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July 3, 2009
CMS Rescinds Controversial
Medicaid “Outpatient Hospital Services” Definition
Change: On June 30, CMS announced its
final decision to rescind three controversial Bush
administration regulations affecting provider
reimbursement under state Medicaid programs (74 FR
31183). The regulations that are now rescinded would
have eliminated reimbursement for certain school-based
program costs, restricted beneficiary access to case
management services and, of concern to many safety
net providers, a November 7, 2008 final rule would
have “clarified” the definition of hospital
“outpatient hospital services” in ways many thought
too restrictive. The clarified definition would
limit reimbursement to services included in the
Medicare hospital outpatient benefit and would
prohibit reimbursement as an outpatient hospital
service anything that could be provided and covered by
Medicaid outside a hospital. The regulations had been
subject to Congressional moratoria, but were about to
go into effect on July 1, 2009. On May 6, 2009, CMS
proposed rescinding the regulations in their entirety
and requested public comments on the need for
regulating the Medicaid program in these areas. The
June 30 final notice describes and responds to these
comments and concludes that rescission of the three
regulations is appropriate. The definition of
“outpatient hospital services” at 42 CFR §440.20, in
place before the November 2008 final rule became
effective, is reinstated by the June 30 final notice.
That definition provides states with more flexibility
in determining what constitutes an outpatient
hospital service.
CMS Launches Health Information
Technology Web site: On June 22, the
Centers for Medicare and Medicaid Services (CMS)
launched
a Web site that includes CMS related information on
the American Recovery and Reinvestment Act (ARRA)
(P.L. 111-5). The Act included three areas
pertaining to health information technology (HIT),
including: Health IT incentives and support for
adoption; establishment of Health IT standards and
infrastructure; and privacy security pertaining to
Health IT. CMS' Web site features resources specific
to Medicare and Medicaid, including a fact sheet with
questions and answers pertaining to the incentive
program, a link to information on the process to
define meaningful use, and resources on Health IT
privacy and security (HIPPA)
Drug Manufacturers Promise Brand
Name Discounts in Part D Donut Hole: At a
news conference on June 22, President Obama praised
the Pharmaceutical Research and Manufacturers of
America (PhRMA) agreement with the White House and
the Senate Finance Committee to discount drugs for
enrollees in the Medicare Part D drug benefit whose
high expenses have caused them to enter the coverage
gap (between $2700 and $6154 in 2009). Few details
are available, but statements from PhRMA and other
parties to the agreement indicate that
pharmaceutical companies will provide a 50 percent
discount to most beneficiaries on brand-name medicines
covered by a patient's Part D plan when purchased in
the coverage gap. Few Part D Plans offered gap
coverage in the 2009 plan year. AARP also supported
the agreement, which PhRMA estimated will cost the
industry $80 billion. The agreement will allow “the
entire negotiated price of the Part D covered medicine
purchased in the coverage gap [to] count toward the
beneficiary's out-of-pocket costs, thus lowering their
total out-of-pocket spending,” according to a June 20
PhRMA statement. According to a statement from Sen.
Max Baucus, the new Medicare Prescription Drug
Discount Program will begin July 1, 2010, and will be
administered by a third party. Manufacturers will
be “subject to audits to ensure the discounted prices
are appropriately set.” The program has been widely
praised so far, but beneficiary advocates, such as the
Center for Medicare Advocacy caution that the “devil
is in the details” and that coverage gap help is good,
but should be part of the Medicare program and not up
to the “good graces of the pharmaceutical industry.”
The National Community Pharmacists Association also
wants to learn more about the program to ensure that
pharmacies are treated fairly. The PhRMA statement can
be found
here.
June 5, 2009
Legislation Offers Medicare
DMEPOS Surety Bond Exemption for Pharmacies (S. 956) :
On May 1, Sens. Tester (D-MT) and Roberts (R-KS)
introduced the Senate version of the
Preserve Patient Access to the Reputable DMEPOS
Providers Act of 2009 (S. 956) that would
amend the Social Security Act to exempt certain
state-licensed retail and mail-order pharmacy (i.e.
any state-licensed independent, chain, supermarket, or
mass merchandiser pharmacy) from the surety bond
requirement under the Medicare program for suppliers
of durable medical equipment, prosthetics, orthotics,
and supplies (DMEPOS) and Medicare Part B drugs. While
the House of Representatives has also introduced this
bill (H.R.
1970) and continues to gain co-sponsors, we
now need to show support for the Senator version of
the bill.
May 18, 2009
Medicare Part A Trust Fund Will
be Insolvent by 2017: The trust fund that
Medicare uses to pay for beneficiaries' hospital care
(Medicare Part A) will be insolvent by 2017,
two years earlier than predicted by the trustees last
year. Since last year, the program has been paying out
more than it collects in taxes and interest, in
part due to the worsening economy, according to a
Medicare Payment Advisory Commission (MedPAC) report
issued May 12, 2009. Since the recession began, 5.7
million jobs have been lost, resulting in a reduction
in trust fund revenues from payroll taxes due to lower
wages and fewer covered workers. „Exhaustion' of the
hospital fund does not mean it would run out of money,
but that it would be unable to pay full reimbursements
for hospital benefits by 2017. The fund likely would
pay 81 cents per dollar claimed by hospitals,
according to the report. The Medicare programs that
cover outpatient care (Part B) and pharmaceuticals
(Part D) -- which are funded by premiums and taxes --
are not at risk of insolvency, although costs for
beneficiaries are expected to rise along with overall
health care spending. The White House and members
of Congress called for “major health reform that helps
bring down the growth rate of national health care
spending” as the best way to address the trust fund
shortfalls. A summary of the trustees‟ report can
be found
here.
CMS Proposal to Rescind
“Outpatient Services” Definition Change Welcomed by
Safety Net Hospitals: The Centers for
Medicare & Medicaid Services (CMS) plans to rescind
three controversial Medicaid regulations because
of potential adverse effects on beneficiaries and
states, according to a proposed rule published in the
May 6 Federal Register (74 Fed. Reg. 21232). Under the
proposal, a regulation that would eliminate
reimbursement for school-based administrative and
transportation services, and another that would narrow
the scope of covered case management services under
Medicaid would be rescinded. The third regulation,
which would change the definition of “outpatient
hospital facility services” was of considerable
concern to safety-net hospitals because of the
negative impact on Medicaid reimbursement. If the new
definition goes into effect, reimbursement would be
limited to services included in the Medicare
outpatient hospital benefit. The new definition would
also prohibit reimbursement of a hospital outpatient
service that could be provided and covered by Medicaid
outside a hospital. Previously, states had flexibility
in defining what constituted an outpatient hospital
service. In the May 6 proposed rule, CMS said it is
proposing to rescind the regulations because of “the
potential restrictions on services available to
beneficiaries, potential deleterious effect on
state partners in the economic downturn, and the lack
of clear evidence demonstrating that the approaches
taken in the regulations are warranted.” CMS said
rescinding the regulations “will permit further
opportunity to determine the best approach to further
the objectives of the Medicaid program in providing
necessary health benefits coverage to needy
individuals.” Comments on the proposed rule are due
June 1.
The
rule is available on the Web
here.
April 17, 2009
As Expected, Medicare Spending
on Outpatient Drugs Spiked in Part D's First Year:
According to a report released March 27 by the federal
Agency for Healthcare Research and Quality (AHRQ),
Medicare payments for outpatient prescription
medications increased by more than $38 billion (from
$5.9 billion to $44.3 billion) from 2005 to 2006.
Medicare's share of the Medicare population's overall
drug spending increased from 7 percent to 45 percent
during the same time period, the report said. AHRQ
noted that Medicare offered prescription drug coverage
to all Medicare beneficiaries beginning in January
2006 with the implementation of Medicare Prescription
Drug Coverage or Medicare Part D.
AHRQ
also looked at how other payers—Medicaid and private
insurers—were affected by the launch of Part D.
Medicaid's share of the Medicare population's drug
spending from 2005 to 2006 decreased from 15.5 percent
to about 1 percent, with the move of the “dual
eligible” beneficiaries into Medicare, and private
insurance's share fell from approximately 25 percent
to 16.5 percent, according to AHRQ. The analysis or
statistical brief, Prescription Drug Estimates for
Medicare Beneficiaries, 2005 and 2006, is available
here.
CMS Report: U.S. Health Care
Spending Reached $2.4 Trillion in 2008:
U.S. health care spending reached $2.4
trillion in 2008 and health care spending as a
portion of the gross domestic product is expected to
climb from 16.6 percent in 2008 to 17.6 percent in
2009—its largest one-year rise ever, according
to a report by the Centers for Medicare & Medicaid
Services (CMS). Private health care spending is
expected to experience a 15-year low by rising
just 3.9 percent in 2009, CMS projected in the report,
“Health Spending Through 2018: Recession Effects Add
Uncertainty To The Outlook..” The low growth rate is
due to slower price growth due to the recession and
higher unemployment rates and thus fewer Americans
with employer-sponsored coverage, the report said. CMS
said the number of Americans with private health
coverage is projected to fall from 195.5 million in
2008 to 192.1 million in 2009 and 189.5 million in
2010.
Public spending is expected to grow 7.4 percent in
2009, from 7 percent in 2008, reaching $1.2
trillion, largely as a result of faster growth in
Medicaid enrollment and spending. Public spending will
exceed half of all national health spending, growing
to 51.3 percent by 2018, according to the report.
Prescription drug spending is projected to be the
fastest growing component of Medicare spending,
climbing an average 10.2 percent annually from 2011 to
2018. Other findings include:
Overall (public and private) prescription drug
spending slowed from 4.9 percent in 2007 to 3.5
percent in 2008, reaching $235.4 billion, due to fewer
prescriptions being filled because of the recession
and greater use of generics. Drug spending is expected
to rebound between 2014 and 2018 and reach $453.7
billion by 2018.
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Spending on hospital care is expected to reach $1.4
trillion by 2018, up from $746.4 billion in 2008.
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Physician spending is expected to grow 6 percent in
2009, compared with 6.2 percent in 2008, reaching
$539.1 billion.
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Home health care spending grew 9.1 percent in 2008,
reaching $64.4 billion. Growth in 2007 was 11.3
percent. Home health spending has slowed recently as
a result of Medicare payment changes, but it is
expected to grow at an average of 7.9 percent from
2013 to 2018.
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Nursing home spending rose 4.6 percent in 2008,
totaling $137.4 billion. Nursing home care is
expected to rise 6.6 percent annually by 2018.
The
report is available on the Web
here.
CMS
Publishes Final Cost-Sharing Rule
On November 25, 2008 the Centers for Medicare and
Medicaid Services (CMS) published a Final Rule in
the Federal Register (73 FR 71828) that would
permit state Medicaid programs to introduce programs
that may increase Medicaid cost-sharing and premium
charges for beneficiaries.
The final rule implements part of the Deficit
Reduction Act (DRA) of 2005, which among other
things, would give states the flexibility to
implement programs that would increase cost-sharing
for some Medicaid beneficiaries. It would allow
states to charge copayments of up to $3.40 for
individuals with income at 100% FPL or less.
Beneficiaries with incomes of 100-150% of FPL could
be charged as much as 10% of the state’s cost for a
service, and those above 150% of FPL could be
charged as much as 20% of the state’s cost. However,
total out of pocket spending may not exceed 5% of
any beneficiary’s annual income. States may also
increase cost-sharing requirements for non-preferred
drugs and waive or reduce cost-sharing for preferred
drugs.
Finally, providers will now be permitted to deny
care to Medicaid beneficiaries who are unable to
afford their copayment.
A
copy of the final rule may be found at:
http://edocket.access.gpo.gov/2008/pdf/E8-27717.pdf
CMS
Clarifies Requirement for Medicare Part D Fraud,
Waste, and Abuse Training Requirements
The Medicare Modernization Act (MMA)
(P.L. 108-173) requires that Medicare Advantage (MA)
organizations and Medicare Part D plan sponsors
provide their first tier, downstream, and related
contracting entities (such as pharmacies) with
appropriate fraud, waste and abuse training. Plan
sponsors are responsible for ensuring that all
employees (including managers and directors) and
downstream/contracting entities are provided
appropriate training on an annual basis. Due to the
increasing number of questions that the Centers for
Medicare and Medicaid Services (CMS) received on
this issue and recognizing that the requirement
could be cumbersome for entities that contract with
multiple plan sponsors,
CMS issued additional clarification.
The annual training requirement
becomes effective January 1, 2009 but does not have
to be completed until December 31, 2009. CMS noted
that it is working with associations to develop a
training program that meets CMS' requirements so
that entities would only have to take this training
once a year. Specifically, the one training would
satisfy the CMS requirement for all MA organizations
and Medicare Part D plan sponsors with which an
entity is affiliated, alleviating the potential need
for entities to have multiple trainings from
different plan sponsors each year. CMS hopes to have
the training materials available soon. Until that
time, plan sponsors are still responsible for either
providing the training directly or providing the
appropriate materials to ensure that the training is
taken. More fraud and abuse training requirement
information is available on
the CMS Web site.
Medicare Part D 2009 Enrollment Period Begins on
November 15, 2008
November 15 marked the beginning of the 2009 open
enrollment period (when Medicare beneficiaries can
review and change plans) that runs until December
31, 2008. The Centers for Medicare and Medicaid
Services (CMS) has made information available online
for beneficiaries making 2009 prescription drug and
health plan choices through the Medicare
Prescription Drug Plan Finder and Medicare Options
Compare. These tools allow beneficiaries to compare
their current drug and health plan coverage to
options available in 2009. Additional patient
information can be found in
the Medicare & You Handbook that was sent to
each beneficiary.
Read information on the plan finder tool.>>
Access the Low Income Subsidy Outreach Toolkit. >>
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