CMS Makes Changes to RAC Program Processes

On November 6, CMS announced that the number of medical records a recovery audit contractor ("RAC") can request from health care providers to support audits is 0.5 percent of a facility's total amount of paid Medicare claims from the previous year. Currently, the limit on the amount of documents that RACs can request is 2 percent of all paid claims. Moreover, RACs will be required to expand their audits across all claim types so that they cannot target care provided in a specific setting. The new additional documentation request limits will become effective January 1, 2016.

The agency also said it plans to reduce the time that RACs are given to complete complex claim reviews from 60 days to 30 days. Contractors will be required to wait an additional 30 days to allow for a discussion period before they send claims to the Medicare Administrative Contractor. CMS provided a timeline depicting the enhancements it has made to the RAC process but did not specify when the changes that modify current or new RAC contracts would be carried out. 

CMS Announces 2016 Medicare Parts A and B Premiums and Deductibles

On November 10, CMS released the premiums and deductibles for the Medicare inpatient hospital (Part A) and physician and outpatient hospital services (Part B) programs for 2016. Under the new coinsurance amounts, Medicare Part A annual deductibles will increase from 2015 rates while premiums and deductibles for Part B will remain unchanged for most beneficiaries.

The Part A deductible for the first 60 days of inpatient hospital care will be $1,288 in 2016, which is up from $1,260 in 2015. Beneficiaries in skilled nursing facilities will also see an increase in daily coinsurance for days 21 through 100 of their stay, which is up from $157.50 in 2015 to $161 in 2016. According to CMS, about 99 percent of enrollees do not pay a monthly premium in order to receive coverage under Part A because they have at least 40 quarters of Medicare-covered employment. Beneficiaries with 30 to 39 quarters of coverage can buy into Part A at a monthly premium rate of $226, an increase of $2 from 2015, while those with less than 30 quarters of coverage pay the full $411 monthly premium, which is up from $407 in 2015.

MedPAC Considers Changes to 340B Discounts and Part B Fees

Members of the Medicare Payment Advisory Commission ("MedPAC") met on November 5 to review proposals on the 340B Drug Pricing Program and the provider reimbursement formula for drugs under Part B. The proposals recommended cuts to 340B drug discounts and Part B dispensing and supplying fees and changes to how providers are paid by Medicare for administering drugs.

The 340B proposal would cut the pay rate for 340B providers by 10 percent of average drug sale prices and would give some of those savings to Medicare beneficiaries. Some members argued that cutting 340B funding would significantly decrease pay for hospitals and requested that the group hold a broader discussion about 340B and other hospital pay policies before making a decision on the drug discount reduction. MedPAC Chair Francis Crosson said the commission plans to release recommendations on 340B pay cuts by March of 2016. 

Senate Reconciliation Plans Hit Roadblock

A preliminary ruling from the Senate parliamentarian's office on November 10 found that repeal of the ACA's individual and employer mandates, which were included in the House-approved bill, doesn't meet reconciliation standards. Reconciliation provisions in a bill have to be budgetary in nature, but the parliamentarian indicated those repeal provisions were merely incidental. Therefore, Republican efforts to repeal these provisions of the ACA would require 60 votes instead of a simple 50 vote majority and be blocked by Democrats.

The remainder of the reconciliation bill, which was approved by the parliamentarian, would defund Planned Parenthood for one year and repeal the ACA's Cadillac and medical device taxes and the Independent Payment Advisory Board and cut the Prevention and Public Health Fund. Regardless of what bill passes the Congress, President Obama has made clear that he intends to veto the measure.

Health-Related Bills Introduced This Week

Sen. Maria Cantwell (D-WA) introduced a bill (S. 2259) to improve the way that Medicare beneficiaries are assigned under the shared savings program. The ACO Assignment Improvement Act of 2015 would base assignment to the Medicare shared savings program on primary care services provided by nurse practitioners, physician assistants and clinical nurse specialists.

Sen. John Tune (R-SD) introduced the Rural ACO Provider Equity Act of 2015 (S. 2261) to make improvements to the assignment of beneficiaries under the Medicare shared savings program by basing assignment on services provided by rural health clinics and federally qualified health centers.

Next Week in Washington

The House and Senate return for a full work week. The Senate Finance Committee will hold a hearing on November 17 to probe whether physicians should be allowed to earn a portion of sales from medical devices they prescribe. The House Energy and Commerce Health Subcommittee will hold a hearing on November 17 examining the regulation of diagnostic test and laboratory operations.