House committee gives its approval to Medicare Advantage telehealth bill

A bill—The Increasing Telehealth Access in Medicare (ITAM)—aimed at improving access to Medicare Advantage telehealth services received approval from the House Ways and Means Committee on September 13, 2017. The unanimous approval came alongside the committee’s unanimous passage of a bill (H.R. 3726) to simply physician self-referral prohibitions and a bill (H.R. 3729) to continue Medicare add-on payments for ambulance services.

ITAM

The bipartisan bill, Increasing Telehealth Access in Medicare (ITAM) (H.R. 3727), introduced by Representatives Diane Black (R-Tenn) and Mike Thompson (D-Calif), seeks to encourage the use of telehealth by making it a basic benefit—rather than a supplemental service—for Medicare Advantage beneficiaries. Although critics of telehealth warn that the service presents a risk of overutilization in a fee-for-service reimbursement model, proponents of the new ITAM bill note that by pairing telehealth with Medicare advantage, that concern is “flipped on its head.”

Telehealth

A related bill, in the Senate, known as the Furthering Access to Stroke Telemedicine Act (S. 431), would permit any site exclusively administering acute care stroke treatment to be included in the list of eligible Medicare sites for telemedicine services, without regard for the site’s geographic location. In May of 2017, the Senate Finance Committee unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (S. 870), a bill designed to expand telehealth access for Medicare beneficiaries with chronic conditions while increasing the incentives for accountable care organizations (ACOs) to provide those services.

2018 MA and PDP premium, bid amount, related information released

Important 2018 Medicare Part D prescription drug plan (PDP) and Part C Medicare Advantage (MA) information for MA organizations and PDP sponsors has been announced by CMS. The information includes the average basic premium for a PDP, the Part D national average monthly bid amount, the Part D base beneficiary premium, the income-related monthly adjustment amount (IRMAA) for enrollees in PDPs who have incomes above certain threshold amounts, the Part D regional low-income premium subsidy amounts, the MA regional preferred provider organization (PPO) benchmarks, and the MA employer group waiver plan (EGWP) regional payment rates.

Average basic PDP premium

The average premium for 2018 is based on bids submitted by drug plans for basic drug coverage for the 2018 benefit year and calculated by the independent CMS Office of the Actuary. The average basic premium for a PDP in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the actual average premium of $34.70 in 2017. The decline comes despite the fact that spending for the Part D program continues to increase faster than spending for other parts of Medicare, largely driven by spending on high-cost specialty drugs.

Part D national average monthly bid amount

CMS computes the national average monthly bid amount from the applicable Part D plan bid submissions in order to calculate the base beneficiary premium. The national average monthly bid amount is a weighted average of the standardized bid amounts for each stand-alone PDP and MA prescription drug plan (MA-PD). The calculation does not include bids submitted by Medicare medical saving account plans, MA private fee-for-service plans, specialized MA plans for special needs individuals, Program of All-Inclusive Care of the Elderly (PACE) programs, any “fallback” PDPs, and plans established through reasonable cost reimbursement contracts. The reference month for the 2018 calculation was June 2017. The national average monthly bid amount for 2018 is $57.93.

Part D base beneficiary premium

The base beneficiary premium is equal to the product of the beneficiary premium percentage and the national average monthly bid amount. Part D beneficiary premiums are calculated as the base beneficiary premium adjusted by the following factors: (1) the difference between the plan’s standardized bid amount and the national average monthly bid amount; (2) an increase for any supplemental premium; (3) an increase for any late enrollment penalty; (4) a decrease for MA-PDs that apply MA A/B rebates to buy down the Part D premium; and (5) elimination or decrease with the application of the low-income premium subsidy. The Part D base beneficiary premium for 2018 is $35.02. In practice, actual premiums vary significantly from one Part D plan to another and seldom equal the base beneficiary premium.

Income-related monthly adjustment amount (IRMAA)

If a beneficiary’s “modified adjusted gross income” is greater than the specified threshold amounts ($85,000 in 2018 for a beneficiary filing an individual income tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return), then the beneficiary is responsible for a larger portion of the total cost of Part D benefit coverage. Therefore, in addition to the normal Part D premium paid to a plan, such beneficiaries must pay an IRMAA to the standard base beneficiary premium of $35.02 for 2018. Beneficiaries do not pay the IRMAA to the Part D plan; instead, IRMAAs are collected by the federal government.

Part D regional low-income premium subsidy amounts

Full low-income subsidy (LIS) individuals are entitled to a premium subsidy equal to 100 percent of the premium subsidy amount. A Part D plan’s premium subsidy amount is the lesser of the plan’s premium for basic coverage or the regional low-income premium subsidy amount (LIPSA). The 2018 regional LIPSAs are available through the CMS website.

MA regional PPO benchmarks

The standardized PPO benchmark for each MA region is a blend of: (1) a statutory component consisting of the weighted average of the county capitation rates across the region for each appropriate level of star rating; and (2) a competitive, or plan-bid, component consisting of the weighted average of all of the standardized A/B bids for regional MA PPO plans in the region. For 2018, the national weights applied to the statutory and plan-bid components are 66.5 percent and 33.5 percent, respectively.

Beginning in 2017, these benchmarks reflect the average bid component of the regional benchmark excluding EGWPs. The statutory and plan-bid components of the MA regional standardized benchmarks for 19 of the 26 MA regions are available from CMS. In the remaining seven MA regions, there are no regional MA plans.

MA regional EGWP payment rates

For detailed descriptions of the payment policy finalized for 2018 MA regional EGWP payment rates see the 2018 Advance Notice and Rate Announcement. The payment rates for Regional EGWPs are in the file Regional Rates and Benchmarks 2018 which can be accessed on the CMS website.

MedPAC votes to recommend recalculation of MA benchmarks

The Medicare Payment Advisory Commission (MedPAC) unanimously voted to recommend that the HHS Secretary modify the calculation of Medicare Advantage (MA) benchmarks. The recommended change, discussed at the January 12, 2017, MedPAC meeting, would increase spending between $750 million and $2 billion over one year and between $5 billion to $10 billion over five years. Mark Miller, executive director of MedPAC, suggested, however, that previous coding recommendations from the June 2016 report could offset the increased cost.

CMS sets the MA county benchmark based on the average risk-adjusted per capita Part A and Part B fee-for-service (FFS) spending in the county. While this calculation includes all beneficiaries in Part A or Part B, MA enrollees must be in both Part A and Part B. MedPAC policy analyst Scott Harrison noted that 12 percent of FFS beneficiaries are enrolled in Part A only, and Part A-only beneficiaries spend less than half than what those with Part A and Part B spend on Part A. This, he said results in an underestimate of FFS spending compared to MA spending, which leads, in turn, to an understatement of MA benchmarks.

To make calculations more reflective of MA enrollment, the members voted on a draft recommendation, which they also discussed at the December 2016 meeting, that the HHS Secretary should calculate MA benchmarks using FFS spending data only for beneficiaries enrolled in both Part A and Part B.

CMS already adjusts the rate calculation in Puerto Rico so that it is based on beneficiaries who are enrolled in both Part A and Part B. In the April 2016 Announcement of Calendar Year 2017 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter, CMS stated in response to a comment that it would consider expanding this Part A and Part B adjustment to all counties in the future.

At the same meeting, MedPAC also voted to recommend that the Secretary should require hospitals to add a modifier on claims for all surgical services provided at off-campus, stand-alone emergency department facilities. The modifier would allow Congress and CMS to track the growth of off-campus emergency departments, which are reimbursed at higher rates than urgent care centers.

Kusserow on Compliance: HHS Office of Inspector General adopts new Anti-kickback safe harbors

In a Final rule effective January 6, 2017, the HHS Office of Inspector General OIG amended the rules to the Anti-Kickback Statute (AKS) by adding new safe harbors that protect certain payment practices and business arrangements from sanctions under the AKS. The law provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under federal health care programs. This law was so broad that, as Inspector General, I requested Congress to create an administrative alternative. Upon enactment, I was permitted to identify and create safe harbors that would identify practices that would not result in enforcement actions.  The changes created additional safe harbors that enhance flexibility for providers and others to engage in health care business arrangements to improve efficiency and access to quality care while protecting programs and patients from fraud and abuse. They include:

Changes to existing safe harbors for cost-sharing waivers. Changes were made to the definition of the term “remuneration,” allowing the waiver or reduction of certain patient cost-sharing obligations. Previously, there were cost-sharing waiver exceptions that included waivers for some amounts owed for inpatient hospital services, and amounts owed by individuals who qualified for subsidized services or amounts paid to federally qualified health care centers or certain other qualified health care facilities. The new rule expands these existing safe harbors to cover cost-sharing waivers issued to beneficiaries in all federal health care programs, which includs Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP), TRICARE, the Veterans Health Administration (VHA) program, and the Indian Health Service (IHS) program.

Waivers or reductions by pharmacies. Pharmacies will now be allowed to reduce or waive cost-sharing amounts imposed under a federal health care program if the waivers or reductions are not offered as part of an advertisement or solicitation which could result in abusive steering of patients. Waivers or reductions offered to certain individuals eligible for Medicare Part D subsidies need only meet the no-advertising, no-solicitation requirement to fall within this safe harbor. For waivers or reductions offered to individuals not eligible for subsidies, the pharmacy must meet several additional requirements. It must not routinely waive or reduce cost-sharing amounts, and must only waive the cost-sharing amounts “after determining in good faith that the individual is in financial need or after failing to collect the cost-sharing amounts after making reasonable collection efforts.”  Providers should note that this rule only applies to pharmacies, and thus would not allow a physician to waive cost-sharing for Part B drugs.

Waivers or reductions for emergency ambulance services. Cost-sharing reductions or waivers for emergency ambulance services will now be allowed, but extend only to emergency ambulance services furnished by a state, municipality, or federally recognized Indian tribe. However, they must not take into account insurance or financial status of the beneficiary, nor can the ambulance provider shift costs to a federal health care program.

Free or discounted shuttle service and local transportation. A new safe harbor will allow eligible entities to provide free or discounted local transportation or shuttle services, as long as they meet defined requirements. An eligible entity is any individual or entity, except for individuals or entities (or family members or others acting on their behalf) that primarily supply health care items, such as durable medical equipment suppliers, pharmaceutical companies, and pharmacies. Transportation is divided into two categories: (1) a “shuttle service” provided by an eligible entity and (2)other transportation offered to federal health care program beneficiaries. Eligible entities must meet five standards: (1) have the availability of the free or discounted local transportation services set forth in a policy, applied uniformly and consistently and not determined in a manner related to volume or value of federal health care business; (2) not be air, luxury, or ambulance-level transportation; (3) not market or advertise the services, nor market health care items and services during the course of transportation, or pay drivers on a per-beneficiary-transported basis; (4) only make the transportation available to established patients; and (5) bear the cost of the transportation services and not shift the burden onto federal health care programs, other payers, or individuals. Simply put, hospitals and other eligible entities will be able to provide some forms of transport services for their patients without fear of violating the AKS, so long as they meet the applicable safe harbor requirements laid out above.

Protected remuneration between FQHCs and Medicare Advantage. Another safe harbor was created that will protect any remuneration between a federally qualified health center (FQHC) (or an entity controlled by such a health center) and a Medicare Advantage (MA) organization pursuant to a written agreement required by regulations. The payment to the FQHC must not be less than the level and amount of payment that the MA organization would make to a non-FQHC entity. Provision of free space by the FQHC to the MA organization would not be covered by the safe harbor, because arrangements must be related to MA plan enrollees being treated at the FQHC. Similarly, financial support from the MA to the FQHC for outreach services or infrastructure costs, for example, would not be covered.

Medicare Coverage Gap Discount Program. A new safe harbor was created that supplements the already-existing statutorily-based Medicare Coverage Gap Discount Program, which allows prescription drug manufacturers to enter into an agreement with HHS to provide access to discounts on drugs at the point of sale. “Applicable drugs” furnished to “applicable beneficiaries” under the Medicare Coverage Gap Discount Program will not be considered remuneration. The rule requires manufacturers to be “in compliance with the requirements of the Medicare Coverage Gap Discount Program,” rather than “in full compliance with all requirements” of the program. “A manufacturer that knowingly and willfully provided discounts without complying with the requirements of the Medicare Coverage Gap Discount Program could be subject to sanctions.”

Technical revision of the AKS. There is in the Final rule a technical correction pertaining to referral services, whereby the language was changed inadvertently in 2002 to say “. . . business otherwise generated by either party for the referral service . . .” and is now changed back to the 1999 language, “. . . business otherwise generated by either party for the other party”.

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.