Baker Tilly healthcare update October 13, 2014

At the agencies

The Department of Health and Human Services (HHS) released a report on September 24 that estimated that hospitals will save $5.7 billion in uncompensated care costs in 2014. Approximately three-fourths of the savings will go to hospitals located in the 26 states that had expanded Medicaid before the Affordable Care Act’s (ACA) first open enrollment period. The hospitals had major decreases in the number of uninsured patients they treated and increases in Medicaid-covered admissions.

According to a report released by the Centers for Medicare and Medicaid Services (CMS) on September 29, Medicare recovery audit contractors (RACs) identified and corrected improper payment claims that enabled them to collect $3.65 billion in overpayments in fiscal year 2013. The RACs also identified and returned $102.4 million in underpayments during the same time period.

On October 9, CMS’s Director of Provider Compliance, Melanie Combs-Dyer, had a call with hospital representatives in which she discussed clarifications regarding the settlement offer CMS made to providers for disputed claims. Under the settlement CMS has offered to pay 68 percent of all of providers’ outstanding disputed claims, if the provider drops all of their disputed claim appeals. During the call, Combs-Dyer said that the interest in the settlement has been good and they expect to see a significant participation rate in the settlement by the October 31 deadline. Combs-Dyer also made sure to clarify certain aspects of the settlement process including ensuring that rebilled claims under Part B would be eligible for settlement.  Combs-Dyer advised participants on the call that denied claims from Medicare administrative contractors, zone program integrity contractors, and the Comprehensive Error Rate Testing program of the HHS Office of Inspector General were also eligible for the settlement, not just those claim denials from recovery audit contractors. 

The ACA’s Sunshine Act section authorizes CMS to make public information on payments physicians and hospitals receive from pharmaceutical companies and medical device manufacturers. The Open Payments website, through which CMS is doing this, launched on September 30. The website contains information on payments that physicians and hospitals received from pharmaceutical companies and medical device manufacturers.  Approximately 40 percent of the information on the site is currently de-identified, meaning that the payments are not linked to specific providers. CMS said that the data was de-identified in situations where there were questions about the payments or when the providers did not have time to review the data before publication.

On October 6, CMS announced that will be making changes to its five-star rating program for nursing homes, Nursing Home Compare. CMS will, for example, develop an auditable quarterly electronic reporting system that nursing homes can use to report payroll data, which will be used to calculate overall staffing ratios, retention and turnover rates, and staffing mix. The payroll data will be collected starting in 2015 and reported on starting in 2016. Two additional changes to the rating program regarding quality measures and auditing will be added in 2015. Under these additional changes, CMS will increase the number of quality measures it uses for the ratings program and add data on use of anti-psychotics and rehospitalization rates. CMS will also audit and validate the quality of nursing home data reporting on a national basis. CMS had previously piloted such an auditing system in a handful of states. 

On October 9 and 10, the Medicare Payment Advisory Commission (MedPAC) held a public meeting to discuss policy issues and work on recommendations to Congress regarding the Medicare program. The two-day meeting focused on the following topics: international comparison of hospital rates, Medicare Part D risk sharing, opioid use under Medicare Part D, the next generation of Medicare beneficiaries, Medicare entitlements for disabilities, private-sector post-acute care management, and the validity of relative value units in the Medicare fee schedule. The next MedPAC report to Congress will be issued in March 2015.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.