dynamichealthsys.com Blog

Public Comment Period for Draft 2007 MA, MA-PD and PDP Call Letters

We are pleased to issue this notice announcing the release of the DRAFT 2007 Medicare Advantage (MA), Medicare Advantage-Prescription Drug (MA-PD) and Stand Alone Prescription Drug Plan (PDP) Call Letters for public comment. We are sending theseletters out via HPMS and will post them on our website at
http://www.cms.hhs.gov/HealthPlansGenInfo/02_WhatsNew.asp#TopOfPage

and

http://www.cms.hhs.gov/PrescriptionDrugCovContra/01_Overview.asp#TopOfPage

MEDICARE EXPANDS NATIONAL COVERAGE FOR BARIATRIC SURGERY PROCEDURES

The Centers for Medicare & Medicaid Services (CMS) announced today that it is expanding Medicare’s national coverage of bariatric surgery for all Medicare beneficiaries. For seniors, who have experienced high complication rates in some settings, Medicare will cover the procedure only in high-volume centers that achieve low mortality rates.

DOWNLOAD COMPLETE PRESS RELEASE

U.S. healthcare spending rose 7.4% last year

U.S. healthcare spending grew 7.4% in 2005 to surpass $2 trillion and is expected to grow 7.3% in 2006, the CMS said in an annual report. Thats down from a recent peak of 9.1% growth in 2002. The increase in spending on hospital services, 7.9%, outpaced overall healthcare spending growth for the second year in a row. The CMS said Medicare spending will exceed $790 billion in 2015, up from $309 billion in 2004. Medicaid spending, meanwhile, will hit $670 billion in 2015, up from $293 billion in 2004.

MODERN HEALTHCARE

CMS UPDATE: Advance Notice of 2007 Technical Changes to MA Reimbursement

Here are the highlights from the CMS Advanced Notice of Methodological Changes to 2007 MA Rates and Part D Payments:

GENERAL:

• The National Per Capita Growth percentage is used to baseline the rate tables for 2007. The rate is estimated at 6.9%. It is still not possible to predict the final impact on reimbursement with out knowing the other variables, like the Budget Neutrality and Coding Intensity factors.

PART C:

• The HCC model will be recalibrated for 2007 using 2002 and 2003 Fee For Service data. The current model is based on 1999-2000 data. It is expected that the new model will provide a more accurate prediction between health status and the costs associated with providing care. All segments will be updated (community, long-term institutional, new enrollee, and ESRD). There are no changes to the disease grouping in the model however coefficients (the higher the weight allocated to a grouping the higher the reimbursement). As a result of the recalibration of the HCC model, the frailty factor will also be recalibrated.
• The Fee For Service Normalization factor will be recalibrated for 2007 and will no longer be applied to the rate book but to the risk scores. The expectation is that mathematically the result will be the same. However between recalibrating the HCC model AND applying the FFS Normalization factor to the risk scores, the 2007 risk scores will be substantially different in 2007 and not really an apple-apple comparison to 2006 scores
• In 2007 Pain Management will be added (Medicare code 72) to the qualified specialty type and pain management has been added to the HCC model.
• 100% risk adjustment payments in 2007 for all MA plans except Social Health Maintenance Organizations (S/HMOs), Minnesota Senior Health Options (MSHO)/ Minnesota Disability Health Options (MnDHO), Wisconsin Partnership Program (WPP) and Massachusetts Senior Care Options (SCO) demonstrations who will be 75% risk adjusted in 2007.
• The budget neutrality factor will begin its’ phase out in 2007 with a 45% reduction.

DOWNLOAD THE CMS ADVANCE NOTICE HERE

RISK ADJUSTMENT: Plans and Groups Sharing Information.

Next to the roll out of PART D, the implementation of Medicare’s HCC Risk Adjustment reimbursement model for Medicare Advantage plans is one of the most significant changes to the Medicare industry. In 2007 plans will receive 100% of their reimbursement based on the HCC Risk model that pays higher rates for beneficiaries who have chronic conditions and less for healthier beneficiaries. The health of a beneficiary is based on the professional, inpatient and outpatient diagnosis data submitted to CMS by plans.

In order to maximize reimbursement plans, groups and providers need to WORK TOGETHER to code accurately and completely capturing all of the diagnosis’s that pertain to a beneficiary. Any breakdown in the flow of information will result in lower payments. Here are some changes in the relationships between plans, groups and providers.

PLANS NEED TO SHARE INFORMATION DOWNSTREAM – Plans receive MMR and MOR reports from CMS with demographic, eligibility and HHC updates from CMS. In order for groups to also identify gaps in the data that CMS is paying on and the information in medical records, plans must share this information with groups and providers. The Industry Collaboration Effort (ICE) has issued a draft release of a reconciliation report that plans can provide to groups that share all of the key information that CMS is reporting. Groups will use this report to identify what diagnosis codes are in their qualified encounter data and is not showing up in the CMS data reported to plans. The best scenario is where plans and groups both adopt a standard communication format reducing the costs to managed the process.

COLLABORATION AND REVIEWS – We encourage all groups to work closely with each plan they manage beneficiaries for. In these meetings the plan and MSO need to review the impact of the collaborated effort in raising risk scores, identifying gaps in data adopt best practices from other groups and plans.

If you have any questions on how to design or implement a risk adjustment program we at Dynamic Healthcare Systems would be more than happy to meet with you and review your current efforts. You can contact us at info@dynamichealthsys.com.

Deficit Reduction Act Enacted!

Here are the highlights of the Deficit Reduction Act signed in to law on February 8, 2006:

• Fee for Services payments to physicians will NOT be reduced by 4.4%. Claims that have been already processed will be reprocessed. Retro payments will be paid through July 1, 2006.
• Increase in the base payments to ESRD facilities for 2006. Claims that have already been paid will be reprocessed.
• Hold harmless payments for rural hospitals will be reinstated.
• 5% add-on payment to rural home health services to rural beneficiaries
• Caps to outpatient therapy services went in to effect Jan 1 2006. $1,740 per beneficiary per year for speech and occupational therapy.
• Changes to rental arrangement for DME equipment. “Capped rental” equipment are rented by Medicare for 13 months (was 15 months) and the title now transfers to the beneficiary after the 13 month period. The title use to rename in the name of the DME rental company.
• Oxygen equipment is now rented for 36 months (was indefinitely) and the title transfers to the beneficiary at the expiration.
• The minimum number of days that a non-electronic claim will be paid changed from 27 to 29 day

COMPLETE MEMO FROM CMS

Clawbacks Reduced Due to Higher Than Expected Drug Savings

Today the Dept of Health and Human Services announced that Clawback bill will be lower than expected as a result of higher savings from the implementation of the Part D drug benefit. CA payment is estimated to be reduced by $113.2 million, HI $2.1 million, NV $2.2 million, and AZ $5.6 million.

PRESS RELEASE AT HHS

The President’s Modest Medicare Proposal

Dr. Moffit of the Heritage Foundation has done a great job outlining the changes proposed in President Bush’s 2007 budget. Here are some of the highlights

Proposed a modest $36 billion reduction in the growth of the Medicare budget over 5 years. Medicare spending is projected to be $395 billing in 2007 and grow to $504.4 billing in 2011.

Reduction in the increase is primarily achieved by:

• Administrative and regulatory changes in the way payments are made to medical providers, particularly hospitals, nursing homes, and home health agencies.
• “Quality initiatives” to ensure that patients receive medically appropriate and cost-effective care.
• “Competitive bidding” for clinical laboratory services and certain physician-administered drugs, medical supplies, and equipment. “
• Adjustments to Medicare’s complex pricing system for doctors, hospitals, and other medical providers.
• Stronger cost control provisions.

READ the Entire Article from Dr. Moffit HERE.

CMS: Part D Excluded Drugs

Attached is a PDF file from CMS:

“This table provides Part D coverage clarifications for specific products/drugs/drug categories in accordance with statutory and regulatory requirements for Part D drugs. This is not an exhaustive list but only addresses those products/drugs/drug categories that have been the subject of frequently asked questions. Specific products not identified in this table should always be evaluated against the statutory and regulatory definition of a “Part D drug” before drawing conclusions from this table. This table does not address B versus D coverage questions.”

DOWNLOAD: Part D Excluded Drugs

Drug Makers Attempt To Fill Medicare Drug Doughnut Hole

A coalition of drug manufacturers is working on a plan to help millions of low-income seniors to pay for drugs when they enter Medicare’s so called “Doughnut Hole.” The Doughnut Hole is the coverage gap when a beneficiaries is responsible for drug costs when their total is between $2,250 and $5,000 annually.

The government has warned that a plan like this could be construed in violation of federal anti-kickback laws. The drug coalition has named their plan “Bridge Rx.”

Under the plan drug companies would offer discounts of at least 50% when low-income seniors hit the coverage gap. Those in the program would have a co-pay of $15. An amount still well above the means of a low-income beneficiary who likely is prescribed multiple drugs each month.

With only seven drug companies participating to date, they risk using discounts to steer beneficiaries to their drugs by using discounts, a violation of the federal anti-kickback laws.

The Kaiser Family Foundation estimates that 6.9 million beneficiaries will hit the coverage gap in 2006. The Bridge Rx coalition estimates that there could be as many as 500,000 participants in the program costing $30 million in the first year.

A formal response from the OIG on this plan is expected by Mid-February.

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