Virginia Physical Therapy Association

2012 Annual Conference

Health Care Reform

Gillian Russell, JD

Senior Regulatory Affairs Specialist

American Physical Therapy Association

HCR / Goal of Integrated CareThree Part Aim

Emerging Themes in Health Care

Timeline of Key Health Reform Provisions

Collaborative Care Models:Accountable Care

Organizations(ACOs)

What is an Accountable Care Organization (ACO)?

Networks of physicians, hospitals and other providers that will be incentivized to work together to provide quality care and lower growth in health care costs under Medicare FFS

Goal is to provide seamless, high quality care instead of fragmented care in the current FFS model

ACO Final Rulemaking

Highlights of MSSP Final Rule

ACO Multiple Pathways

ACO Resources

•116 MSSP ACOs•32 Pioneers•20 Advanced Payment

Eligible Participants1. ACO Professionals in Group Practice

Arrangements

2. Networks of Individual Practices of ACO Professionals

3. Partnerships or Joint Venture Arrangements Between Hospitals and ACO Professionals

4. Hospitals Employing ACO Professionals

5. Critical Access that bills for facility and professional services

6. Federally Qualified Health Centers

7. Rural Health Clinics

ACO DefinitionsACO Participants ACO Professionals ACO Providers/

Suppliers

Individual or Groups of ACO providers/suppliers

ACO provider/supplier Enrolled in Medicare and bills Medicare FFS

Identified by Medicare-enrolled TIN

Enrolled and bills Medicare FFS

Has a Medicare billing number assigned to ACO participant and listed on ACO legal forms

Alone or together with other ACO participants make-up an ACO

PhysicianPhysician AssistantNurse PractitionerClinical Nurse Specialist

PTPPSHHAsSNFsRehabilitation Agencies

ACO Structure• Formal and legal structure and allows the ACO

to receive and distribute payments for shared savings

• Formal CMS application and approval process

• Representatives from Medicare FFS beneficiaries and each ACO provider/ participant

• Allows for partnering with private entities but ACO participants must have at least 75 percent control of the ACO’s governing body

ACO Structure• Evidence-based medical practice or clinical

guidelines

• Three-year contractual commitment (remedial actions for removing participants for non-compliance)

• 5000 yearly patient threshold

• Participation voluntary for providers and patients

Establishing a Benchmark• Current Medicare FFS payment• Shared savings payments directly to the ACO• Benchmark developed to assess performance • An estimate of total Medicare FFS Parts A and

B costs if provided absent ACO• Benchmark factors in patient characteristics,

geographic location, etc.• Benchmark updated each year of the three-

year period

Risk Models• Minimum savings rate based on percentage of

the benchmark that the ACO must exceed• ACOs must opt into one of two risk-sharing

models:– One-sided Risk (up to 50% shared savings

and <10% of benchmark)– Two-sided Risk Model (up to 60% shared

savings and <15 percent of benchmark, up to 10 % shared losses)

Beneficiary Assignment

• Plurality test for determining beneficiary assignment to an ACO

• Whether a beneficiary receives more primary care from that ACO than from any other provider

ACO Quality: The Measures• Total of 33 measures (scored as 23)

– 4 domains• Better care for individuals• Better health for population

– 4 methods of data submission• Patient survey• Claims• EHR• Group Physician Reporting Option (GPRO)

• Measures will be phased in from pay for reporting to pay for performance

ACOs and Quality• Quality reporting overview:

– ACOs must report and meet quality measure standards for the contracted three years

• Quality reporting will include mix of measures:– Evidence-based care process– Outcome– Patient experience

• CMS did not include utilization measures as the ACO program will address this through improved coordinated and quality

ACO Quality Reporting: Therapy Considerations

Interim Final Rule on Fraud and Abuse Waivers

• 5 final waivers:1. ACO pre-participation

2. ACO participation

3. Shared Savings Distribution

4. Compliance with Physician Self-referral Law

5. Patient incentive

• Applies a “reasoned approach analysis”• Existing exceptions and safe harbors still apply

Anti-trust Enforcement Policy

• Establishes an anti-trust “safety zone”– Combined share of 30% or less of each

combined service PSA– Exception for rural ACOs– “Safety Zone” designation stays in effect

for duration of ACO agreement

• ACOs outside of “safety zones” not necessarily unlawful

Private ACO Collaborations

Dispelling the MythsMyth

ACOs are the same as the HMOs of the 1990sACOs will replace Medicare FFS and providers will be paid by the ACOPatient choice is taken awayACOs widen the door for POPTs

Reality

ACOs have significant quality, governance and marketing requirementsProviders will still submit claims to Medicare Patients/ providers can receive care outside ACO ACOs do not affect Stark IOAS exception but does pose significant issues

Physical Therapy Considerations

What Do ACOs Mean for PT Practice?

Physical Therapists Practicing Outside of

ACO Model

Physical Therapists Practicing

Within ACO Setting

ACO

Is an ACO Partnership Right for Your Practice?

CMS Resources

CMS Shared Savings Program

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html?redirect=/sharedsavingsprogram/

CMMI Pioneer and Advanced Payment Model

http://innovations.cms.gov/initiatives/ACO/index.html

Key Points for Therapists

• Can contract with multiple ACOs• ACO activity and composition will vary• ACOs are voluntary• ACO final rules do not relax Stark II IOAS

exception• Know differences in MSSP, Pioneer, and Private

ACOs• Participation in quality initiatives and collection of

outcomes data is crucial• Assess interoperability of current and potential

EMRs

Collaborative Care Models:Bundled Payments

Section 3023 of ACA: Bundling• Bundling Pilot Project – national, voluntary pilot program• Hospitals, physicians and post-acute care providers

(SNFs, home health, IRFs, and LTCHS)• Improve patient care and cost-savings through bundled

payment model• Must be established by 2013 and will last for five years• Episode of care: 3 days before admission to hospital,

through LOS, and end 30 days post discharge• Based on eight selected conditions• Quality measures/assessment tool to be established• Medicaid bundled payment demo to take place in eight

states

CMMI: Bundling Payment Initiative

• Designed to encourage doctors, hospitals and other health care providers to coordinate care

• Objectives:– Support and encourage providers through three part

aim– Decrease the cost of an acute episode of care and the

associated post-acute care while improving quality– Develop and test new payment models for three-part

aim– Shorten the cycle time for adoption of evidence-based

care

Bundling Initiative: Four Proposed Models

Relationship between Bundling Initiative and Pilot Project

• Bundled Payments for Care Improvement initiative is a separate activity

• Consistent with goals of National Pilot Program on Payment Bundling authorized by ACA

• Bundled initiative will help inform future work under the pilot project

Definition of Bundled Payments

• Single payment made for a defined group of services.

• May cover services furnished by a single entity or items and services furnished by several providers in multiple care delivery settings.

• Single negotiated episode payment of a predetermined amount for all services.

• Paid prospectively or retrospectively.

Source: CMMI Website FAQs

Example Bundled Payment

• Medicare and the provider would agree to a bundled payment target price for acute care hospital services for an inpatient stay plus professional services and post-acute care related to the principal reason for the hospitalization, rather than paying separately for each physician visit and procedure provided during the episode.

Bundling Key Focus: Reduction in Hospital Readmissions

• Implementation of reduction measures in key acute and post acute care settings:– Inpatient hospitals

– Inpatient rehabilitation facilities (IRF PPS 2012)

– Transitioning focus in home health, skilled nursing facilities, and LTCHs

• Private initiatives define readmissions – United Healthcare and Geisinger

Hospital Readmissions Reduction

• The Patient Protection and Affordable Care Act (PPACA) established the Hospital Readmissions Reduction Program.

• Begins in 2013, and is aimed at adjusting hospital payments for those institutions that have higher than expected readmissions.

Hospital Readmissions Reduction Program

• Program to reduce payments for facilities exceeding certain rate of readmissions– Proposed Rule: August 18, 2011– Implementation: October 2012

• Condition specific 30-day readmissions – Acute myocardial infarction (AMI)– Heart failure (HF)– Pneumonia (PN)

Hospital Readmissions Reduction Program

• Additional conditions to be added – As determined by Secretary for FY2015 – Chronic obstructive lung disease, coronary

bypass grafting, percutaneous coronary interventions, other vascular procedures (as identified in 2007 MedPAC report)

• P4P – Withholdings up to 1% FY2013, 2% FY2014,

and 3% FY 2015 and beyond

Additional Readmissions Measures

APTA Readmissions Efforts

• Increased member education regarding through a variety of educational sessions including: – The Value of Physical Therapy in Reducing Avoidable Hospital

Readmissions (audio conference)– Medicare update presentations (CSM & Annual Conference)– Coding, Payment and Practice Applications Seminars

• Creation of new readmission page on the website: http://www.apta.org/HospitalReadmissions/

• Submission of comments by APTA on a variety of payment regulations and measurement methodologies related to readmissions

Collaborative Care Models:Patient-Centered Medical Homes

(PCMHs)

Medical Homes• Redefining primary care

• Primary care medical home accountable for meeting the large majority of each patient’s physical and mental health care needs

• Prevention and wellness, acute care, and chronic care

• Team approach: physicians, nurses, physical therapists, pharmacists, nutritionists, social workers, etc.

Medical Homes: Affordable Care Act

• Sec. 2703 established person-centered health home for State Medicaid and other programs

• Individuals with chronic conditions• PTs not specifically named in statute but can

partner with state entities to participate• Sec. 3502 provides grants to “eligible entities”

to establish community-based health teams to support primary care providers in the creation of PCMHs

Medical Homes: Beyond the ACA

• CMMI Challenge Grants– Up to $1 billion in grants for delivering better health,

improved care and lower costs to people

• CMMI FQHC Advanced Primary Care Practice• Private Partnerships

– Geisinger Health System– Group Health, Seattle– TransforMED National Demonstration Project

Patient-Centered Medical Home Functions and Attributes

Source: AHRQ Patient Centered Medical Home Resource Center

Harris County Hospital (Houston, TX)NCQA distinction as PCMH

Collaborative Care Resource Center

• Evolving resource center designed for physical therapists to gain a better understanding of where PTs fit in integrated models of care

• Practice Applications: discover lessons learned from colleagues currently engaging in new delivery models

• Summary and analysis of federal rulemaking and how it impacts PT

• http://www.apta.org/CollaborativeCare/• Communities Discussion Board

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HCR Implementation:Health Insurance Exchanges

Health Insurance Exchanges• Section 1311 of ACA establishes health

insurance exchanges

• State implementation by 2014

• Centralized marketplace where individuals and small businesses can purchase coverage

• One-stop shop web portal

State Health Insurance Exchange• Financially stable – must be self-financing by January 1, 2015

– Federal grants until then• VA and Federal Funding:

– September 2010: Virginia State Department of Medical Assistance Services received a federal Exchange Planning grant of $1 million.

– VA planned to submit a Level One Establishment grant application in June 2012; however, the Governor announced in a letter to the Legislature in July, he decided not to submit the application.

– VA is one of 9 states receiving technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network

• This assistance includes help with setting up health insurance exchanges, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions

HHS Rulemaking on Exchanges• Establishment of Exchanges and Qualified

Health Plans (QHPs)

• Standards Related to Reinsurance Risk, Risk Corridors and Risk Adjustment

• Exchange functions in the Individual Market: Eligibility Determinations; Exchange Standards for Employers

Coverage under the Exchanges• Coverage for all individuals

– Individual mandate: All individuals must have insurance by 2014

• Coverage facilitated by:– Tax credits for premiums– Subsidies for out-of-pocket costs– Medicaid expansion

• Qualified health plan (QHP) coverage– Essential Health Benefits

Tax Credits and Subsidies

Slide Source: The Commonwealth Fund presentation, “Achieving and Maintaining Near Universal Coverage Under the Affordable Care Act: Key Issues For Federal and State Policy Makers”

Exchange Development Timeline

Slide Source: Avalere Health LLC presentation “Understanding State Efforts to Implement Exchanges”July 18, 2011

TX

FL

NMGA

AZ

CA

WY

NV

AK

OK

MSLA

MT

TN

Status of State Legislation to Establish Exchanges,As of May 2012

Source: National Conference of State Legislatures, Federal Health Reform: State Legislative Tracking Database. http://www.ncsl.org/default.aspx?TabId=22122; Politico.com; Commonwealth Fund Analysis.

WA

ORID

SD

ND

MNWI

MI

IA

AR

IL

OH

WVVA

AL

PA

NY

ME

MA

NHVT

HI

Legislation signed into law post passage of ACA

Legislation passed one or both houses

Governors pursuing non-legislative optionsLegislation signed: intent to establish an exchange, creation of study panel or appropriation

Legislation pending in one or both houses

UTCO

KS

NEIA

MO

ILIN

KY

WVVA

NC

SC

DCMD

DE

NJ

CTRI

Governor veto or decision not to establish exchange

State exchange in existence prior to passage of ACA

Legislation failed/no gubernatorial action

Governors working with HHS on options

No legislative activity to date

Significant State Flexibility• Nationwide standard for:

– Enrollment period– Approval for state exchanges

• Some national standards for:– Streamlined applications and eligibility decisions– Governance structure

• West Virginia vs. California vs. Maryland

– Subsidiary and regional exchanges– SHOP Employer/Employee Choice Model

Significant State Flexibility• Some national standards for:

– Exchange consumer tools– Navigator program– Requirements for QHP offerings– Network requirements

• States completely flexible on:– Health plan selection process

• Utah vs. Massachusetts– Network adequacy standards– Marketing requirements– Agent and broker roles

• Waivers?

Snapshot of State ExchangesUtah

Massachusetts

• Virginia: http://www.healthinsurance.org/

Essential Health Benefits• Comprehensive set of services and items that must be

offered in the qualified health plans within the Exchange, Small Business Health Options Program, and Medicaid expansion– Ambulatory patient services– Emergency services– Hospitalization– Mental health and substance abuse services– Rehabilitative and habilitative services and devices– Prescription drugs– Laboratory services– Preventive and wellness services and chronic disease management– Maternity and newborn care– Pediatric services

Flexibility for States’ EHBs• Institute of Medicine (IOM) issued reports

advocating for flexibility in EHB definitions

• HHS Bulletin: December 16, 2011– States will choose benchmark plan from the

following health insurance plans:• One of the three largest small group plans in the state by

enrollment;

• One of the three largest state employee health plans by enrollment;

• One of the three largest federal employee health plan options by enrollment;

• The largest HMO plan offered in the state’s commercial market by enrollment.

Rehabilitation and Habilitation Definitions under EHBs

• National Association of Insurance Commissioners (NAIC) definitions:– Rehabilitation Services: Health care services that help a person keep,

get back or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.

– Habilitation Services: Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.

Rehabilitation and Habilitation Definitions under EHBs

• Mosby’s Medical Dictionary:– Habilitation: the process of supplying a person with the means to

develop maximum independence in activities of daily living through training or treatment.

• IOM Report:– Congressional floor statement advocating broadly based

interpretation for rehabilitation, habilitation and devices, including “items and services used to restore functional capacity, minimize limitations on physical and cognitive functions, and maintain or prevent deterioration of functioning”

– Advocates for children suggest modeling medical necessity after EPSDT coverage rules, “allowing a child to accommodate to a condition and reach his/her highest level of functioning”

APTA Efforts on Exchanges/EHBs

• Comments submitted to HHS in response to IOM report, Essential Health Benefits: Balancing Coverage and Cost

• Comments submitted to HHS in response to Establishment of Exchanges and Qualified Health Plans proposed rule

• APTA Website created for EHB and Exchanges– Member education– State chapter advocacy tools

EHB Advocacy Principles• Generally, rehabilitation services may

include:– Diagnosis and management of movement dysfunction and

human performance to enhance physical and functional abilities;– Skilled interventions to address functional limitations,

impairments and disabilities that diminish an individual’s quality of life, health status, or independence in activities of daily living. Restoration, maintenance and promotion of optimal physical function; and

– Prevention and management of the onset, symptoms, and progression of impairments, functional limitations and disabilities that may result from disease, disorders, conditions or injuries.

EHB Advocacy Principles (cont.)

• Rehabilitative services should be provided by qualified health care professionals currently authorized under federal law

• No absolute limits on the provision of rehabilitation services– No restriction on the number of therapy visits

in EHB packages without allowing exceptions– No limit on annual visits

EHB Advocacy Principles (cont.)• Devices should be a covered benefit

• Defining medical necessity: – Health care practitioners should determine

what method, scope or type of treatment is medically necessary

• Allow latitude for treatment variations while balancing costs

• Actuarial data should be utilized if certain limits are allowable

EHB Advocacy Principles (cont.)• Individual and community education and

consumer choice• If states have flexibility, appropriate education

should be provided to ensure all stakeholders are aware of the minimum federal requirements and how to obtain information regarding any additional state requirements

• Planning grants and technical assistance could mitigate the impact of financial strain

• Plan Rating System

Virginia Health Insurance Exchange

• April 6, 2011: Governor Bob McDonnell (R) signed HB 2434 into law, declaring the state’s intent to establish a health insurance exchange– Based on a recommendation by the Virginia Health

Reform Initiative Advisory Council

• November 25, 2011: Advisory Council’s exchange recommendations were submitted to the General Assembly by the Governor

Virginia Health Insurance Exchange

• Council voted in favor of establishing a state-based exchange as a quasi-governmental agency with a governing board.

• Council recommended the exchange follow the state’s existing conflict of interest guidelines, maintain administrative flexibility in hiring, compensation, transparency and procurement, and appoint 11 to 15 board members.

Virginia Small Business Health Options Program (SHOP)

• Advisory Council recommended that Virginia:– Limit the size of the SHOP exchange to

employers with up to 50 employees in 2014– Maintain one administrative structure for both

the individual and SHOP Exchange, but keep the risk pools separate

Virginia EHB

• Advisory Council recommended in June 2012 that a subcommittee be established to consider Anthem, the state’s small-group PPO as the state’s benchmark plan.

• The subcommittee recommended Anthem as the EHB benchmark plan and the Children’s Health Insurance Program (CHIP) dental benefit plan (Smiles for Children) as the pediatric dental supplemental plan

Virginia Information Technology• Focus on a significant Medicaid IT system

upgrade and has received approval from the CMS for an enhanced federal match.

• May 2012: released a Request for Proposals soliciting subcontractors to streamline eligibility and enrollment for all existing social service benefits, including Medicaid, TANF, and food stamps. – State officials envision eventual interoperability

between the upgraded system and an exchange.

Virginia: Next Steps

• VA has declared a preference for a state-based exchange as opposed to a federally run exchange

• Must submit declaration letter signed by the Governor and an application to HHS by Nov. 16, 2012

• VA has until Jan. 1, 2013 to create state-based exchange that HHS approves fully or conditionally.

HCR Implementation:Medicaid Expansion

Medicaid Expansion• Jan. 1, 2014: ACA expands Medicaid to

include individuals between the ages of 19 up to 65 (children, pregnant women, parents, and adults without dependent children) with incomes up to 138% FPL.

• CMS has stated that states may “decide whether and when to expand, and if a state covers the expansion group, it may later drop the coverage.

Impact of SCOTUS Decision

• Between now and 2014, states will determine whether to implement the ACA’s Medicaid expansion and receive the associated enhanced federal matching funds

• CMS has stated:– States may “decide whether and when to expand, and if a state

covers the expansion group, it may later drop the coverage.– No deadline yet by which states must tell CMS of Medicaid

expansion plans (though Exchange blueprint to HHS by Nov. 16)

• Court decision does not impact reduction to DSH payments

Initial State Plans for Medicaid Expansion

Virginia and Medicaid Expansion

• Gov. Bob McDonnell considering opting out of Medicaid expansion– Letter to legislators in July 2012, considering

opting out, stating that he needs more information

– Potential repeal of law after election

Beyond HCR:Medicare Therapy Cap Updates

2012 Therapy Cap• For 2012, the therapy cap amount is $1880 for PT and

SLP combined and a separate $1880 cap for OT.• Therapy cap does not apply in outpatient hospitals.• Medicare Advantage plans do not have to implement a

therapy cap.• Exceptions process will be in effect until December 31,

2012. • If your patients exceed the therapy cap, you may submit

the claim with a KX modifier (if services are medically necessary) until December 31

• Congressional action is necessary to extend the exceptions process

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2012 Therapy Cap: Hospitals

• The therapy cap has applied in the past to all outpatient therapy settings except hospitals.

• Starting October 1, 2012 the therapy cap with an exceptions process will also apply to hospital outpatient settings. (critical access hospitals are exempt)

• Hospitals would no longer be subject to the therapy cap after December 31, 2012 unless Congress extends the provision in future legislation.

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Therapy Cap: Exceptions

• January 1-October 1, 2012: an automatic exception to the therapy cap may be made when documentation supports the medical necessity of the services beyond the cap. Providers should use the KX modifier.

• October 1, 2012-December 31, 2012: an automatic exception may be made for claims between $1880-$3700 (use KX modifier)

• October 1, 2012-December 31, 2012: Claims exceeding $3700 in expenditure will be subject to manual medical review to be paid

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Therapy Cap: Manual Medical Review

• Starting October 1 for claims exceeding $3700• All therapy services beginning January 1, 2012

count toward the therapy cap amount in calculating the $3700.

• CMS issued guidance on manual medical review in a fact and question and answer document.

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Therapy Cap: Manual Medical Review

• Phase I providers: Subject to manual medical review from October 1‐December 31, 2012.

• Phase II providers: Subject to manual medical review from November 1‐December 31, 2012

• Phase III providers: Subject to manual medical review from December 1‐December 31, 2012.

• List of NPIs and phases to which they are assigned is available at:

https://data.cms.gov/dataset/Therapy-Provider-Phase-Information/ucun-6i4t

Therapy Cap: Manual Medical Review

• If a provider does not request advanced approval prior to providing services over $3700, payment for the claims will stop and a request for medical records will be sent to the provider.

• The provider will be subject to prepayment review for those claims and the time frame for review will be approximately 60 days.

APTA Resources for Therapy Cap Changes

• http://www.apta.org/Payment/Medicare/TherapyCap/2012/Changes/– FAQ– Webinar– Podcast– List of links to all MACs– Complaint form

CMS Resources for Therapy Cap Changes

• A transcript of a special open door forum held by CMS on the manual medical review process is available at the link below: (http://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/Downloads/080712TherapyClaimsSODFAnnouncementTranscriptAudio.pdf)

• Questions may be emailed to: therapycapreview@cms.hhs.gov.

CMS Resources for Therapy Cap Changes

• Medicare Benefit Policy Manual– http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/

downloads/bp102c15.pdf

• Medicare Claims Processing Manual, chapter 5– http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/

downloads/clm104c05.pdf

• Centers for Medicare and Medicaid Services– www.cms.hhs.gov– CR 6660: http://www.cms.hhs.gov/transmittals/downloads/R1860CP.pdf – CR 5871, Pub. 100-04, Transmittal 1414– Transmittal 2537 CR 7881 (August 31, 2012)

http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2012-Transmittals-Items/R2537CP.html

– Transmittal 1117; CR 8036 http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2012-Transmittals-Items/R1117OTN.html

Beyond HCR:Reporting Functional

Information on Medicare Claims

Reporting Functional Information on Claim Form

• By 2013 CMS will implement a claims based data collection strategy designed to collect data on the claim form about patient function.

• Proposal included in 2013 physician fee schedule rule.

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Reporting Functional Information on Claim Form

• Comment deadline: September 4– APTA submitted extensive comments

• Involves reporting of G codes regarding functional limitation accompanied by a severity modifier.

• CMS proposes the use of tools and translation of the scores from those tools to determine the level of impairment and severity modifier reported.

• Final rule will be published November 1, 2012

Functional Limitation Reporting

Functional Limitation Reporting

MedPAC report

• MedPAC must submit a report on how to improve the outpatient therapy benefit to Congress by June 15, 2013.

• MedPAC discussed outpatient therapy at March 2012 meeting, September 7 meeting, and October 5 meeting

HCR Initiatives:Program Integrity

Improper Payments Under Medicare

•  For fiscal year 2010, HHS reported almost $48 billion in Medicare improper payments, (38 percent of the total $125.4 billion estimate for the federal government)

• Medicare Fee for Service error rate in 2010 was around 10.5% ($34.3 billion)

• Governments goal is to reduce the Medicare FFS improper payment rate to: 8.5% by Nov 2011 and 6.2% by Nov 2012

Improper Payment• Improper Payment: Any payment to the

wrong provider for the wrong services or in the wrong amount

• Overpayments and underpayments– Didn’t meet the statutory coverage

requests– Didn’t meet the Medical necessity

requirements– Incorrectly coded– Didn’t submit sufficient documentation

Program Integrity Efforts• More coordination among Agencies

– CMS, Office of Inspector General, Department of Justice, FBI

• Use of Program Safeguard Contractors, Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors, HEAT (DOJ-FBI-HHS Strike Forces)– HEAT is focused on: Detroit, Houston, Brooklyn, Tampa and

Baton Rouge, Dallas, Chicago

• Increased Ability to Detect Aberrant Billing (collecting near real time data)

• Increased Focus on Physical Therapy Services

Strategies to Reduce Improper Payments

Provider Enrollment• Enrollment Screening:

– ACA requires that HHS and OIG establish screening procedures for providers/suppliers

– Level of screening varies among categories of providers/suppliers based on risk of fraud and abuse

– Screen can include:• Licensure checks, fingerprinting, criminal

background checks, site visits, etc.

• Final Rule Issued Feb. 2011

Limited Moderate High

-Physician or nonphysician practitioners, occupational therapists, speech language pathologists, medical groups or clinics-Hospitals-SNFs

-CORFs-Physical therapists enrolling as individuals or groups in private practice-Revalidating home health agencies-Revalidating DMEPOS suppliers

-Newly Enrolling Home Health Agencies-Newly Enrolling DMEPOS suppliers

Licensure checks Site visits, Licensure checks

Licensure checks,Fingerprinting, site visits

Provider Enrollment• Physical Therapists in Private Practice (PTPPs)

placed in moderate risk category.• PTPPs must have a site visit prior to enrollment

as of March 25, 2011.• PTPPs may be subject to unannounced site visits• PTPPs are exempt from the new $505 (raised to

$523 for 2012) enrollment fee.• If a PTPP also enrolls as a DMEPOS supplier

(e.g. a hand therapist), they must meet the DMEPOS supplier requirements (pay enrollment fee of $523; high risk category for new DMEPOS suppliers)

Provider Enrollment: Revalidation

• ACA established a requirement for all enrolled providers and suppliers to revalidate their enrollment information under new enrollment screening criteria. (applies to those providers and suppliers that were enrolled prior to March 25, 2011).

• Between now and March 23, 2015, MACs will send out notices to begin the revalidation process for each provider and supplier.

• Providers and suppliers must wait to submit the revalidation only after being asked by their MAC.

Resources on Provider Enrollment

• February 2, 2011 final rule

• http://edocket.access.gpo.gov/2011/pdf/2011-1686.pdf

• Transmittal 371 (effective date March 25, 2011)

• https://www.cms.gov/transmittals/downloads/R371PI.pdf

Prepayment Review• Reviews are conducted by Medicare Administrative

Contractors (MACs), Zone Program Integrity Contractors (ZPICs).

• Small business Jobs Act of 2010 required predictive modeling to identify &prevent improper payments

• CMS contracted with Northrop Grummon to deploy algorithms and an analytical process that looks at CMS claims in real time—by beneficiary, provider, service origin or other patterns

• Starting July 1, 2011 will identify problems and assign an “alert” and risk scores for claims that are aberrent

• Beginning with 10 states identified by CMS as having the highest risk of fraud, waste, or abuse.

Prepayment Review• CMS identifies practices that are potentially

fraudulent/abusive through Northrop Grummon and sends information to Safeguard Contractor.

• Safeguard Contractor sends personnel to visit the practice and request names, addresses, birth dates of all employees, business contracts, licenses of professionals, etc. Requests that information be provided within 24 hours.

Prepayment Review• Medicare Administrative Contractors (MACs) are

targeting providers with claims they think may have improper payments.

• Request medical records via paper letter, which are then reviewed by clinicians (nurses, physical therapists, etc)

• For prepayment review, contractors are initially requesting documentation on approximately 5 claims to review for medical necessity. If they find a problem, will request a greater number of medical records.

• If documentation does not support medical necessity, MAC may place the provider on 100% prepayment review.

Prepayment Review: MACs

• Will deny payment if review and find it is not medically necessary

• Provider can appeal to the MAC any denials.

• Reviews will result in delays in payment.

Postpayment Review• Reviews are being conducted by Office of

Inspector General, ZPICs, MACs, Recovery Audit Contractors

• MACs will target certain claims; will review, and recoup payment if found to be improperly paid. Provider can appeal.

• Recovery Audit Contractors– PPACA expanded Medicare’s RAC program to

Medicare Advantage and the prescription drug benefit program.

Recovery Audit Contractors (RACs)

• RACs identify Medicare underpayments & overpayments & recover overpayments. (Part A & B-so any provider can be subject to RAC review)

• RACs are paid contingency fees (for overpayments collected & for underpayments identified)

• A Database of claims for RACs to review was created by CMS

• Website: www.cms.hhs.gov/RAC

Recovery Audit Contractors (RACs)

• Region A – Diversified Collection Services, Inc. of Livermore, CA ( CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, RI and VT)

• Region B – CGI Technologies and Solutions, Inc. of Fairfax, VA ( IL, IN, KY, MI, MN, OH and WI)

• Region C – Connolly Consulting Associates, Inc. of Wilton. CT ( AL, AR, CO, FL, GA, LA, MS, NM, NC, OK, SC, TN, TX, VA, WV, Puerto Rico and U.S. Virgin Islands.)

• Region D – HealthDataInsights, Inc. of Las Vegas, NV (• AK, AZ, CA, HI, ID, IA, KS, MO, MT, ND, NE, NV, OR, SD, UT, WA,

WY, Guam, American Samoa and Northern Marianas. )

Recovery Audit Contractors• Can reopen claims up to three years from the date the

claim was paid.

• RACs cannot review claims prior to October 1, 2007

• The RAC Program is required to follow all applicable Medicare regulations such as payment policies, reopening timeframes, and appeal rights for providers.

• RACs required to have a medical director on staff, and to use nurses, therapists, and certified coders.

• Cannot collect contingency fee if claim is being appealed at any level of appeal.

Recovery Audit Contractors• RACs choose issues to review based on

data mining techniques, OIG and GAO reports and experience of staff.

• Two types of review – Automated (no medical record)– Complex (medical records)

• New Issues for review will be posted on RAC’s website.

Recovery Audit Contractors• RACs will send request for medical records.• If provider does not submit requested

record in 45 days, the service will be denied.

• Records may be submitted via mailed paper copy, fax, or mailed CD/DVD

• CMS has established medical record limits.

Recovery Audit Contractors• Medical Record Request Limits

– Inpatient hospital, IRF, SNF, hospice =10% of avg monthly Medicare claims (max of 45 days) per NPI

– Other Part A Billers (outpatient hospital, home health)=1% of avg monthly Medicare services (max of 200) per 45 days per NPI

– Physicians, Physical therapists in private practice• Solo practitioner = 10 medical records per 45 days per

NPI• Partnership of 2-5 individuals: 20 medical records per 45

days per NPI• Group of 6-15 individuals=30 medical records per 45 days

per NPI• Large Group (16+ individuals)=50 medical records per 45

days per NPI.

Zone Program Integrity Contractors• ZPICs combine data from a number of different

sources to create a platform for complex data analysis. 

• ZPICs were started by CMS by combining Program Safeguard Contractors (PSCs) and Medicare Prescription Drug Integrity Control (MEDIC) contracts. 

• Use data to look for overpayments, and also to look for potential fraud.

• ZPIC auditors refer all identified overpayments to the a MAC, who subsequently sends the provider a demand letter for recoupment; may conduct site visits, refer cases to OIG, FBI, etc.

Zone 1 CA, NV, American Samoa, Guam, HI and the Mariana Islands

Safeguard Services

Zone 2 AK, WA, OR, MT, ID, WY, UT, AZ, ND, SD, NE, KS, IA, MO

AdvanceMed

Zone 3 MN, WI, IL, IN, MI, OH and KYPSC

Zone 4 CO, NM, OK and TX Health Integrity, LLC

Zone 5 AL, AR, GA, LA, MS, NC, SC, TN, VA and WV AdvanceMed

Zone 6 PA, NY, MD, DC, DE and ME, MA, NJ, CT, RI, NH and VT PSC

Zone 7  FL, PR and VI Safeguard Services

Contractor Review• ACA included provisions for CMS to evaluate

contractors receiving Medicare Integrity Program and Medicaid Integrity Program funding every 3 years. – ACA requires these contractors to provide

performance statistics to HHS and its OIG upon request.

• Contractors must competitively bid for the contract; therefore, they are under pressure to keep their rates of improper payment low.

Summary of: Reviewers• Medical Review Units at MACs

– Prepay and postpay, automated and complex)– Targeted claims selected– To stop future incorrect payments

• Recovery Audit Contractors– Postpay, automated and complex– Detect and correct past improper payments

• CERT– Postpay only, complex only– Randomly Selected

Risk Areas for Physical Therapists In Outpatient Settings

• Missing Certifications on plan of care• Billing for services furnished by Aides/Techs• Providing inadequate supervision • Billing for one-on-one codes instead of group

therapy• Billing for co-treatment• Failing to comply with the 8 minute rule• Failing to comply with CCI edits• Submitting claims for services that provider

knows are not reasonable and necessary

Risk Areas for Physical Therapists In Outpatient Settings

• Code Gaming– Unbundling (hot pack, dressings)– Upcoding (E-Stim)

• Billing for ‘not medically necessary’ services without an ABN

• Billing for maintenance care• Billing for excessive duration and frequency of services• Billing for services not furnished• Billing for student services• Documentation deficits or fraudulent modifications post

denial or request for records

Risk Areas for Physical Therapists in Outpatient Settings

• Signatures not legible (physician on plan of care or PT)

• Used a stamped signature• Plan of care not signed by the physician• Plan of care not recertified • Duration/frequency not in compliance with

that identified in Local Coverage Decision• Documentation is insufficient• Services not medically necessary

Risk Areas for Physical Therapists

• Frequent use of the KX modifier (aberrent from the norm)

• In a private practice setting, the billing is going under one PT provider number rather than each separate PT enrolling.

• Collecting cash from the patient with no ABN

Risk Areas for Physical Therapists in Post-Acute Care Settings

• Home Health:– Documenting medical necessity– Incomplete documentation (lack of measurable goals

or rationale for number of therapy visits furnished)– Supervision and use of PTAs– Overlap of services between acute and post acute

care– Establishment and management of maintenance

therapy– Timely submission of claims and request for

documentation– Evidence to support patient homebound status

Risk Areas for Physical Therapists in Post-Acute Care Settings

• Skilled Nursing Facilities:– Documenting medical necessity and

justification for modes of therapy– Use of different modes of therapy (individual,

concurrent, and group therapy)– Adherence to MDS scheduled assessment

periods– Use of physical therapy aides and students– Use and documentation of modalities

Risk Areas for Physical Therapists in Post-Acute Care Settings

• Inpatient Rehabilitation Facilities– Adherence to three hour rule (intensive therapy

requirements) – Distinction of skilled versus unskilled therapy– Use of different modes of therapy (individual,

concurrent, and group therapy)– Use of physical therapy aides– Completion of preadmission screening and post

admission evaluation– Physician involvement– Interdisciplinary team meetings

Tips on How to Protect Yourself• Be familiar with Medicare coverage criteria

(keep a copy of applicable Local and National Coverage Polices)

• Know how access key Medicare reference documents (Medicare Benefits Policy and Claims Processing manuals)

• Sign up for Medicare contractor list servs and email alerts for Open Door Forums and other educational outreach opportunities

• Conduct periodic self audits

Appeal Rights• You have an appeal right when your

carrier/intermediary/MAC determines an overpayment occurred on prepayment or postpayment review.

• Five levels of appeal—each level has different requirements – Redetermination– Reconsideration– Administrative Law Judge– Medicare Appeals Council– Federal District Court

Questions?