Kusserow on Compliance: New CMS proposed outpatient rules

The 2020 annual rule cycle has been active for CMS with several proposed rules in the outpatient prospective payment system (OPPS) area. Hospitals and health system executives should monitor these annual rules carefully for provisions that will affect their organizations’ operations. Among the significant regulatory rule proposals for hospital and health system executives are the following:

  1. Mandated disclosure of negotiated charges between health plans and hospitals for all items and services for about 300 “shoppable” services
  2. Proposed penalties which would be over $100,000 a year for noncompliant hospitals
  3. The addition of several ASC procedures
  4. The removal of total hip arthroplasty from the inpatient-only list for 2020, allowing the procedure to be performed on an outpatient basis
  5. Reduction of supervision level for hospital outpatient department from direct to general for hospital outpatient departments
  6. A requirement for prior authorization of certain outpatient department services.
  7. Continued payment reduction for 340B purchased drugs
  8. Increased per-day cost threshold for separate payment for certain outpatient drugs
  9. The establishment a prior authorization process for five categories of services that often may be cosmetic: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation
  10. Various updates to Hospital Outpatient Quality Reporting Program requirements

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 LinkedIn.

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Copyright © 2019 Strategic Management Services, LLC. Published with permission.

CMS final rule reduces hospital administrative burdens

 

CMS issued a final rule to reduce unnecessary burden for health care providers, allowing them to focus on their priority—patients. Included in the rule is the removal of Medicare regulations identified as unnecessary, obsolete, or excessively burdensome. The rule removes the requirements for a facility to:

 

  • Request or allow swing-bed patients to perform services for the facility.
  • Provide an ongoing activities program that is directed by a qualified professional because the patient’s activity needs are addressed in the nursing care plan.
  • Employ a qualified social worker on a full-time basis because of the hospital swing-bed and Critical Access Hospital (CAH) bed limit requirements for those with more than 120 beds.
  • Assist residents in obtaining routine and 24-hour emergency dental care because of the existing requirement for hospitals and CAHs to provide care in accordance with the needs of the patient.
  • For CAHs, to perform a review of all their policies and procedures.
  • To disclose the names of people with a financial interest in the CAH.
  • For Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs), to review the patient care policies and facility evaluation annually, changing the frequency to every two years.
  • For a hospital’s medical staff, to attempt to secure autopsies in all cases of unusual deaths and of medical-legal and educational interest.

 

Hospitals, CAHs, and Home Health Agencies (HHAs) under the rule will be required to:

 

  • Have new discharge planning requirements—as mandated by the IMPACT act for hospitals, HHAs, and CAHs—which require facilities to assist patients, their families, or the patient’s representative in selecting a post-acute care (PAC) services provider or supplier by using and sharing PAC data on quality measures and resource use measures.
  • Have revised language that now requires a hospital (or CAH) to discharge the patient, and also transfer or refer the patient where applicable, along with his or her necessary medical information (current course of illness and treatment, post-discharge goals of care, and treatment preferences), at the time of discharge, to not only the appropriate post-acute care service providers and suppliers, facilities, agencies, but also to other outpatient service providers and practitioners responsible for the patient’s follow-up or ancillary care.
  • Have revised compliance language for HHAs that now requires these facilities to send all necessary medical information (current course of illness and treatment, post-discharge goals of care, and treatment preferences), to the receiving facility or health care practitioner to ensure the safe and effective transition of care, and that the HHA must comply with requests made by the receiving facility or health care practitioner for additional clinical information necessary for treatment of the patient.
  • Send necessary medical information to the receiving facility or appropriate PAC provider (including the practitioner responsible for the patient’s follow-up care) after a patient is discharged from the hospital or transferred to another PAC provider or, for HHAs, another HHA.
  • In the case of hospitals, ensure and support patients’ rights to access their medical records in the form and format requested by the patient, if it is readily producible in such form and format.
  • Allow multi-hospital systems to have unified and integrated Quality Assessment and Performance Improvement (QAPI) programs and unified and integrated infection control and antibiotic stewardship programs for all their member hospitals.
  • Allow hospitals the flexibility to establish a medical staff policy describing the circumstances under which a pre-surgery/pre-procedure assessment for an outpatient could be utilized, instead of a comprehensive medical history and physical examination.
  • Additionally, CMS is moving to clarify the requirement to allow the use of non-physician practitioners and doctors of medicine/doctors of osteopathy (MD/DOs) to document progress notes of patients receiving services in psychiatric hospitals.

 

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 LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: CMS issues final rule on affiliation disclosure requirements for the provider enrollment process

CMS issued a final rule on September 10 that sets forth requirements mandating providers and suppliers who submit an application for enrollment or revalidation for Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) disclose current or previous (up to five years) affiliations with a provider or supplier who has uncollected debt; has been or is subject to a payment suspension under a federal health care program; has been excluded from participation from Medicare, Medicaid, or CHIP; or has had billing privileges denied or revoked. CMS said a history of bad actors trying to escape the ramifications of inappropriate or fraudulent behavior by re-entering the program in some capacity, and/or shifting their activities to another enrolled Medicare provider or supplier with which they are affiliated, provided the motivation for the rule. In addition to furnishing the disclosure information, the provider must submit: (a) an organizational diagram identifying all of the entities listed in this section and their relationships with the provider and with each other; and (b) if the provider is a skilled nursing facility, a diagram identifying the organizational structures of all of its owners.

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 LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

CVS-Aetna merger approved, subject to divestiture of PDP business

The federal district court in the District of Columbia has concluded that the proposed consent judgment allowing the merger of CVS Health Corporation and Aetna, Inc. is in the public interest. The merger may go forward under the condition that CVS divest Aetna’s individual Medicare prescription drug plan (PDP) business to WellCare Health Plans, Inc. The court considered objections to the merger raised by industry, consumers, and states, and concluded that the divestiture will effectively remedy the harm to the PDP market and will not be rendered ineffective due to the proposed judgment’s failure to address effects in markets adjacent to the PDP market (U.S. v. CVS Health Corporation, September 4, 2019, Leon, R.).

In response to the proposed merger between CVS and Aetna, the United States simultaneously filed a complaint and a proposed consent judgment in 2018. Under the terms of the proposed consent judgment, CVS would divest Aetna’s individual Medicare prescription drug plan (PDP) business to WellCare Health Plans, Inc. A number of parties including members of industry, consumer groups, and state regulatory bodies (amici) opposed the proposed consent judgment and filed briefs stating their concerns. As part of its review under the Tunney Act, the court conducted a hearing with witnesses from parties and amici.

The court concluded that the proposed consent judgment is in the public interest, although it did reject the government’s assertion that the court may only consider harms alleged in the complaint. The amici briefs raised three primary objections to the merger. First, that Aetna’s divestiture to WellCare will not effectively remedy the harm to the PDP market, because the divestiture leaves the PDP market overly concentrated and WellCare will not be as strong a competitor in the PDP market as Aetna was. On this point, the court found the evidence from CVS and the Government to be more persuasive. That evidence included testimony that the PDP market is already highly competitive, because plans can be easily compared, and the market is only moderately concentrated. The moderate concentration in the PDP market has neither prevented WellCare from competing in the market, nor prevented price competition from driving premium prices down, in recent years.

Amici also argued that the proposed final judgment’s failure to address effects in markets adjacent to the PDP market will undercut the effectiveness of the divestiture remedy and harm the public. For example, CVS could raise the price of its pharmacy benefit manager (PBM) services when selling the services to health insurance competitors. Such an action could threaten the success of the proposed divestiture remedy because WellCare, which both competes against CVS in the PDP market and contracts with CVS for PBM services, would be vulnerable to such a tactic. But CVS presented more persuasive evidence that substantially undermines this theory. Rival PBMs try to underbid CVS and CVS’s PBM oftentimes competes against its own customers because health insurance companies can move PBM services in house if they consider CVS’s price for contract services too high. That evidence strongly suggests that, if CVS were to raise its PBM prices, customers like WellCare could simply switch to a less expensive PBM or stop contracting for those PBM services altogether.

Finally, amici argued that the proposed final judgment without modification will harm HIV and AIDS patients in need of affordable, quality healthcare. But the court concluded that the record did not establish that the judgment will likely result in CVS gaining the ability to steer patients away from their current healthcare providers (such as the AIDS Healthcare Foundation). The Foundation uses a different PBM and maintains its own pharmacies, therefore it is unlikely that CVS will be likely to steer patients away from the Foundation.

In the Department of Justice press release announcing the settlement, Assistant Attorney General Makan Delrahim of the Antitrust Division expressed pleasure with the decision, noting that the judgment provides a “comprehensive remedy” that “protects seniors and other vulnerable customers of individual PDPs from the anticompetitive effects that would have occurred if CVS and Aetna had merged their individual PDP businesses.”

American Antitrust Institute (AAI) statement. “AAI strongly disagrees with the merits of the court’s opinion,” said AAI President Diana Moss. “On most points, the court simply accepted piecemeal evidence introduced by the DOJ and CVS. The opinion discounts the showing by amici that the remedy will fail to preserve competition in PDP markets and that the merger raises significant vertical concerns ignored by the DOJ in its complaint. The opinion’s statement that ‘[N]otwithstanding CVS’s significant market share, the evidence showed that CVS must compete vigorously to retain its PBM customers’ is divorced from sound economics.”