Washington Report – February, 2018 (Covers activity between 2/1/18 and 2/28/18)

Bill Finerfrock, Matt Reiter, Nathan Baugh, Ryan Mash and Carolyn Bounds

Short-Term Government Funding Bill Includes Many Medicare Policy Changes

White House Releases President’s FY 2019 Budget Request to Congress

Administration Proposes Requiring Registration/Enrollment of Medical Billing Companies

with Medicare

MIPS Quality Performance Data Now Available on QPP Website but ECs Still Have Time

to Report

CMS Will Begin Including QMB Status in Remittance Advice on July 1st

Trump Administration Proposes Rule to Expand Short-Term Insurance Plans

CMS Announces Opportunity for Eligible Clinicians to Participate in MIPS Burden

Reduction Study

Deadline to Express Interest in a Low Volume Appeal Settlement March 9th or 12th

Depending on NPI

GAO Studies Ways to Redesign Medicare Cost-Sharing

Administration’s Burden Reduction Initiatives Continue to Take Shape

CMS Office of the Actuary Releases National Health Expenditures Projections

CMS Transmittals

Short-Term Government Funding Bill Includes Many Medicare Policy Changes

In the early hours of February 9th, both the House and Senate approved, H.R. 1892 the Bipartisan

Budget Act of 2018 (BBA) that keeps the government funded through March 23rd. The bill was

signed into law (PL 115-123) by President Trump within hours of passing the House. The bill,

however, did much more than simply keep the government open. PL 115-123 will make a

number of changes to the Medicare program as well as other health programs.

The Bipartisan Budget Act of 2018 will significantly raise funding available for both domestic

discretionary spending as well as the money available for the Department of Defense. The new

law, in effect, breaks the budget “caps” that had been placed on both domestic discretionary and

defense spending since 2011 (Budget Control Act of 2011). Specifically, the top line budget

figures for both defense and non-defense discretionary spending will increase by about $300

billion over two years. The agreement also suspends the debt ceiling until March, 2019.

1

The increase in the non-defense spending in the budget deal will be $63 billion this fiscal year

and $68 billion next fiscal year. Although the agreement does not describe how this money will

be allocated (that is left up to the Appropriations Committees) it is expected that some of this

“new” money will result in increased spending for health programs overseen by the Department

of Health and Human Services (HHS) and its sub-agencies.

It should be noted that this agreement does not repeal the budget sequestration policy enacted as

part of the Budget Control Act of 2011 (BCA) which mandates a two percent across-the-board

cut to both defense and non-defense spending absent Congressional action (such as this

agreement) to exceed the caps.

The BCA of 2011 agreement mandates a two percent reduction in Medicare reimbursements if

the budget targets are not met. This mandatory sequestration was originally designed to expire in

2011. However subsequent legislation periodically extended the final year of Medicare

sequestration cut until 2025. This new agreement extends Medicare sequestration for an

additional two years meaning the two-percent reduction will remain in effect through 2027.

Depending upon your personal priorities, the BBA of 2018 is somewhat of a mixed bag for

healthcare providers. On the one hand, it reduces the 0.5 percent update to the Medicare

Physician Fee Schedule (MPFS) Conversion Factor scheduled to take effect on January 1, 2019,

to a 0.25 percent update. However, the new law repeals the Independent Payment Advisory

Board (IPAB), a very unpopular Board authorized under the Affordable Care Act (ACA).

Although never formally constituted, the ACA gave IPAB broad authority to institute Medicare

payment cuts with very limited Congressional oversight or input.

The new law also makes several important changes to the Medicare Quality Payment Program’s

(QPP) Merit-based Incentive Payment System (MIPS). Perhaps most notably, the PL 115-123

provides the Centers for Medicare and Medicaid Services (CMS) with increased flexibility to

implement MIPS by giving CMS the authority to establish the MIPS performance threshold for

the third, fourth and fifth MIPS performance years. The original statute required CMS to use

either the mean or the median Composite Performance Score (CPS) as the performance threshold

beginning in year three of MIPS reporting.

Absent this change, there would have been a drastic increase in the performance threshold from

the first two years. Eligible clinicians (EC) who score below the performance threshold will

receive a negative payment adjustment for the corresponding performance year. This flexibility

will allow CMS to gradually increase the performance threshold over time which should allow

many clinicians to avoid the MIPS penalties. CMS would be required to use the mean or median

CPS beginning in the sixth year of MIPS.

The bill grants CMS discretion in how to weight the Resource Use (cost) performance category

in MIPS for the second through fifth years of MIPS. Cost will account for ten percent of each

EC’s CPS in the 2018 reporting year and is required by statute to represent 30 percent of an EC’s

2

CPS in the 2019 reporting year. CMS is required to maintain at least a weighting of 10 percent

for the cost category. Further, CMS will not be allowed to factor improvement within this

category into an EC’s CPS.

The new law makes it easier for providers to obtain a hardship exemption from the Advancing

Care Information (ACI) reporting category of MIPS. It also removes a requirement that CMS

make use of EHR requirements more stringent over time. Relaxing this requirement will increase

the likelihood that providers will be able to comply with those standards.

The legislation provides an additional four years of authorization for the Children’s Health

Insurance Program (CHIP) beyond the six-year reauthorization passed in January. This will

result in approximately $6 billion in savings for the federal government. It also reauthorizes

funding for Community Health Centers (CHC) for two years and increases funding by about $4

billion for each year. Funding for CHCs expired on September 30, 2017.

Lastly, the bill addresses a number of temporary Medicare payment policies that expired at the

end of 2017 due to Congressional inaction. These provisions are often referred to as “extenders.”

The bill extends most of these expired provisions, such as:

Extending the ground ambulance add-on payments until December 2023.

Extends the Geographic Practice Cost Indices (GPCI) floor of 1.0 on the “work”

component of Medicare payments for two years, until January 1, 2020.

Permanently repeals the Medicare payment cap for outpatient physical therapy,

occupational therapy and speech-language pathology services. CMS would continue to

require that an appropriate modifier be included on claims over the current exception

threshold indicating that the services are medically necessary, and it would lower the

threshold for the targeted manual medical review process from $3,700 to $3,000.

Congress will have to pass another bill funding the government by March 23rd if it wants to

avoid another government shutdown. It is expected that they will meet this deadline and pass

legislation funding the government through the remainder of the 2018 Fiscal Year (September

30, 2018).

Return to Top

White House Releases President’s FY 2019 Budget Request to Congress

The President has officially submitted his annual Budget Request to Congress for the 2019 fiscal

year (October 1, 2018 – September 30, 2019). This Budget Proposal contains many significant

regulatory and legislative policy proposals. Although the President’s proposed Budget is mostly

a symbolic document, it is a clear indication of the Administration’s policy priorities on many

important issues.

3

Each year the President is required to submit a formal Budget Request to Congress. President

Trump’s Budget, like those of his predecessors, was characterized as “dead on arrival” shortly

after it was submitted to Congress.

The actual federal discretionary and mandatory spending decisions are made by Congress which

passes its own budget to set top-line spending caps. Congress passes appropriations bills that

allocate money to all of the federal agencies. The Congressional budget and appropriations bills

typically reflect the priorities of Congress and not the President. Sometimes they align but more

often than not, they differ.

The President’s Budget makes several significant health policy proposals in its proposed budget

for the Department of Health and Human Services (HHS). The Budget requests $68.4 billion for

HHS, a $17.9 billion (21 percent) decrease from the estimated 2018 enacted level of $87.3

billion.

The Budget projects that the Centers for Medicare and Medicaid Services (CMS) will spend $1.1

trillion in mandatory and discretionary spending in FY 2019 across Medicare, Medicaid, the

Children’s Health Insurance Program (CHIP) and other programs. The Budget proposes to

reduce Mandatory spending across Medicare, Medicaid and CHIP by $632 billion over the next

decade. $493.7 billion of this would come from Medicare.

The President’s budget would fulfil an eight-plus year Republican campaign promise to fully

repeal and replace the Affordable Care Act (ACA). The GOP Congress and President Trump

previously succeeded in repealing the ACA’s individual mandate penalty as part of the tax

reduction/reform package enacted in December, 2017. The Budget supports a full repeal and a

replacement in the form of the “Graham-Cassidy” legislation that was considered, but not

passed, in 2017. This bill would provide states block grants to come up with their own

replacement for the ACA’s individual and small business exchanges as well as the Medicaid

expansion.

Despite proposing to repeal and replace the ACA, the Budget seeks to reform the ACA for the

years it is in place before a replacement takes effect. Among the reform proposals, the Budget

proposes to allow states to set their own requirements for determining whether a plan is a

Qualified Health Plan (QHP).

The Administration is also proposing to reduce the 90-day grace period, for which a consumer

can maintain their ACA coverage despite not paying their premium, to a 30-day grace period.

The Budget would also make drastic changes to the Quality Payment Program (QPP). Among

the proposals, the Administration would limit Merit-based Incentive Payment System (MIPS)

payment adjustments to Medicare Physician Fee Schedule (PFS) services rather than to all Part B

services.

4

The Administration is proposing to eliminate two of the four performance categories in MIPS

beginning with the 2021 MIPS reporting year. Specifically, the Advancing Care Information (use

of technology) and the Clinical Practice Improvement Activities categories would be eliminated.

MIPS performance would be assessed based on quality and cost measures and clinicians would

not be required to report any data. Instead, data would be collected through claims and surveys

and would only be reported at the group level. This implies that individual reporting would not

be allowed.

The Administration is also proposing to eliminate the threshold that clinicians must meet to be

eligible for the bonus payments linked to Advanced APM participation. The proposal changes

this bonus payment from a five percent lump sum bonus based on all PFS payments so that the

five percent bonus would only apply to PFS revenues received through the Advanced APMs in

which they participate.

Other important Medicare policy proposals include continuing to rely on prior authorization for

services determined to be at high risk for fraud and abuse. It would also allocate extra money for

reforming the Medicare claims appeals process and addressing its massive backlog of pending

appeals.

The Trump Budget also proposes to have Medicare implement a site-neutral payment policy

across all off-campus hospital outpatient departments. Current law only applies a site-neutral

payment policy for new off-campus hospital outpatient departments (built after the law was

enacted in November, 2015). This proposal would extend this policy to existing off-campus

hospital outpatient departments.

Finally, the Budget proposes to reduce Medicare’s coverage of bad debt. Medicare currently

reimburse certain providers to cover copayments and deductibles for beneficiaries who are

unable to pay at 65 percent of the bad debt. The Administration is proposing to gradually reduce

this reimbursement to 25 percent over three years.

Again, this budget proposal should be viewed as an indication of the President’s priorities with

the understanding that little (if any) of this proposal will become law.

Return to Top

Administration Proposes Requiring Registration/Enrollment of Medical Billing Companies

with Medicare

Buried in the supporting documents accompanying the Trump Administration’s budget proposal

under the heading “Medicare: Address Fraud and Abuse” is a proposal that “clearinghouses and

billing agents acting on behalf of Medicare providers and suppliers enroll in the program.”

The budgetary “savings” chart that accompanies the series of “Fraud and Abuse” prevention

proposals, identifies nearly a dozen ideas for reducing fraud and abuse and generate savings to

5

the Medicare program. CMS estimates that requiring clearinghouses and billing agents to enroll

in Medicare would result in “zero” savings.

This idea is not new. Section 6503 of the Affordable Care Act authorized states to enroll any

agent, clearinghouse, or other alternate payee (as defined by the Secretary) that submits

Medicaid claims on behalf of a health care provider to register with the State. It appears very

few states have exercised this authority.

HBMA staff reached out to CMS staff responsible for provider enrollment and they were not

familiar with this budgetary proposal and had no guidance from the Secretary of HHS or the

CMS Administrator on what or how this would work. HBMA will remain in contact with

appropriate CMS staff should the agency attempt to operationalize this budget

recommendation.

Return to Top

MIPS Quality Performance Data Now Available on QPP Website but ECs Still Have Time

to Report

Although the deadline to report 2017 Quality Payment Program (QPP) data is not until March

31st, eligible clinicians (EC) who have already reported their 2017 data for the Merit-based

Incentive Payment System (MIPS) Quality category via claims reporting can now view their

results online via the QPP website.

ECs can only report MIPS quality data via claims if they are reporting as an individual. Claims

reporting for quality data is not an available reporting mechanism for ECs reporting as a group.

ECs can report Quality data using reporting mechanisms other than claims including registry

reporting or directly through the CMS QPP website (www.qpp.cms.gov). Each of the four MIPS

categories has its own set of reporting options that might apply differently depending on if an EC

is reporting individual or as part of a group.

EC’s who fail to report any MIPS data will receive a four percent downward adjustment on their

Medicare Part B revenue in 2019. ECs can avoid the negative payment adjustments if they

successfully report any amount of quality or clinical practice improvement data for 2017 or if

they are exempt from MIPS reporting for reasons such as falling below the low-volume provider

threshold.

CMS has made available several resources on MIPS reporting on the Quality Payment Program

website:

MIPS Claims Data Submission Fact Sheet

MIPS Data Submission Video

MIPS Data Submission Fact Sheet

6

Reporting questions can also be directed to the QPP Service Center (Call: 1-866-288-8292 or

TTY: 1-877-715-6222; Email: qpp@cms.hhs.gov).

Return to Top

CMS Will Begin Including QMB Status in Remittance Advice on July 1st

After delaying an initiative to include a patient’s status as a Qualified Medicare Beneficiary

(QMB) in a claim’s remittance advice (RA) to address some technical issues, the Centers for

Medicare and Medicaid Services (CMS) will restart this action on July 1st.

CMS is making a strong effort to help providers accurately bill QMBs – or rather, help providers

accurately not bill them.

QMBs are individuals who are dually eligible for Medicare and Medicaid. Providers are

prohibited from charging these patients for the cost sharing associated with Medicare Part A and

B services under any circumstances. Medicaid programs can cover this cost sharing obligation

but often times do not.

A 2015 study found that many QMBs are still being wrongly billed and that confusion about

billing rules persists. As part of this effort, CMS recognizes that often times a provider is not

intentionally billing a QMB for Medicare cost sharing. The provider usually does not know that a

patient is a QMB.

In its original policy which was issued in 2017, CMS indicated the QMB status and zero cost-

sharing liability of beneficiaries would be included in the RA and the Medicare Summary Notice

(MSN) for claims processed on or after October 2, 2017.

In particular, CMS updated the MSN to include new messages for QMB beneficiaries and reflect

$0 cost-sharing liability. In addition, CMS modified the RA to include new Alert Remittance

Advice Remark Codes (RARC) to notify providers to refrain from collecting Medicare cost-

sharing because the patient is a QMB.

However, these changes to the display of patient liability in the RAs for QMB claims caused

“unforeseen” issues affecting the processing of QMB cost-sharing claims directly submitted by

providers to states and other payers secondary to Medicare.

On December 8th, CMS temporarily suspended the policy of providing QMB status in RA while

these issues were corrected. CMS is preparing to begin this notification policy again on July 1st.

Return to Top

7

Trump Administration Proposes Rule to Expand Short-Term Insurance Plans

Which is better: Having good, but relatively inexpensive health insurance or having more

comprehensive but also more expensive health insurance? That question is at the heart of the

debate over newly proposed regulations put forward by the Trump Administration that would

make short-term, limited duration insurance plans (STLDI) more readily available.

On February 21st, the Trump administration issued a proposed a rule that would expand the

coverage period for STLDI plans. The rule would allow consumers to purchase STLDI plans for

up to 12 months, rolling back the Obama-era regulation that limited such plans to three months.

Consumers will be able to renew these plans after 12 months subject to approval from the

insurer.

STLDI plans are a type of health insurance coverage that were originally designed to fill

temporary gaps in coverage when an individual was transitioning from one plan or coverage to

another form of coverage. These plans generally offer less-comprehensive coverage than ACA

plans. STLDI plans are exempt from many ACA requirements such as the inclusion of essential

health benefits and STLDI plans can impose certain pre-existing condition requirements as a

condition of sale. Insurers offering STLDI plans are not required to guarantee renewal of these

plans. As a result of these differences, STLDI plans are often less expensive than ACA approved

health plans.

This proposed rule is being put forward as a consequence of the Executive Order President

Trump issued in early 2017 directing the Centers for Medicare and Medicaid Services (CMS) to

expand access to short-term insurance plans as an alternative to plans sold through the individual

and small group exchanges established by the Affordable Care Act (ACA).

Proponents of the rule claim that if it is adopted, it will increase flexibility and options for

consumers, allowing them to purchase the level of insurance they feel they need rather than what

is federally mandated by the ACA. CMS cites the fact that premiums are rising on the ACA

exchanges and fewer insurers are offering plans as justification to provide more choices for

consumers in the form of STLDI plans.

Critics of the rule believe that it will weaken the individual market because many young, healthy

people will “vote with their feet” and voluntarily leave the ACA insurance pool opting instead

for these less comprehensive and less expensive health plans. This would, it is argued, leave the

least healthy individuals in the ACA pool further driving up the cost of ACA plans.

The Trump administration is said to be targeting the 28 million uninsured Americans with this

proposal. In announcing his new proposal, CMS Administrator Seema Verma said, “What we see

right now is that there are healthy people sitting on the sidelines without coverage, and this is an

opportunity to provide them with coverage.”

8

CMS is accepting public comments on the proposed rule until April 23, 2018. A final rule is

expected to be issued later in the spring.

Return to Top

CMS Announces Opportunity for Eligible Clinicians to Participate in MIPS Burden

Reduction Study

The Centers for Medicare and Medicaid Services (CMS) has announced an opportunity for

eligible clinicians (EC) to apply for inclusion in a CMS study on the burdens of reporting data

under the Merit-based Incentive Payment System (MIPS). Not every EC who applies will be

accepted in the study. The study will run from April 2018 through March 2019.

Specifically, CMS is looking to:

Study clinical workflows and data collection methods using different submission

systems.

Understand the challenges ECs have when collecting and reporting quality data.

Recommend changes to try to lower an EC’s burden, improve quality data collection and

reporting, and enhance clinical care.

ECs who participate will earn full credit towards the Clinical Practice Improvement Activity

(CPIA) category of MIPS. If a selected EC reports MIPS data as part of a group rather than as an

individual, their entire reporting group will earn this credit.

Selected ECs will be required to:

Complete a 2017 MIPS participation survey in April/May 2018.

Complete a 2018 MIPS planning survey in September/October 2018.

If invited by the study team, join a virtual 90-minute focus group between November

2018 and February 2019.

Meet minimum requirements for the MIPS Quality performance category by submitting

data for at least three measures in the MIPS Quality performance category, as required

for 2018 MIPS participation. The data submitted must:

o Include one outcome measure.

o Be submitted to us by the March 31, 2019, final MIPS reporting deadline.

o Be submitted through any method accepted under MIPS for Year 2 of the Quality

Payment Program (2018).

Applications must be submitted by March 23, 2018. Interested ECs can apply online via:

https://surveys.abtassociates.com/s3/FY18-Improvement-Activity-IA-Study-Application. For

additional information on the study, ECs can email: MIPS_Study@abtassoc.com.

9

Return to Top

Deadline to Express Interest in a Low Volume Appeal Settlement March 9th or 12th

Depending on NPI

On February 5, 2018, CMS began accepting Expressions of Interest (EOIs) for its new Low

Volume Appeals (LVA) program. This new program will allow providers with fewer than 500

appeals pending at the Office of Medicare Hearing and Appeals (OMHA) and the Medicare

Appeals Council (Council) at the Departmental Appeals Board to receive a settlement on those

appeals. Each of these appeals must be a total billed amount or $9,000 or less to qualify for this

settlement. Under the program, The Centers for Medicare and Medicaid Services (CMS) will

settle appeals at 62 percent of the net Medicare approved amount.

Eligible appeals are appeals meeting all of the following criteria:

1. The appeal was pending before the OMHA and/or Council level of appeal as of November 3,

2017;

2. The appeal has a total billed amount of $9,000 or less;

3. The appeal was properly and timely filed at the OMHA or Council level as of November 3,

2017;

4. The claims included in the appeal were denied by a Medicare contractor and remain in a fully

denied status in the Medicare system;

5. The claims included in the appeal were submitted for payment under Medicare Part A or Part

B;

6. The claims included in the appeal were not part of an extrapolation; and,

7. As of the date this Agreement is fully executed, the appeal was still pending at the OMHA or

Council level of review.

Providers wishing to utilize this settlement procedure must initiate the process by submitting an

EOI. The deadline to do so has almost arrived. March 9, 2018, is the last day for appellants with

National Provider Identifiers (NPIs) ending in an even number (0, 2, 4, 6, 8) to submit an

expression of interest (EOI) for the LVA settlement initiative.

From March 12, 2018, through April 11, 2018, appellants with NPIs ending in an odd number (1,

3, 5, 7, 9) can submit their expressions of interest. Appellants with both odd and even NPIs

should submit one EOI per NPI during these designated timeframes.

Additional information on the LVA including how to submit an EOI is available on the CMS

LVA website.

CMS is hosting a Medicare Learning Network informational conference call on Tuesday March

13, 2018, from 1:30 to 3:00 pm. This call will cover the logistics of this settlement process.

Return to Top

10

GAO Studies Ways to Redesign Medicare Cost-Sharing

The Government Accountability Office (GAO) conducted a study in which it examined ways to

redesign Medicare FFS (Fee for Service) cost-sharing benefits for both Medicare Parts A and B.

Medicare Part A currently has a $1,316 per-inpatient-episode deductible and a per-day

coinsurance component for hospital stays beyond 60 days. Medicare Part B currently has a $183

annual deductible and requires beneficiaries to pay 20 percent coinsurance for most services.

There is no annual out of pocket spending cap for Medicare FFS.

The GAO, as well as some Members of Congress believe that the Medicare FFS cost-sharing is

poorly designed and outdated. In its report, the GAO says, “Medicare FFS’s cost-sharing is

complicated and not well designed to discourage unnecessary use of services.”

The GAO was asked to examine several options for redesigning Medicare FFS cost-sharing

including a single deductible, uniform coinsurance above the deductible, and an annual cap on

out-of-pocket (OOP) spending. With regard to these proposals, this report describes:

1. Implications of the current Medicare FFS cost-sharing design and options for modernizing

while maintaining Medicare’s and beneficiaries’ aggregate share of costs;

2. How modernized cost-sharing designs could directly affect beneficiaries’ cost-sharing

responsibilities; and

3. How modernized cost-sharing designs could indirectly affect beneficiaries’ out-of-pocket

costs.

For this report, the GAO analyzed Medicare claims data and reviewed studies on this topic. The

GAO looked at four different FFS designs over an eight-year period to determine the short and

long term impact of changing the design vs keeping the existing model. Specifically, GAO

wanted to see various types of redesigned cost-sharing benefits reduced OOP cost for

beneficiaries and reduced or increased Medicare’s share of the spending. The examples GAO

tested are as follows:

Example Deductible *(Single annual

deductible for all four

proposals)

Coinsurance Spending Cap

Current

Medicare Cost-

Sharing Benefit

Design

$1,316 – Part A

$183 – Part B

Varies based on

length of stay and

type of facility.

20%

None

Proposal 1 $0 18% $10,000

Proposal 2 $175 20% $6,700

Proposal 3 $525 20% $5,100

Proposal 4 $1,225 20% $3,400

11

In modeling out each proposal over eight years, the GAO found that in the first year, FFS

redesigns that had low deductibles and higher caps (Proposals 1 and 2) resulted in either the

same or lower out-of-pocket costs than the current system, on average. The examples with higher

deductibles and lower caps (Proposals 3 and 4) would see a rise in median costs over this same

time period.

Over the full eight-year period, Proposals 1 and 2 came closer to the current median, while being

slightly more expensive. However, there would be a great decrease in maximum out-of-pocket

costs as all four proposals have hard caps implemented. Models 3 and 4 would lead to greater

median and average OOP spending but the annual cap would be much lower than the first two

proposals meaning exposure catastrophic expenses would be mitigated.

The GAO did not recommend any of the proposals and reiterated that it is difficult to assess the

net effect of any of these potential redesigned benefit structures. The GAO acknowledged that in

modernizing the FFS cost-sharing benefit design, there would need to be tradeoffs between

deductibles, coinsurance and annual caps. These new designs would limit high OOP costs

12

associated with catastrophic care, and increase the simplicity of the system, however they would

generally result in higher average OOP spending for beneficiaries.

Return to Top

Administration’s Burden Reduction Initiatives Continue to Take Shape

The Centers for Medicare and Medicaid Services (CMS) recently announced two new initiatives

to help reduce the administrative burdens various Medicare programs place on providers. These

are the Meaningful Measures Initiative (MMI) and Patients Over Paperwork (POP). Over the

past few months these burden reduction programs have begun to take shape.

For example, CMS is easing the requirements for how providers in teaching settings can oversee

how medical students document evaluation and management Services (E/M) in the medical

record. Under current regulation, a physician must write their own notes in the medical record

for documenting E/M services. This has been criticized as being inefficient for causing

redundancies and adding to the time burden for the physicians.

As part of the Administration’s efforts to reduce administrative burdens on healthcare providers,

this action will now allow a teaching physician to verify what was documented by a medical

student instead of being required to re-write the student’s notes themselves for every patient.

Specifically, CMS is updating Chapter 12, Section 100.1.1 of the Medicare Claims Processing

Manual to allow the teaching physician to verify in the medical record any student

documentation of components of E/M services, rather than re-documenting the work. The

teaching physician will be required to verify in the medical record all student documentation or

findings, including history, physical exam and/or medical decision making.

The teaching physician is still required to personally perform (or re-perform) the physical

examination and medical decision making activities of the E/M service being billed, but may

verify any student documentation of them in the medical record, rather than re-documenting this

work.

Other changes include allowing medical equipment suppliers to use bar codes to track

Certificates of Medical Necessity. CMS also clarified that a physician may delegate

documentation requirements to another person, as long as the physician signs and verifies the

documentation and that the scribe’s signature is never needed for payment.

Return to Top

13

CMS Office of the Actuary Releases National Health Expenditures Projections

On February 14th, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary

(OACT) released its annual projected national health expenditures for the coming decade. OACT

projects that national health expenditures will grow by 5.5 percent annually between 2017 and

2026.

“Healthcare spending” includes spending by Medicare and other insurers on healthcare benefits

and personal healthcare spending by individuals on medical goods and services including

medical services and prescription drugs.

Growth in healthcare spending is projected to outpace national GDP growth by one percent over

this period. CMS expects healthcare’s share of GDP to grow from 17.9 percent to 19.7 percent

over the next ten years.

Medicare spending is expected to be the largest contributor of healthcare spending growth.

OACT projects Medicare will see a 7.4 percent annual growth over the ten year window studied.

Private insurance and Medicaid are expected to grow at 4.7 percent and 5.8 percent, respectively.

Personal spending on healthcare services is projected to average 5.5 percent over ten years with

increased prices and utilization of healthcare services as the primary factors for this increase.

The percentage of Americans with health insurance is expected to decrease from 91.1 percent to

89.3 percent. OACT believes this is largely due to the elimination of the Affordable Care Act’s

(ACA) Individual Mandate penalty as well as a downward trend in employer-sponsored health

insurance enrollment.

These projections are made using current law. It is highly unlikely that current law goes

unchanged for the next decade. In fact, OACT’s projections will likely influence policy changes.

Although these projections will likely change over the next ten years, these OACT projections

can be a useful benchmark for future policy changes.

Return to Top

CMS Transmittals

The following Transmittals were released by CMS during the month of February.

Transmittal

Number Subject

Effective

Date

R2039OTN

ICD-10 and Other Coding Revisions to National Coverage

Determinations (NCDs) 2018-02-28

R773PI Form CMS-855O Processing Guide 2018-03-23

14

R771PI

Clarification of Instructions Regarding the Intensive Level

of Rehabilitation Therapy Services Requirements 2018-03-23

R3982CP

Update to the Federally Qualified Health Center (FQHC)

Prospective Payment System (PPS) for Calendar Year (CY)

2018 - Recurring File Update

2018-04-02

R2034OTN

Identifying and Eliminating Discrepancies in Shared System

Enrollment Data and Provider Enrollment Chain and

Ownership System (PECOS) Data

2018-07-01

R3976CP

Quarterly Update to the Medicare Physician Fee Schedule

Database (MPFSDB) - April 2018 Update 2018-04-02

R3980CP

Remittance Advice Remark Code (RARC), Claims

Adjustment Reason Code (CARC), Medicare Remit Easy

Print (MREP) and PC Print Update

2018-07-02

R2031OTN

Modifications to the Implementation of the Paperwork

(PWK) Segment of the Electronic Submission of Medical

Documentation (esMD) System

2018-07-02

R4PR242

Provider Reimbursement Manual Part 2, Provider Cost

Reporting Forms and Instructions, Chapter 42, Form CMS-

265-11

N/A

R2032OTN

Provider Enrollment, Chain, and Ownership System

(PECOS) Extract Changes for Multi-Carrier System (MCS)

- Analysis Only

2018-07-02

R2033OTN

ICD-10 and Other Coding Revisions to National Coverage

Determinations (NCDs) N/A

R3978CP

Common Edits and Enhancements Modules (CEM) Code

Set Update 2018-07-02

R3977CP

Healthcare Provider Taxonomy Codes (HPTCs) April 2018

Code Set Update 2018-07-02

R2035OTN

Targeted Probe and Educate Metrics Deliverables Update

and Glossary 2018-03-19

R3975CP

Healthcare Common Procedure Coding System (HCPCS)

Codes Subject to and Excluded from Clinical Laboratory

Improvement Amendments (CLIA) Edits

2018-04-02

R3973CP

Quarterly Update for Clinical Laboratory Fee Schedule and

Laboratory Services Subject to Reasonable Charge Payment 2018-04-02

R3972CP

Update to the Federally Qualified Health Center (FQHC)

Prospective Payment System (PPS) for Calendar Year (CY)

2018 - Recurring File Update

2018-04-02

R768PI Post-Payment Review Timeliness Requirements 2018-04-01

15

R3974CP

Diagnosis Code Update for Add-on Payments for Blood

Clotting Factor Administered to Hemophilia Inpatients 2018-07-02

R3961CP Editing Update for Mammography Services 2018-07-02

R2026OTN

Part B Detail Line Expansion - Multi-Carrier System (MCS)

Phase 8 N/A

R2025OTN

Shared System Enhancement 2014: Implementation of

Fiscal Intermediary Shared System (FISS) Obsolete On-

Request Jobs - Phase 1

N/A

R766PI

Comprehensive Error Rate Testing (CERT) Updates to

Chapter 12 of Pub. 100-08 2018-03-02

R241BP New “K” Code for Therapeutic Shoe Inserts 2018-04-02

R3MPI Update to the Medicaid Program Integrity Manual (PIM) 2018-04-03

R191DEMO

Update to CR9341 Oncology Care Model (OCM) Restricted

Care Management Code List 2018-07-02

R2030OTN

Shared System Enhancement 2014: Implementation of

Fiscal Intermediary Shared System (FISS) Obsolete Core

Reports - Phase 3

2018-07-02

R3966CP

Quarterly Healthcare Common Procedure Coding System

(HCPCS) Drug/Biological Code Changes - April 2018

Update

2018-04-02

R2028OTN

Shared System Enhancement 2014: Implementation of

Fiscal Intermediary Shared System (FISS) Obsolete

Financial Reports - Phase 3

2018-07-02

R3962CP

Modifications to the National Coordination of Benefits

Agreement (COBA) Crossover Process N/A

R2029OTN

Implementation of Automating First Claim Review in Serial

Claims for Durable Medical Equipment, Prosthetics,

Orthotics, and Supplies (DMEPOS)

N/A

R3965CP

Reinstating the Qualified Medicare Beneficiary Indicator in

the Medicare Fee-For-Service Claims Processing System

from CR 9911

2018-07-02

R204NCD

Supervised Exercise Therapy (SET) for Symptomatic

Peripheral Artery Disease (PAD 2018-07-02

R298FM

Removal of Contractor Reporting Requirements for the

Physician Scarcity Area (PSA), the Health Professional

Shortage Area Surgical Incentive Payment Program (HSIP)

and the Primary Care Payment Incentive Program (PCIP)

Quarterly Reports

2018-07-02

R3969CP

Supervised Exercise Therapy (SET) for Symptomatic

Peripheral Artery Disease (PAD) 2018-07-02

16

R3970CP

Removal of Contractor Reporting Requirements for the

Physician Scarcity Area (PSA), the Health Professional

Shortage Area Surgical Incentive Payment Program (HSIP)

and the Primary Care Payment Incentive Program (PCIP)

Quarterly Reports

2018-07-02

R3971CP

E/M Service Documentation Provided by Students (Manual

Update) 2018-03-05

R3963CP

Quarterly Update to the National Correct Coding Initiative

(NCCI) Procedure-to-Procedure (PTP) Edits, Version 24.1,

Effective April 1, 2018

2018-04-01

Return to Top

17