Life Science Compliance Update

February 08, 2018

CMS Improper Payment Rate Dips Below 10%

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In 2017, the improper payment rate for fee-for-service Medicare dropped to 9.5%, the first time since 2013 that figure has been below 10%. By comparison, the rate was 11% in 2016, and there was a $4.9 billion year-over-year decrease in estimated improper payments, according to a blog post by Kimberly Brandt, principal deputy administrator for operations at the Centers for Medicare & Medicaid Services.

Last year, CMS officials said the improper payment rate dropped from 12.1% in 2015 to 11% in 2016 chiefly because of the two-midnight rule, which set a new benchmark for impatient hospital claims. But in both of those years, it failed to reach the target of less than 10% established in the Improper Payments Elimination and Recovery Act of 2010. An independent audit released in May 2016 said the rate exceeded 12% in 2015 mainly because of a spike in improper payments for home health claims.

FY 2017 Medicare FFS Improper Payments (in Millions) and Percentage of Improper Payments by Monetary Loss and Type of Error

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The above figure provides information on Medicare FFS improper payments that are a known “monetary loss” to the program (i.e. medical necessity, incorrect coding, and other errors). The estimated known “monetary loss” improper payment rate is 3.0 percent, representing an estimated known monetary loss of $11.3 billion out of the total estimated improper payments of $36.2 billion.  In the figure, “unknown” represents payments where there was no or insufficient documentation to support the payment as proper or a known monetary loss.

Improper Payments

Brandt notes that improper payments are not always indicative of fraud, nor do they necessarily represent expenses that should not have occurred. As an example, there are cases where there is no documentation to support the payment as proper and is cited as improper payments under the current OMB guidance. The blog post points out that the majority of Medicare FFS improper payments are due to documentation errors and CMS could not determine whether the billed items or serves were actually provided, were billed at the appropriate level, and/or were medically necessary. A smaller portion of these payments are for claims that CMS determined should not have been made or made in a different amount.

February 06, 2018

Tomorrow: CMS To Host Open Payments Webinar/Q&A

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Tomorrow, February 7, 2018, the Centers for Medicare and Medicaid Services (CMS) will be hosting a Webinar and Question and Answer session with CMS Open Payments program experts from 2:00 pm to 3:00 pm EST. CMS has been hosting these every few months for stakeholders to get some of their important questions answered.

During this webinar/Q&A session, the Open Payments team will present an overview of system enhancements and data submission activities and will then be able to respond to your questions about the 2017 Open Payments program year.

If you have a question, you must go online and register at least fifteen minutes prior to the webinar here. Once you are registered, you will receive an email with instructions on how to join the call and ask a question.

If you do not have a question, but want to listen to the call to gain insightful information, you can dial in to (844) 396-8222 and enter meeting number 900 984 780 when prompted.

January 25, 2018

CMS Changes Policy Regarding Enforcement Actions

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On October 27, 2017, CMS issued a draft Survey and Certification Memo (S & C Memo) in which it announced its intention to reverse a previous policy regarding “immediate jeopardy” and federal enforcement actions. The new draft policy significantly revises the previous position of CMS and offers a more equitable and pragmatic approach to enforcement actions.

CMPs

CMS Regional Offices have been imposing high 6-figure civil money penalties (CMP), and frequently CMPs well in excess of $1 million, for alleged deficiencies that constitute immediate jeopardy. The approach by CMS regarding CMPs was fueled, in part, by an S & C Memo from July 29, 2016.

CMS is authorized to impose either a per instance or a per day CMP for noncompliance with the Requirements of Participation. When CMS alleges that immediate jeopardy existed for months prior to a survey and opts to impose a per day CMP instead of a per instance CMP, the financial impact of that decision can be devastating. The draft S & C Memo reflects a major policy shift that may offer relief for providers alleged to have noncompliance at the immediate jeopardy level.

Instead of reflexively imposing a per day CMP whenever immediate jeopardy is alleged, which has been the practice of many CMS Regional Offices, the new policy states that “when the current survey identifies Immediate Jeopardy (IJ) that does not result in serious injury, harm, impairment or death, the CMS Regions may determine the most appropriate remedy.”

Purpose and Other Changes

CMS notes that “the purpose of federal remedies is to encourage the provider to achieve and sustain substantial compliance.” Additionally, the draft policy does not change statutorily required remedies such as a mandatory denial of payment for new admissions (DPNA) when there is 90 days of noncompliance and termination from the Medicare program when there is six months of noncompliance. It does however, recommend that the CMS Regional Offices use “the type of remedy that best achieves the purpose based on the circumstances of each case.” This view represents a departure from the previously inflexible approach employed by some CMS Regional Offices.

CMS emphasized that when there is immediate jeopardy without resultant serious harm or death, “the [CMS] RO [Regional Office] must impose a remedy or remedies that will best achieve the purpose of attaining and sustaining compliance.” Such a refreshing policy statement connects the type of remedy with the underlying facts rather than using a cookie-cutter per day CMP approach to enforcement. It reflects serious thought and a practical approach that will better enable providers to achieve, maintain, and sustain substantial compliance with the Requirements for Participation.

Among the remedies CMS may impose are the following: Directed In-Service Training; a Directed Plan of Correction; Temporary Management; Denial of Payment for New Admissions (DPNA); Denial of Payment for all Medicare and Medicaid Residents (DPAA); State Monitoring; and Termination of the Medicare Provider Agreement.

The provider community, acting through professional organizations, elected officials, and individual counsels, had been raising concerns with CMS about the inappropriate imposition of per day CMPs in the context of alleged immediate jeopardy.

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