Category: Medicare

Federal government tightening enforcement for hospice, post-acute care providers

By Curtis Campbell, Class of 2019; Jessie C. Neil, Partner at Waller; J. Logan Wilson, Associate at Waller

The Department of Health and Human Services’ Office of Inspector General (OIG) recently announced that it had found several vulnerabilities in the Medicare hospice program while examining practices between 2006 and 2016.

The number of beneficiaries in the program expanded 53 percent between these dates, growing from 930,000 beneficiaries in 2006 to 1.4 million beneficiaries in 2016. However, spending in the same period grew 81 percent, increasing from $9.2 billion in 2006 to $16.7 billion in 2016. The number of hospices also increased 43 percent, growing from 3,062 in 2006 to 4,374 in 2016.

Beneficiaries of the program forgo curative care for terminal illnesses and instead receive palliative care. Palliative care can be provided in a variety of settings, including the patient’s home, a nursing facility, a hospital or a hospice inpatient unit. Medicare pays hospices for each day a beneficiary receives care, regardless of the quantity or quality of services. Medicare pays a different daily rate for four (4) different levels of hospice care: routine home care, general inpatient care, continuous home care and inpatient respite care.

While conducting its examination, OIG concluded that hospices did not always provide necessary services to beneficiaries. In some cases, hospices did not manage patients’ symptoms or medications effectively, leaving them in pain for many days. Additionally, OIG found that hospices often did a poor job care planning, that hundreds of hospices only offered routine home care, that many hospices did not offer services on the weekend, and that many beneficiaries did not see a physician. Some beneficiaries and their families and caregivers also did not receive critical information needed to make informed decisions about the care the beneficiary received.

OIG also identified issues with hospices inappropriately billing costs and higher-than-appropriate levels of care to Medicare worth hundreds of millions of dollars. OIG noted several fraudulent activities, including enrolling beneficiaries who are not eligible for hospice care and billing for services that were never provided.

Furthermore, OIG found that the current payment system incentivizes hospices to minimize patient services and seek beneficiaries who have uncomplicated needs. The Centers for Medicare & Medicaid Services (CMS) has made some changes to the payment system, but the underlying structure remains unchanged.

As a result, OIG made several recommendations to CMS about how to improve the hospice program, including:

  • Strengthening the survey process to better ensure that hospices provide beneficiaries with needed services and quality care;
  • Seeking statutory authority to establish remedies for hospices with poor performance;
  • Developing and disseminating additional information on hospices to help beneficiaries and their families and caregivers make informed choices about their care;
  • Educating beneficiaries and their families and caregivers about the hospice benefit;
  • Promoting physician involvement and accountability to ensure that beneficiaries get appropriate care;
  • Strengthening oversight of hospices to reduce inappropriate billing; and
  • Taking steps to tie payment to beneficiary care needs and quality of care to ensure that services rendered adequately serve beneficiaries’ needs, seeking statutory authority if needed.

OIG is telegraphing its intent to focus enforcement efforts around hospice care in particular and post-acute care in general. Companies with a proactive compliance program will wisely adapt their processes to reflect these new government priorities.

Pathways to Success: CMS proposes accelerated shift to provider risk in ACOs

By Clay Brewer, Class of 2020; Jesse C. Neil, Partner at Waller

In an effort to facilitate the American healthcare system’s transformation from volume-based to value-based payment, the Centers for Medicare and Medicaid Services (CMS) is requesting public comment regarding its newly proposed rule that would shift the amount of risk participants in Accountable Care Organizations (ACOs) assume under the Medicare Shared Savings Program (MSSP).

An ACO is a group of physicians, hospitals, and other healthcare providers that care for a group of beneficiaries under Medicare Parts A and B. The core principles of the system are to streamline care and reduce costs within a cohesive structure. Under the current MSSP framework, ACOs may join one of three tracks with each differing primarily on the amount of risk each ACO opts to assume. Currently, 561 of the 649 ACOs are members within one of the tracks, with eighty-two percent of the 561 being enrolled in Track 1. Under Track 1, the ACOs only experience “upside-risk,” which means the ACO members are eligible to receive any achieved savings but are not financially responsible if the ACO incurs a loss.[1] CMS Administrator Seema Verma, however, recently opined that “[t]he results show that ACOs that take on regular levels of risk show better results for cost and quality over time.”[2] As a result, CMS is requesting comment on a new proposed rule, entitled “Pathways to Success,” to shift more of the downside risk to providers with the goal of incentivizing more efficient care and across-the-board savings.

The proposed framework establishes two tracks: (1) BASIC and (2) ENHANCED. Each ACO would be permitted to choose the track that best fits its needs while also being able to enter into five-year agreements as opposed to three-year. This would enable the ACOs to adjust to the risk that will need to be assumed over time while also learning to manage the associated costs.

The BASIC approach will permit the ACOs to assume risk over a five-year period with the first two years being upside-only risk with a “glide path” into years three, four, and five with increasing risk assumption. One caveat to the glide path is that ACOs currently within an upside-only risk plan, such as Track 1, would be limited to one of the two years of upside-only risk under the BASIC track. However, after year five, this newly-assumed risk would qualify the ACO as an Advanced Alternative Payment Model (APM), permitting the ACO to receive additional incentive payments for meeting quality thresholds.

Under the ENHANCED approach, ACOs may enter the program immediately qualifying as an APM at a set risk amount for the entire five-year period as long as the risk is greater than year five of the BASIC approach. On the other hand, ACOs that have had no experience under a two-sided risk approach may enter into any of the BASIC’s glide paths or enroll into the ENHANCED model from the start.

Due to the differences that exist between low revenue (i.e., physician practices) and high revenue (i.e., hospitals) entities, those who qualify as low revenue would be eligible to reapply for another five-year BASIC program at the highest level of risk. High revenue entities would be required to move into the ENHANCED track and assume additional risk.

Although efficient care and lower costs are appealing to practically everyone, the timing of the announcement and a change in the economic model will have a material impact on hospitals and physicians that participate in the programs. There are few areas where public policy is so intertwined with the clinical, operational, and financial performance of healthcare providers. Some stakeholders may see a competitive advantage to an accelerated move to downside financial risk. For others, it could lead them to withdraw from participation in the program altogether. Regardless, it is a critical moment in the transition to a value-based system, and these programs will benefit immensely from thoughtful, practical feedback from the physicians, hospitals, payors, and even investors that are trying to lead the way.

 

[1] Tracks 2 and 3 consist of only eighteen percent of enrollees with varying degrees of two-sided risk. Track 3 becomes the ENHANCED approach in the proposed rule.

[2] Seema Verma, Pathways to Success: A New Start for Medicare’s Accountable Care Organizations. August 9, 2018.

Why telehealth was a big winner in new budget deal

By Andy Cole, Class of 2018; Amber Greene Arnold, Associate at Waller

Hidden in the details of the Bipartisan Budget Act of 2018 are some key telehealth provisions that are receiving praise from many industry groups and could mark a significant development for Medicare telehealth policy.

The new legislation promotes telehealth in several ways.

Tele-stroke. Medicare currently only covers tele-stroke services for patients located in rural health professional shortage areas and counties not classified as a metropolitan statistical area.  Effective January 1, 2019, however, Medicare will cover a telehealth consultation for any Medicare beneficiary presenting at a hospital with acute stroke symptoms, without regard to current geographic restrictions.

End-Stage Renal Disease (ESRD) Services.  Beginning January 1, 2019, the legislation allows nephrologists to use telehealth to provide monthly clinical assessments for ESRD patients on home dialysis.  This provision is not subject to any geographical restrictions and the “originating site” may be a freestanding dialysis facility or the patient’s home. However, ESRD patients benefiting from this provision will still be required to have an in-person assessment each of the first three months of home dialysis and once every three months thereafter.  This provision is notable for ESRD patients who may have difficulty traveling.

Medicare Advantage Plans.  Currently, Medicare Advantage plans may cover telehealth services in addition to those covered by the traditional Medicare program, but these additional telehealth services are not paid for separately by Medicare.  The new legislation, however, authorizes Medicare Advantage plans, beginning with the 2020 plan year, to offer to include additional telehealth benefits beyond those available under traditional Medicare in their annual bid to the government.  These additional telehealth services would also have to be available to patients through in-person visits as well.  Due to the rapidly growing number of beneficiaries enrolling in Medicare Advantage plans, this provision may have a significant effect on the growth of telehealth services under Medicare.

Accountable Care Organizations.  The legislation also allows for increased coverage of telehealth services provided to Medicare patients assigned to certain ACOs.  More specifically, after January 1, 2020, for two-sided ACOs (meaning the ACO shares in both savings and losses) or an ACO tested or expanded through the Center for Medicare and Medicaid Innovation, existing telehealth geographic limitations will not apply.  This will allow for a patient’s home to qualify as an “originating site” even if the patient’s home is not located in a rural health professional shortage area.

These changes reflect a continued interest by lawmakers in supporting and expanding telehealth services and have the potential to increase access to care for Medicare beneficiaries while potentially lowering costs.  Healthcare providers should monitor the implementation of these provisions and evaluate opportunities for participating in Medicare’s expansion of coverage for telehealth.