Covers Activity Between 11/1/13 and 11/30/13

Washington Report – November, 2013 (Covers activity between 11/1/13 and 11/30/13)

Bill Finerfrock, Zhaneta Mansaku, Kirk Shields

Comments on SGR Repeal/Replace Proposal CMS issues 2014 Medicare Physician Fee Schedule Final Rule CMS issues 2014 Outpatient Facility Policy and Payment Changes Government Regulations and the ACA CMS Creates Open Payment App If you like your Health Insurance, You can Keep it… Period! White House announces delay of online health exchange for small businesses CMS issues policy guidance on Incarcerated Beneficiary Claim Denials Reducing the Federal Deficit – There are Options CMS Transmittals

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Comments on SGR Repeal/Replace Proposal

In late October a bipartisan/bicameral group of legislators put forward a DRAFT proposal to permanently repeal the flawed SGR formula (see related story in October, Washington Report).

On November 14th, HBMA, along with many other organizations, submitted detailed comments on this proposal to the House and Senate Sponsors. The Senate Finance Committee has scheduled a “mark-up” to formally consider this proposal on December 12th. At this time, it does not appear there is sufficient time for Congress to adopt a permanent SGR repeal prior to January 1, 2014. Consequently, it is highly likely that Congress will once again have to enact a short- term fix to prevent an SGR related cut in physician fee schedule payments from taking effect on January 1, 2014.

In the Association’s comments, HBMA began by making the point that when the Medicare program was created, the Congress and the President were concerned about the impact the new initiative would have on the way providers delivered care.

That concern was such a driving force behind the creation of the Medicare program that the authors put the following sentence as the first sentence of the Medicare statute:

“Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided...”

In reviewing the proposal, however, it appears that this is exactly what Congress is trying to do, exercise “control over the practice of medicine” and the “manner in which medical services are provided.” HBMA also made the point that if enacted, this SGR repeal/replace proposal would increase administrative and overhead costs for most physician practices. Such an outcome could prove financially devastating to many – especially smaller – physician practices. Such an outcome would be particularly ironic occurring on the cusp of the implementation of the Affordable Care Act, whose intent is to prevent millions of individuals from personal bankruptcy due to escalating healthcare costs. In this case, elected officials are putting forward legislation that has a very predictable likelihood of creating so much administrative burden and financial stress, that literally thousands of healthcare providers could be motivated to retire or be forced to abandon the practice of medicine.

In reviewing the proposal, HBMA leaders also concluded that a principal goal behind the administratively complex method for replacing annual inflationary adjustments with composite “incentive” payments, is to “encourage” more physicians to move from the independent practice of medicine into more organized delivery models. In these organized delivery models (Hospital owned health systems and ACOs or similar models) physicians are either employees of the organization or part of a large physician organization where the group is paid using some type of risk-sharing or risk-bearing model.

Therefore, HBMA concluded that if a provider wanted to see any increase in Medicare payments, their best hope would reside in moving to one of the Alternative Payment Models referenced in the summary.

Finally, HBMA noted that the proposal, if enacted as written, would impose a hard freeze on physician payments for 2014, 2015 and 2016.

HBMA expects that for those physicians who wish to continue to practice medicine but find none of the SGR related reforms attractive, they will either exit the system or may opt to move to a concierge style of medicine and only accept cash payments for services rendered, a trend that is already beginning to gain traction.

Availability of Data

This proposal will largely succeed or fail based upon the ability of providers to meet certain markers. The higher the composite score, the higher the annual update. The lower the composite score, the lower the annual update. And, for some providers, a negative update (i.e. reduction).

Under the proposed system, the ability of the provider to track, manage and report data (or have someone do it for him/her/them) will be critical to ensuring annual updates. Providers who are unable to manage, track and report data will consistently find themselves in the lowest rankings and subject to reductions in Medicare payments.

Testing the Process

Under the proposed SGR repeal/replace proposal, making sure providers have the right measures is only part of the challenge they will face in implementing these types of payment reforms. One can reasonably ask – will it work? Will the pieces fit together and result in accurate and timely updates? Will physicians entitled to increases get those increases and will those subject to penalties, see those reductions?

The only way to know the answer to these questions is to test the system before it goes live.

This is a major administrative undertaking and providers need to know if the composite scoring process will work as intended.

HBMA noted that, “This means full end-to-end testing!”

Over the past few weeks, providers have seen what happens when the government tries to make changes in the marketplace and does not adequately test the new system – it crashes.

If this proposal is adopted, CMS must test this system in the real world to make sure it works as advertised. The testing must be complete, end-to-end testing.

Finally, HBMA asked, “what will this mean for patients?”

HBMA’s letter notes, “Academicians and researchers can run all of the computer models you want to assess what the financial impact of these changes will be on total Medicare costs and total Medicare expenditures. But we have yet to see a model that assesses the impact of changes such as this on patients and their ability to access the healthcare delivery system.”

If Congress is concerned that people are angry because of government policies that are leading to their insurance company canceling their insurance, one can only wonder how people will react when they are told by their Doctor that Medicare payment policies have lead their physician to decide to leave the practice of medicine or disenroll from Medicare.

If you would like to read the entire document, go the to the HBMA website and you can find the comments under “Comments and Communications” section of the HBMA website.

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CMS issues 2014 Medicare Physician Fee Schedule Final Rule

As most people were in planes, trains or automobiles heading home to begin either the Thanksgiving Holiday or the start of Hanukkah, the Centers for Medicare and Medicaid released the 2014 physician fee schedule Final Rule.

This rule “with comment period” finalizes the Medicare physician and non-physician payment rates for 2014. According to a press release accompanying the final rule, “CMS projects that total payments under the fee schedule in 2014 will be approximately $87 billion.”

One of the more anticipated announcements from the final rule is the Medicare Conversion Factor (CF) for the subsequent year. Under the SGR formula, physicians have been annually subjected to reductions in the CF. However, due to Congressional intervention, most of these cuts have been avoided.

According to this Final Rule, CMS calculates the CY 2014 Physician Fee Schedule Conversion Factor to be $27.2006. This represents a reduction of 20.1% from the current CF of $34.0230. While less draconian than earlier estimates, this still represents a significant cut in physician fee schedule payments if Congress fails to intervene. Absent Congressional action, physicians will experience a 20.1% reduction in their fee schedule payments exclusively due to the SGR. This reduction in the CF could be mitigated for some specialties due to higher Relative Value Unit (RVU) scores for certain services. Conversely, the amount of the actual reduction per specialty could be even higher in those instances where the final rule reduces the RVU for certain services.

According to CMS, the 2014 payment rates increase payments for some medical specialties with some of the greatest increases going to providers of mental health services. However, CMS is also reducing the value of certain codes it has deemed “misvalued” (See link below).

The following documents provide supplemental information that you may wish to review as they pertain to your particular clients.

 CY 2014 PFS Final Rule Addenda [ZIP, 1MB]  CY 2014 PFS Final Rule Direct PE Inputs [ZIP, 5MB]  CY 2014 PFS Final Rule Indirect Practice Cost Indices [ZIP, 7KB]  CY 2014 PFS Final Rule Physician Time [ZIP, 504KB]  CY 2014 PFS Final Rule PE/HR [ZIP, 11KB]  CY 2012 PFS Utilization Data Crosswalked to 2014 [ZIP, 10MB]  CY 2014 PFS Final Rule 2013 to 2014 Crosswalk [ZIP, 10KB]  CY 2014 PFS Final Rule GPCI Public Use Files [ZIP, 1MB]  CY 2014 CPT Codes Subject to 90 Percent Equipment Utilization Rate Assumption [ZIP, 8KB]  CY 2014 PFS Actions on CY2013 New, Revised, and Potentially Misvalued Codes [ZIP, 47KB]

The final rule also includes several provisions regarding physician quality programs and the Physician Value-Based Payment Modifier. For 2016 CMS is finalizing its proposals to apply the Physician Value-Based Payment Modifier to physician groups with 10 or more eligible professionals. Also beginning in 2016 physicians in large groups (100 or more eligible professionals) will be subject to upward and downward payment adjustments based on performance. However, only upward adjustments based on performance will be applied to groups of physicians with between 10 and 99 eligible professionals. Physicians in these “small” groups will NOT be subject to downward payment adjustments at this time.

Beginning in 2014, individual eligible professionals will be able to report quality measures through qualified clinical data registries. This option has previously been reserved to physicians working in groups.

CMS is also going to align quality measures across quality reporting programs so that physicians and other eligible professionals may report a measure once to receive credit in all quality reporting programs in which that measure is used. Finally, certain data collected in 2012 for groups reporting certain PQRS measures under the Group Practice Reporting Option (GPRO) will be publicly reported on the CMS Physician Compare website in 2014.

In addition, this final rule with comment period includes discussions and/or policy changes regarding:

● Telehealth Services. ● Applying Therapy Caps to Outpatient Therapy Services Furnished by CAHs. ● Requiring Compliance with State law as a Condition of Payment for Services furnished “Incident to” Physician and Other Practitioner Services. ● Revising the MEI. ● Updating the Ambulance Fee Schedule regulations. ● Adjusting the Clinical Laboratory Fee Schedule based on technological changes ● Updating the - Physician Compare Website. - Physician Quality Reporting System. - Electronic Prescribing (eRx) Incentive Program. - Medicare Shared Savings Program. - Electronic Health Record (EHR) Incentive Program. ● Physician Value-Based Payment Modifier and the Physician Feedback Reporting

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CMS issues 2014 Outpatient Facility Policy and Payment Changes

On November 27, CMS released a final CY 2014 hospital outpatient and ambulatory surgical center (ASC) payment Final Rule. Most significantly, “CMS will replace the current five levels of hospital clinic visit codes for both new and established patients with a single code describing all outpatient clinic visits.” CMS believes that a single code and payment is administratively simpler for hospitals and “better reflects hospital resources involved in supporting an outpatient visit.”

CMS is also expanding efforts to bundle more outpatient services under a single payment because the agency believes this will “encourage more efficient delivery of outpatient facility services.”

Examples of the types of items and services that will be included in a single payment include drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; drugs and biologicals that function as supplies when used in a surgical procedure, including skin substitutes; certain clinical diagnostic laboratory services; certain procedures that are never done without a primary procedure (add-ons); and device removal procedures.

As part of this broader proposal to consolidate payment for larger groups of services, the final rule with comment period also establishes an encounter-based or “comprehensive” payment for certain device-related procedures like cardiac stents and defibrillators, but in a change from the proposed rule, delays its effective date to 2015.

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Government Regulations and the ACA

Over the past few years, the federal government has been issuing numerous regulations to implement the Affordable Care Act. Recently, the Center for Consumer Information and Insurance Oversight (CCIIO), published a compilation of all of the ACA related regulations issued since the law was enacted in March, 2010. Here is that list with the links to the final rules by subject matter area.

External Appeals July 23, 2010 OCIIO-9993-IFC: Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes Under the Patient Protection and Affordable Care Act June 22, 2011 CMS-9993-IFC2: Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes July 26, 2011 CMS-9993-CN: Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes; Correction

Content Requirements for “Plan Finder” May 5, 2010 Health Care Reform Insurance Web Portal Requirements

Pre-Existing Conditions Insurance Plans July 30, 2010 OCIIO–9995 –IFC: Pre-Existing Condition Insurance Plan Program August 30, 2012 CMS–9995–IFC2: Pre-Existing Condition Insurance Plan Program May 22, 2013 CMS–9995–IFC3: Pre-Existing Condition Insurance Plan Program

Early Retiree Insurance Program May 5, 2010 Early Retiree Reinsurance Program December 13, 2011 CMS-9996-N2: Early Retiree Reinsurance Program Notice regarding Incurred Claims Date March 21, 2012 CMS-9996-N3: Early Retiree Reinsurance Program Notice regarding the Date by which Plan Sponsors Must Use Funds April 23, 2013 CMS-9996-N4: Early Retiree Reinsurance Program Notice regarding Termination of Several Operational Processes

Health Insurance Marketplaces July 15, 2011 CMS-9989-P:Establishment of Exchanges and Qualified Health Plans August 17, 2011 CMS-9974-P: Exchange Functions in the Individual Market: Eligibility Determinations; Exchange Standards for Employers August 17, 2011 CMS-2349-P: Medicaid Program; Eligibility Changes under the Affordable Care Act of 2010 August 17, 2011 REG-131491-10: Health Insurance Premium Tax Credits September 30, 2011 Patient Protection and Affordable Care Act: Establishment of Exchanges and qualified Health Plans and Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment: Extension of Comment Period March 16, 2012 Regulatory Impact Analysis: Establishment of Exchanges and Qualified Health Plans (CMS-9989-FWP) and Standards Related to Reinsurance Risk Corridors and Risk Adjustment (CMS-9975-F) March 27, 2012 CMS-9989-F: Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers May 29, 2012 CMS-9989-CN: Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers; Correction January 14, 2013 CMS-2334-P: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange Eligibility Appeals January 30, 2013 CMS-9958-P: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions March 11, 2013 CMS-9964-P2: Establishment of Exchanges and Qualified Health Plans; Small Business Health Options Program April 3, 2013 CMS-9955-P: Patient Protection and Affordable Care Act; Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel June 4, 2013 CMS-9964-F2: Establishment of Exchanges and Qualified Health Plans; Small Business Health Options Program June 14, 2013 CMS-9957-P: Patient Protection and Affordable Care Act; Program Integrity: Exchange, SHOP, Premium Stabilization Programs, and Market Standards June 26, 2013CMS-9958-F: Patient Protection and Affordable Care Act; Exchange Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions July 5, 2013 CMS-2334-F: Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment July 12, 2013 CMS-9955-F: Patient Protection and Affordable Care Act; Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel; Consumer Assistance Tools and Programs of an Exchange and Certified Application Counselors August 28, 2013 CMS-9957-F: Patient Protection and Affordable Care Act; Program Integrity: Exchange, SHOP, and Eligibility Appeals October 24, 2013 CMS-9957-F2: Patient Protection and Affordable Care Act; Program Integrity: Exchange, Premium Stabilization Programs, and Market Standards; Amendments to HHS Notice of Benefit and Payment Parameters for 2014

Plan Management June 5, 2012 CMS-9965-P: Data Collection to Support Standards Related to Essential Health Benefits; Recognition of Entities for the Accreditation of Qualified Health Plans July 18, 2012 CMS-9965-F: Data Collection to Support Standards Related to Essential Health Benefits; Recognition of Entities for the Accreditation of Qualified Health Plans November 26, 2012 CMS-9961-N: Recognition of Entities for the Accreditation of Qualified Health Plans November 26, 2012 CMS-9980-P: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation February 20, 2013 CMS-9980-F: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation

Premium Stabilization Programs July 15,2011 CMS-9975-P: Standards Related to Reinsurance, Risks Corridors and Risk Adjustment July 15, 2011 CMS-9989-P2: Preliminary Regulatory Impact Analysis: Establishment of Exchanges and Qualified Health Plans (CMS-9989-P) and Standards Related to Reinsurance, Risk Corridors and Risk Adjustment (CMS-9975-P) March 16, 2012 Regulatory Impact Analysis: Establishment of Exchanges and Qualified Health Plans (CMS-9989-FWP) and Standards Related to Reinsurance, Risk Corridors and Risk Adjustment (CMS-9975-F) March 23, 2012 CMS-9975-F: Standards Related to Reinsurance, Risks Corridors and Risk Adjustment December 7, 2012 CMS-9964-P: HHS Benefit and Payment Parameters for 2014, and Medical Loss Ratio March 11, 2013 CMS-9964-F: HHS Benefit and Payment Parameters for 2014 March 11, 2013 CMS-9964-IFC: Amendments to the HHS Notice of Benefit and Payment Parameters for 2014

State Innovations March 10, 211 Application, Review, and Reporting Process for Waivers for State Innovation February 22, 2012 CMS-9987-F: Application, Review, and Reporting Process for Waivers for State Innovation

Consumer Operated and Oriented Plan (CO-OP) Program June 23, 2010 Establishment of the Consumer Operated and Oriented Plan (CO-OP) Advisory Board July 20, 2011 Establishment of the Consumer Operated and Oriented Plan (CO-OP) Program December 13, 2011 CMS-9983-F: Patient Protection and Affordable Care Act, Establishment of Consumer Operated and Oriented Plan (CO-OP) Program February 10, 2012 IRS Revenue Procedures Published in the Federal Register For Tax-Exempt 501(c)(29) Qualified Nonprofit Health Insurance Issuers April 4, 2013 Questions and Answers on Consumer Operated and Oriented Plan Program Contingency Fund

Health Insurance Market Reforms November 26, 2012 CMS-9979-P: Incentives for Wellness Programs in Group Health Plans November 26, 2012 CMS-9972-P:Patient Protection and Affordable Care Act: Health Insurance Market Rules; Rate Review January 30, 2013 CMS-9958-P: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions February 27, 2013 CMS-9972-F:Patient Protection and Affordable Care Act: Health Insurance Market Rules; Rate Review June 3, 2013 CMS-9979-F: Incentives for Nondiscriminatory Wellness Programs in Group Health Plans November 8, 2013 CMS-4140-F: Final Rules under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008

Annual Limits June 28, 2010 OCIIO–9994–IFC: Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections

Coverage for Young Adults May 13, 2010 OCIIO – 4150 – IFC: Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 Under the Patient Protection and Affordable Care Act

Grandfathered Plans June 17, 2010 OCIIO–9991–IFC: Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act November 15, 2010 OCIIO–9991–IFC2: Amendment to the Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act

Medical Loss Ratio December 1, 2010 OCIIO–9998–IFC: Health Insurance Issuers Implementing Medical Loss Ratio (MLR) Requirements Under the Patient Protection and Affordable Care Act Technical Appendix Interim Final Rule for Health Insurance Issuers Implementing Medical Loss Ratio (MLR) Requirements under the Patient Protection and Affordable Care Act Technical Correction (December 30, 2010) Technical Correction to the Medical Loss Ratio Interim Final Rule December 7, 2011 CMS-9998-FC: Medical Loss Ratio Requirements under the Patient Protection and Affordable Care Act December 7, 2011 CMS-9998-IFC2: Medical Loss Ratio Rebate Requirements for Non-Federal Governmental Plans May 16, 2012 CMS-9998-F: Medical Loss Ratio Requirements under the Patient Protection and Affordable Care Act May 16, 2012 CMS-9998-IFC3: Medical Loss Ratio Requirements under the Patient Protection and Affordable Care Act; Correcting Amendment November 30, 2012 CMS-9964-P: HHS Benefit and Payment Parameters for 2014, and Medical Loss Ratio March 11, 2013CMS-9964-F: HHS Benefit and Payment Parameters for 2014

Patient Bill of Rights June 28, 2010 OCIIO–9994–IFC: Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections

Prevention July 19, 2010 OCIIO–9992–IFC: Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services under the Patient Protection and Affordable Care Act August 3, 2011 CMS-9992-IFC2: Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services under the Patient Protection and Affordable Care Act February 10, 2012 CMS-9992-F: Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act March 21, 2012 CMS 9968-ANPRM: Preventive Services Under the Affordable Care Act February 6, 2013 CMS-9968-P: Coverage of Certain Preventive Services Under the Affordable Care Act June 28, 2013 CMS-9968-F: Coverage of Certain Preventive Services Under the Affordable Care Act

Review of Insurance Rates December 23, 2010 OCIIO–9998–IFC: Rate Increase Disclosure and Review; Proposed Rule May 19, 2011 CMS-9999-FC: Rate Increase Disclosure and Review; Final Rule September 6, 2011 CMS-9999-F: Rate Increase Disclosure and Review: Definitions of Individual Market and Small Group Market November 26, 2012 CMS-9972-P:Patient Protection and Affordable Care Act: Health Insurance Market Rules; Rate Review February 22, 2013CMS-9972-F:Patient Protection and Affordable Care Act: Health Insurance Market Rules; Rate Review

Student Health Plans February 11, 2011 CMS–9981–P: Student Health Insurance Coverage March 21, 2012 CMS-9981-F: Student Health Insurance Coverage

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CMS Creates Open Payment App

Yes, there’s an App for that… And now, CMS has created an “open payment” application where providers can track their payments from various sources.

CMS has developed a mobile app to serve as a tool that can be used by physicians to track payments and other transfers of value made throughout the year. The mobile app can be downloaded free of charge and placed on the users mobile device.

The app specifically designed for physicians is called Mobile for Physicians

Physicians are not required to report anything. They (or their designee) can use the mobile app to track and ensure accuracy of information on their financial relationships that will be reported by industry. According to CMS, “Ultimately, the goal of the apps is to make tracking payment information easier and more convenient, and to improve the accuracy of payment information by tracking payments as they occur throughout the year.

The app will not interact with CMS systems, or CMS contractors, and cannot be used directly for data reporting to CMS or its contractors.

The app will allow the provider to:

• Password-protect their information. • Store their own personal profile information such as name, address, contact information, National Provider Identifier (NPI), state medical licensure number, and other information for easy retrieval and transfer to industry representatives at the time of the event or interaction. • Create or import (using a Quick Response (QR) Code reader) a contact for industry representatives. • Record details of each payment or transfer of value. • View, edit, or delete a payment or transfer of value. • Generate a QR Code to assist in the transfer of information to another user’s device. Information that can be transferred includes a physician’s profile, industry representative profile, and details associated with the situation in which the payment or other transfer of value occurred. • Export a summary of stored data (using email) in a Comma Separated Value (CSV) file format. The user can email themselves the data to store on a computer or other device, and can then refer to it when reviewing transactions annually. • Access the official OPEN PAYMENTS website and other resources to learn more about the program and other general information.

All data entered into the app is stored locally on the user’s device.

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If you like your Health Insurance, You can Keep it… Period!

At this point, the President would probably like a “do over” on that phrase. But it was said on numerous occasions and now, the White House and Congress are battling to give those words some meaning.

The President announced in early November that insurance companies can offer consumers the option to renew their 2013 health plans in 2014, without change, allowing them to keep their plans. Whether an individual can keep his/her current plan also depends on the insurance company and State insurance commissioner – but for at least 2014, it will no longer be the Affordable Care Act that is forcing people to buy a new health plan.

In a letter to insurance industry executives, the Centers for Medicare and Medicaid said, “To ensure consumers are informed about their options, insurers that are offering renewal of 2013 plans must let consumers know what protections the renewed plan is not including and how they can learn about new plans with better protections and possibly tax credits.” This option will not allow older plans to be sold to new customers in 2014. The President has left open the possibility that this authority could be extended beyond 2014.

On November 15, the House of Representatives approved legislation entitled, “Keep Your Health Plan Act” by a bi-partisan vote of 261 to 157. This legislation would allow health care plans currently available on the individual market to continue to be offered next year.

Just prior to passing the bill, Congressman Fred Upton, the sponsor of the bill had this to say about his legislation – “Our straightforward, one-page bill says if you like your current coverage, you should be able to keep it. The president should heed his own advice and work with us, the Congress, as the Founders intended, not around the legislative process. Everyone today should embrace the Keep Your Health Plan Act, and our efforts to protect Americans from the damage of this law should not stop there. Let’s keep the promise.”

Although similar bi-partisan legislation is being proposed in the Senate, thus far Senate Majority Leader Harry Reid (D-NV) has not indicated whether he will allow this legislation – or any legislation – fulfilling the “if you like it promise” to come to the floor of the Senate for a vote.

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White House announces delay of online health exchange for small businesses

Earlier this year, the White House announced that the employer mandate originally scheduled to take effect on January 1, 2014 would be delayed for one year. Now, the Administration is announcing that the launch of the on-line small business Health Insurance Exchange (SHOP) is being delayed for one year. This means that small businesses (i.e. less than 50 employees) wishing to purchase health insurance for their employees through the Exchange, will have to use an agent or broker.

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CMS issues policy guidance on Incarcerated Beneficiary Claim Denials

It has long been Medicare policy that the program will not pay for medical services furnished to a beneficiary who was incarcerated or in custody under a penal statute at the time items and services were furnished. Enforcement of this policy has been problematic and the agency has long been criticized by the Inspector General’s office of not more aggressively enforcing this policy.

Earlier this year, CMS initiated recoveries from providers and suppliers based on data from the Social Security Administration’s that indicated a beneficiary was receiving Medicare covered services even though they were incarcerated at the time the services were provided. This action resulted in thousands of payments being recouped from providers (hospitals and physicians). Unfortunately, after the program began, CMS learned that the information was inaccurate or incomplete. CMS has restored the original data on the Medicare Enrollment Data Base. Any new claims that are denied on or after October 28, 2013, because the beneficiary was incarcerated on the date of service, are based upon that information. CMS is also identifying all of the claims that were incorrectly demanded or collected, making changes to claims processing system, and refunding amounts collected. This process will identify the claims that were denied in error and reprocessing will be completed by the Medicare Administrative Contractors.

CMS has indicated that the “fix” requires a series of complex actions including the restoration of the original data on the Medicare Enrollment Data Base (EDB), the identification of claims that were incorrectly denied or cancelled, the determination of amounts that will need to be refunded, and making changes to our claims processing systems to update Medicare history. According to CMS, “The EDB data has been updated and CMS has reduced related non-supplier open accounts receivable to zero in the majority of instances. We anticipate that most suppliers will receive refunds by the first week in December.”

Accounts receivable related claims that have been appealed are not impacted by this action; appealed claims will be handled separately and, where appropriate, refunds will be generated at a later date.

As part of the reprocessing work to correct the erroneous claim denials, Medicare is reviewing the claims that were denied between May and October, 2013. If the original denial was in error, the MAC will adjust the claim to pay. All of the reprocessing should be completed no later than the end of December 2013.

Providers, suppliers, and beneficiaries can appeal the denied claims. Liability for the denied claims will be determined for each claim on a case by case basis. The MACs have been instructed to process any appeals for claim denials or overpayments related to incarcerated beneficiaries that were pended by the MAC, and any appeal requests received without regard to the time limits for filing appeals.

CMS has issued an FAQ that goes into further detail on the Incarcerated Felons problems and the steps CMS is taking to fix these problems. You are encouraged to review the entire FAQ. If you still have questions, you should contact your Medicare Administrative Contractor.

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Reducing the Federal Deficit – There are Options

The Congressional Budget Office (CBO) is a non-partisan arm of the United States Congress. As the name of the agency implies, it is responsible for advising Congress on the federal budget matters, including spending and taxes. It is the counterpart of the federal Office of Management and Budget which advises the President on federal budgetary matters.

The people who work at CBO are typically economists, actuaries and occasionally people with subject matter expertise in certain areas. Each year, CBO compiles a list of “options” Congress can consider for reducing the federal deficit. Not surprisingly, many of these “options” never get seriously considered due to the political ramifications of some of the possible changes.

But make not mistake, there are options for reducing the federal deficit.

Recently, CBO produced a list of options for the Congress to consider. The report, entitled, “Options for Reducing the Deficit: 2014 to 2023” is a 316 page compilation of the various options CBO has identified. CBO does not endorse any option nor try to push spending reductions or revenue raising (i.e. tax increases) as the way to reduce the deficit. The report is what it says – options.

Below are those identified as “health” options. These may be either spending reductions or proposals to raise revenue. If you review the report, you will see a more detailed explanation of these of the health related options (Chapter 5) and how CBO came up with the revenue savings/raising projections.

Where the “savings” is presented as a range, it is because Congress could adopt changes along a continuum of options and therefore the amount of the savings achieved would depend upon the specific option the Congress chose.

10-Year Savings Health Options (Billions) 2014 – 2023 Impose Caps on Federal Spending for Medicaid $105 to $606 Add a “Public Plan” to the Health Insurance Exchanges $37 Eliminate Exchange Subsidies for People With Income Over 300 Percent of $173 the Federal Poverty Guidelines Limit Medical Malpractice Torts $57 Introduce Minimum Out-of-Pocket Requirements Under TRICARE for Life $31 Convert Medicare to a Premium Support System $22 to $275 Change the Cost-Sharing Rules for Medicare and Restrict Medigap Insurance $52 to $114 Raise the Age of Eligibility for Medicare to 67 $23 Increase Premiums for Parts B and D of Medicare $20 to $287 Bundle Medicare’s Payments to Health Care Providers $17 to $47 Require Manufacturers to Pay a Minimum Rebate on Drugs Covered Under $123 Part D of Medicare for Low-Income Beneficiaries Modify TRICARE Enrollment Fees and Cost Sharing for Working-Age $20 to $71 Military Retirees Reduce or Constrain Funding for the National Institutes of Health $13 to $28 End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8 $48 Reduce Tax Preferences for Employment-Based Health Insurance $266 to $613 Increase the Excise Tax on Cigarettes by 50 Cents per Pack $37

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CMS Transmittals The following Transmittals were issued by CMS during the month of November.

Transmittal Effective Subject Number Date State Operations Manual (SOM) Chapter 3 Policy and R92SOMA Nomenclature revisions for Intermediate Care Facilities for 2013-11-22 Individuals with Intellectual Disabilities (ICF/IID) R2824CP New Influenza Virus Vaccine Code 2014-04-07 Merge of the Daily CMS-1522 PULSE Roll-Up Number Report R1322OTN 2014-01-27 Data for A/B MAC Workloads. Instructions for Downloading the Medicare ZIP Code File for R2822CP 2014-04-07 April 2014 Calendar Year (CY) 2014 Annual Update for Clinical Laboratory R2823CP Fee Schedule and Laboratory Services Subject to Reasonable 2014-01-06 Charge Payment The Medicare Contractors and the Shared Systems Shall Send the Correct Cost Avoided Indicator and Special Project Type to the R98MSP Common Working File (CWF) so the Correct Savings is applied N/A both to the Medicare Secondary Payer (MSP) Savings Report and the Originating Contractor Removal of Existing Material in Chapter 14 of the Program R491PI 2013-12-04 Integrity Manual Revised Beneficiary Liability and Messages Associated with R1320OTN Denials for Claims for Services Furnished to Incarcerated 2014-02-24 Beneficiaries Medicare Benefit Policy Manual - RHC and FQHC Update - R173BP 2014-01-06 Chapter 13 Fiscal Year (FY) 2014 Inpatient Prospective Payment System R2819CP 2013-10-07 (IPPS) and Long Term Care Hospital (LTCH) PPS Changes R12SS CMS Business Partners Systems Security Manual 2014-01-17 Updates to the Medicare Claims Processing Internet-Only R2815CP 2014-03-18 Manual (IOM) Immediate Suspension of Postpayment Patient Status Reviews of R1315OTN 2013-12-02 Inpatient Hospital Admissions 10/1/13-12/31/13 Bariatric Surgery for Treatment of Co-Morbid Conditions R2816CP 2013-12-17 Related to Morbid Obesity Bariatric Surgery for Treatment of Co-Morbid Conditions R157NCD 2013-12-17 Related to Morbid Obesity Update to Medicare Deductible, Coinsurance and Premium Rates R82GI 2014-01-06 for 2014 R1318OTN Use of Claim Adjustment Reason Code 23 N/A R1316OTN Implement Operating Rules - Phase III ERA EFT: CORE 360 2014-04-07 Uniform Use of Claim Adjustment Reason Codes (CARC) and Transmittal Effective Subject Number Date Remittance Advice Remark Codes (RARC) Rule - Update from CAQH CORE - October 1, 2013 version 3.0.3 Quarterly Update to the Correct Coding Initiative (CCI) Edits, R2817CP 2014-01-06 Version 20.0, Effective January 1, 2014 Affordable Care Act Bundled Payments for Care Improvement R91DEMO Initiative - Recurring File Updates Models 2 and 4 January 2014 2014-01-06 Updates Implementation of the Award for the Jurisdiction K (JK) Part A R1314OTN and Part B Medicare Administrative Contractor (A/B MAC) to 2013-10-07 National Government Services Termination of the Common Working File ELGA, ELGH, R1313OTN 2014-04-07 HIQA, HIQH, and HUQA Part A Provider Queries Common Working File (CWF) and Fiscal Intermediary Standard System (FISS) Informational Unsolicited Response (IUR) or R1312OTN 2014-04-07 Denial of Inpatient Services Related to a Hospice Terminal Diagnosis Modifications to the National Coordination of Benefits R2810CP 2014-04-07 Agreement (COBA) Crossover Process Reassignment to Part A Critical Access Hospitals billing under R490PI 2014-01-06 Method II (CAH II) Denial for Power Mobility Device (PMD) Claim from a Supplier R1305OTN of Durable Medical, Orthotics, Prosthetics, and Supplies 2014-04-07 (DMEPOS) When Ordered By a Non-Authorized Provider The Coordination of Benefits Contractor (COBC) to Remove and No Longer Apply Federal Tax Information (FTI) Received through the Internal Revenue Service (IRS), Social Security R1307OTN 2014-04-07 Administration (SSA), Centers for Medicare and Medicaid Services (CMS) Medicare Secondary Payer (MSP) Data Match Program on the Common Working File (CWF). MREP and PC Print Updates for Operating Rules Phase III 360 R1308OTN 2014-04-07 Rule Compliance R1309OTN FISS Claims Processing Update for Ambulance Services 2014-04-07 Informational Unsolicited Response (IUR) or Reject for R1311OTN 2014-04-07 Ambulance SNF to SNF Transfer HCPCS Analysis CR for Conversion of Old HCPCS Code to R1310OTN 2014-04-07 New R1302OTN Braille and Large Print Medicare Summary Notices. 2014-01-06 Changes to the Laboratory National Coverage Determination R2806CP 2014-01-06 (NCD) Software for ICD-10 Codes R1303OTN International Classification of Diseases, 10th Revision (ICD-10) N/A Testing with Providers through the Common Edits and Enhancements Module (CEM) and Common Electronic Data Transmittal Effective Subject Number Date Interchange (CEDI