Health Law Blog

Medicare contractors will begin prepayment reviews of certain Medicare claims starting in January 2012 in several states, including New York. 

The first of the three-year demonstration programs -- all beginning in January 2012 -- will allow Medicare recovery audit contractors to conduct prepayment reviews of certain claims in 11 states, including NY. RACs currently examine claims after they have been paid. Auditors will begin the pilot program by focusing on inpatient hospital claims, especially those for short stays, and conduct the reviews before payment is authorized, said Deborah Taylor, director of the Office of Financial Management at the Centers for Medicare & Medicaid Services.

The second demonstration program will require prior authorization for powered mobility devices in seven states (including NY). It will begin with prepayment reviews for every claim, then transition to prior authorization within a year.

The third demonstration program will provide hospitals a new avenue to recover inpatient Medicare claims that were denied because the wrong site of service was listed. Hospitals will be allowed to resubmit these inpatient bills as outpatient claims at a slightly reduced rate and avoid the existing appeals process that CMS said can be costly and time-consuming.

It is unclear at this point to what extent individual physicians will be targeted by these pilot programs.

Physicians meeting criteria in 2011 to earn federal electronic medical record incentives will have more time before the Dept. of Health and Human Services requires them to satisfy tougher standards for attaining additional bonuses.

Doctors and hospitals who currently meet stage 1 meaningful use criteria would be able to vie for bonuses for an extra year under the same requirements, HHS Secretary Kathleen Sebelius announced on Nov. 30. These bonus recipients would not need to upgrade their EMR systems to comply with stage 2 standards until 2014, instead of 2013 under the initial plan.

The delay of stage 2 affects only physicians and hospitals who met stage 1 criteria in 2011. Doctors who will report meeting stage 1 requirements for the first time in 2012 will still be expected to meet stage 2 requirements starting in 2014. Before the new policy change, those who waited until 2012 to adopt would have had a later upgrade deadline but still would have been eligible to receive the same total bonus amounts as the early adopters.

Oct. 3 was the last day a physician could begin a 90-day reporting period for 2011, according to the Centers for Medicare & Medicaid Services. Physicians who met the requirements will have until Feb. 29, 2012, to register and attest to receive a bonus for 2011. Physicians can earn up to $44,000 over five years from the Medicare program or up to $63,750 over six years from Medicaid.

The government said on December 12, 2011 that Medicare will allow its claims database to be used by employers, insurance companies and consumer groups  to produce report cards on doctors.  It is expected that the data will be used by rating experts and other groups to summarize such information as how often a doctor has performed a particular procedure and get a general sense of problems such as preventable complications.

Doctors will be individually identifiable through the Medicare files, but  personal data on their patients will remain confidential.

Medicare data contains records pertaining to 47 million beneficiaries and virtually every physician in the country.  It is expected that public reports will be available by late 2012.

Physician organizations have not released any statements of position on the news concerning this development.

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CMS released its CY 2012 Medicare Physician Fee Schedule (PFS) Final Rule, effective January 1, 2012. Some of the most important provisions of the Final Rule include:

• A 27.4% reduction in payment rates based on the sustainable growth rate formula unless the Congress again votes to avert the cuts.
• A change in how CMS adjusts payments for geographic variation in the cost of practice, including (i) the use of American Community Survey data instead of Department of Housing and Urban Development rental data and (ii) an adjustment in payments for the full range of occupations employed in physicians’ offices.
• An expansion of the potentially misvalued code initiative. CMS will focus on the codes billed by physicians in each specialty that result in the highest Medicare expenditures under the PFS.
• An expansion of the multiple procedure payment reduction policy to the professional interpretation of advance imaging services.
• A set of criteria for health risk assessments (HRAs) to be used in conjunction with annual wellness visits (AWV) and an increase in AWV payments to reflect the increased office staff time necessary to administer HRAs.
• An expansion of services that can be furnished through telehealth for services beginning in CY 2013 including smoking cessation.
• Updates to various physician incentive programs, including the Physician Quality Reporting System, the ePrescribing Incentive Program, and the Electronic Health Records Incentive Program.
• The finalization of quality and cost measures for the value-based modifier that CMS will use to adjust physician payments for certain physicians starting January 1, 2015 and all physicians starting January 1, 2017.