Final rule on Medicaid Prescription Drug Programs

In January of 2016, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on covered outpatient drugs. The rule changes the Medicaid Drug Rebate Program by the Patient Protection and Affordable Care Act (PPACA) and the overall Medicaid drug reimbursement program.  These changes have several goals, including reducing the cost to the federal and state governments and improving beneficiary access to covered outpatient drugs.

CMS claims the changes implemented will help the government save money in the Medicaid Drug Rebate Program, which had been subject to sustainability issues. One key change in the final rule is a definition of the Average Manufacture Price, which in turn gets used to determine rebates and pharmacy reimbursements subject to the federal upper limit. Similarly, the changes to the federal upper limit formula will incentivize pharmacies to use certain generic drugs. The final rules clarify many of the ambiguous sections of the Medicaid Drug Rebate Program by the PPACA, including the manufacturer reporting requirements. The rule also aligns the pharmacy reimbursement system with the actual acquisition cost of the drug.

Overall, the new incentives and changes should improve the reimbursement system and help manage drug costs. This rule becomes effective April 1, 2016, although CMS is allowing comment for 60 days after publication on certain elements of the rule. The new rule can be found at the following link:

 © 2015 Vandenack Williams LLC
For more information, Contact Us

Final Rules Issued by CMS on Stage 3 Electronic Health Record Incentive Program

On October 6th, 2015, the Centers for Medicare and Medicaid Services (CMS) issued two final rules regarding the incentive program for eligible professionals adopting electronic health records. One rule pertained to the requirements necessary to receive a stage 3 incentive payment and the second rule pertained to the electronic health record use requirements for stage 3 participants.

Of the many specifics in the final rules, eligible professionals should note a change to the meaningful use incentive payment reporting period. Previously, eligible professionals had to report meeting the requirements for a full year, but the new rule only requires reporting that the eligible professional met the specifications for 90 days, significantly shortening the reporting period. Another important change, CMS shifted hospitals to a calendar year from a fiscal year, meaning that the attestation period has been moved as well. For hospitals looking to attest to meeting the meaningful use requirements in 2015, the hospital will have to wait until the online attestation portal opens on January 4, 2016. For non-hospital eligible professionals, this will not change the attestation timing because CMS already required the use of a calendar year for these individuals.

The attestation requirements are important for Medicare providers because these 2016 incentive payments turn into Medicare penalties, a negative payment adjustment, in 2017. The final rules for stage 3 electronic health record incentive payments will be published on October 16, with comments open until December 15, 2015. The final rules can be found at the following links:

© 2015 Houghton Vandenack Williams
For more information, Contact Us

CMS announces equitable plan to improve care for under-served Medicare populations.

In an effort to reduce health-care disparities among specific Medicare populations, the Centers for Medicare & Medicaid Services (CMS) has developed the Medicare Equity Plan. Announced on September 8, 2015, the plan is designed to improve upon healthcare disparities, especially for minority populations, in four years. The equity plan, to be implemented in conjunction with other CMS priorities, focuses on improving health-care quality to under-served Medicare groups, especially those with traditionally higher percentages of disease, low quality of care, and high barriers to care.


The six priorities of the Medicare Equity Plan, as outlined by CMS, are as follows:

  •  Priority 1: Expand the Collection, Reporting, and Analysis of Standardized Data
  • Priority 2: Evaluate Disparities Impacts and Integrate Equity Solutions Across CMS Programs
  • Priority 3: Develop and Disseminate Promising Approaches to Reduce Health Disparities
  • Priority 4: Increase the Ability of the Health Care Workforce to Meet the Needs of Vulnerable  Populations
  • Priority 5: Improve Communication and Language Access for Individuals with Limited English Proficiency and Persons with Disabilities
  • Priority 6: Increase Physical Accessibility of Health Care Facilities”


For those that participate in Medicare as recipients or providers, more information may be obtained from CMS at the following location:

© 2015 Houghton Vandenack Williams
For more information, Contact Us

Physician Reimbursement for End of Life Planning

The Centers for Medicare and Medicaid Services released a proposed regulation, as part of the proposed Medicare Physician Fee Schedule rule, that allows doctors to be reimbursed for end of life planning with patients. These counselling sessions, known as advance care planning, allows a doctor to bill for two 30 minute sessions with a patient to discuss how they would like to be treated as they are dying.

For physicians billing Medicare for reimbursement, this will make two new codes active. Although the codes were enacted in the fiscal year 2015 fee schedule, they were not eligible for reimbursement. The new fee schedule, that would be effective January 1, 2016, allows physicians to be reimbursed for two 30 minute sessions. Although experts expect that many patients will only require one 30 minute session, up to an hour can be reimbursed.

For the approximately 55 million individuals insured by Medicare, this will allow the patient to tell the doctor what their wishes are and how they would like to be cared for at the end of life. Although some private insurers currently offer payment for these discussions, Medicare offering reimbursement will significantly increase the volume of these discussions. The proposal will be open to comment for 60 days, prior to the final rule being published at the end of 2015, with reimbursement starting on January 1, 2016.

© 2015 Houghton Vandenack Williams

For more information, Contact Us

Private Parties May Not Sue States over Medicaid Reimbursement Rates

On March 31, 2015, the United States Supreme Court decided Armstrong v. Exceptional Child Ctr., Inc.. At issue was whether a provider of Medicaid-covered services may sue, as a private party, a state over their reimbursement rates. The providers sought to sue states over rates that they believed were too low and not in compliance with Section 30(a) of the Medicaid Act.

Section 30(a) states that reimbursement rates should be “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.”

The providers argued that the language of the act, coupled with the Supremacy Clause of the United States Constitution, means that providers can sue to enforce the federal law. In doing so, the providers believed they could force states to increase their Medicaid reimbursement rates. The Supreme Court rejected this notion and found that it is up to the Department of Health and Human Services to remedy the state’s rates.

© 2015 Houghton Vandenack Williams
For more information, Contact Us

HHS Announces Goal of Tying Medicare Payments to Quality of Service

On January 26, 2015, Health and Human Services (HHS) announced a new goal of tying Medicare payments to the quality of service provided through the use of alternative payment models. According to HHS, this is the first time Medicare has ever set explicit goals for payment to providers based upon value and quality. The alternative-payment goals include tying 30% of traditional fee-for-service payments to quality. The 30% goal is set for the end of 2016, with a 50% goal by the end of 2018.

In addition to the traditional fee-for-service payments, HHS has set a goal of tying 85% of all traditional Medicare payments to quality by 2016 and 90% in 2018. HHS points to the value-based purchasing and hospital readmission reduction programs as examples of tying fees and payments to quality.

HHS also hopes to make these goals scalable and created the Healthcare Payment Learning and Action Network. This network will work with all areas of the healthcare industry to advance alternative payment models.

The HHS announcement may be found at the following link:

© 2015 Houghton Vandenack Williams

For more information, Contact Us

Medicare Adds Payment for Chronic Care Management

By M. Thomas Langan II.

Beginning January 1, 2015, health care providers can submit claims to Medicare for staff time used for developing and implementing a care plan for a patient with at least two chronic conditions. This addition is in response to complaints from providers that they have to spend a lot of time coordinating care with numerous healthcare contacts that the patient has – time that was previously not billable. The applicable code can be submitted once per patient per calendar month. It is recommended that staff members document their time coordinating the care to support the claim.

© 2015 Houghton Vandenack Williams Whitted Weaver Parsonage LLC

For more information, Contact Us

New Regulations for Supplier & Service Provider Enrollment in Centers for Medicare & Medicaid Services

On December 3, the Centers for Medicare & Medicaid Services (CMS) issued a final rule with new provisions for supplier and service provider enrollment in CMS programs. In sum, three provisions are applicable to healthcare providers who participate in CMS billing.

First, CMS expanded the right to deny or revoke CMS enrollment if the provider or supplier has a previous felony conviction in the preceding 10 years. The crimes that qualify include crimes against persons, financial crimes, and malpractice felonies. Each potential violation will be reviewed under the lens of what is detrimental to CMS programs and beneficiaries.

Second, CMS may deny enrollment to a new CMS service provider, supplier, or owner if they had previously had an ownership relationship with an entity that had Medicare debt. This coincides with another rule enabling CMS to revoke billing privileges of a CMS entity if they have a demonstrated practice of submitting claims that do not fully meet Medicare billing requirements.

Third, for ambulatory service providers, the “back bill” provisions have been eliminated. This means that the services rendered while the application to CMS is pending will no longer be billable to CMS. CMS will save approximately $327 million dollars annually with this change.

The CMS rule will be published on December 5 in the Federal Register, becoming effective 60 days later on February 3, 2015. The final rule is available as a PDF at the following link:

© 2014 Parsonage Vandenack Williams LLC
For more information, Contact Us

Medicare and Medicaid Requesting Comment on Proposed Changes to Home Health Regulations

A proposed rule issued July 1 by the Center for Medicare and Medicaid Services (CMS) (CMS-1611-P) looks to change payment rates for home health agencies and simplify the  face-to-face encounter regulatory requirements. The decrease in payments to the home health agencies will begin in 2015 and reduce the overall budget .30 percent, equivalent to $58 million dollars.

The Affordable Care Act mandates that individuals shifting from hospital care to home health meet with a physician to certify that the home health services are medically necessary. Current regulation requires that the meeting occur within 90 days prior or 30 days after services begin. Regulations also require documentation with a narrative explaining why the patient requires home services. The proposed rule eliminates the narrative requirement, reduces the CMS review to only the certifying physician’s medical records for initial eligibility, while the physician’s visit to patient’s home for certification would not be covered if the overall claim was not approved.

CMS is requesting comment by September 2, 2014.

Other proposed changes include:  changes to the home health quality reporting program requirements, rebasing of the 60-day payment rate, and simplifying the certification regulatory requirements.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us

CMS Expands Proposed Five-Star Rating System for Providers

The Centers for Medicare and Medicaid Services have announced another expansion to their planned five-star rating system for various medical facilities. At present, CMS uses star ratings to allow consumers to compare Medicare Advantage plans and nursing homes on its website.

Over the past six months, CMS has stated that it would include star ratings on its Physician Compare website. Now, CMS will also include star rankings for hospitals, home health agencies, and dialysis providers. CMS plans on rolling out the new star ranking system in late 2014 to early 2015.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us