Tuesday, August 02, 2005

CMS Releases Fiscal Year 2006 Medicare Reimbursement Regulations
[Aug 02, 2005]

      CMS on Monday released regulations regarding payments to Medicare providers for fiscal year 2006, CQ HealthBeat reports. The regulations include a final rule to increase payment rates for hospital inpatient care an average of 3.7% in FY 2006 and 3.3% for facilities that do not submit data on quality of care. CMS also released a final rule on payments to inpatient rehabilitation facilities and a proposed rule on payments to physicians (Reichard, CQ HealthBeat, 8/1). Summaries of the regulations appear below.

• Physician payments: In accordance with the current formula used to calculate Medicare physician payments, CMS proposed a 4.3% reduction in payments to doctors for FY 2006 for more than 7,000 procedures. According to CMS Administrator Mark McClellan, "CMS is working with members of Congress, physician organizations and other health care stakeholders on ways to improve physician payments without adding to overall Medicare costs, if at all possible." The American Medical Association has warned that many doctors will stop seeing Medicare beneficiaries if the payment reduction takes place (Freking, AP/Philadelphia Inquirer, 8/2). The physician-payment proposal also calls for a large potential reduction in the dispensing fee for inhalation therapy via nebulizers and an expansion of anti-referral prohibitions. The physician-payment proposal also would change payments for drugs and biological products billable outside Medicare's standard payment rate for dialysis facilities to the average sales price plus 6%. In addition, coverage for glaucoma screening would be extended to Latino Americans who are ages 65 and older, and payments to certain community heath centers that contract with Medicare Advantage plans would be raised. CMS also would reduce payments for some diagnostic imaging procedures to take into account "their limited additional costs when they are performed on contiguous body parts in the same session with the patient." Finally, CMS has proposed improving data capture in a pilot project on quality of care for chemotherapy patients (Reichard, CQ HealthBeat, 8/1). The agency will accept public comments on the proposed physician-payment regulations until Sept. 30 and will publish a final rule in November (AP/Philadelphia Inquirer, 8/2).
  
  
• Hospital inpatient care: CMS issued a final rule governing hospital inpatient care that requires hospitals to "correctly abstract and report clinical data on 10 quality measures relating to the treatment of heart attack, heart failure and pneumonia cases for two consecutive calendar quarters" to receive the full 3.7% payment increase for FY 2006. Facilities that do not report such data will receive a payment increase averaging 3.3%. In addition, the regulation seeks to better match Medicare payments to severity of illness of cardiovascular patients. The rule, which seeks to address issues related to physician-owned cardiac specialty hospitals, revises payments for cardiovascular care to "make sure that the hospitals that do best in Medicare are the ones that do best in quality and cost, not the ones that get the most straightforward cases," McClellan said. The inpatient rule also increases to 182 the number of diagnosis-related payment groups subject to Medicare's transfer policy, under which Medicare reduces payment to hospitals when patients are transferred to a skilled nursing facility or other "post-acute care setting that provides most of the patient care," CQ HealthBeat reports.
  
  
• Inpatient rehabilitation care: CMS also issued a final rule for inpatient rehab care that increases total Medicare payments to the industry by $210 million in FY 2006, a 3.4% increase. According to McClellan, the increase is intended to ensure access to high-quality care. He added, however, that CMS "will continue to monitor the impact of our payment policies on access to the rehabilitation services needed by the most severely disabled beneficiaries" (Reichard, CQ HealthBeat, 8/1).

Related Medicare Coverage
The following summarizes other recent news coverage of Medicare developments.

• Appeals: The Government Accountability Office in a report made public Monday warns that HHS is unprepared to assume the responsibility of handling Medicare appeals from individuals whose requests for coverage or reimbursement have been denied, a move mandated in the 2003 Medicare law, CQ HealthBeat reports. Under a plan developed by HHS and the Social Security Administration -- which currently handles such appeals -- a single HHS Medicare appeals unit would be created between July 1 and Oct. 1. In its report, GAO says that the plan developed by HHS and SSA lacks adequate detail, which seriously jeopardizes "a successful and timely transition." GAO says that HHS' timeframe for hiring and training administrative law judges to administer the hearings is "extremely ambitious and provides little margin for error" and also expressed concern about "operational challenges" at HHS, including the implementation of a new Medicare appeals case-tracking system. GAO also raises concerns that the reduction in the number of hearing rooms available to beneficiaries -- SSA has 141 and HHS has only four -- could deny beneficiaries access to hearings. In addition, the report says HHS relies too heavily on videoconferencing technology to hold the hearings and "has not provided convincing evidence" that the technology is an adequate substitute for in-person hearings. HHS responded to the report by saying that videoconferencing hearings are an adequate substitute and that beneficiaries still can request in-person hearings (CQ HealthBeat [1], 8/1).
  
  The report is available online. Note: You must have Adobe Acrobat Reader to view the report.
  
  
• CMS tool kit: CMS has posted on its Web site brochures, fact sheets and pamphlets for doctors and their staff to distribute to help educate patients about the new Medicare prescription drug benefit. The materials include information on where providers can refer patients for help in signing up for the benefit and toll-free numbers for the State Health Insurance Program offices. In a letter to doctors accompanying the materials, McClellan suggested that doctors direct patients to call 1-800-Medicare or visit medicare.gov to learn more about their options under the benefit and organizations that can help them enroll. In October, CMS also will give providers access to a program that will allow doctors to list their patients' drugs and identify possible plans that best fit their patients' needs (CQ HealthBeat [2], 8/1).
  
  
• Web site: In addition, CMS on Monday announced that it has launched a secure Web site for employers and unions to apply for the subsidy available to them under the new prescription drug benefit. Employers and unions that retain their existing retiree prescription drug coverage programs will be eligible for a subsidy equal to 28% of their costs from the program. The subsidies were included in the 2003 Medicare law as an incentive to employers and unions to continue offering their retiree drug benefits (CQ HealthBeat [3], 8/1).
  
  
• Disease-management pilot program: The Washington Post on Tuesday examined a CMS pilot program that seeks to test whether nurses monitoring patients from privately run call centers can improve the health and reduce the costs of Medicare beneficiaries with diabetes or congestive heart problems or both. CMS has selected eight firms to test the effectiveness of monitoring patients with these conditions in parts of Florida, Georgia, Illinois, Maryland, Mississippi, Oklahoma, Pennsylvania, Tennessee and Washington, D.C. The firms, including Nashville-based American Healthways, have signed three-year contracts with CMS to administer the call centers in return for a fee. Nurses hired by the call centers explain test results, suggest pain-reduction techniques, remind patients to fill prescriptions and arrange rides to doctor appointments, among other things. Programs that fail to reduce the costs of the beneficiaries participating in the pilot program by 5% in comparison with a control group must refund the fees they receive from CMS (ElBoghdady, Washington Post, 8/2).

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