Hospital appeals settlement recipients identified by CMS

More than 2,000 hospitals that received almost $1.5 billion in total settlement money from CMS for fee-for-service denials based on patient status reviews for admissions prior to October 1, 2013, were identified by name, provider number, total claims settled, and amount of money received. The settlement, which was paid in 2015 at 68 percent of the net allowable amount, gave providers a guaranteed timely payment in exchange for withdrawing pending appeals that were tied up waiting through a large administrative hearing backlog. Settled claims numbers ranged from one to almost 3,000, with amounts paid between $0 and almost $16 million.

The settlement was a one-time offer by CMS to alleviate the burdens on the Medicare appeals system. The agency only settled claims for patients admitted prior to October 1, 2013, because it believed that the two-midnight rule, which began on that date, would reduce future appeals volume (see CMS offers partial payments for certain Part A hospital claims under appeal, Health Law Daily, September 3, 2014; CMS pays $1.3B to settle hospital inpatient claims, Health Law Daily, June 15, 2015).

The administrative hearing backlog remains a problem for CMS, which last month proposed regulations to improve the efficiency of the Medicare appeals process and address the increasing number of backlogged appeals waiting for administrative adjudication (Proposed rule, 81 FR 43789, July 5, 2016). The settlement offer was made nine months after Nancy Griswold, Chief Administrative Law Judge for HHS’ Office of Medicare Hearings and Appeals (OMHA), said that there were 375,000 claims waiting for adjudication and suspended new requests for hearings before an administrative law judge. As of April 2016, however, OMHA had over 750,000 pending appeals. The two-midnight rule, which did not have the desired effect of reducing appeals, has also ended after hospital backlash (see 1.5 percent payment cut overshadows end of Two-Midnight, Health Law Daily, August 3, 2016).

Second annual release provides clearer look into Part D costs

CMS’s second annual release of privacy-protected data details information on prescription drugs paid under the Medicare Part D prescription drug program. The data provides key information to consumers, providers, researchers, and other stakeholders to help transform the health care delivery system. With data from 2013 and 2014, CMS will now be able to analyze trends, prescribing habits for specific providers, brand versus generic drug prescribing rates, and state- and local-level differences in drug utilization and costs.

The new release is based on 2014 data describing the specific medications prescribed for 38 million enrollees in Medicare Advantage (MA) prescription drug plans (PDPs) and stand-alone PDPs. The 2014 data set includes new aggregated information on opioids, antibiotics, antipsychotics, and high-risk medications among the elderly. A prescriber enrollment status field has also been added to the 2014 data set to indicate whether the prescriber is enrolled, is not enrolled, or opted out of the Medicare program.

Public data set

The public data set, the Medicare Provider Utilization and Payment Data: Part D Prescriber Public Use File (PUF), was created by CMS using information on prescription drugs prescribed by individual physicians and other health care providers and paid for under the Medicare Part D. The Part D Prescriber PUF is based on information from CMS’ Chronic Conditions Data Warehouse,which contains prescription drug event records submitted by MA-PD plans and by stand-alone PDPs. The dataset identifies providers using their National Provider Identifier and presents the specific prescriptions dispensed at their direction, listed by brand and generic name.

For each prescriber and drug, the dataset includes the total number of prescriptions dispensed and the total drug cost. The total drug cost includes the ingredient cost of the medication, dispensing fees, sales tax, and any applicable administration fees. The total cost is based on the amounts paid by the Part D plan, Medicare beneficiary, other government subsidies, and any other third-party payers (such as employers and liability insurers). Total drug costs do not reflect any manufacturer rebates paid to Part D plan sponsors through direct and indirect remuneration or point-of sale rebates.

Drugs by claim count

For 2014, the top 10 drugs based on claim count were generic drugs, and the top nine drugs were among the drugs with the highest claim counts in 2013. The 2014 claim counts for these drugs ranged from 22.1 to 38.3 million claims,andthe total drug costs for each drug ranged from $136 million to $748 million. From 2013 to 2014, the total number of claims increased from 1.37 billion to 1.42 billion, a 3 percent increase from 2013 to 2014.

Drugs by cost

The drugs with the highest cost in 2014 were all brand name drugs. In 2014, Solvaldi® (Hepatitis C antiviral) had the highest total drug costs at $3.1 billion, with the costs for each of the top 10 drugs all more than $1 billion. Total drug costs increased from $104 billion in 2013 to $121 billion in 2014, reflecting a 17 percent increase.

Lantus Solostar® and Lantus® insulin products had the highest growth in total drug costs between 2013 and 2014 with growth rates of 47 percent and 32 percent, respectively. Abilify® (antipsychotic), Januvia® (diabetes), and Revlimid® (cancer) also had high growth rates of 20 percent or higher. Advair Discus® (asthma and COPD) had a very low growth in total drug costs of only 1 percent.

Antibiotic prescribing

The new 2014 dataset also can be used to examine patterns of antibiotic prescribing in the Medicare program. These data can inform where high rates of antibiotic prescribing are occurring across the U.S. The 2014 data shows that states in the South and Midwest have rates of antibiotic prescribing that are higher than the national average of 1.39 fills per beneficiary.

Florida health care provider settles monopolization, conspiracy claims

Health First, Inc. and its subsidiaries have settled allegations that they attempted to establish a vertically integrated, self-reinforcing, illegally-maintained health care monopoly in Southern Brevard County, Florida. Just days after denying Health First’s motion for summary judgment, the federal district court in Orlando dismissed the antitrust claims with prejudice.

Omni Healthcare, Inc. and other physicians and physician practice groups filed suit against “fully integrated” health care corporation Health First, Inc. and three of its wholly owned subsidiaries: Holmes Regional Medical Center, Inc.; Health First Health Plans, Inc., and Health First Physicians, Inc. Omni alleged that Health First engaged in an anticompetitive scheme to monopolize Southern Brevard County’s interrelated health care markets for years and that the scheme has largely been successful.

The court denied Health First summary judgment on August 13, 2016, finding that Omni and other physicians and physician groups created genuine issues of material fact in whether Health First monopolized, attempted to monopolize, and conspired to monopolize the markets for physician services, Medicare Advantage, and ancillary services.

Kusserow on Compliance: CMS extends and expands enrollment moratoria in six states

CMS announced that it is extending for six months its temporary provider enrollment moratoria efforts in six states, as means to control fraud.  The agency is also expanding statewide the temporary provider enrollment moratoria on new Medicare Part B non‑emergency ground ambulance suppliers in New Jersey, Pennsylvania, and Texas and home health agencies (HHAs) in Florida, Texas, Illinois, and Michigan.  This statewide expansion also applies to Medicaid and Children’s Health Insurance Program (CHIP).  CMS also announced the Provider Enrollment Moratoria Access Waiver Demonstration (PEWD), which gives CMS the ability to allow for provider and supplier enrollment exceptions in the moratoria areas if accesses to care issues are identified and for the development and improvement of methods of investigating and prosecuting fraud in Medicare, Medicaid, and CHIP.  The agency will also immediately lift the current temporary moratoria on all Medicare Part B, Medicaid and CHIP emergency ground ambulance suppliers.  The purpose of these actions is to focus on identifying parties engaged in fraudulent practices and to find means to better control the programs against such actions.

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.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.