CCH Medicare and Medicaid Guide- September 2008

Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (PubLNo 110-275)

The Social Security Act sections related to the Medicare and Medicaid programs, as published in the CCH Medicare and Medicaid Guide, have been updated to reflect the “Medicare Improvements for Patients and Providers Act of 2008” (MIPPA) (PubLNo 110-275). The law section now includes revisions of existing law, the addition of new sections enacted by MIPPA, and updated amendment notes and histories.

You can find the Social Security Act under the Reimbursement tab, in the Medicare and Medicaid Guide/Laws and Regulations/Medicare Laws.  

CMS proposes adopting ICD-10 codes as new standard.

The International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) would be concurrently adopted as standard code sets for coding diagnoses and inpatient hospital procedures, respectively under certain provisions of the Administrative Simplification subtitle of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 (PubLNo 104-191). When adopted as final, the ICD-10 codes would replace volumes 1, 2, and 3 of the ICD-9-CM. Proposed rule, 73 FR 49795, Aug. 22, 2008, ¶220,677; and Proposed rule, 73 FR 49741, Aug. 22, 2008, ¶220,676.

Medi-Cal's 10 percent rate cut detrimental to recipients.

A district court issued a preliminary injunction prohibiting the California Department of Health Services from implementing a 10 percent reduction in the Medi-Cal fee-for-service (FFS) reimbursement rate paid to providers for services on or after July 1, 2008. Petitioners who sought the injunction included health care advocates, Medi-Cal providers and recipients. The prohibition of the cut was not applicable to services provided at acute care hospitals or reimbursements to managed care organizations. The petitioners presented evidence that they will likely succeed on their claim that providers and recipients will suffer irreparable harm if the rate cuts were implemented. Independent Living Center of Southern California v. Shewry, W.D. Cal., Aug. 18, 2008, ¶302,604.

Medicaid Integrity Program emphasizes quality, planning.

As the Medicaid Integrity Program (MIP) enters the implementation stage, providers should prepare for more intensive review by this new group of auditors, says James G. Sheehan, Medicaid Inspector General for the state of New York. At a seminar sponsored by the Health Care Compliance Association, Sheehan and Brian Flood, managing director of KPMG, advised compliance officers to strengthen their compliance programs.

The federal MIP also will focus on quality of care, patient outcomes and failure to meet professional standards by requiring reporting of adverse events, denying payment for the costs resulting from "never events" and mining of databases to identify patterns of poor outcomes, fraud or abuse. Medicaid programs are directed to deny payment for the costs resulting from never events just as Medicare is doing. The policy will identify the physicians or providers involved in never events. CCH Chicago Bureau, Aug. 14, 2008.

PGP demo advances quality of care for chronic illness.

Participants in the Physician Group Practice (PGP) Demonstration earned $16.7 million in incentive payments, and improved the quality of care for beneficiaries with congestive heart failure, coronary heart disease, and diabetes mellitus in the second year of the demonstration, according to CMS. All 10 of the participating physician groups achieved benchmark or target performance in 25 out of 27 quality measures. The demonstration is one of CMS' value-based purchasing (VBP) initiatives that tie Medicare payments to performance on health care cost and quality measures. The PGP demonstration is a companion VBP to the Physician Quality Reporting Initiative (PQRI), which allows physicians to earn incentive payments by reporting measurement data about the quality of care they provide to Medicare beneficiaries. CCH Chicago Bureau, Aug. 14, 2008.

Administration eases up on SCHIP penalties for states.

The Bush Administration has let states know they will work with those that want to expand their Children's Health Insurance Programs (SCHIP) to higher income families even if they cannot yet prove they already provide coverage to most poor children. "At this time, we are not taking compliance action," said an HHS spokesman on August 14, 2008. In April of this year, the Government Accountability Office (GAO) issued a report stating that the directive is in fact a rule for purposes of the Congressional Review Act and, therefore, violates the statutory requirements for congressional notice and review (see Report 1511, "Congress must review letter limiting SCHIP expansion: GAO"). The directive also has come under fire in Congress and a group of senators recently tried to nullify it. They said the 95 percent threshold is "unachievable" and is "in effect, tying the hands of those states attempting to provide greater access to health insurance for children." Sen. Jay Rockefeller (D-W.Va.) said, "The Administration clearly overstepped its legal authority in issuing the August 17 letter." CCH Washington Bureau, Aug. 15, 2008.

CMS takes steps to make permanent Medicare RAC program successful.

Since the recovery audit contractor (RAC) pilot program will be phased in nationwide beginning this fall, provider organizations should review the demo program so that they can become better prepared. Fortunately, there are several changes to the program that will make it easier for providers to comply and the Centers for Medicare and Medicaid Services is available to discuss the program with providers and answer their questions. The RAC program mission is to detect and correct past improper payments and to implement actions that will prevent future improper payments. “That’s important so that providers can avoid submitting claims that don’t comply with Medicare rules, CMS can lower its error rate, and taxpayers and future Medicare beneficiaries are protected,” according to Melanie Combs-Dyer, a senior technical advisor at the CMS division of demonstrations management, financial services group in Baltimore, Md. CCH Washington Bureau, Aug. 15, 2008.