CY 2019 Medicare Part C and D policy changes and updates finalized

CMS has issued a Final rule making revisions to the Medicare Advantage (MA) (Part C) and prescription drug benefit (Part D) programs based on its continued experience in the administration of these programs and to implement certain provisions of the Comprehensive Addiction and Recovery Act of 2016 (CARA) (P.L. 114-198) and the 21st Century Cures Act (P.L. 114-255). The major provisions of the Final rule include: (1) the implementation of the CARA provisions governing the establishment of drug management programs, (2) revisions to timing and method of disclosure requirements for MA and Part D plans, and (3) preclusion list requirements for prescribers in Part D and individuals and entities in MA, cost plans, and Programs of All-Inclusive Care for the Elderly (PACE) (Final rule, 83 FR 16440, April 16, 2018).

On November 28, 2017, CMS published the Proposed rule (see Proposed CY 2019 Part C and D changes address opioid misuse and numerous other policy concerns, Health Law Daily, November 17, 2017). While this Final rule finalizes several of the provisions from the Proposed rule, there are a number of provisions from the Proposed rule that CMS intends to address later and a few that it does not intend to finalize. These provisions are discussed in the Final rule.

CARA provisions

CARA includes new authority for Part D plans to establish drug management programs effective on or after January 1, 2019. This Final rule establishes a framework under which Part D plan sponsors may establish a drug management program for beneficiaries at risk for prescription drug abuse or misuse, or “at-risk beneficiaries.” Specifically, under drug management programs, Part D plans will engage in case management of potential at-risk beneficiaries, through contact with their prescribers, when such beneficiary is found to be taking a specific dosage of opioids or obtaining them from multiple prescribers and multiple pharmacies who may not know about each other. Sponsors may then limit at-risk beneficiaries’ access to coverage of controlled substances that CMS determines are “frequently abused drugs” to a selected prescribers or network pharmacies after case management with the prescribers for the safety of the enrollee.

CMS also limits the use of the special enrollment period (SEP) for dually- or other low income subsidy (LIS)-eligible beneficiaries by those LIS-eligible beneficiaries who are identified as at-risk or potentially at-risk for prescription drug abuse under such a drug management program. Finally, these provisions will codify the current Part D Opioid Drug Utilization Review (DUR) Policy and Overutilization Monitoring System (OMS) by integrating this current policy with drug management program provisions.

The purpose of these CARA drug management program provisions is to create a lock-in status for certain at-risk beneficiaries. In addition to the benefits of preventing opioid and benzodiazepine dependency in beneficiaries, CMS estimates, in 2019, a reduction of $19 million in Trust Fund expenditures because of reduced opioid scripts. This $19 million reduction modestly increases to a $20 million reduction in 2023.

Timing and method of disclosure requirements

CMS is finalizing changes to align the MA and Part D regulations in authorizing CMS to set the manner of delivery for mandatory disclosures in both the MA and Part D programs. CMS will use this authority to allow MA plans to meet the disclosure and delivery requirements for certain documents by relying on notice of electronic posting and provision of the documents in hard copy when requested, when previously the documents, such as the Evidence of Coverage (EOC), had to be provided in hard copy. CMS is also changing the timeframe for delivery of the MA and Part D EOC to the first day of the Annual Election Period (AEP), rather than 15 days prior to that date.

Allowing MA and Part D plans to provide the EOC electronically will alleviate plan burden related to printing and mailing and reduce the number of paper documents that enrollees receive from plans. In addition, changing the date by which plans must provide the EOC to enrollees will (1) allow plans more time to finalize the formatting and ensure the accuracy of the information in the EOC, and (2) separate the mailing and receipt of the EOC from the Annual Notice of Change (ANOC), which describes the important changes in a patient’s plan from one year to the next.

CMS estimates that 67 percent of the current 47.8 million beneficiaries will prefer use of the internet versus hard copies. This will result in a savings to the industry of $54.7 million each year, 2019 through 2023, due to a reduction in printing and mailing costs.

Preclusion list requirements for prescribers and providers

The Final rule rescinds the current regulatory requirement that prescribers of Part D drugs and providers of MA services and items must enroll in Medicare in order for the drug, service, or item to be covered. Instead, a Part D plan sponsor will be required to reject, or require its pharmacy benefit manager to reject, a pharmacy claim for a Part D drug if the individual who prescribed the drug is included on the “preclusion list.” Similarly, an MA service or item will not be covered if the provider that furnished the service or item is on the preclusion list.

The preclusion list will consist of certain individuals and entities that are currently revoked from the Medicare program under 42 CFR sec. 424.535 and are under an active reenrollment bar, or have engaged in behavior for which CMS could have revoked the individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that led, or would have led, to the revocation is detrimental to the best interests of the Medicare program.

CMS estimates that for 2019, the preclusion list provision will save providers $34.4 million. For 2020 and future years, there will be no savings. The $34.4 million in savings to providers arises because of removal of the requirement of MA providers and suppliers and Part D prescribers to enroll in Medicare as a prerequisite for furnishing health care items and services. Part C providers and suppliers will save $24.1 million in reduced costs while Part D providers will save $10.3 million in reduced costs.

Kusserow on Compliance: CMS improperly paid $367M for outpatient physical therapy

The OIG issued an audit report that found sixty-one percent of Medicare claims for outpatient physical therapy services reviewed did not comply with Medicare medical necessity, coding, or documentation requirements, resulting in an estimated overpayment of $367 million for outpatient physical therapy services that did not comply with Medicare requirements. These overpayments occurred because CMS controls were not effective in preventing improper payments for outpatient physical therapy services. The Medicare Part B program paid approximately $2 billion for outpatient physical therapy services provided to beneficiaries and past OIG reviews of individual physical therapy providers identified claims for outpatient physical therapy services that were not reasonable, medically necessary, or properly documented.  The OIG analyzed a stratified random sample of 300 outpatient claims for physical therapy services. The OIG’s stated objective was to determine whether Medicare claims for outpatient physical therapy services complied with Medicare requirements. Errors identified fell under three categories:

  1. Services that were not medically necessary, including services which were not reasonable—there was no evidence that the services would be effective, the services did not require the skills of a therapist, or there was not expectation of significant improvement.
  2. Coding did not meet medical requirements—timed units claimed did not match units in treatment notes; missing modifiers; and incorrect codes.
  3. Documentation did not meet Medicare requirement—plan-of-care deficiencies; treatment note deficiencies; and recertification deficiencies.

The OIG recommended CMS: (1) instruct the Medicare contractors to notify providers of potential overpayments so that those providers can exercise reasonable diligence to investigate and return any identified overpayments, (2) establish mechanisms to better monitor the appropriateness of outpatient physical therapy claims, and (3) educate providers about Medicare requirements for submitting outpatient physical therapy claims for reimbursement. CMS generally disagreed with these findings and believes further analysis of the sampled claims is warranted to determine whether the claims met Medicare requirements, according to the report.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Stark Law continues to be questioned

CMS kicked off the New Year by announcing plans to convene an inter-agency group to focus on how to minimize the regulatory barriers of the Stark Law that began in 1989 and underwent expansion in the 1990s. Providers have raise concerns from the beginning of the implementation of the Stark Law. The agencies involved in the review will include: CMS, the HHS Office of Inspector General (OIG), HHS General Counsel, and the Department of Justice (DOJ). Since the announcement, there has been considerable speculation as to how serious this effort will be and how soon something will materialize from it. The subject came up during a hearing on March 21 concerning the implementation of physician payment policies under the Medicare Access and CHIP Reauthorization Act (MACRA). CMS called for the need to consider such reforms as the agency pushes toward a value-based healthcare system. The Stark Law has been viewed by much of the industry as creating real barriers to meeting new government policy objectives.

CMS testimony noted that the Stark Law “has a really big impact on how relationships are structured in the healthcare space, which prohibits physicians from referring a Medicare or Medicaid patient to a provider with which the physicians have financial ties.” The testimony went on to state that the health care system has so many fractured silos with many rules and regulations that govern every part of the health care system and that both MACRA and Stark are important pieces of it. It was noted that the President’s budget proposal for fiscal year 2019 includes a line item calling for the “physician self-referral law” to be reformed “to better support and align with alternative payment models [APM] and to address overutilization.”

The Stark Law prohibits doctors from referring Medicare patients to hospitals, labs and colleagues with whom they have financial relationships, unless they fall under certain exceptions. It also prevents hospitals from paying providers more when they meet certain quality measures, such as reducing hospital-acquired infections, while paying less to those who miss the goals. The result is the law is viewed as making it difficult for physicians to enter innovative payment arrangements because they are not susceptible to fair market value assessment, a Stark requirement. These prohibitions are seen as interfering with key factors related to value-based care. Unlike the Anti-Kickback Statute, which is enforced by the OIG, the Stark law is considered regulatory and falls under CMS jurisdiction. From a regulatory standpoint, there is only so much that CMS can do to make substantive changes. Any real changes in the law will have to come from Congress.

This is not the first time the CMS has tried to move the easing of rules concerning the Stark law.  In 2015, CMS published a Proposed rule relaxing aspects of the Stark law, including easing of some of the strict liability features of the law and CMS’ burden in dealing with the interpretation of key terms, requirements, and other issues.  After reviewing an enormous amount of self-disclosures, CMS realized that a large part of its docket involved arrangements that may technically violate the statute but do not actually pose significant risks of abuse. Therefore, it appears that CMS seeks to reduce the number of self-disclosures reported. However, the proposed update is also intended to account for recent changes relating to health care reform and advancements in patient care and payment methodologies. CMS wanted to ensure that Stark does not inhibit Affordable Care Act (ACA) reforms and these are the same concerns driving the latest initiative.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG opinion on the effect of exclusion

OIG Advisory Opinion 18-01 was issued in response to a request regarding the effect of an exclusion from Medicare, Medicaid, and all other Federal health care programs. As a result of criminal conviction for health care fraud pursuant to a civil False Claims Act (FCA) settlement, the Requestor agreed to be permanently excluded. The Requestor received a good faith employment offer from a newly formed, for-profit corporation that will be offering long-term care pharmacies (the LTC Pharmacies) access to discounted rates for emergency medications that the company negotiates with local retail pharmacies. The prices the company would charge for the medications the LTC Pharmacies obtain from the local retail pharmacies would be the discounted rate the company negotiated with the local retail pharmacies, plus a mark-up. The Requestor inquired whether the engagement proposal to market its services (the Proposed Arrangement) would violate the terms of the exclusion and constitute grounds for the imposition of sanctions.

The OIG concluded that, although the Proposed Arrangement could violate the terms of the exclusion and could constitute grounds for the imposition of sanctions, the OIG would not impose such sanctions in connection with the Proposed Arrangement, based upon the following representations:

  • Neither the Requestor nor the company would directly submit claims for items or services that are paid for by any federal health care program, including any medications the LTC Pharmacies obtain from the local retail pharmacies; and would not directly or indirectly have any role in the LTC Pharmacies’ or their customers’ submission of claims to any federal health care program.
  • Neither the Requestor nor the company would submit claims to Medicare, Medicaid, or any other federal health care program for any items or services provided in connection with the Proposed Arrangement.
  • The Requestor would market the company’s services to the LTC Pharmacies and offer them the opportunity to contract with the company to receive lower prices than they normally would pay when ordering emergency medications from a local retail pharmacy.
  • Neither the Requestor nor the company would exercise any direct or indirect control over determining the volume, type, and frequency of any medications they would need or order.
  • The company would pay the Requestor a fixed salary plus a commission based on the number of LTC Pharmacy accounts the Requestor secured for the company with no compensation determined based on the volume, value, frequency, price, or selection of any medications, including federally reimbursable medications, the LTC Pharmacies or their customers would order.
  • Neither the Requestor, nor any member of the immediate family would have direct or indirect control of the company.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2017 Strategic Management Services, LLC. Published with permission.