hfma a&a: medicare update...– under the current snf pps system, rate is based primarily on...

WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTINGInvestment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor

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Presented by Emily Wetsel, CPASC HFMA Medicare Reimbursement Update

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Objectives• Discuss current reimbursement changes and trends• Discuss the updates included in the Proposed CMS FY19 Medicare

Inpatient Payment Rule • Discuss the updates included in the Proposed CMS FY19 Medicare

Skilled Nursing Facility Rule• Discuss the updates included in the Proposed CMS FY19 Medicare

Hospice • Discuss the updates included in the Final CMS FY18 Medicare

Health Agencies• Discuss the current industry trends in reimbursement for Federally

Qualified Health Centers (FQHC)

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Emily Wetsel, CPA

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Emily Wetsel, CPA

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Emily has nine years of public accounting experience. She provides audit, reimbursement and consulting services for CliftonLarsonAllen clients across the nation.

Emily is experienced in Medicare and Medicaid reimbursement consulting and other reimbursement services, including cost report preparation and review. Her Medicaid experience ranges across a number of states, including North Carolina, South Carolina, Virginia, and Tennessee. She also has experience with cost based reimbursement on a Hospital level.

Emily received her Bachelor of Science in Business Administration concentrating in Accounting and Management from Presbyterian College and a Masters of Accountancy from NC State University.

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Current Reimbursement Changes

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2018 Bipartisan Budget Act of 2018

• After a brief government shutdown (9 hours), it was signed by President Trump on February 9, 2018

• Extension of Medicare Low-Volume Hospital Payments and Medicare Dependent (MDH) program

• Delays for two years Reductions in Reimbursement to DSH• Provides $3B per year (FY18/19) to combat opioid abuse• Extends and Increases funding for GME program from

$60M/yr to $126.5M/yr

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2018 A New Era:New Secretary of Health & Human Services• Alex Azar, Secretary HHS

– Confirmed by Senate 1/24/18– Previously held significant roles in HHS

◊ 2001 General Counsel◊ 2005 Deputy Secretary

– Played key roles during President George W. Bush Administration

◊ Implementation of Medicare Part D◊ Managed and oversight over various epidemic

and chemical outbreaks/concerns

– 2007 to 2017 President of Eli Lilly U.S. Operations

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2018 A New Era:New Secretary of Health & Human Services• Azar’s Top Priorities as Leader of HHS

– Sky rocketing drug prices– Health care affordability and availability– Shifting Medicare to paying for health and outcomes– Tackling the opioid epidemic

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LLP2018 A New Era:

Health Care Spending Drives Unsustainable Trend• Major Health Care Programs are projected to continue to escalate to 6.9% of GDP• This is the fastest and largest of any spending category.• Under this scenario, the total deficit would grow from 77% to 89% of GDP.• This would be the highest level of debt since WWII in 1947 and more than double the average

over the past five decades.

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• Azar’s priorities are signaling a return to advancing the speed of payment transformation, along with other potential changes that could impact providers of all types.

• Key comments he made during his various Senate hearings included the following signals:

– Stressed his belief in market competition and opening up markets to allow competition

– On record as agreeing with the “able bodied work” initiative to receive Medicaid benefits

– Emphasized the need to move the current payment to paying for health and outcomes

– Believes in leveraging technologies that have been implemented– Believes in capitalizing on best elements in one program, and translating

them to others

• Themes we hear from Azar are in direct alignment with the Administration

2018 A New Era:Key Take Away for Health Care Providers

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* Source: 2016 letter to CMS from 178 congressional law makers

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Current Reimbursement Changes - VBPValue Based Payment: a reform initiative whereby health care providers will receive payment for service based on their performance or the potential outcomes of the service

Tying payment to performance is perhaps the most significant aspect of health care reform.The de facto definition of “value” in health care reform is the intersection of lower cost and improved quality.

Providers who can lower costs and deliver quality will be measured as “value-based providers”

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Lower Cost

Improved Quality

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Current Reimbursement Changes - ReformReform at the Core will Continue: The Triple Aim Goals Plus…• Better Care

– Improve/maintain quality and patient outcomes– Eliminate avoidable readmissions– Eliminate potentially preventable conditions (e.g., never events)

• Better Health– Primary care driven– Focus on prevention & wellness

• Reduce Cost – Reduce/eliminate duplication– Improved coordination

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Current Reimbursement Changes -New Payment Models

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Increasing Risk & Uncertainty, Enhanced Collaboration & Communication, Increasingly Complex Metrics and Business Practices

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Current Reimbursement Changes – Filing

• Electronic Filing– Effective for periods ending December 31, 2017: Providers

may electronically file report & electronically sign◊ Certification Statement must be checked for electronic signature◊ Signature must be Chief Financial Officer or Provider

Administrator

– Hard-copy of signature page with original ink signature only required if NOT electronically filing

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FY19 Proposed Inpatient Prospective Payment System (IPPS) Rule

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CMS Proposed Rule for FY19 Inpatient Payments Summary*• Increase of 1.75% in Operating Payment Rate (for

hospitals reporting quality measures and are meaningful users)

1.Market Basket Projected Increase 2.8%2.MACRA Documentation and Code Increase 0.5%3.Multifactor Productivity Adjustment Decrease 0.8%4.ACA Adjustment Decrease 0.17%

• CMS Accepting Comments until June 25, 2018

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*Source: https://www.gpo.gov/fdsys/pkg/FR-2018-05-07/pdf/2018-08705.pdf

https://www.gpo.gov/fdsys/pkg/FR-2018-05-07/pdf/2018-08705.pdf

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CMS Proposed Rule for FY19 Inpatient Payments Summary*(Continued)

• HRRP Penalties 2,610 Hospitals• Low Volume Hospitals +$72M• Medicare DSH +4.8% (or $140M)• Uncompensated Care +21.9% ($1.484B)

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* Sources: CMS website and http://www.hfma.org/Content.aspx?id=60616

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CMS Proposed Rule for FY19 Inpatient Payments Summary*(Continued)

• Meaningful Measure Initiative• Value Based Payment Program• Hospital Inpatient Quality Reporting Program (IQR)• E.H.R Programs• Price Transparency

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* Sources: CMS website and http://www.hfma.org/Content.aspx?id=60616

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FY19 Proposed Skilled Nursing Facility Rule

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CMS Proposed Rule for FY19 Skilled Nursing Facilities Summary*• Continued commitment to shift Medicare payments

from Volume to Value• Biggest three provisions:1. New Case-Mix Model to focus on patient’s condition2. SNF Value Based Purchasing Program (VBP)3. SNF Quality Reporting Program (QRP)

• Comments accepted until June 26, 2018

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* Sources: CMS website

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CMS Proposed Rule for FY19 Skilled Nursing Facilities Summary*(Continued)

1. Case-Mix: Change from RUGs payment to RCS (Resident Classification System) version 1

– Under the current SNF PPS system, rate is based primarily on therapy minutes rather than patient characteristics and care needs

– Aligns with CMS initiatives to move payment towards resident characteristics and value of services provided

– Renamed “SNF Patient-Driven Payment Model” (PDPM)

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2. Quality Reporting Program (QRP) the rule will adopt four new measures that address functional status starting in FY 2020:

– Change in Self-Care Score for Medical Rehabilitation Patients– Change in Mobility Score for Medical Rehabilitation Patients– Discharge Self-Care Score for Medical Rehabilitation Patients– Discharge Mobility Score for Medical Rehabilitation Patients

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3. Value-Based Purchasing Program (VBP) includes:– Updates to policies including the performance and

baseline periods for the FY21 SNF Program Year– Adjustment to the SNF VBP scoring methodology– Extraordinary Circumstances Policy (ECE)

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Payroll-Based Journal Update

• Transition to Payroll-Based Journal Data beginning in April 2018

• CMS will use PBJ data in their Five-Star Quality Rating System

• Penalties for errors or untimely filing• CMS shares common errors found in PBJ reporting

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FY19 Proposed Hospice Rule

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CMS Proposed Rule for FY19 Hospice*

• Proposed rate increase 1.8% – Depending on geographic location, rate could increase as

high as 3.3% or as low as 1.4%– Economic Impact $340M increased payments to hospices

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* Sources: CMS website, Leading Age summary

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CMS Proposed Rule for FY19 Hospice* (Continued)

• Advancing My HealthEData• Burden Reductions• Meaningful Measures• Improving Transparency

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CMS Proposed Rule for FY19 Hospice* (Continued)

• Cap amount for FY19 $29,205.44 (increased by 1.8% from FY18)

• Cap year runs October 1, 2018-September 30, 2019 • Self reporting Cap due February 28, 2020

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Hospice Industry Trends• Reduced revenue and margins • Increasing denials based on lack of medical necessity • Increasing partnerships among large hospice providers and

hospitals• Heightened regulatory/compliance issues• ACO development • Future development of “Star Rating” system on quality scores (after

HH launch)• Overall aging work force

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CMS Final Rule for FY18 Home Health Summary*

• Updates to the Home Health Prospective Payment System payment rates effective January 1, 2018

– National standardized 60-day episode payment rates– National per visit rates– Non-routine medical supply conversion (NRS) factor– Estimated $80M (-0.4%) reduction in payments to HHAs

• Nurses/Aides vs Therapies – Therapy Volume Determinant payment eliminated– Still many unanswered questions – proposed effective date is 2019

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* Sources: CMS website, NAHC Summary

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CMS Final Rule for FY18 Home Health Summary * (Continued)

• Updates to case-mix methodology refinements, as well as a change in the unit of payment from 60-day episodes of care to 30-day periods of care– Implementation for home health services beginning on or after

January 1, 2019– Non-budget neutral implementation: Estimated to save Medicare

$950 million (4.3%) in CY2019– Budget neutral implementation: Estimated to save Medicare $480

million (2.2%) in CY2019

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CMS Final Rule for FY18 Home Health Summary * (Continued)

• Changes to the Home Health Value-Based Purchasing (HHVBP) Model – Estimated to save Medicare $378 million in reduced

spending for IP Hospitalization and SNF stays by 2022– CMS moving forward with proposed VBP pilot

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Key Issues Facing Federally Qualified Health Centers

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Federal Funding

Alternative Payment Models

Partnership Opportunities

Behavioral Health 340B

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Emily Wetsel, CPACliftonLarsonAllen LLP Healthcare [email protected] 704-998-5252

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hfma a&a: medicare update...– under the current snf pps system, rate is based primarily on...

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