they run out of gas? US News & World Report estimates that today, one in three Americans is covered by Medicare or Medicaid, and it is that extension of coverage to a larger population that is driving innovation. In the article, “America’s Health Care Elixir,” Kimberly Leonard states, “Because the government covered more people, and eventually extended that coverage to include drugs and medical devices, industries knew they could invest in research because they would eventually recoup the costs of their work through sales of new products.” However, innovation is beginning to outstrip the programs’ ability to keep pace. For example, Leonard states, “Pharmaceuticals also are moving toward developing more expensive biologic drugs, which could be a challenge for Medicare and Medicaid to afford.” More important, the programs’ outdated structure, developed during a different business environment, serving a different population, is making it difficult for them to keep pace with technology.

  4. Medicare and Medicaid helped end segregation in health care facilities. One lesser-known positive effect on the industry is that these programs helped end segregation, at least at health care facilities. The programs required that health care facilities could not be racially segregated if they wanted to receive Medicare and Medicaid payments, which meant facilities had to start accepting African-American patients.

With the changes introduced with the Affordable Care Act, it is clear that the government is keen on keeping these programs going for another 50 years or more, and their legacy of influence in the health care industry continues to evolve. Where they will be in 50 years remains to be seen.

ARTICLE BY Health Care Practice Group of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

Over a Decade in the Making: CMS Releases Long-Awaited Medicaid Managed Care Rule

On May 27, 2015, the Centers for Medicare and Medicaid Services (“CMS”) published a 653-page proposed rule affecting the thirty-nine states (plus the District of Columbia) that use managed care organizations (“MCOs”) to administer their Medicaid benefits. This represents the first major overhaul of the Medicaid managed care system since the rules were established in 2002, now covering approximately seventy percent of all Medicaid enrollees.

Centers for Medicare & Medicaid Services, CMSPublic comments are due July 27, 2015, which gives health plans, providers, consumer groups, and even state Medicaid directors a narrow window to identify potential areas of concern and to propose solutions for formal CMS consideration. While some issues will align important stakeholder groups, others are likely to remain contested during the comment period and up to publication of the final rule.

As a backdrop leading to the publication of the proposed rules, the managed care landscape has become much more complex and variable among the states that have adopted this approach in their Medicaid programs. Because of this, CMS has been contemplating ways to ensure more consistent rules that promote adequate access to health services while also creating more synergy between Medicaid, Medicare, and even the commercial sector via delivery system reforms that improve quality and lower costs.

The proposed rule also addresses some areas of perceived inequity in the Medicaid program that range from behavioral and substance-abuse treatment to long-term care and insurance reforms akin to those in the Affordable Care Act (“ACA”), which was mostly targeted at commercial health plans.

But CMS’s ambitions in proposing the rules need to be tempered by the reality that state Medicaid programs are administered by the individual states: through federal regulations CMS can establish minimal standards for the state Medicaid managed care systems but states may enact state regulations or impose managed care contract terms that go farther than the federal requirements. The managed care community must view federal regulations as a starting, not an end, point.

CMS categorizes the massive Medicaid managed care proposed rule into several issue areas in its Fact Sheet:

Beneficiary Experience

  • Requires states to improve access to care through regular assessment and certification of a health plan’s provider network and time/distance standards to providers including behavioral health, pediatric dental, and pharmacy.

  • Updates communication rules directed towards Medicaid/CHIP beneficiaries to include electronic methods, non-English language options, and additional information in provider/drug formulary directories,

  • Sets standards for care coordination, assessments and treatment plans that include care transition services, initial health risk assessments within 90 days of enrollment, and regularly updated assessments and treatment plans for beneficiaries with special health care needs or long-term services and supports.

  • Creates a new enrollment selection period of 14 days to allow beneficiaries to research and select managed care plan options.

State Delivery System Reform

  • Encourages participation in Medicare-led alternative payment models and initiatives.

  • Establishes minimum reimbursement standards or fee schedules for providers that deliver a particular covered service.

  • Clarifies “short-term stay” rule that managed care plans are able to receive capitated payments for beneficiaries who are admitted to an institution for mental disease (“IMD”) for no more than 15 days so long as the facility is an inpatient hospital or sub-acute short-term crises residential service.

Quality Improvement

  • Creates a public notice and comment period to determine a core set of performance measures and improvement projects for states related to managed care plans.

  • Establishes a Medicaid managed care quality rating system in each state that would report performance information on all health plans, akin to the Medicare Advantage (“MA”) and marketplace ratings.

Program and Fiscal Integrity

  • Requires certain types of data to be used for rate setting purposes and the level of documentation and detail about the development of the capitation rates such as trend factors, adjustments and the development of non-benefit costs.

  • Establishes a medical loss ratio (“MLR”) for both Medicaid and CHIP plans using standards similar to Medicare Advantage and the commercial market.

  • Adds several components to fraud prevention efforts by implementing procedures for internal monitoring, auditing, and prompt referral of potential compliance issues, etc.

Managed Long-Term Services and Supports (“MLTSS”) Programs

  • Affirms recent updates such as Olmstead, stakeholder engagement requirements, and provider credentialing in the development and implementation of MLTSS programs.

  • Requires MLTSS-specific elements to be included in a state’s quality improvement strategy and reporting systems to protect MLTSS enrollees.

Children’s Health Insurance Program (“CHIP”)

  • CMS proposes to align the CHIP managed care regulations, where appropriate.

Alignment with Medicare Advantage and Private Coverage Plans

  • Importantly, CMS proposed where appropriate and possible, to align the Medicaid managed care regulations with those governing MA and private health insurance plans including the MLR, appeals and grievances, and marketing rules.

Finally, other highlights from the proposed rule include a requirement that Medicaid managed care entities offering outpatient drug coverage must now collect the necessary information for the states to include those managed care drugs in rebate invoices to drug manufacturers pursuant to the Medicaid Drug Rebate Program (“MDRP”) as well as modifications to the rules governing plan appeals and grievance procedures to increase uniformity with the procedures that apply to MA and commercial plans.

Discussion

Alignment with Medicare Advantage and Private Coverage Plans

CMS proposes numerous changes aimed at aligning Medicaid managed care with other health care programs… click here to continue reading…

ARTICLE BY Susan W. Berson, Andrew J. Shin, Ellyn L. Sternfield, Pamela Kramer, Lauren M. Moldawer & Bridgette A. Wiley of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

DaVita Agree to $495 Million Settlement in Alleged Medicare Fraud Lawsuit Filed by Qui Tam Whistleblowers

On Monday, May 4, 2015, DaVita Kidney Care, a division of DaVita Healthcare Partners, Inc. (DaVita), and one of the leading dialysis services providers in the United States, agreed to pay the U.S. Government $450 million for allegedly violating the False Claims Act (FCA) when it continuously discarded good medicine and then billed Medicare and Medicaid for it. DaVita also agreed to pay $45 million for legal fees.

According to the lawsuit filed in 2011 by two former employees of DaVita, between 2003 and 2010, when DaVita administered iron and vitamin supplements such as Zemplar, Vitamin D, and Venofer, vials containing more than what the patients needed were used and the rest was thrown away. For example, if a patient only needed 25 milligrams of medicine, DaVita allegedly used a 100 milligram vial, administered only 25 mg, and tossed the rest in the trash. Although before 2001, this practice was condoned by the National Centers for Disease Control and Prevention (CDC) in order to prevent infectious outbreaks caused by the re-entry of the same vial of medicine, the CDC subsequently changed it policies to outlaw this practice.

This FCA lawsuit alleging that DaVita misused and mishandled of medicine, and overbilled Medicare and Medicaid is not the first such allegation against DaVita, which is not a stranger to FCA lawsuits. In fact, DaVita previously settled two other lawsuits in which it allegedly violated the FCA. In October 2014, DaVita agreed to pay the U.S. Government $350 million for allegedly persuading physicians or physician groups to refer their dialysis patients to DaVita by offering kickbacks for each patient referred. And in 2012, DaVita agreed to pay $55 million to the federal government for overbilling the government for Epogen, an anemia drug. These lawsuits were filed by former employees who decided to come forward as whistleblowers and to help to uncover what they considered to be illegal practices by DaVita. Under the FCA, such whistleblowers can bring what is known as a “qui tam” lawsuit, which is brought by a private citizen to recover money obtained by fraud on the government. As an incentive to bring qui tam lawsuits, the FCA provides that qui whistleblowers receive between 15 and 30 percent of the amount of funds recovered for the government.

Provisions of the FCA make it unlawful for a person or company to defraud governmental programs, such as Medicare or Medicaid.

Posted by the Whistleblower Practice Group at Tycko & Zavareei LLP

© 2015 by Tycko & Zavareei LLP