Category: Medicaid

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Medicare Payments for Telehealth Increased 28% in 2016: What You Should Know

Telehealth providers can celebrate another successful year of growth, as CMS reported a 28% increase over total 2016 payments for telehealth services under the Medicare program. Providers continue to successfully integrate telehealth services into their traditional health care delivery approaches, and are realizing payment opportunities both within the Medicare FFS program and in other sources of revenue.  Our thanks to POLITICO Pro Morning eHealth Reporter, David Pittman, who first reported on the story and shared the claims data.

2016 Medicare Telehealth Claims Data

Let’s review the numbers. In CY 2016, Medicare paid a total of $28,748,210 for telehealth services, spread across a total of 496,396 claims. This includes payments to distant site providers and originating site payments. Compare this amount to last year, in which Medicare paid a total of $22,449,968 for telehealth services, spread across a total of 372,518 claims. (The figures are slightly different than reported in prior years, as CMS changed its data collection and calculation methodology this year.)

The result: 2016 saw a 33% increase in the number of Medicare telehealth claims submitted and a 28% increase in total payments. This uptick in total payments is not attributable to fee schedule rate increases, but rather to more providers using telehealth services with their traditional Medicare FFS beneficiaries.

More Originating Site Claims Filed Than Ever Before

Perhaps the most interesting element in the new data is the significant increase in originating site claims (HCPCS Code Q3014)..  Before 2015, approximately half of all distant site claims did not have a corresponding originating site claim.  This gap has closed in the last two years, and in 2016, 66% of all distant site claims had a corresponding originating site claim.  The remaining gap could be due to providers not bothering to bill for the $25 originating site facility fee, or it could be that some claims were billed when the patient was located at home (a different site of service for which a facility would not bill).  The federal Office of Inspector General at the Department of Health & Human Services has announced a new audit project to review Medicare payments for telehealth services and understand the reason(s) for this gap.

Despite the increase, Medicare’s $28.7 million payments in 2016 remains a small portion of the $600+ billion overall Medicare program budget. Remember: in 2001, the Congressional Budget Office estimated it would cost the Medicare program $150 million to cover telehealth services for the first five years ($30 million a year).  Fifteen years later, total payments (2011-2016) still have not cracked that $150 million forecast and annual spend has not hit $30 million.

Medicare Coverage of Telehealth Services is Limited

Coverage of telehealth services under Medicare remains limited, with the restrictions established via statute under the Social Security Act.  Any notable expansion of telehealth coverage under Medicare would require legislation by Congress. There are several bills pending in Congress to remove these limitations, but until such time, there are five main conditions for coverage for telehealth services under Medicare.

  1. The beneficiary is located in a qualifying rural area (providers can check if the originating site is in a qualifying rural area by using the Medicare Telehealth Payment Eligibility Analyzer);
  2. The beneficiary is located at one of eight qualifying originating sites (i.e., the offices of physicians or practitioners; Hospitals; Critical Access Hospitals; Rural Health Clinics; Federally Qualified Health Centers; Hospital-based or CAH-based Renal Dialysis Centers (including satellites); Skilled Nursing Facilities; and Community Mental Health Centers);
  3. The services are provided by one of ten distant site practitioners eligible to furnish and receive Medicare payment for telehealth services (i.e., physicians; nurse practitioners;™physician assistants;™nurse-midwives;™ clinical nurse specialists;™ certified registered nurse anesthetists; clinical psychologists; clinical social workers; registered dietitians; and nutrition professionals);
  4. The beneficiary and distant site practitioner communicate via an interactive audio and video telecommunications system that permits real-time communication between them (store and forward is covered in Alaska and Hawaii under demonstration programs); and
  5. The CPT/HCPCS (Current Procedural Terminology/Healthcare Common Procedure Coding System) code for the service itself is named on the CY 2017 (or current year) list of covered Medicare telehealth services.

In order to bill Medicare for telehealth services, the distant site practitioner must fully comply with each of these requirements. If the service does not meet each of these above requirements, the Medicare program will not pay for the service.  If, however, the conditions of coverage are met, the use of an interactive telecommunications system substitutes for an in-person encounter (i.e., it satisfies the “face-to-face” element of a service).

How to Request Additional Medicare Telehealth Services

Providers and other interested parties need not wait on federal legislation to pass. Anyone may send CMS a request to add services (HCPCS codes) to the list of covered Medicare telehealth services. This can include medical specialty societies, individual physicians or practitioners, hospitals, state and federal agencies, telehealth companies, vendors, and even patients. Requests may be submitted at any time on an ongoing basis. The requests will be consolidated and considered during the CMS rulemaking cycle that establishes the physician fee schedule rates.

Each request should address the following:

  • Name(s), address(es) and contact information of the requestor.
  • The HCPCS code(s) that describes the service(s) proposed for addition or deletion to the list of Medicare telehealth services. If the requestor does not know the applicable HCPCS code, the request should include a description of services furnished during the telehealth session.
  • A description of the type(s) of medical professional(s) providing the telehealth service at the distant site.
  • A detailed discussion of the reasons the proposed service should be added to the definition of Medicare telehealth service.
  • An explanation as to why the requested service cannot be billed under the current scope of telehealth services, for example, the reason why the HCPCS codes currently on the list of Medicare telehealth services would not be appropriate for billing the service requested.
  • Evidence that supports adding the service(s) to the list on either a category 1 or category 2 basis as explained in the section labeled “CMS Criteria for Submitted Requests.”

Email your request to Telehealth_Review_Process@cms.hhs.gov and title it “Telehealth Review Process.” Alternatively, you can mail the request to: Division of Practitioner Services, Mail Stop: C4-03-06, Centers for Medicare and Medicaid Services, 7500 Security Boulevard Baltimore, Maryland 21244-1850. Attention: Telehealth Review Process.

Continued expansions in reimbursement mean providers should make enhancements to telehealth programs now, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction.

For more information on telemedicine, telehealth, and virtual care innovations, including the team, publications, and other materials, visit Foley’s Telemedicine Practice.

 

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Ninth Circuit Victory Opens the Door to Medicaid Reimbursement Challenges Based on Equal Access Requirement

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The Ninth Circuit held August 7 that the Department of Health and Human Services Secretary erred in approving a Medicaid State Plan Amendment (SPA) that cut reimbursement for outpatient hospital services in California by 10% for eight months in 2008-2009. The Hoag Memorial decision sided with the 57 hospitals that challenged the SPA under the theory that the reimbursement cut violated the federal Medicaid requirement that payment rates be sufficient to provide Medicaid beneficiaries with equal access to care and services.

In Hoag Memorial, the Court Did Not Defer to the Secretary’s Interpretation of the Medicaid Statute

The decision is particularly significant because prior Ninth Circuit caselaw had largely deferred to the Secretary when considering how reimbursement cuts would impact the availability of Medicaid services. In 2013, the court rejected a hospital challenge in Managed Pharmacy Care v. Sebelius, in which plaintiffs had alleged that a reimbursement cut did not satisfy the Medicaid requirement under section 1902(a)(30)(A) of the Social Security Act (Section 1902(a)(30)(A)) to “assure that payments are consistent with efficiency, economy, and quality of care” because the Secretary did not consider provider costs.

Hoag Memorial distinguished Managed Pharmacy Care by relying on a different clause in section 1902(a)(30)(A). The court wrote that the requirement that payments “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,” unambiguously expressed Congress’ intent such that the court need not defer to the Secretary’s interpretation about whether the requirement was met. It said that the equal-access requirement is a “concrete standard, objectively measurable against the health care access afforded among the general population,” in contrast to the “broad and diffuse” requirement that payments be “consistent with efficiency, economy and quality of care.” Based on this analysis, the court held that the Secretary’s approval of the SPA was arbitrary and capricious under the Administrative Procedure Act (APA) because it failed to consider Medicaid beneficiaries’ access to care relative to that of the general (i.e., non-Medicaid) population.

The APA’s Role in Challenging Medicaid State Plan Amendments

About two years ago, in Armstrong v. Exceptional Child Center, the United States Supreme Court rejected a Section 1902(a)(30)(A) Medicaid reimbursement challenge brought against the state of Idaho for lack of a viable cause of action. In that case, the plaintiff providers had argued that they were entitled to challenge the sufficiency of Idaho’s Medicaid rates pursuant to the Supremacy Clause of the United States Constitution. The Courtheld that the Supremacy Clause “instructs courts what to do when state and federal law clash, but is silent regarding who may enforce federal laws in court, and in what circumstances they may do so.” The Court also asserted that “the Medicaid Act implicitly precludes private enforcement of §30(A)” and expressed skepticism of efforts to “circumvent Congress’s exclusion of private enforcement.” Notwithstanding the Supreme Court’s observation that the Medicaid Act precludes private enforcement, Hoag Memorial allowed a challenge to the sufficiency of Medicaid rates in federal court based on the express statutory cause of action in section 702 of the APA for persons who suffer legal wrong because of agency action.

CMS is Likely to React to the Decision by Considering Additional Evidence When Approving Medicaid Reimbursement SPAs

The holding in Hoag Memorial relied on what the court found to be the Secretary’s failure to consider any evidence regarding the general population’s access to care and services. In the court’s view, such oversight rendered it logically impossible for the Secretary to meet the statutory standard because there could be no way of proving that Medicaid beneficiaries had at least the same level of access to care and services as the general population if the Secretary did not know anything about the general population’s access. Without the ability to make the statutorily mandated comparison, it was not enough that the administrative record included evidence that Medi-Cal beneficiary utilization of hospital outpatient services had not decreased after the payment cut, nor that it included evidence that just as many hospitals provided outpatient services to Medi-Cal beneficiaries.

In 2015, the Centers for Medicare and Medicaid Services (CMS) issued a final rule requiring states considering reductions or restructuring of Medicaid reimbursement that could have an adverse impact on beneficiary access to care to conduct access reviews and submit those findings to CMS along with the request for approval of the reimbursement change. Although the rule references section 1902(a)(30)(A), it does not provide detailed instruction about the evidence that CMS needs from states to evaluate whether the equal-access-to-service component of section 1902(a)(30)(A) has been satisfied. CMS may propose modifications to the rule in response to the Ninth Circuit’s ruling, and begin directing states to submit the kind of evidence the court did not find in the administrative record in Hoag Memorial —either studies directly comparing access to care and services for Medicaid beneficiaries with access for the general population, or independent evidence of the level of access for both groups that CMS can compare when evaluating the SPA.

If CMS modifies the information it requires states to submit in an access review, or if states independently collect comparison data as part of their access reviews, the next round of litigation over equal access for Medicaid beneficiaries may focus not on the Secretary’s failure to consider any evidence at all, but on whether the Secretary considered the right kinds of evidence and drew reasonable conclusions from it. If so, the question of deference will again become paramount because plaintiffs will continue to face uphill battles challenging SPA approvals if courts defer to CMS’ evaluation and interpretation of the evidence. On the one hand, the complexity of the Medicaid program and CMS’ agency expertise in administering it may counsel in favor of deference to the agency. But on the other hand, plaintiffs are likely to argue that deference is not warranted based on the court’s statement in Hoag Memorial that a “straightforward comparison of data under the equal-access requirement would derive little benefit from the Secretary’s expertise.”

It is also possible that the federal government will appeal Hoag Memorial by requesting en banc review at the Ninth Circuit or by appealing to the Supreme Court. As of publication of this article, no petition for further review had been filed.

The Path for Future Medicaid Reimbursement Challenges

Ultimately, Hoag Memorial proves the continuing viability of section 1902(a)(30)(A) challenges to Medicaid reimbursement, even after the defeats for providers in the last few years in the Ninth Circuit and Supreme Court. While APA litigation over the federal approval of Medicaid SPAs is likely to remain challenging for plaintiffs, Hoag Memorial potentially lays the groundwork for future equal-access-to-care arguments and provides support for an argument that courts need not defer to CMS’ conclusions if they are convinced that the Medicaid statute is clear.

Copyright 2017, American Health Lawyers Association, Washington, DC. Reprint permission granted.

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CMS Revokes Billing Privileges for Competitive Bid Supplier

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The Centers for Medicare and Medicaid Services (CMS) has demonstrated that it will not hesitate to use one of its most crippling administrative enforcement tools—the revocation of Medicare billing privileges—against one of its largest suppliers, as is evident in its case against Arriva Medical, LLC. Medicare billing privileges may be revoked for any one (or more) of several grounds laid out in the regulations at 42 C.F.R. § 424.535. In this case, CMS relied upon 42 C.F.R. § 424.535(a)(8), “abuse of billing privileges,” and specifically subsection (i)(A), regarding the submission of a claim for an item or service that could not have been furnished to a specific individual on the date of service because the beneficiary was deceased.

A revocation of billing privileges precludes payment for any claims submitted after the effective date of the revocation, and is accompanied by a ban on re-enrollment. A revocation has much the same impact as an exclusion imposed by the Department of Health and Human Services (HHS) Office of Inspector General (OIG), i.e., no Medicare payment, and in some cases revocations have been imposed after OIG declined to exclude an individual or entity.1 A Medicare revocation can also result in similar actions under Medicaid.

Arriva provides diabetic testing supplies under Medicare’s competitive bidding program, and describes itself as the nation’s largest supplier of home-delivered diabetic testing supplies.2 In October 2016, Arriva was notified by CMS that its billing privileges would be revoked, effective November 4, 2016, with a three year ban on reenrollment, due to the submission of Medicare claims for deceased beneficiaries. On December 6, 2016, Arriva was notified that its competitive bidding contract would be terminated effective January 20, 2017, based upon its lack of Medicare billing privileges.

Arriva filed for administrative review of the revocation of its billing privileges, an appeal that as of this writing is pending with the Departmental Appeals Board (DAB), and filed for a temporary restraining order and injunctive relief in light of the upcoming deadline for termination of its competitive bid contract. In its filing, Arriva alleged that the revocation was based upon 211 claims (0.003%) for supplies shipped to beneficiaries after they had died, out of approximately 5.8 million claims over a five-year period.3 Arriva further noted that CMS found concerns with the supporting claims documentation for 47 of those 211 beneficiaries. However, Arriva argued that any errors in billing for these claims after the beneficiary died were primarily the result of Medicare system flaws, and the revocation itself was related to the backlog of claims appeals before the Office of Medicare Hearings and Appeals.

Defendants (HHS) responded by filing an Opposition to Plaintiff’s First Application for Temporary Restraining Order (TRO) and Preliminary Injunction and Motion to Dismiss Plaintiff’s Complaint (Defendants’ Opposition), in which it was reported that CMS had advised Arriva that CMS was willing to defer the termination of the competitive bidding contract until such time as the DAB rendered the final agency decision on the revocation. Defendants’ Opposition notes that several courts have addressed revocation actions imposed by CMS, including allegations of imminent and irreparable harm, and have dismissed the complaints for lack of jurisdiction. Here, HHS again argued that administrative exhaustion is required before revocation disputes can be heard by a court. Moreover, HHS argued that a post-deprivation avenue for appeal did not violate the supplier’s due process rights, with a lengthy discussion of case law on this issue. Defendants’ Opposition also includes a lengthy discussion of Defendants’ view on the standard for granting a TRO, including arguments that the case law does not support a finding of “irreparable harm” for health care entities even against allegations that they might have to shut down as a result of the challenged action.

By minute order entered on January 4, 2017, the request for a TRO was denied, with the court setting a schedule for plaintiff to file a renewed motion for preliminary injunction and for defendant to file an opposition to that motion as well as a motion to dismiss. The hearing on both motions is currently scheduled for February 8, 2017.

This case should be closely watched for its evaluation of CMS’ revocation authorities.

Originally, this post was an alert sent to the American Health Lawyers Association’s (AHLA) Regulation, Accreditation, and Payment Practice Group Members. It appears here with permission. For more information, visit AHLA’s website.


1 For a discussion of the difference between exclusions and revocations, see Desfosses v. Noridian Healthcare Solutions, LLC, 2015 WL 1196018 (Mar. 16, 2015).

2 Complaint for Declaratory and Injunctive Relief, Arriva Medical, LLC v United States Department of Health and Human Services, Case No. 1:16-cv-02521-JEB (D.D.C.).

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