Hall Render Protests Possible Changes to Medicare Group Appeals Process

On July 9, Hall Render attorneys John Williams and Elizabeth Elias met with staff at the Senate Finance and House Ways and Means committees to raise awareness of a provision buried in the FY 2015 Hospital IPPS proposed rule that could make it more difficult for hospitals to recover monies owed to them under Medicare reimbursement laws and regulations. The proposal adds a new regulation that allows a hospital to file an appeal only if it indicates it is "dissatisfied" with its reimbursement amount at the time it files its cost report. This seems to be in conflict with the governing statute that states a hospital has to be "dissatisfied" once it files an appeal aftera cost report is finalized, which can take as long as seven years.

This proposed change to Medicare appeal procedure is significant because it is impossible for a hospital to know all appeal items it might want to appeal between the time it files its cost report and the time a the cost report is settled. In addition, hospitals that participate in group appeals related to changes in Medicare reimbursement policy printed in the Federal Register could be prohibited from participating in such an appeal until their cost report is finalized. That means the hospital would be subject to the adverse policy change, such as the 0.2% cut for the 2-Midnight Rule, for years before it is permitted to pursue an appeal.

Congressional staff were completely unaware of this issue and have reached out to CMS for clarification on its intent for these changes in the FY 2015 IPPS proposed rule. The proposed rule should be finalized in early August and, if these changes occur, congressional intervention may be necessary in order to protect a provider's Medicare reimbursement appeal rights.

CMS Releases Proposed Physician Payment Rule

On July 3, CMS issued its 609-page proposed rule for the calendar year 2015 hospital inpatient physician fee schedule.  The proposed rule includes a variety of changes to the Shared Savings Program for accountable care organizations, the Physician Quality Reporting System and the inventive program for electronic health records.

CMS proposed lowering Medicare payments for radiation therapy centers and radiation oncology services by reclassifying equipment purchases as indirect expenses of providing care.  The proposed rule would increase payments for family practices (2%), internal medicine (2%) and independent labs by 3%.

The proposed rule also seeks to expand the array of telehealth services that qualify for Medicare reimbursement.  Added to the list of covered telehealth services are wellness visits, both for an initial visit and follow-ups and behavioral visits for psychoanalysis and family psychotherapy.

The proposed rule will be published in the Federal Register on July 11.  CMS will accept comments on the proposed rule until September 2, 2014.  The final rule generally comes out around November.

CMS Releases Proposed Hospital Outpatient Rule

Also on July 3, CMS issued its proposed rule for calendar year 2015 for the hospital outpatient prospective payment system.  Under the proposed rule, hospital outpatient payments would increase by 2.1% for hospitals reporting required data.  Those not reporting the data would see payments rise by 0.1%.

The proposed rule includes new policies for ancillary services.  CMS also reaffirmed their plan to shift to the new comprehensive Ambulatory Payment Classification group policy.  Under the policy, categories of related items and services will be packaged into a single payment for a comprehensive primary service.

The proposed rule affects more than 4,000 hospitals, including general acute care, inpatient rehab facilities, inpatient psychiatric facilities, long-term acute care, children's and cancer hospitals.  According to a CMS fact sheet, the agency will accept comments on the proposed rule until September 2, 2014 and intends to issue a final rule on or around November 1.

Senate Confirms Donovan to Run OMB

On July 10, the Senate confirmed Shaun Donovan as the new director of the White House Office of Management and Budget ("OMB").  As OMB Director, Donovan will be responsible for preparing the President's annual budget request and reviewing proposed agency regulations before they become final.  Donovan will take over for Sylvia Burwell, who left OMB to lead HHS following the resignation of Kathleen Sebelius.  Donovan was confirmed on a 75-22 vote.

CMS Announces Health Care Innovation Grants

On July 9, CMS announced round-two prospective awardees to test new payment and service delivery models to improve care outcomes and lower costs.  The round-two awards include $360 million for 39 recipients in 27 states and D.C.  In May, CMS announced 12 of the prospective round-two recipients.

Bills Introduced This Week

Senator Mark Kirk (R-IL) introduced a bill (S. 2586) that seeks to establish a smart card pilot program under the Medicare program.

Next Week in Congress

The House and Senate return Monday of next week.  Discussions on health agency spending bills will continue to be an area of focus.  House appropriators have yet to begin action on the health spending bill or even schedule a markup, and the Senate version has yet to advance from the committee. Current discussions focus on the form of an omnibus bill including a stopgap continuing resolution extending current health care agency and program funding past the October 1 start of the new fiscal year.