Senate Finance Committee Leaders Release Comprehensive Report on Combating Waste, Fraud and Abuse in Medicare & Medicaid Programs

by Erica Stocker

On January 31, a group of six current and former members of the Senate Finance Committee—led by current Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT)—released a comprehensive report detailing recommendations on combating waste, fraud and abuse in the Medicare and Medicaid programs. The report is a compilation of recommendations received from more than 160 health care industry stakeholders following a solicitation of such information in May 2012, and also includes proposals from the group of Senate Finance leaders themselves.

Senators Baucus and Hatch were joined by Senators Tom Coburn (R-OK), Ron Wyden (D-OR), Chuck Grassley (R-IA) and Tom Carper (D-DE) in soliciting the recommendations and releasing the report. In the coming months, this group of six intend to work not only within the Finance Committee—which has jurisdiction over Medicare and Medicaid—but also with other relevant Senate Committees, the Centers for Medicare and Medicaid Services (CMS), other appropriate federal agencies and interested stakeholders.

Specifically, the bipartisan report focuses on five key themes: improper payments; beneficiary protection; audit burden; data management; and enforcement. Several changes of note—some of which are within CMS’ authority to make and will not require legislation—include:

  • Increasing state Medicaid anti-fraud program funding;
  • Making changes to payment policies that tend to lead to waste, fraud and abuse due to inconsistent pricing;
  • Requiring the Centers for Medicare and Medicaid Services (CMS) to use currently un-utilized statutory authorities, such as mandatory compliance programs;
  • Making operational changes with regard to CMS audit contractors, in order to promote efficiency and effectiveness;
  • Clarifying appropriate settings for care (inpatient vs. outpatient, for example); and
  • Creating a balance between Medicare contractor incentives for identifying overpayments versus penalties when findings are overturned through appeals to CMS.

Upon the report’s release, Chairman Baucus noted that the Committee had received nearly 2,000 pages of input from stakeholders. “Now we must take these ideas and put them to work and strengthen Medicare and Medicaid, ensuring the programs continue to care for those they serve,” Baucus stated.

The Finance Committee press release with a link to the full PDF report can be found here.

As these recommendations advance, we can assist clients in expressing any ideas or concerns to relevant legislators and policymakers.

CMS Releases its 2012 ACO Application; Pioneer ACOs Advance

by J. Peter Rich and Lesley DeRenzo

Medicare MSSP ACOs

Pursuant to the Medicare Shared Savings Program (MSSP) final rule released on October 20, 2011, the Centers for Medicare and Medicaid Services (CMS) has released its 2012 Accountable Care Organization (ACO) application.  Organizations interested in participating as an ACO in the MSSP created under the Patient Protection & Affordable Care Act may now move forward with the application process. 

Organizations must submit a brief Notice of Intent (NOI) to CMS by 5:00 p.m. EST on January 6, 2012.  A link to the NOI is accessible here.

Once CMS receives and processes an applicant’s NOI, the applicant will receive an acknowledgement letter from CMS that contains the applicant’s ACO ID.  Additionally, CMS will provide the applicant with detailed information on how to obtain a CMS user ID (which is necessary to apply for the MSSP). 

After an applicant has obtained an ACO ID and CMS user ID, the applicant should submit the MSSP application to CMS by no later than 5:00 pm EST on January 20, 2011, for the April 1, 2012 contract start date.  Applicants wishing to participate starting July 1, 2012, should submit the MSSP application to CMS by no later than 5:00 pm EST on March 30, 2012.  

For more information about the MSSP application process click here

Separate ACO Development - Pioneer ACOs Advance

In a separate ACO development, CMS has recently pursued partnerships with ACOs through its Pioneer ACO model, led by the Center for Medicare & Medicaid Innovation (CMI) within CMS.  The Pioneer ACO program has been designed for health care providers that have relatively more experience with an integrated delivery system model, and thus, greater readiness to contract with CMI as an ACO.  Approximately 40-50 of the Pioneer ACO applicants were offered contracts, and approximately 25-30 Pioneer ACOs are expected to enter into contracts with CMI.  CMI’s collaborations with Pioneer ACOs are aimed at achieving better care for individuals, better health for populations, and reduced expenditures for Medicare, Medicaid, and CHIP beneficiaries.

For more information about CMI click here.

CMS Creates Permanent Open Enrollment Period for High-Quality MA Plans

As part of its continued efforts to incentivize Medicare Advantage (MA) Organizations to achieve a 5-star quality rating, the Centers for Medicare and Medicaid Services (CMS) announced the creation of a special enrollment period (SEP) to permit enrollment into 5-star rated MA Plans at any time during the benefit year.

The SEP will be available beginning in calendar year (CY) 2012 to all Medicare beneficiaries who:

1)  Are enrolled in an MA Plan with a quality rating of 4.5 stars or less, or enrolled in traditional Medicare fee-for-service and eligible to enroll in an MA Plan, and
2)  Reside in the service area of a 5-star rated MA Plan. 

MA Plans with a quality rating of 4.5 stars or less seem to be limited to enrolling Medicare beneficiaries during the annual election period or a beneficiary’s initial enrollment period or another SEP.  Thus, in addition to competing for new members with 5-star MA Plans in the same service area, MA Plans with a 4.5-star or less rating will be vulnerable to potentially losing members during the year.

A copy of the Health Plan Management System (HPMS) memo regarding the SEP can be found here.  Additional guidance on this SEP is expected in the CY 2012 Call Letter. 

What This Means
This new SEP is one of several benefits for 5-star MA Plans in CY 2012, in addition to higher quality bonus payments and enhanced access to MA rebate dollars.  All MA Organizations, and particularly those serving areas in which other 5-star MA Plans are operating, need to be identifying and implementing changes to enhance their quality rating. 

Next Steps
CY 2012 star ratings, issued in Fall 2010, are based on data collected in 2009 and 2010.  Thus, MA Organizations should focus on quality improvement activities that will positively impact 2011 data elements, and thus CY 2013 and CY 2014 star-quality ratings, such as provider-driven elements and other beneficiary “touch points” evaluated under the surveys that contribute to star-quality ratings

AMA Establishes New Principles for ACOs

The American Medical Association has established new principles to guide the development and operation of accountable care organizations, which emphasize physician leadership and patient participation.

To read the full article, click here.

Centers for Medicare and Medicaid Services Issues Proposed Changes to Medicare Graduate Medical Education Payments

The U.S. Department of Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS) has released proposed changes to the Medicare Outpatient Hospital Prospective Payment System (OPPS), including several proposed changes to Medicare Graduate Medical Education (GME) payments.  Hospitals with existing GME programs, those that are contemplating new or expanded GME programs, and those considering closure of programs or sale or acquisition of a hospital should carefully review the proposed regulations to evaluate the effect of the proposed changes and consider submitting comments to CMS before August 31, 2010. 

Click here to view the full article.

President Obama Appoints Don Berwick to Lead CMS

On July 7, 2010, in a recess appointment, President Obama appointed Don Berwick, M.D., M.P.P., to lead the Centers for Medicare and Medicaid Services (CMS).  Dr. Berwick is a pediatrician, Harvard professor, and president and chief executive officer of the Institute for Healthcare Improvement.  As administrator of CMS, Dr. Berwick will play a pivotal role in the implementation of health reform legislation. 

The president's use of his recess appointment power obviates the traditional U.S. Senate confirmation process, which would have included a confirmation hearing at the U.S. Senate Committee on Finance (Finance Committee), at which legislators could ask questions of the nominee, and, if the Finance Committee reported the nomination, a subsequent Senate floor vote which would have provided all Senators an opportunity to discuss the nominees' record and vote for or against his confirmation.  The recess appointment avoids what would likely have been an extremely partisan and drawn out confirmation battle.  Indeed, congressional Republicans—with an eye toward the rapidly approaching November 2010 congressional elections—seemed bent on using the Berwick confirmation process as a referendum on health reform legislation.  While the recess appointment effectively installs Dr. Berwick at CMS without Senate confirmation, a recess appointment lasts only as long as the current Congress, which extends through 2011.  This means that, in order to serve beyond 2011, Dr. Berwick would need Senate confirmation in 2012, or another recess appointment. 

To learn more about Dr. Berwick's background and extensive experience, see McDermott's previous blog post.

Concern about the recess appointment was not confined to the Republican side of the aisle.  Both Senator Max Baucus (D-MT), chairman of the Finance Committee, and Senator Charles Grassley (R-IA), the ranking Republican on the Finance Committee, expressed dismay.  Senator Baucus said he was “troubled that, rather than going through the standard nomination process, Dr. Berwick was recess appointed.  Senate confirmation of presidential appointees is an essential process prescribed by the Constitution that serves as a check on executive power….by ensuring that crucial questions are asked of the nominee – and answered.”  Senator Grassley protested the recess appointment as well, saying, “The administration has taken advantage of the fact that there's no check on its power, with one-party control of Congress and the White House.”  He continued, “This recess appointment follows a pattern.  Health care legislation was written behind closed doors.  Broad new regulations have been written within the bureaucracy and issued without any public comment period.  It really flies in the face of the President's pledge to have the most transparent administration ever.” 

Despite the controversy regarding the appointment, Dr. Berwick does enjoy support from past CMS administrators, including those appointed by both Democratic and Republican administrations.  He also receives support from numerous providers and other organizations, and he has a long history of working to improve both the quality and efficiency of health care—one of the principal aims of health reform legislation. 

Implementation of FY 2011 Hospital Payment Provisions

Health care providers should review the Proposed Rule on hospital payment policies posted by the Centers for Medicare and Medicaid Services (CMS) and consider submitting comments on the effects of the suggested provisions.

Click here to view the full article.