Medicare Compliance & Reimbursement

ICD-10 transition still on track.

President Barak Obama signed into law the Medicare Access and CHIP Reauthorization Act on April 16, bringing a huge respite to all healthcare providers who suffered a constant sense of crisis each year. Physicians finally have a permanent fix to the Sustainable Growth Rate methodology that would have led to a 21-percent cut to physician payment rates this year.

Background: Since 2003, each year physicians have faced a massive cut in their Medicare reimbursement and have relied on Congress to prevent these cuts — something that has occurred 17 times between 2003 and 2014.

Doc Increases Kick in July 1

So now that the SGR formula is out, how will docs get paid? The Medicare and CHIP Reauthorization Act gives 0.5 percent annual boosts to their Medicare pay for five years starting in July, after which practitioners will get bonuses based on quality of care rather than the number of procedures administered. As for their current payments, they’ll continue to collect based on the rates that were in effect from Jan. 1 through March 31, giving MACs and practices time to prepare their systems for the new payment formulas that will kick in on July 1.

The Act introduces a new system called the Merit-Based Incentive Payment System (MIPS) for physicians. MIPS will replace the current value based modifier and PQRS programs, but not just yet.

“The MIPS shall apply to payments for items and services furnished on or after January 1, 2019,” the bill reads. MIPS will use four performance categories in determining docs’ composite performance score: quality, resource use, clinical practice improvement activities, and meaningful use of certified EHR technology.

In the meantime, Medicare will process some of physicians’ claims at the reduced rate that was set to take effect April 1, it notes in its message.

But “the MACs will automatically reprocess claims paid at the reduced rate with the new payment rate,” CMS explains.

Cuts for Home Health, Hospice

The bill contained a 2018 payment update reduction for both home health agencies and hospices, as well as a $50,000 surety bond requirement for HHAs. The payment update would be limited to 1 percent in 2018, and the surety bond would have a minimum $50,000 amount — and the amount would increase corresponding to a home health agency’s revenues.

HHAs had hoped to get the surety bond provision bumped from the version of the doc fix bill the Senate passed, but on April 14 the legislative body ended up passing legislation identical to the House’s version. Senators did not want to delay the bill, allowing the physician pay cut to kick in. If the Senate passed a different version, it would have to go back to the House to work out differences.

The bill faced opposition, perhaps most notably from fiscal conservatives who weren’t pleased that about $140 billion of the bill’s $200 billion-plus cost wasn’t paid for. But it still passed overwhelmingly in both chambers.

Ahead: Prior to the Senate’s vote, the National Association for Home Care & Hospice (NAHC) noted that it expects Congress to work on more Medicare legislation this year. That may provide a vehicle for repealing the surety bond requirement, as well as securing desired face-to-face physician encounter changes.

No Delay To ICD-10 Implementation

Although some providers were expecting legislators to include language that would push ICD-10 implementation back another year, there was no ICD-10 delay included in the bill. Therefore, providers are still fully on track to implement the new diagnosis coding system in October.

One of the few bill amendments senators voted on included an end to therapy caps, but that amendment was rejected. Thus, physical, occupational, and speech therapists will continue to face reimbursement caps for their outpatient Part B services.

Exceptions to therapy caps were approved in the bill, however, notes the Centers for Medicare & Medicaid Services (CMS) in an announcement about the legislation.

The cost of the new Medicare payment plan reportedly amounts to more than $200 billion over the next decade, and some of that cost will be passed on to higher-earning Medicare beneficiaries with increased cost-sharing.