HEAR YE, HEAR YE: Medicare reimbursement rate increase!!
On April 27th, CMS proposed a rule to increase Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for fiscal year (FY) 2022. The proposed rule will update Medicare payment policies and rates for operating and capital‑related costs of acute care hospitals and for certain hospitals. The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (“IQR”) Program and are meaningful electronic health record (“EHR”) users is approximately 2.8%. This reflects the projected hospital market basket update of 2.5% reduced by a 0.2 percentage point productivity adjustment and increased by a 0.5 percentage point adjustment required by legislation.
Secondly, a sample audit of nursing homes conducted by CMS will lead to more scrutiny of nursing homes and long-term care facilities. The sample audit showed that two-thirds of Massachusetts’s nursing homes that receive federal Medicaid and Medicare funding are lagging in required annual inspections — and MA is demonstrative of the country.
237 nursing homes and long-term care facilities in the state, or 63.7% of the total, are behind on their federal health and safety inspections by at least 18 months. The national average is 51.3%.
We cannot blame COVID for everything. Those inspections lagged even before the pandemic, the data shows, but ground to a halt last year when the federal agency discontinued in-person visits to nursing homes as they were closed off to the public to help prevent spread of the COVID.
Lastly, on April 29, 2021, CMS issued a final rule to extend and make changes to the Comprehensive Care for Joint Replacement (“CJR”) model. You’ve probably heard Dr. Ron Hirsch reporting on the joint replacement model on RACMonitor. The CJR model aims to pay providers based on total episodes of care for hip and knee replacements to curb costs and improve quality. Hospitals in the model that meet spending and quality thresholds can get an additional Medicare payment. But hospitals that don’t meet targets must repay Medicare for a portion of their spending.
This final rule revises the episode definition, payment methodology, and makes other modifications to the model to adapt the CJR model to changes in practice and fee-for-service payment occurring over the past several years. The changes in practice and payment are expected to limit or reverse early evaluation results demonstrating the CJR model’s ability to achieve savings while sustaining quality. This rule provides the time needed to test modifications to the model by extending the CJR model for an additional three performance years through December 31, 2024 for certain participant hospitals.
The CJR model has proven successful according to CMS. It began in 2016. Hospitals had a “statistically significant decrease” in average payments for all hip and knee replacements relative to a control group. $61.6 million (a savings of 2% of the baseline)
“Medicare for All” is the talk of the town. People are either strong proponents or avid naysayers. Most of the articles that I have seen that have discussed Medicare for All writes about it as if it is a medical diagnosis and “cure-all” for the health care disease debilitating our country. Others articles discuss the amount Medicare for All will cost the taxpayers.
I want to look at Medicare for All from a different perspective. I want to discuss Medicare for All from the health care providers’ perspectives – those who already accept Medicare and those who, currently, do not accept Medicare, but may be forced to accept Medicare under the proposed Medicare for All and the legality or illegality of it.
I want to explore the implementation of Medicare for All by using my personal dentist as an example. When I went to my dentist, Dr. L, today, who doesn’t accept Medicare or Medicaid, he was surprised to hear from the patient (me) in whom he was inserting a crown (after placing a long needle in my mouth to numb my mouth, causing great distress and pain) that he may be forced to accept Medicare in the near future. “I made the decision a long time ago to not accept Medicare or Medicaid,” he said. “Plus, Medicare doesn’t even cover dental services, does it?”
While Medicare doesn’t cover most dental care, dental procedures, or supplies, like cleanings, fillings, tooth extractions, dentures, dental plates, or other dental devices, Medicare Part A (Hospital Insurance) will pay for certain dental services that you get when you’re in a hospital. Part A can pay for inpatient hospital care if you need to have emergency or complicated dental procedures, even though the dental care isn’t covered. However, some Medicare Advantage Plans (Part C) offer extra benefits that original Medicare doesn’t cover – like vision, hearing, or dental. Theoretically, Medicare for All will cover dental services since Part C covers dental, although, there is a question as to how exactly Medicare for All will/would work. Who knows whether dental services would be included in Medicare for All – this is just an example. Insert any type of medical service in lieu of dental, if you wish.
Dr. L had made the decision not accept Medicaid or Medicare. He only accepts private pay or cash pay. If Medicare for All is implemented, Dr. L’s decision to not accept Medicare will no longer be his decision; it would be the government’s decision. The rates that Dr. L charges now and receives for reimbursements now could be slashed in half without Dr. L’s consent or business plan.
In a 2019 RAND study, researchers examined payment and claims data from 2015 to 2017 representing $13 billion in healthcare spending across 25 states at about 1,600 hospitals. The study showed that private insurers pay 235% of Medicare in 2015 to 241% of Medicare in 2017. The statistics differ state to state. In some states private pay reimbursed as low as 150% of Medicare, while in others private pay reimbursed up to 400% of Medicare.
To show how many providers are adverse to accepting Medicare: In 2000, nearly 80% of health care providers were taking new Medicare patients. By 2012, that number dropped to less than 60%. Currently, less than 40% of the health-care system are government run and nearly 33% of doctors won’t see new Medicaid patients. Medicare patients frequently have difficulty finding a new primary-care doctor.
My question is –
Is it legal for the government to force health care providers to accept Medicare rates by issuing a Medicare for All system?
An analogy would be that the government forced all attorneys to charge under $100/hour, or all airplane flights to be $100, or all restaurants to charge a flat fee that is determined by the government. Is this what our country has transformed into? A country in which the government determines the prices of services and products?
Let me be clear and and rebut what some readers will automatically think. This is not simply an anti-Medicare for All blog. Shoot, I’d love to get health care services for free. Instead, I am reviewing Medicare for All from a legal and constitutional perspective to discuss whether government implemented reimbursement rates will/would be legal. Or would government implemented reimbursement rates violate due process, the right to contract, the right to pursue a career, the right to life, liberty, and the pursuit of happiness, and/or our country’s history of capitalism.
The consequences of accepting Medicare can be monumental. Going back to Dr. L, due to the massive decrease of reimbursement rates under Medicare, he may be forced to downsize his staff, stop investing in high tech devices to advance the practice of dentistry, take less of a salary, and, perhaps, work more to offset the reimbursement rate reduction.
Not to mention the immense regulatory oversight, including audits, documentation productions, possible suspensions of Medicare contracts or accusations of credible allegations of fraud that comes hand in hand with accepting Medicare.
I don’t think there is one particular law that would allow or prohibit Medicare for All requiring health care providers to accept Medicare reimbursements, even against their will. Although I do think there is potential for a class action lawsuit on behalf of health care providers who have decided to not accept Medicare if they are forced to accept Medicare in the future.
I do not believe that Medicare for All will ever be implemented. Just think of a world in which there is no need for private insurance companies…a utopia, right? But the private health care insurance companies have enough money and enough sway to keep Medicare for All at bay. Hospitals and the Hospital Association will also have some input regardless the implementation of Medicare for All. Most hospitals claim that, under Medicare for All, they would close.
Regardless the conversation is here and will, most likely, be a highly contested issue in our next election.
Shockingly, not all new rules that emerge from the Center for Medicare and Medicaid Services (CMS) are actually compliant with the law. Wait! What? How can CMS publish Final Rules that are not compliant with the law?
This was an eye-opening discovery as a “baby lawyer” back 20 years ago. The government can and does publish and create Rules that, sometimes, exceed its legal authority. Of course, the Agency must follow appropriate rule-making procedure and allow for a comment period (etc.), but CMS does not have to listen to the comments. Theoretically, CMS could publish a Final Rule mandating that all Medicare providers provide 50 hours of free services a year or that the reimbursement rate for all services is $1. Both of my examples violate multiple rules, regulations, and laws, but until an aggrieved party with standing files a lawsuit declaring the Final Rule to be invalid or Congress passes a law that renders the Rule moot, the Rule exists and can be enforced by CMS and its agents.
The Rule-change (the “Site-Neutrality Rule”), which became effective January 1, 2019, reduced Medicare reimbursements to hospitals with outpatient facilities. Medicare will pay hospitals that have outpatient facilities “off campus” at a lower rate — equivalent to what it pays independent physicians for clinic visits. This decrease in Medicare reimbursements hits hard for most hospitals across the country, but, especially, rural hospitals. For the past 10+ years, hospitals have built outpatient facilities to serve more patients, and been reimbursed a higher Medicare reimbursement rate than independent physicians because the services at the hospital’s outpatient facility were connected to an outpatient facility affiliated with a hospital. Now the Site-Neutrality Rule leaves many hospitals trying to catch their breaths after the metaphoric punch to the belly. On the other hand, independent physicians claim that they have been providing the exact, same services as the hospital-affiliated outpatient facilities for years, but have received a lower reimbursement rate. I have no opinion (I do, but my opinion is not the topic in this blog) as to whether physicians and hospitals should be reimbursed equally – this blog is not pro-physician or pro-hospital. Rather, this blog is “pro-holding CMS liable to render Rules that follow the law.” Whether the hospitals or the physicians were receiving a cut in reimbursement rates, I am in favor of the those cuts (and future cuts) abiding by the law. Interestingly, should the AHA win this case, it could set solid, helpful, legal precedent for all types of providers and all types of decreased Medicare/caid reimbursements going forward.
Because of the Site-Neutrality Rule, in 2019, hospitals’ reimbursements will drop approximately $380 million and $760 million in 2020, according to CMS.
Before CMS brags on a decrease in the Medicare budget due to a proposed or Final Rule, it should remember that there is budget neutrality requirement when it comes to Rules implemented by CMS. 42 US.C. § 1395l. Yet, here, for the Site-Neutrality Rule, according to articles and journals, CMS is boasting its Site-Neutrality Rule as saving millions upon millions of dollars for Medicare. Can we say “Budget Non-Neutrality?”
The American Hospital Association filed a lawsuit December 2018 claiming that CMS exceeded its authority by implementing the Final Rule for “site neutral” Medicare reimbursements for hospitals with outpatient facilities. The lawsuit requests an injunction to stop the decrease and an order to repay any funds withheld thus far.
The claim, which, I believe has merit, argues that the Site-Neutrality Rule exceeds CMS’s statutory authority under the Medicare Act because of the budget neutrality mandate, in part – there are other arguments, but, for the sake of this blog, I am concentrating on the budget neutrality requirement. In my humble opinion, the budget neutrality requirement is overlooked by many attorneys and providers when it comes to challenging cuts to Medicare or Medicaid reimbursement rates.
On March 22, 2019, CMS filed a Motion to Dismiss or in the alternative, a Cross Motion for Summary Judgment. On April 5, 2019, AHA (and the rest of the Plaintiffs) responded in opposition. On April 19, 2019, CMS responded to AHA’s response in opposition. The Judge has not ruled on the Motions, as of today, April 25, 2019.
Obviously, I will be keeping a close eye on the progress of this case going forward. In the meantime, more reductions in reimbursement rates are on the horizon…
Recently, CMS recently proposed three new rules that would further update the Medicare payment rates and quality reporting programs for hospices, skilled nursing facilities (SNFs), and inpatient psychiatric facilities.
Change your calendars! 2019 is here!
2019 is the 19th year of the 21st century, and the 10th and last year of the 2010s decade. Next we know it’ll be 2020.
Few fun facts:
- January 7th is my birthday. And no, you may not ask my age.
- In February 2019, Nigeria will elect a new president.
- In June the Women’s World Cup will be held in France.
- November 5, 2019, USA will have our next election. Three Governor races will occur.
What else do we have in store for 2019? There are a TON of changes getting implemented for Medicare in 2019.
Hospital Prices Go Public
For starters, hospital prices will go public. Prices hospitals charge for their services will all go online Jan. 1 under a new federal requirement. There is a question as to how up-to-date the information will be. For example, a hospital publishes its prices for a Cesarian Section on January 1, 2019. Will that price be good on December 1, 2019? According to the rule, hospitals will be required to update the information annually or “more often as appropriate.”
“More often as appropriate” is not defined and upon reading it, I envision litigation arising between hospitals and patients bickering over increased rates but were not updated on the public site “more often as appropriate.” This recently created requirement for hospitals to publish its rates “more often as appropriate” will also create unfamiliar penalties for hospitals to face. Because whenever there is a rule, there are those who break them. Just ask CMS.
Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP) Is Implemented
Skilled nursing facilities (SNF) will be penalized or rewarded on an annual basis depending on the SNFs’ performance, which is judged on a “hospital readmissions measure” during a performance period. The rule aims to improve quality of care and lower the number of elderly patients repeatedly readmitted to hospitals. The Medicare law that was implemented in October 2018 will be enforced in 2019.
Basically, all SNFs will receive a “performance score” annually based on performance, which is calculated by comparing data from years prior. The scores range from 0 – 100. But what if you disagree with your score? Take my word for it, when the 2019 scores roll in, there will be many an unhappy SNFs. Fair scoring, correct auditing, and objective reviews are not in Medicare auditors’ bailiwick.
Expansion of Telehealth
Telehealth benefits are limited to services available under Medicare Part B that are clinically appropriate to be administered through telecommunications and e-technology. For 2019, a proposed rule creates three, new, “virtual,” CPT codes that do not have the same restrictions as the current, “traditional” telehealth definition. Now CMS provides reimbursement for non-office visits through telehealth services, but only if the patients present physically at an “originating site,” which only includes physician offices, hospitals, and other qualified health care centers. This prevents providers from consulting with their patients while they are at their home. The brand-new, 2019 CPT codes would allow telehealth to patients in homes.
Word of caution, my friends… Do not cross the streams.
- CPT #1 – Telephone conference for established patients only; video not required
- CPT #2 – Review of selfies of patient to determine whether office visit is needed; established patients only
- CPT #3 – Consult with a specialist or colleague for advice without requiring a specialist visit; patient’s consent required.
These are not the only developments in Medicare in 2019. But these are some highlights. Here is wishing you and yours a very happy New Year, and thank you for reading my blog because if you are reading this then you read the whole blog.
What the heck is the False Claims Act and why is it important to you?
When it comes to Medicaid and Medicare, the ghoulish phrase “False Claims Act” is frequently thrown around. If you google False Claims Act (FCA) under the “news” option, you will see some chilling news article titles.
- Pediatric Services of America, units to pay $6.88 in False Claims
- NuVasive, Inc. Agrees to Pay $13.5 Million to Resolve False Claims
- California Oncologist Pays $736k to Settle False Claims Allegations
False claims cases tend to be high dollar cases for health care providers; many times the amounts are at issue that could potentially put the provider out of business. FCA is spine-chilling, and many health care providers would rather play the hiding child rather than the curious investigator in a horror story. Come on, let’s face it, the curious characters usually get killed. But, this is not a horror story, and it is imperative that providers are informed of the FCA and potential penalties.
I have blogged about post payment reviews that use extrapolation, which result in astronomical alleged overpayments. See blog and blog. Interestingly, these alleged overpayments could also be false claims. It is just a matter of which governmental agency is pursuing it (or person in the case of qui tem cases).
But the ramifications of false claims allegations are even more bloodcurdling than the astronomical alleged overpayments. It is important for you to understand what false claims are and how to prevent yourself from ever participating in a false claim, knowingly or unknowingly.
First, what is a false claim?
A false claims occurs when you knowingly present, or cause to be presented, to the US Government a false or fraudulent claim for payment or approval. (abridged version).
The false claim does not have to be billed with actual knowledge that it is false or fraudulent. The false claim does not even have to be fraudulent; it can be merely false. The distinction lies in that a fraudulent claim is one that you intentionally alter. A false claim could merely be incorrect information. Saying it another way, the false claim can be a false or incorrect claim that you had no actual knowledge was false. That is hair-raising.
What is the penalty? It is:
A civil penalty of not less than $5,500 and not more than $11,000 per claim, plus 3 times the amount of the claim. You can see why these are high dollar cases.
The federal government recovered a jaw-dropping $5.7 billion in 2014 under the False Claims Act (FCA). In 2013, the feds recovered $5 billion under the FCA. Expect 2015 to be even higher. Since the inception of the Affordable Care Act (ACA), FCA investigations have increased.
Overwhelmingly, the recoveries are from the health care industry.
Everyone knows that the Medicare Claims Processing Manual is esoteric, verbose, and vague. Let’s face it: just Chapter 1 “General Billing Requirements” alone is 313 pages! Besides me, who reads the Medicare Claims Processing Manual cover to cover? Who, besides me, needs to know that Medicare does not cover deported beneficiaries or the exceptions to the Anti-markup Payment Limitation?
Not to mention, the Manual is not law. The Manual does not get approved by Congress. The Manual is guidance or policy.
However, in FCA cases, you can be held liable for items in the Medicare Claims Processing Manual of which you were not aware. In other words, in FCA cases, you can be found liable for what you should have known.
Real life hypotheticals:
Hospital submits claims to Medicare and received payment for services rendered in a clinical trial involving devices to improve organ transplants. Unbeknownst to the hospital, the Manual prohibits Medicare reimbursements for non-FDA approved services.
Physician A has reciprocal arrangement with Physician B. A undergoes personal surgery and B serves A’s Medicare Part B patients while A is recovering. A returns and bills Medicare and is paid for services rendered by B 61 days+ after A left the office.
A physician accepts assignment of a bill of $300 for covered Medicare services and collects $80 from the enrollee. Physician neglects to depict on the claim form that he/she collected anything from the patient. Medicare’s allowable amount is $250, and since the deductible had previously been met, makes payment of $200 to the physician.
These are just a few examples of situations which could result in a FCA allegation.
But do not fret! There are legal defenses written into the Social Security Act that provides protection for health care providers!
1. Check whether you have insurance coverage for FCA.
2. Have an attorney on hand with FCA experience.
3. Read portions of the Medicare Claims Billing Manual which are pertinent to you.
Most importantly, if you are accused of billing false claims, get your advocate sooner rather than later! Do not engage in any conversations or interviews without counsel!
Appeal all findings!
A new CMS proposal could transform durable medical equipment (DME) Medicare reimbursements to hospitals. The proposal, if adopted, would implement a mandatory bundled Medicare reimbursement for hip and knee replacements or lower extremity joint replacements (LEJRs).
CMS has proposed this change to be piloted in 75 metropolitan areas prior to being implemented nationwide.
This mandatory bundled Medicare reimbursement will be unprecedented, as, thus far, CMS has only implemented voluntary bundled reimbursement rates. However, CMS has stated that its goal is to have at least 50% of all Medicare fee-for-service reimbursement to be paid under an alternative payment model by 2018, and, in order to meet this objective, CMS will need to implement more mandatory alternative payment models.
Another first is that CMS proposes that hospitals bear the brunt of the financial risk. To date, CMS has not targeted a type of health care provider as being a Guinea pig for new ideas, unlike the other proposed and implemented Bundled Payments for Care Improvement (BPCI) initiative where there are many types of providers that can participate and bear risks.
Will this affect NC hospitals?
Of the 75 metropolitan areas chosen as “test sites” for the new bundled payment plan, 3 are located in NC.
3. Durham-Chapel Hill
Apparently, CMS believes that Durham and Chapel Hill are one city, but you got to give it to them…by hyphenating Durham and Chapel Hill, CMS gets both Duke and UNC health systems to participate in the mandatory trial. Other large metro areas included in the trial are Los Angeles, New York City, and Miami.
LEJRs are the most frequent surgeries in the Medicare population. The average Medicare expenditures for LEJRs, including surgery, hospitalization, and recovery, can range from $16,500 to $33,000.
The mandatory bundled reimbursement will become effective January 2, 2016; however, the hospitals will not carry the financial risk until January 1, 2017. So, hospitals, you got a year and a half to figure it out!!
What exactly will this bundled reimbursement rate include?
Answer: Everything from an inpatient admission billed under MS DRG 469 or 470 until 90 days following discharge.
And we are talking about everything.
Thus, you will be reimbursed per “Episode of Care,” which includes:
“All related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, including physicians’ services, inpatient hospital service, readmissions (subject to limited exceptions), skilled nursing facility services, durable medical equipment, and Part B drugs.”
What should you do if you are a hospital so graciously selected to participate?
1. Assess your protocol as to discharging patients. Where do your patients go after being discharged?
2. Determine whether you want to partner with any critical care facilities, skilled nursing agencies, or home health agencies.
3. Assess your current reimbursement rates and analyze what current delivery patterns must be revamped in order to maintain profitability.
4. Determine future care management and clinical reprogram needs.
5. Analyze ways to provide more efficient delivery components.
6. Communicate with your DME vendors. Discuss ways to decrease spending and increase efficiency.
7. Plan all ways in which you will follow the patient after discharge through the 90 day period.
8. Consult your attorney.
If you would like to comment on the proposed rule, you have until September 8, 2015 at 5:00pm.
NC Medicaid Reimbursement Rates for Primary Care Physicians Slashed; Is a Potential NC Lawsuit Looming?
Here is my follow-up from yesterday’s blog post, “NC Docs Face Retroactive Medicaid Rate Cut.”
Nearly one-third of physicians say they will not accept new Medicaid patients, according to a new study. Is this shocking in light of the end of the ACA enhanced payments for primary physicians, NC’s implementation of a 3% reimbursement rate cut for primary care physicians, and the additional 1% reimbursement rate cut? No, this is not shocking. It merely makes economic sense.
Want more physicians to accept Medicaid? Increase reimbursement rates!
Here, in NC, the Medicaid reimbursement rates for primary care physicians and pediatricians have spiraled downward from a trifecta resulting in an epically, low parlay. They say things happen in threes…
(1) With the implementation of the Affordable Care Act (ACA), the Medicaid reimbursement rate for certain primary care services increased to reimburse 100% of Medicare Cost Share for services paid in 2013 and 2014. This enhanced payment stopped on January 1, 2015.
(2) Concurrently on January 1, 2015, Medicaid reimbursement rates for evaluation and management and vaccination services were decreased by 3% due to enactments in the 2013 NC General Assembly session.
(3) Concurrently on January 1, 2015, Medicaid reimbursement rates for evaluation and management and vaccination services were decreased by 1% due to enactments in the 2014 NC General Assembly session.
The effect of the trifecta of Medicaid reimbursement rates for certain procedure codes for primary care physicians can be seen below.
As a result, a physician currently receiving 100% of the Medicare rates will see a 16% to 24% reduction in certain E&M and vaccine procedure codes for Medicaid services rendered after January 1, 2015.
Are physicians (and all other types of health care providers) powerless against the slashing and gnashing of Medicaid reimbursement rates due to budgetary concerns?
No! You are NOT powerless! Be informed!!
Section 30(A) of the Medicaid Act states that:
“A state plan for medical assistance must –
Provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan (including but not limited to utilization review plans as provided for in section 1396b(i)(4) of this title) as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”
Notice those three key goals:
- Quality of care
- Sufficient to enlist enough providers
- So that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area
Courts across the country have held that low Medicaid reimbursement rates which are set due to budgetary factors and fail to consider federally mandated factors, such as access to care or cost of care, are in violation of federal law. Courts have further held that Medicaid reimbursement rates cannot be set based solely on budgetary reasons.
For example, U.S. District Court Judge Adalberto Jordan held in a 2014 Florida case that:
“I conclude that while reimbursement rates are not the only factor determining whether providers participate in Medicaid, they are by far the most important factor, and that a sufficient increase in reimbursement rates will lead to a substantial increase in provider participation and a corresponding increase to access to care.”
“Given the record, I conclude that plaintiffs have shown that achieving adequate provider enrollment in Medicaid – and for those providers to meaningfully open their practices to Medicaid children – requires compensation to be set at least at the Medicare level.
Judge Jordan is not alone. Over the past two decades, similar cases have been filed in California, Illinois, Massachusetts, Oklahoma, Texas, and D.C. [Notice: Not in NC]. These lawsuits demanding higher reimbursement rates have largely succeeded.
There is also a pending Supreme Court case that I blogged about here.
Increasing the Medicaid reimbursement rates is vital for Medicaid recipients and access to care. Low reimbursement rates cause physicians to cease accepting Medicaid patients. Therefore, these lawsuits demanding increased reimbursement rates benefit both the Medicaid recipients and the physicians providing the services.
According to the above-mentioned study, in 2011, “96 percent of physicians accepted new patients in 2011, rates varied by payment source: 31 percent of physicians were unwilling to accept any new Medicaid patients; 17 percent would not accept new Medicare patients; and 18 percent of physicians would not accept new privately insured patients.”
It also found this obvious fact: “Higher state Medicaid-to-Medicare fee ratios were correlated with greater acceptance of new Medicaid patients.”
Ever heard the phrase: “You get what you pay for.”?
A few months ago, my husband brought home a box of wine. Yes, a box of wine. Surely you have noticed those boxes of wine at Harris Teeter. I tried a sip. It was ok. I’m no wine connoisseur. But I woke the next morning with a terrible headache after only consuming a couple of glasses of wine. I’m not sure whether the cheaper boxed wine has a higher level of tannins, or what, but I do not get headaches off of 2 glasses of wine when the wine bottle is, at least, $10. You get what you pay for.
The same is true in service industries. Want a cheap lawyer? You get what you pay for. Want a cheap contractor? You get what you pay for.
So why do we expect physicians to provide the same quality of care in order to receive $10 versus $60? Because physicians took the Hippocratic Oath? Because physicians have an ethical duty to treat patients equally?
While it is correct that physicians take the Hippocratic Oath and have an ethical duty to their clients, it’s for these exact reasons that many doctors simply refuse to accept Medicaid. It costs the doctor the same office rental, nurse salaries, and time devoted to patients to treat a person with Blue Cross Blue Shield as it does a person on Medicaid. However, the compensation is vastly different.
Why? Why the different rates if the cost of care is equal?
Unlike private insurance, Medicaid is paid with tax dollars. Each year, the General Assembly determines our Medicaid budget. Reducing Medicaid reimbursement rates, by even 1%, can affect the national Medicaid budget by billions of dollars.
But, remember, rates cannot be set for merely budgetary reasons…
Is a potential lawsuit looming in NC’s not so distant future???
Medicare Appeals to OMHA Reaches 15,000 Per Week, Yet Decisions Take Years; Hospital Association Sues Over Medicare Backlog
When you are a health care provider and make the business determination to accept Medicare or Medicaid, you are agreeing to deal with certain headaches. Low reimbursement rates and more regulations than you can possibly count make accepting Medicare and Medicaid a daunting experience. Throw in some pre- and post-payment review audits, some inept contractors, and dealing with the government, in general, and you have a trifecta of terrible to-dos.
But having to “pay back” (by reimbursement withholding) an alleged overpayment before an appeal decision is rendered is not a headache which hospitals have agreed to take, says the American Hospital Association. And it said so very definitively, in the form of a Complaint in the U. S. District Court for the District of Columbia
In both Medicaid and Medicare audits, if you get audited and are told to pay back XX dollars, you have a right to appeal that determination. Obviously, with Medicare, you appeal on the federal level and with Medicaid, you appeal to the state level. But the two roads to appeal (the state and federal) are not identical. Robert Frost once said, “Two roads diverged in a wood, and I, I took the one less traveled by, And that has made all the difference.” However,the Medicare appeal route is NOT the route less traveled by.
As of February 12, 2014, over 480,000 Medicare appeals were pending for assignment to an Administrative Law Judge (ALJ), with 15,000 new appeals filed each week. In December 2013, HHS Office of Medicare Hearings and Appeals (OMHA) announced a moratorium on assignment of provider appeals to ALJs for at least the next two years, and possibly longer. The average wait-time for a hearing is approximately 24 months, but will undoubtedly increase quickly due to the moratorium. A decision would not come until later. And all the while the parties are waiting, the provider’s reimbursements will be withheld until the alleged overpayment amount is met. Literally, a Medicare appeal could take 3-5 years.
The American Hospital Association is fed up. And who can blame them? On May 22, 2014, the American Hospital Association (AHA) filed a Complaint in the United States District Court in the District of Columbia against Kathleen Selebius, in her official capacity as Secretary of Health and Human Services (HHS), complaining that HHS is noncompliant with federal statutory law because of the Medicare appeal backlog. I am not surprised by AHA’s Complaint; I am only surprised that it took this long for a lawsuit. I am also surprised that more providers, other than hospitals, are not taking action.
AHA is requesting relief under the Mandamus Act, 28 U.S.C. § 1361. The Mandamus Act allows a court to compel an officer or employee of the United States or any agency thereof to perform a duty owed. In this case, the AHA is saying that HHS has a statutory duty to resolve Medicare appeals within 90 days. So, AHA is asking the district court to compel HHS to resolve Medicare appeals by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.
And, here, I am obliged to insert a quick, two thumbs-up for our very own Office of Administrative Hearings (OAH) in NC for its handling of Medicaid appeals. If you file a contested case at OAH, it will not take 3-5 years.
AHA’s lawsuit is significant because AHA does not restrict the relief requested to only hospital Medicare appeals. AHA requests that the District Court “enter a declaratory judgment that HHS’s delay in adjudication of Medicare appeals violates federal law.” If granted, I would assume that this declaratory judgment would impact all Medicare providers. The only way to ensure all providers are covered by this decision is for all providers to either (1) file a separate action (to include damages, which is not included in AHA’s action for some reason); or (2) to join AHA’s action (and forego damages), but its impact will be broad. I am not sure why AHA did not seek damages; the time value of money is a real damage…the non-ability for the hospitals to invest in more beds because their money is stuck at HHS is a real damage…the loss of the interest on the withheld money, which is obviously benefiting the feds, is a real damage.
AHA’s request is not dissimilar to an arrested individual’s right to a speedy trial. During a criminal trial, the defendant remains incarcerated. Therefore, because we believe our liberty is so important, the defendant has a right to a speedy trial. That way, if he or she is innocent, the defendant would have spent the least number of days imprisoned.
With a Medicare audit appeal, HHS begins immediately withholding reimbursements until the alleged overpayment amount is met, even though through the appeal, that overpayment will most likely be decreased quite substantially. Apparently, across the nation, the percent of overturned Medicare audits through appeal is around 72%, but I could not find out whether the 72% represents ANY amount overturned or the entire 100% of the audit being overturned. Because, in my personal experience, 99.9% of Medicare appeals have SOME reduction in the alleged amount (I would have said 100%, but we are taught not to use definitive remarks as attorneys).
Because the provider’s Medicare money is withheld based on an allegation of an overpayment, the fact that the cases are backlogged at the ALJ level is financially distressing for any provider.Even without the backlog, Medicare appeals take longer than Medicaid appeals. In Medicare, there is four-step appeal process. Going before the ALJ is the 3rd level.
First, a Medicare appeal begins with the Medicare Administrative Contractor (MAC) for redetermination. The MAC must render a redetermination decision within sixty days.
If unsuccessful, a provider can appeal the MAC’s decision to a Qualified Independent Contractor (“QIC”) for reconsideration. QICs must render a decision within sixty days.
Provided that the amount in controversy is greater than $140 (for calendar year 2014), the next level, and where the backlog begins, is at the level of appeal to an ALJ. The ALJ is required both to hold a hearing and to render a decision within ninety days, which is not happening.
Hence, AHA’s lawsuit. Hopefully AHA will be successful, because a backlog of Medicare appeals at the ALJ level doesn’t help anyone. And audits are not going away.
There are more people on Medicaid than Medicare.
Think about that. There are more people in America who qualify for Medicaid than Medicare. Yet, as a nation, we spend more on Medicare than Medicaid. (I assume because the older population requires more expensive services). 58 million people relied on Medicaid in 2012 as their insurance.
And Medicaid is growing. There is no question that Medicaid is growing. When I say Medicaid is growing, I mean the population dependent on Medicaid is growing, the demand for services covered is growing, and the amount of money required to satisfy the demand is growing. This means that every year we will spend more and more on Medicaid. Logically, at some point, at its current growth pattern, there will come a point at which we can no longer afford to sustain the Medicaid budget.
If you think of the Medicaid budget as a super, large balloon, imagine trying to inflate the balloon more and more. At some point, the balloon cannot withstand the amount of air being put into it and it…POPS.
Will Medicaid eventually POP if we keep cramming more people into it, demanding more services, and demanding more money to pay for the increased services?
First, let’s look at the amount of money spent on Medicaid last year.
The Center for Medicare and Medicaid Services (CMS) just released the 2013 Actuarial Report on the Financial Outlook on Medicaid and its report considers the effect of Obamacare.
The CMS report found that total Medicaid outlays in 2012 were $431.9 billion.
The feds put in $250.5 billion or 58%. States paid $181.4 billion or 42%. In 2011, the federal government’s percentage of the whole Medicaid expenditure was 64%.
The CMS report also made future projections.
“We estimate that the [Affordable Care] Act will increase the number of Medicaid enrollees by about 18 million in 2022 and that Medicaid costs will grow significantly as a result of these changes starting in 2014.”
The 10 year projection, according to the report, is an increase in expenditures at an annual rate of 7.1%. By 2022, the expenditures on Medicaid will be $853.6 billion.
Just for some perspective…a billion is a thousand million.
If you sat down to count from one to one billion, you would be counting for 95 years (go ahead…try it!).
If I gave you $1000 per day (not counting interest), how long would it take you to receive one billion dollars? Answer: 2,737.85 years (2,737 years, 10 months, 7 days). Now multiply 2,737.85 years by 853.6.
That’s a lot of years!!
In the next ten years, average enrollment is projected to reach 80.9 million in 2022. It is estimated that, currently, 316 million people live in America.
So the question becomes, how can we reform, change, alter (whatever verb you want to use) Medicaid so that we can ensure that the future of Medicaid is not a POPPED balloon? While I do not have the answer to this, I do have some ideas.
According to the CMS report, per enrollee spending for health goods and services was estimated to be $6,641 in 2012. I find this number interesting because, theoretically, each enrollee could use $6,641 to purchase private insurance.
Remember my blog: “A Modest Proposal?” For that blog, I used the number $7777.78 per enrollee to purchase private insurance, which would require an increase in Medicaid spending assuming we give $7,777.78 to each enrollee. But think of this…the amount would be a known amount. Not a variable.
My health care, along with health care for my husband, costs $9,000/year. My cost includes two people. If I wanted individual insurance it would only have cost $228/month or $2,736/year.
What are other options to decrease the future Medicaid budgets and to avoid the big POP:
- Decrease Medicaid reimbursements (really? Let’s make LESS providers accept Medicaid);
- Decrease covered services (I would hope this idea is obviously stupid);
- Decrease the number of recipients (I believe the ACA shot this one out of the water);
- Create a hard cap on Medicaid spending and refuse to allow services over the cap regardless of the medical necessity (Again, I would hope this idea is obviously stupid);
- Decrease administrative costs (this is apparently an impossible feat);
- Create more difficult standards for medical necessity (I believe the ADA would have something to say about that); or
- Print more money (Hmmmm…can we say inflation?).
Please, if anyone else has a good idea, let me, or, better yet, your General Assembly, know.
Because without question the future of Medicaid is larger and more expensive than today. We want to avoid that…