DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
MEDICARE NEWS
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
Dec. 14, 2011 (202) 690-6145
Affordable Care Act “sunshine” rule increases transparency in health care
The Centers for Medicare & Medicaid Services (CMS) announced today a proposed rule that will increase public awareness of financial relationships between drug and device manufacturers and certain health care providers. This is one of many steps under the Affordable Care Act designed to increase transparency in the health care system, which can lead to better care at lower costs.
“When people are faced with the difficult task of choosing the right doctor, they need all the information they can gather. If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it,” said Peter Budetti, M.D. CMS deputy administrator for Program Integrity. “Disclosure of these relationships will discourage the inappropriate influence on clinical decision-making that sometimes occurs while still allowing legitimate partnerships.”
The proposed rule would require manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report to CMS payments or other transfers of value they make to physicians and teaching hospitals. The proposed rule would also require manufacturers and group purchasing organizations (GPOs) to disclose to CMS physician ownership or investment interests.
This increased transparency is intended to help reduce the potential for conflicts of interest that physicians or teaching hospitals might face as a result of their relationships with manufacturers.
Drug and biologic manufacturers, medical device or supply manufacturers, and GPOs would be affected by the new reporting requirements. These organizations, as well as the physicians and teaching hospitals, would be allowed an opportunity to review and correct information prior to its publication.
The Affordable Care Act provides that violators of the reporting requirements will be subject to civil monetary penalties (CMPs), capped at $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report.
CMS is proposing that data collection will not begin on Jan. 1, 2012 and that manufacturers and GPOs do not need to begin data collection until final regulations are issued. Depending on the timing of the final rule, CMS is proposing that manufacturers and GPOs will be required to submit a partial year on Mar. 31, 2013. Once the data has been submitted, CMS will aggregate manufacturer submissions at the individual physician and teaching hospital level, provide them with a 45-day period to confidentially review and, if necessary, correct the data, and make the data publicly available by Sep. 30, 2013.
CMS will accept comments on the proposed rule until Feb. 17, 2012, and will respond to them in a final rule to be published in 2012.
The proposed rule can be downloaded at:
https://s3.amazonaws.com/public-inspection.federalregister.gov/2011-32244.pdf
# # #
FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
Dec. 14, 2011 (202) 690-6145
CMS proposals to implement certain disclosure provisions of the Affordable Care Act
On Dec. 14, 2011, the Centers for Medicare & Medicaid Services (CMS) published a notice of proposed rulemaking (NPRM) which would make information publicly available about payments or other transfers of value from manufacturers of drugs, devices, biologicals and medical supplies covered by Medicare, Medicaid, and CHIP (applicable manufacturers) to physicians and teaching hospitals (covered recipients).
The proposed rule, which would implement Section 6002 of the Affordable Care Act, Transparency Reports and Reporting of Physician Ownership or Investment Interests, also would make information publicly available about physician (or immediate family members of a physician) ownership or investment interests in applicable manufacturers and group purchasing organizations (GPOs).
CMS estimates that roughly 150 drug or biologic manufacturers, 1,000 device or medical supply manufacturers, and 420 GPOs will be required to submit information to CMS on an annual basis pursuant to this provision.
SUMMARY OF REPORTING REQUIREMENTS IN THE AFFORDABLE CARE ACT
Section 6002 specifies that applicable manufacturers must report annually to the Secretary of Health and Human Services all payments or transfers of value (including gifts, consulting fees, research activities, speaking fees, meals, and travel) from applicable manufacturers to covered recipients. In addition to reporting on payments, applicable manufacturers, as well as applicable GPOs, must report ownership and investment interests held by physicians (or the immediate family members of physicians) in such entities. However, the law does not require applicable manufacturers or applicable GPOs to report ownership or investment interests held by teaching hospitals. The law requires CMS to provide applicable manufacturers, applicable GPOs, covered recipients, and physician owners and investors at least 45 days to review and correct the information before posting it on a publicly available website. The information on the website must be easily aggregated, downloaded and searchable.
IMPLEMENTING PROVISIONS
Implementation timeline: Applicable manufacturers and applicable GPOs will not be required to begin collecting data until after a final rule is published. The proposed rule solicits comments on how much time manufacturers and GPOs will need after a final rule is published to begin collecting data. CMS is also considering whether to require applicable manufacturers and GPOs to submit partial year data for calendar year 2012.
Proposed interpretations of statutory language:
Applicable manufacturers
CMS is proposing to define applicable manufacturer as any entity that manufactures a drug, device, biological, or medical supply for sale or distribution in the United States that is available for payment by Medicare, Medicaid, or CHIP. The statutory definition extends to entities under common ownership with an applicable manufacturer that are involved in manufacturing, marketing, selling or distributing covered products.
Applicable GPOs
Applicable GPOs are defined broadly in the statute to include entities that purchase and arrange for, or negotiate the purchase of covered drugs, devices, biologicals, or medical supplies in the United States. CMS is proposing to interpret this to include traditional GPOs that do not purchase products directly, as well as organizations that purchase products for resale or distribution. This proposed definition would include reporting of ownership and investment interests in physician-owned distributors (PODs).
Covered drug, device, biological, and medical supply
CMS is proposing that covered drug, device, biological, or medical supply includes all drugs, devices, biologicals, and medical supplies eligible for payment by Medicare, Medicaid, or CHIP, including products paid either separately as a part of a fee schedule, or bundled as a part of a composite payment system (such as the hospital inpatient prospective payment system).
Teaching hospital
The Medicare law does not define the term “teaching hospital.” For purposes of determining whether a hospital is a “covered recipient” of reportable payments or transfers of value, CMS is proposing to define a “teaching hospital” as any hospital that receives either Medicare direct or indirect medical education payments.
Research payments
Applicable manufacturers are required to report numerous types of payments to physicians and teaching hospitals. These are outlined in the statute and include categories, such as consulting fees, food and beverages, and research payments. The proposed rule provides special consideration to research payments since collaboration between physicians and teaching hospitals, and manufacturers is essential to the development of new products. Research payments often include payment for all research activities, including patient tests and supplies, and the administration of the study, so the proposed rule outlines procedures to ensure that the nature of these relationships is understood, but there is also sufficient information on the extent of the research relationship. In addition to including information on the nature of these relationships, the statute also protects applicable manufacturer’s competitive interests, by allowing CMS to delay publication of certain research payments until the earlier of FDA approval of the product that is the subject of the research or four years after the payment date. CMS is proposing to require manufacturers to report these payments must be reported in the year they were made, but to delay publication until the earlier of FDA approval or four years has passed.
Opportunity to review and correct the information prior to publication
The law requires CMS to give covered recipients and physician owners and investors 45 days to review and correct the information related to them that is submitted by applicable manufacturers and applicable GPOs. CMS is proposing to notify physicians and teaching hospitals of the processes for this review through various methods of communication, including public postings and emails through CMS’ list serves.
CMS is proposing to leave it to the applicable manufacturer or applicable GPO and the covered recipient or physician owner to resolve disputes about the information reported. CMS is proposing that if the dispute cannot be resolved, the transaction will be noted as disputed, and both amounts will be published.
Penalties for failure to report required information accurately, completely, and timely
The Affordable Care Act provides that violators of the reporting requirements will be subject to civil monetary penalties (CMPs), capped at $150,000 for failure to report, and $1,000,000 for knowing failure to report. CMS is proposing that the HHS Office of the Inspector General (OIG) and CMS reserve the right to audit, evaluate, or inspect applicable manufacturers and applicable GPOs for their compliance with the reporting requirements. In order to facilitate these inspections, CMS is proposing that applicable manufacturers and applicable GPOs must maintain all records and documents for at least five years from the date the payment or other transfer of value, or ownership or investment interest is published publicly on the Web site.
State law preemption
Section 6002 of the Affordable Care Act also preempts any State or local laws requiring reporting of payments or other transfers of value made by applicable manufacturers to covered recipients. No State or local government may require the separate reporting of any information regarding a payment or other transfer of value that is required to be reported under this statute, unless such information is being collected by a Federal, State, or local governmental agency for public health surveillance, investigation, or other public health purposes or health oversight. Despite the fact that manufacturers and GPOs are not required to report to the Secretary without regulations, the state law preemption clause takes effect on January 1, 2012. On and after that date, states may not require applicable manufacturers or applicable GPOs to report any information that is the same as the Federal requirements. We urge manufacturers to continue to report information to states with reporting requirements until CMS is able to finalize regulations and begin collecting this information.
CMS will accept comments on the proposed rule until Feb. 17, 2012, and will respond to them in a final rule to be published in 2012.
The proposed rule can be downloaded at:
https://s3.amazonaws.com/public-inspection.federalregister.gov/2011-32244.pdf
# # #
Please note: This rule is scheduled to be published on 12/19/2011 and will be available on this page http://www.federalregister.gov/articles/2011/12/19/2011-32244/transparency-reports-and-reporting-of-physician-ownership-or-investment-interests-medicare-medicaid
At Medicare is Simple, we look to educate and enable you to choose among Medicare plans to help find the policy that may best fit your needs. Get free quotes using our advanced quoting technology. HealthCare Reform is also a hot topic of interest to people of all ages, and we look to keep you updated on the issues relevant to learning more. Medicare Is Simple 800-442-4915
Friday, December 30, 2011
Thursday, December 29, 2011
Despite Late Surge, MA AEP Was Slower Than Expected Due to Timetable, Stability
Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care.
By James Gutman, Managing Editor
December 15, 2011 Volume 17 Issue 24
A variety of factors contributed to what several plans and consultants tell MAN was a generally slower than expected 2012 Medicare Advantage Annual Election Period (AEP). Despite apparently very heavy activity near the Dec. 7 end of the AEP, many plans are likely to have fallen short of their perhaps overly ambitious goals, although there are prominent exceptions.
Some of the difficulties relate to the required earlier start — Oct. 15 — and end of AEP enrollment this time, which some seniors were unaware of until very late despite major ad campaigns from both plans and CMS itself (MAN 9/15/11, p. 1). But most of the problems, marketing experts say, stem from the lack of compelling reasons for beneficiaries already in MA products to switch plans.
The majority of MA sponsors had only small changes in benefits and premiums, and there were no mass exits of products this year — although WellPoint, Inc. did drop its troubled regional PPO in California (MAN 8/18/11, p. 3) — as there were the last two years with private-fee-for-service (PFFS) plans. Moreover, there weren’t any major sponsors under marketing and enrollment sanctions as there were in the AEP for 2011 (MAN 11/25/10, p. 1).
Even MA sponsors saying they did well in the 2012 AEP report that at least some of these factors had an impact on their results. “We started slow just like everybody else,” says, for instance, John Sowell, vice president, marketing for fast-growing Windsor Health Plan, Inc., a unit of Munich Health North America. “But we had an extremely strong close, so we will meet our sales goal for the 2012 AEP,” he told MAN Dec. 8.
‘Inertia’ Hampered MA AEP Results
Sowell says one reason the beginning of the AEP was so tough was that MA plans had to “change established consumer behavior.” Despite good efforts by CMS and plans, including Windsor itself, to let beneficiaries know the AEP was starting and ending early, “it’s not relevant till it’s upon them,’ he observes. This was a factor in phone calls showing “almost panic” by some seniors that Windsor experienced in the closing days.
Evidently this was fairly typical, so CMS late on Dec. 6 notified all MA and Part D sponsors that they had until midnight Dec. 10 to complete enrollments that were in process as of Dec. 7. CMS in its memo emphasized that the “additional flexibilities” were “only for this AEP” and that no AEP-related marketing could take place after Dec. 7 in any case.
Data from Windsor, which operates in 21 states, show the kinds of issues MA plans faced in the AEP. This year, Sowell says, the plan generated one-third less of its marketing leads in the first two weeks of the AEP versus last year, when enrollment didn’t start until Nov. 15. On the flip side, Windsor generated nearly twice the number of leads during the last two weeks this year compared with last year, when the AEP ended on Dec. 31, thanks to television commercial spots opening up and a strong public relations and direct-mail push, according to Sowell.
It was not just the earlier AEP that led to this big change, he stresses. Windsor, like other MA sponsors, was “fighting inertia” caused by the facts that there generally were not any major premium, copayment or benefit changes or service-area reductions in the AEP for 2012.
Windsor’s lead conversion figures varied substantially by MA product, he adds. Conversion rates in its HMOs, Sowell says, which are able to offer better benefits because they’re more “highly managed” than are Windsor’s other MA products, held up well, but that was less true for its PPO and PFFS offerings, which also had less favorable costs per lead.
The company was able to come out well in the end because it had “fully prepared” to move quickly in the final weeks and days to get phone calls and appointments to close MA sales, he explains. Earlier in the season, however, notes Sowell, it had to deal with marketing crowd-out stemming from the fact that “at least half” of the 30 TV markets Windsor is in “had major political spending” in October and November because of state and local elections and referendums, even though 2011 is not a major election year.
He says another complication was that direct-mail performance was “down” overall for Windsor in the AEP because the market has become “numbed” from too much and/or not-well-done DM.
Star Ratings Were Bigger Factor This Time
Star-rating-related marketing was a factor in its markets this year, he continues. According to Sowell, Windsor’s call centers got numerous inquiries — some of them transferred from CMS’s 800-MEDICARE phone line — asking about aspects of its stars performance.
In Tennessee, its headquarters state and a major Windsor MA market, competitor HealthSpring, Inc., advertised its four-star rating.
Star ratings also were a factor for Essence Healthcare, Inc., another plan that reports doing well in the AEP (see story, p. 5). In Washington state, notes Director of Marketing Andy Shea, Essence was competing against five-star Group Health Cooperative. In its larger St. Louis market, on the other hand, Shea tells MAN, Essence’s 4.5 stars made it the highest-rated MA plan in the area, a fact it promoted aggressively, including via TV ads. The new emphasis on stars has changed “public perceptions,” he says, but it’s uncertain whether that is generating more marketing leads.
Highmark Inc. did not have to compete against any 4.5- or five-star plans — nor does it have such ratings itself — but it did face a change in the eastern part of its service area. That’s because a prime competitor, Aetna Inc., was not hampered by marketing and enrollment sanctions this AEP as it was in the last one, points out Cynthia Dellecker, senior vice president and senior markets leader. Despite that and issues related to the earlier AEP, she told MAN on Dec. 7, Highmark did “pretty well” in the AEP and is “pleased” with its results.
Dellecker concedes that Highmark’s AEP started slowly, but she says it picked up “significantly” after Thanksgiving. The company was concerned about beneficiaries not knowing about the new AEP dates this time, so it mentioned the earlier period in individual letters to members and in TV ads, she says. Nevertheless, many seniors “might have sat where they were” rather than try to change Medicare plans this year, Dellecker adds.
The lack of a major factor such as plan exits or large premium and benefit changes, she acknowledges, could have been a factor in this since seniors “don’t move” readily when costs are stable. And Blues plan licensee Highmark is aided in such an environment by its “Blue message,” she contends.
But MA plans needed a lot more than a good brand to do well in this AEP. It has been a slow season for plan switches across the entire MA client base of marketing firm KBMG Health Services, which works with about 20 plans, says Peter Rodes, vice president, strategy and consulting. Rodes, speaking two days before the end of the AEP, cited to MAN factors such as “a period of price stability” and the relative lack of PFFS exits or “a plan imploding” this year, compared with the situation last year. There didn’t seem to be any geographic differences in the relative lack of activity, he adds.
On the other hand, he says, MA firms were able to benefit in the AEP from the relative weakness of Medicare supplement plans, which have suffered because of high and rising premiums in a bad economy. This has spurred switches from Medigap to MA, he maintains. However, the environment still was tough for MA plans, which have been cutting back on use of outside sales agents and, even if they were converting a previously “superstar” 20% of leads before, are finding that now “you got to do better.”
Some Plans Went ‘Slower’ to Ensure Compliance
Marketing compliance was another inhibiting factor, says Paul Sharon, national marketing director for field marketing organization (FMO) Premier Senior Marketing. He tells MAN that compliance concerns were making MA firms “go slower” this AEP, thus making it more difficult to get a strong return on investment in marketing.
Also hindering performance in the AEP was that some MA plans simply weren’t fully prepared for its earlier start this year, according to Gorman Health Group, LLC President Jeff Fox. That led to a slow start, he said in a Dec. 5 conference call with investors sponsored by Citigroup Global Markets, and FMOs told him there hadn’t been a lot of pickup since Thanksgiving as expected. He noted that a substantial increase this AEP in online enrollment (several others confirmed this to MAN) will help. But most MA sponsors overall are missing their enrollment targets, he added.
By James Gutman, Managing Editor
December 15, 2011 Volume 17 Issue 24
A variety of factors contributed to what several plans and consultants tell MAN was a generally slower than expected 2012 Medicare Advantage Annual Election Period (AEP). Despite apparently very heavy activity near the Dec. 7 end of the AEP, many plans are likely to have fallen short of their perhaps overly ambitious goals, although there are prominent exceptions.
Some of the difficulties relate to the required earlier start — Oct. 15 — and end of AEP enrollment this time, which some seniors were unaware of until very late despite major ad campaigns from both plans and CMS itself (MAN 9/15/11, p. 1). But most of the problems, marketing experts say, stem from the lack of compelling reasons for beneficiaries already in MA products to switch plans.
The majority of MA sponsors had only small changes in benefits and premiums, and there were no mass exits of products this year — although WellPoint, Inc. did drop its troubled regional PPO in California (MAN 8/18/11, p. 3) — as there were the last two years with private-fee-for-service (PFFS) plans. Moreover, there weren’t any major sponsors under marketing and enrollment sanctions as there were in the AEP for 2011 (MAN 11/25/10, p. 1).
Even MA sponsors saying they did well in the 2012 AEP report that at least some of these factors had an impact on their results. “We started slow just like everybody else,” says, for instance, John Sowell, vice president, marketing for fast-growing Windsor Health Plan, Inc., a unit of Munich Health North America. “But we had an extremely strong close, so we will meet our sales goal for the 2012 AEP,” he told MAN Dec. 8.
‘Inertia’ Hampered MA AEP Results
Sowell says one reason the beginning of the AEP was so tough was that MA plans had to “change established consumer behavior.” Despite good efforts by CMS and plans, including Windsor itself, to let beneficiaries know the AEP was starting and ending early, “it’s not relevant till it’s upon them,’ he observes. This was a factor in phone calls showing “almost panic” by some seniors that Windsor experienced in the closing days.
Evidently this was fairly typical, so CMS late on Dec. 6 notified all MA and Part D sponsors that they had until midnight Dec. 10 to complete enrollments that were in process as of Dec. 7. CMS in its memo emphasized that the “additional flexibilities” were “only for this AEP” and that no AEP-related marketing could take place after Dec. 7 in any case.
Data from Windsor, which operates in 21 states, show the kinds of issues MA plans faced in the AEP. This year, Sowell says, the plan generated one-third less of its marketing leads in the first two weeks of the AEP versus last year, when enrollment didn’t start until Nov. 15. On the flip side, Windsor generated nearly twice the number of leads during the last two weeks this year compared with last year, when the AEP ended on Dec. 31, thanks to television commercial spots opening up and a strong public relations and direct-mail push, according to Sowell.
It was not just the earlier AEP that led to this big change, he stresses. Windsor, like other MA sponsors, was “fighting inertia” caused by the facts that there generally were not any major premium, copayment or benefit changes or service-area reductions in the AEP for 2012.
Windsor’s lead conversion figures varied substantially by MA product, he adds. Conversion rates in its HMOs, Sowell says, which are able to offer better benefits because they’re more “highly managed” than are Windsor’s other MA products, held up well, but that was less true for its PPO and PFFS offerings, which also had less favorable costs per lead.
The company was able to come out well in the end because it had “fully prepared” to move quickly in the final weeks and days to get phone calls and appointments to close MA sales, he explains. Earlier in the season, however, notes Sowell, it had to deal with marketing crowd-out stemming from the fact that “at least half” of the 30 TV markets Windsor is in “had major political spending” in October and November because of state and local elections and referendums, even though 2011 is not a major election year.
He says another complication was that direct-mail performance was “down” overall for Windsor in the AEP because the market has become “numbed” from too much and/or not-well-done DM.
Star Ratings Were Bigger Factor This Time
Star-rating-related marketing was a factor in its markets this year, he continues. According to Sowell, Windsor’s call centers got numerous inquiries — some of them transferred from CMS’s 800-MEDICARE phone line — asking about aspects of its stars performance.
In Tennessee, its headquarters state and a major Windsor MA market, competitor HealthSpring, Inc., advertised its four-star rating.
Star ratings also were a factor for Essence Healthcare, Inc., another plan that reports doing well in the AEP (see story, p. 5). In Washington state, notes Director of Marketing Andy Shea, Essence was competing against five-star Group Health Cooperative. In its larger St. Louis market, on the other hand, Shea tells MAN, Essence’s 4.5 stars made it the highest-rated MA plan in the area, a fact it promoted aggressively, including via TV ads. The new emphasis on stars has changed “public perceptions,” he says, but it’s uncertain whether that is generating more marketing leads.
Highmark Inc. did not have to compete against any 4.5- or five-star plans — nor does it have such ratings itself — but it did face a change in the eastern part of its service area. That’s because a prime competitor, Aetna Inc., was not hampered by marketing and enrollment sanctions this AEP as it was in the last one, points out Cynthia Dellecker, senior vice president and senior markets leader. Despite that and issues related to the earlier AEP, she told MAN on Dec. 7, Highmark did “pretty well” in the AEP and is “pleased” with its results.
Dellecker concedes that Highmark’s AEP started slowly, but she says it picked up “significantly” after Thanksgiving. The company was concerned about beneficiaries not knowing about the new AEP dates this time, so it mentioned the earlier period in individual letters to members and in TV ads, she says. Nevertheless, many seniors “might have sat where they were” rather than try to change Medicare plans this year, Dellecker adds.
The lack of a major factor such as plan exits or large premium and benefit changes, she acknowledges, could have been a factor in this since seniors “don’t move” readily when costs are stable. And Blues plan licensee Highmark is aided in such an environment by its “Blue message,” she contends.
But MA plans needed a lot more than a good brand to do well in this AEP. It has been a slow season for plan switches across the entire MA client base of marketing firm KBMG Health Services, which works with about 20 plans, says Peter Rodes, vice president, strategy and consulting. Rodes, speaking two days before the end of the AEP, cited to MAN factors such as “a period of price stability” and the relative lack of PFFS exits or “a plan imploding” this year, compared with the situation last year. There didn’t seem to be any geographic differences in the relative lack of activity, he adds.
On the other hand, he says, MA firms were able to benefit in the AEP from the relative weakness of Medicare supplement plans, which have suffered because of high and rising premiums in a bad economy. This has spurred switches from Medigap to MA, he maintains. However, the environment still was tough for MA plans, which have been cutting back on use of outside sales agents and, even if they were converting a previously “superstar” 20% of leads before, are finding that now “you got to do better.”
Some Plans Went ‘Slower’ to Ensure Compliance
Marketing compliance was another inhibiting factor, says Paul Sharon, national marketing director for field marketing organization (FMO) Premier Senior Marketing. He tells MAN that compliance concerns were making MA firms “go slower” this AEP, thus making it more difficult to get a strong return on investment in marketing.
Also hindering performance in the AEP was that some MA plans simply weren’t fully prepared for its earlier start this year, according to Gorman Health Group, LLC President Jeff Fox. That led to a slow start, he said in a Dec. 5 conference call with investors sponsored by Citigroup Global Markets, and FMOs told him there hadn’t been a lot of pickup since Thanksgiving as expected. He noted that a substantial increase this AEP in online enrollment (several others confirmed this to MAN) will help. But most MA sponsors overall are missing their enrollment targets, he added.
Quote of the Day
“I think [recent Senate hearings on the Medco/Express Scripts merger] clearly demonstrated some of the very substantial competitive concerns….There are 32 football teams, but there are only two in the Super Bowl. When it comes down to the Super Bowl of pharmacy benefits for large employers, it’s basically [the soon-to-be-merged company and CVS Caremark Corp.]"
— David Balto, a former policy director with the FTC who testified on behalf of a coalition of unions, employers and consumer groups that oppose the merger, told AIS’s Drug Benefit News.
— David Balto, a former policy director with the FTC who testified on behalf of a coalition of unions, employers and consumer groups that oppose the merger, told AIS’s Drug Benefit News.
Friday, December 23, 2011
Medicare Rights Offers Comments on Part C and D Rules
Last week, the Medicare Rights Center submitted comments developed with fellow consumer advocates to the Centers for Medicare and Medicaid Services (CMS) on its proposed rules governing Part C Medicare private health plans, also known as Medicare Advantage (MA) plans, and the Part D Medicare prescription drug benefit for plan year 2013. The comments are generally supportive of the proposed regulations, which encourage increased transparency and greater plan accountability, though they also urge CMS to further strengthen some of these policies.
Specifically, the comments ask CMS to strengthen a proposed rule that codifies CMS’s authority to terminate contracts with poorly performing plans that receive a one or two star rating for three consecutive years. The comments urge CMS to decrease the number of years after which it can terminate plan contracts on the basis of poor ratings. In addition, the comments suggest the creation of probationary periods for plans that avoid termination by increasing their quality ratings, but have a history of poor performance.
Furthermore, the comments address issues that may arise as MA plans implement new coverage policies for durable medical equipment (DME). As CMS allows MA plans to create preferred DME brands and suppliers and to limit coverage to those brands and suppliers, CMS must ensure that an easily accessible exceptions process exists for patients. The exceptions process should include, for instance, coverage of equipment from a non-preferred provider when DME from the non-preferred provider is medically necessary.
Medicare Rights’ comments also applaud CMS for proposed regulations that seek to eliminate conflicts of interest for consultant pharmacists working in long term care settings. Recent reports demonstrate that associations with drug companies and other entities may cause pharmacists to favor prescribing certain drugs, even when these drugs are potentially inappropriate or dangerous for patients.
Among other topics also discussed in the comments are the need for clarification of rules around Special Needs Plans and extra benefits they may offer, as well as suggested improvements to rules implementing the coverage gap discount program for the Part D benefit.
Specifically, the comments ask CMS to strengthen a proposed rule that codifies CMS’s authority to terminate contracts with poorly performing plans that receive a one or two star rating for three consecutive years. The comments urge CMS to decrease the number of years after which it can terminate plan contracts on the basis of poor ratings. In addition, the comments suggest the creation of probationary periods for plans that avoid termination by increasing their quality ratings, but have a history of poor performance.
Furthermore, the comments address issues that may arise as MA plans implement new coverage policies for durable medical equipment (DME). As CMS allows MA plans to create preferred DME brands and suppliers and to limit coverage to those brands and suppliers, CMS must ensure that an easily accessible exceptions process exists for patients. The exceptions process should include, for instance, coverage of equipment from a non-preferred provider when DME from the non-preferred provider is medically necessary.
Medicare Rights’ comments also applaud CMS for proposed regulations that seek to eliminate conflicts of interest for consultant pharmacists working in long term care settings. Recent reports demonstrate that associations with drug companies and other entities may cause pharmacists to favor prescribing certain drugs, even when these drugs are potentially inappropriate or dangerous for patients.
Among other topics also discussed in the comments are the need for clarification of rules around Special Needs Plans and extra benefits they may offer, as well as suggested improvements to rules implementing the coverage gap discount program for the Part D benefit.
Congress Agrees to SGR Fix
WASHINGTON -- The House of Representatives has reached a deal with the Senate to pass a two-month payroll tax cut extension bill that also delays a 27% cut in Medicare physician reimbursement for two months.
Quote of the Day
“Considering that HHS did not find it persuasive that five carriers withdrew from Indiana’s market [in deciding to reject the state’s application for a phase-in of the 80% medical loss ratio requirement under the reform law], we will need to determine what HHS considers to be a market disruption before deciding whether it is worthwhile to ask them to reconsider.”
— Logan Harrison, the Indiana Department of Insurance’s chief deputy commissioner for health, legislative and public affairs, told AIS’s Health Reform Week.
— Logan Harrison, the Indiana Department of Insurance’s chief deputy commissioner for health, legislative and public affairs, told AIS’s Health Reform Week.
Tuesday, December 20, 2011
House Vote Sets Stage for 27% Pay Cut for Doctors
WASHINGTON - The House of Representatives has voted 229 to 193 to reject the Senate’s payroll tax break bill that would delay a 27% cut in Medicare payments to doctors, and instead voted for leaders in both chambers to conference to work out a longer-term solution, but leaders of the Democratic-controlled Senate say they will not return to Washington to conference.
High court finalizes dates of oral arguments on health care law
Reuters reports the Supreme Court on Monday announced it would hear oral arguments on the Affordable Care Act for five-and-a-half hours spread over three days from March 26 to 28. The court said it will allot one hour of arguments on March 26 to study whether legal challenges on the mandate must wait until the law takes full effect in 2014. A two-hour argument on March 27 is set to discuss the law's constitutionality, while a 90-minute argument on March 28 will mull whether other parts of the law will survive if the mandate is struck down.
New Affordable Care Act Demonstration to provide care at home for Medicare patients
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
New Affordable Care Act Demonstration to provide care at home for Medicare patients
Health care reform law demonstration to improve care, lower costs for seniors and people with disabilities
Up to 10,000 Medicare patients with chronic conditions will now be able to get most of the care they need at home under a new demonstration announced today by the Centers for Medicare & Medicaid Services (CMS).
“This program gives new life to the old practice of house calls, but with 21st Century technology and a team approach,” said CMS Acting Administrator Marilyn Tavenner.
Created by the Affordable Care Act, the new Independence at Home Demonstration greatly expands the scope of in-home services Medicare beneficiaries can receive. The Independence at Home Demonstration will provide chronically ill patients with a complete range of primary care services. Participation in the Demonstration is voluntary for Medicare beneficiaries.
“In my days as a practicing nurse, I saw many patients whose health improved when they were happier with their living conditions,” said Tavenner. “When a critically-ill patient can remain in familiar surroundings, the benefits are many: the person retains greater control over their daily lives, families and caregivers report greater satisfaction with the care, and unnecessary hospitalizations are avoided.”
CMS will join with medical practices to test the effectiveness of delivering primary care services in a home setting on improving care for Medicare beneficiaries with multiple chronic conditions. Medical practices led by physicians or nurse practitioners will provide primary care home visits tailored to the needs of beneficiaries with multiple chronic conditions and functional limitations.
The Demonstration will reward healthcare providers that show a reduction in Medicare expenditures through an incentive payment if they succeed in providing high-quality care while reducing costs. CMS will use quality measures to ensure beneficiaries experience high quality care.
Medical practices eligible to participate in the Demonstration must include physicians or nurse practitioners who have experience delivering home-based primary care. Up to 50 practices will be selected and each must serve at least 200 Medicare fee-for-service beneficiaries with multiple chronic conditions and functional limitations. Practices in the demonstration will be responsible for coordinating patient care with other health and social service professionals.
The new demonstration is one of a series of CMS initiatives to build a Medicare program that offers beneficiaries better care and better health at an affordable cost. It will be supported by the CMS Innovation Center, which was created by the Affordable Care Act to develop and test new models of health care delivery and payment, and disperse best practices throughout the health care system.
Applications and Letters of Intent, if applicable, are due on February 6, 2012. Additional information about this demonstration, including how to apply, can be found at
http://www.cms.gov/DemoProjectsEvalRpts/downloads/IAH_FactSheet.pdf
Questions on this demonstration may be submitted to CMS at: IndependenceAtHomeDemo@cms.hhs.gov.
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
New Affordable Care Act Demonstration to provide care at home for Medicare patients
Health care reform law demonstration to improve care, lower costs for seniors and people with disabilities
Up to 10,000 Medicare patients with chronic conditions will now be able to get most of the care they need at home under a new demonstration announced today by the Centers for Medicare & Medicaid Services (CMS).
“This program gives new life to the old practice of house calls, but with 21st Century technology and a team approach,” said CMS Acting Administrator Marilyn Tavenner.
Created by the Affordable Care Act, the new Independence at Home Demonstration greatly expands the scope of in-home services Medicare beneficiaries can receive. The Independence at Home Demonstration will provide chronically ill patients with a complete range of primary care services. Participation in the Demonstration is voluntary for Medicare beneficiaries.
“In my days as a practicing nurse, I saw many patients whose health improved when they were happier with their living conditions,” said Tavenner. “When a critically-ill patient can remain in familiar surroundings, the benefits are many: the person retains greater control over their daily lives, families and caregivers report greater satisfaction with the care, and unnecessary hospitalizations are avoided.”
CMS will join with medical practices to test the effectiveness of delivering primary care services in a home setting on improving care for Medicare beneficiaries with multiple chronic conditions. Medical practices led by physicians or nurse practitioners will provide primary care home visits tailored to the needs of beneficiaries with multiple chronic conditions and functional limitations.
The Demonstration will reward healthcare providers that show a reduction in Medicare expenditures through an incentive payment if they succeed in providing high-quality care while reducing costs. CMS will use quality measures to ensure beneficiaries experience high quality care.
Medical practices eligible to participate in the Demonstration must include physicians or nurse practitioners who have experience delivering home-based primary care. Up to 50 practices will be selected and each must serve at least 200 Medicare fee-for-service beneficiaries with multiple chronic conditions and functional limitations. Practices in the demonstration will be responsible for coordinating patient care with other health and social service professionals.
The new demonstration is one of a series of CMS initiatives to build a Medicare program that offers beneficiaries better care and better health at an affordable cost. It will be supported by the CMS Innovation Center, which was created by the Affordable Care Act to develop and test new models of health care delivery and payment, and disperse best practices throughout the health care system.
Applications and Letters of Intent, if applicable, are due on February 6, 2012. Additional information about this demonstration, including how to apply, can be found at
http://www.cms.gov/DemoProjectsEvalRpts/downloads/IAH_FactSheet.pdf
Questions on this demonstration may be submitted to CMS at: IndependenceAtHomeDemo@cms.hhs.gov.
Monday, December 19, 2011
HHS to give states more flexibility to implement health reform
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
FOR IMMEDIATE RELEASE Contact: HHS Press Office
Friday, December 16, 2011 (202) 690-6343
HHS to give states more flexibility to implement health reform
Approach will help ensure consumers have quality, affordable coverage starting in 2014
The Department of Health and Human Services today released a bulletin outlining proposed policies that will give states more flexibility and freedom to implement the Affordable Care Act.
The Affordable Care Act ensures all Americans have access to quality, affordable health insurance. To achieve this goal, the law ensures that health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges (Exchanges), offer a comprehensive package of items and services, known as “essential health benefits.”
The bulletin released today describes an inclusive, affordable and flexible proposal and informs stakeholders about the approach that HHS intends to pursue in rulemaking to define essential health benefits. HHS is releasing this intended approach to give consumers, states, employers and issuers timely information as they work toward establishing Exchanges and making decisions for 2014. This approach was developed with significant input from the public, as well as reports from the Department of Labor, the Institute of Medicine, and research conducted by HHS.
“Under the Affordable Care Act, consumers and small businesses can be confident that the insurance plans they choose and purchase will cover a comprehensive and affordable set of health services,” said HHS Secretary Kathleen Sebelius. “Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs.”
Under the Department’s intended approach announced today, states would have the flexibility to select an existing health plan to set the “benchmark” for the items and services included in the essential health benefits package. States would choose one of the following health insurance plans as a benchmark:
• One of the three largest small group plans in the state;
• One of the three largest state employee health plans;
• One of the three largest federal employee health plan options;
• The largest HMO plan offered in the state’s commercial market.
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage. Consistent with the law, states must ensure the essential health benefits package covers items and services in at least ten categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all ten categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan, to determine the type of benefits that will be included in the essential health benefits package.
The policy proposed today by HHS would give states the flexibility to select a plan that would be equal in scope to the services covered by a typical employer plan in their state. States and insurers would retain the flexibility to evolve the benefits package with the market as innovative plan designs are developed and advancements in care become available, and meetthe needs of their citizens.
“More than 30 million Americans who newly have insurance coverage in 2014 will have a comprehensive benefit package,” said Sherry Glied, PhD, assistant secretary for planning and evaluation. “In addition to assuring comprehensive coverage for the newly insured, many millions of Americans buying their own insurance today will gain valuable new coverage, including more than 8 million Americans who currently do not have maternity coverage, and more than 1 million who will gain prescription drug coverage.”
The bulletin issued today addresses only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments, and coinsurance. The cost-sharing features will be addressed in future bulletins and cost-sharing rules will determine the actuarial value of the plan.
Public input on this proposal is encouraged. Comments are due by Jan 31, 2012 and can be sent to: EssentialHealthBenefits@cms.hhs.gov.
For the essential health benefits bulletin, visit: http://cciio.cms.gov/resources/regulations/index.html#hie
For a fact sheet on the essential health benefits bulletin, visit: http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html
For a summary of individual market coverage as it relates to essential health benefits, visit: http://aspe.hhs.gov/health/reports/2011/IndividualMarket/ib.shtml
For information comparing benefits in small group products and state and Federal employee plans, visit: http://aspe.hhs.gov/health/reports/2011/MarketComparison/rb.shtml
###
Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.
Additional Information can be found here:
• HHS Press release - http://www.hhs.gov/news/press/2011pres/12/20111216b.html
• Healthcare.gov Fact sheet - http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html
• ASPE Research Brief, “Actuarial Value and Employer Sponsored Insurance,” November 2011. Available at: http://aspe.hhs.gov/health/reports/2011/AV-ESI/rb.pdf
• ESSENTIAL HEALTH BENEFITS BULLETIN 12/16/11-http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
FOR IMMEDIATE RELEASE Contact: HHS Press Office
Friday, December 16, 2011 (202) 690-6343
HHS to give states more flexibility to implement health reform
Approach will help ensure consumers have quality, affordable coverage starting in 2014
The Department of Health and Human Services today released a bulletin outlining proposed policies that will give states more flexibility and freedom to implement the Affordable Care Act.
The Affordable Care Act ensures all Americans have access to quality, affordable health insurance. To achieve this goal, the law ensures that health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges (Exchanges), offer a comprehensive package of items and services, known as “essential health benefits.”
The bulletin released today describes an inclusive, affordable and flexible proposal and informs stakeholders about the approach that HHS intends to pursue in rulemaking to define essential health benefits. HHS is releasing this intended approach to give consumers, states, employers and issuers timely information as they work toward establishing Exchanges and making decisions for 2014. This approach was developed with significant input from the public, as well as reports from the Department of Labor, the Institute of Medicine, and research conducted by HHS.
“Under the Affordable Care Act, consumers and small businesses can be confident that the insurance plans they choose and purchase will cover a comprehensive and affordable set of health services,” said HHS Secretary Kathleen Sebelius. “Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs.”
Under the Department’s intended approach announced today, states would have the flexibility to select an existing health plan to set the “benchmark” for the items and services included in the essential health benefits package. States would choose one of the following health insurance plans as a benchmark:
• One of the three largest small group plans in the state;
• One of the three largest state employee health plans;
• One of the three largest federal employee health plan options;
• The largest HMO plan offered in the state’s commercial market.
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage. Consistent with the law, states must ensure the essential health benefits package covers items and services in at least ten categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all ten categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan, to determine the type of benefits that will be included in the essential health benefits package.
The policy proposed today by HHS would give states the flexibility to select a plan that would be equal in scope to the services covered by a typical employer plan in their state. States and insurers would retain the flexibility to evolve the benefits package with the market as innovative plan designs are developed and advancements in care become available, and meetthe needs of their citizens.
“More than 30 million Americans who newly have insurance coverage in 2014 will have a comprehensive benefit package,” said Sherry Glied, PhD, assistant secretary for planning and evaluation. “In addition to assuring comprehensive coverage for the newly insured, many millions of Americans buying their own insurance today will gain valuable new coverage, including more than 8 million Americans who currently do not have maternity coverage, and more than 1 million who will gain prescription drug coverage.”
The bulletin issued today addresses only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments, and coinsurance. The cost-sharing features will be addressed in future bulletins and cost-sharing rules will determine the actuarial value of the plan.
Public input on this proposal is encouraged. Comments are due by Jan 31, 2012 and can be sent to: EssentialHealthBenefits@cms.hhs.gov.
For the essential health benefits bulletin, visit: http://cciio.cms.gov/resources/regulations/index.html#hie
For a fact sheet on the essential health benefits bulletin, visit: http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html
For a summary of individual market coverage as it relates to essential health benefits, visit: http://aspe.hhs.gov/health/reports/2011/IndividualMarket/ib.shtml
For information comparing benefits in small group products and state and Federal employee plans, visit: http://aspe.hhs.gov/health/reports/2011/MarketComparison/rb.shtml
###
Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.
Additional Information can be found here:
• HHS Press release - http://www.hhs.gov/news/press/2011pres/12/20111216b.html
• Healthcare.gov Fact sheet - http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html
• ASPE Research Brief, “Actuarial Value and Employer Sponsored Insurance,” November 2011. Available at: http://aspe.hhs.gov/health/reports/2011/AV-ESI/rb.pdf
• ESSENTIAL HEALTH BENEFITS BULLETIN 12/16/11-http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf
Affordable Care Act helps 32 health systems improve care for patients, saving up to $1.1 billion
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
FOR IMMEDIATE RELEASE Contact: HHS Press Office
Monday, December 19, 2011 (202) 690-6343
Affordable Care Act helps 32 health systems improve care for patients, saving up to $1.1 billion
Leading health care providers will be Pioneer Accountable Care Organizations
Thirty-two leading health care organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative made possible by the Affordable Care Act, HHS Secretary Kathleen Sebelius announced today. The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.
Under this initiative, operated by the Centers for Medicare & Medicaid Services (CMS) Innovation Center (Innovation Center), Medicare will reward groups of health care providers that have formed ACOs based on how well they are able to both improve the health of their Medicare patients and lower their health care costs.
“Pioneer ACOs are leaders in our work to provide better care and reduce health care costs,” said Secretary Sebelius. “We are excited that so many innovative systems are participating in this exciting initiative – and there are many other ways that health care providers can get involved and help improve care for patients.”
The Pioneer ACO initiative is just one of a menu of options for providers looking to better coordinate care for patients and use health care dollars more wisely. The Pioneer ACO model is designed specifically for groups of providers with experience working together to coordinate care for patients. The Medicare Shared Savings Program and the Advance Payment ACO Model, both announced in October 2011, are also ACO options for providers. More information about the full menu of options for providers and how to apply to participate is available here.
“We know that health care providers are at different stages in their work to improve care and reduce costs,” said Marilyn Tavenner, acting Administrator of CMS. “That’s why we’ve developed a menu of options for Medicare to meet doctors, hospitals, and other healthcare providers where they are, and begin the conversation of how to enhance the care they are offering to people with Medicare.”
The 32 Pioneer ACOs underwent a rigorous competitive selection process by the Innovation Center, including extensive review of applications and in-person interviews.
The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These payment models will allow organizations that are successful in achieving better care and lower cost growth to move away from a payment system based on volume under the fee-for-service model, towards one where the ACO is paid based on the value of care it provides.
The Pioneer ACO model requires ACOs to engage other payers in similar efforts to reward health care providers that deliver high-quality care. The Pioneer ACO model also includes strict beneficiary protections, including the ability for patients to seek care from any Medicare provider they wish.
Selected Pioneer ACOs include physician-led organizations and health systems, urban and rural organizations, and organizations in various geographic regions of the country, representing 18 States and the opportunity to improve care for about 860,000 Medicare beneficiaries.
The first performance period of the Pioneer ACO Model will begin January, 1st 2012.
For the final list of participating Pioneer ACOs and more information about the Pioneer ACO Model, a fact sheet is posted at http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4225
or you can visit: http://innovations.cms.gov/initiatives/aco/pioneer
The Pioneer ACO Model is one of several initiatives underway at CMS designed to support the formation of ACOs. For more information, visit www.cms.gov/aco.
For more information about the CMS Innovation Center, visit innovations.cms.gov.
###
Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.
CMS FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
December 19, 2011 (202) 690-6145
Pioneer Accountable Care Organization Model:
General Fact Sheet
The Pioneer ACO Model is a CMS Innovation Center initiative designed to support organizations with experience operating as Accountable Care Organizations (ACOs) or in similar arrangements in providing more coordinated care to beneficiaries at a lower cost to Medicare. The Pioneer ACO Model will test the impact of different payment arrangements in helping these organizations achieve the goals of providing better care to patients, and reducing Medicare costs.
Accountable Care Organizations
Accountable Care Organizations (ACOs) are one way CMS is working to ensure better health care, better health, and lower growth in expenditures through continuous improvement.
The Medicare Shared Savings Program provides incentives for ACOs that meet standards for quality performance and reduce cost while putting patients first. Established by the Affordable Care Act, CMS published final rules for the Shared Savings Program on November 2, 2011. More information is available at www.cms.gov/sharedsavingsprogram.
Working in concert with the Shared Savings Program, the Innovation Center is testing an alternative ACO model, the Pioneer ACO Model. The Innovation Center is also testing the Advance Payment ACO Model, which will provide additional support to physician-owned and rural providers participating in the Shared Savings Program who would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.
More information on all of these initiatives is available on the Innovation Center website at www.innovations.cms.gov.
The Pioneer ACO Model and Selected Organizations
The Pioneer ACO Model was designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements. The selected organizations were chosen for their significant experience offering this type of quality care to their patients, along with other criteria listed in the Request for Applications (RFA) document available at www.innovations.cms.gov. These organizations were selected through an open and competitive process from a large applicant pool that included many qualified organizations.
The 32 organizations participating in the Pioneer ACO Model:
Organization Service Area
1. Allina Hospitals & Clinics Minnesota and Western Wisconsin
2. Atrius Health Eastern and Central Massachusetts
3. Banner Health Network Phoenix, Arizona Metropolitan Area (Maricopa and Pinal Counties)
4. Bellin-Thedacare Healthcare Partners Northeast Wisconsin
5. Beth Israel Deaconess Physician Organization Eastern Massachusetts
6. Bronx Accountable Healthcare Network (BAHN) New York City (the Bronx) and lower Westchester County, NY
7. Brown & Toland Physicians San Francisco Bay Area, CA
8. Dartmouth-Hitchcock ACO New Hampshire and Eastern Vermont
9. Eastern Maine Healthcare System Central, Eastern, and Northern Maine
10. Fairview Health Systems Minneapolis, MN Metropolitan Area
11. Franciscan Alliance Indianapolis and Central Indiana
12. Genesys PHO Southeastern Michigan
13. Healthcare Partners Medical Group Los Angeles and Orange Counties, CA
14. Healthcare Partners of Nevada Clark and Nye Counties, NV
15. Heritage California ACO Southern, Central, and Costal California
16. JSA Medical Group, a division of HealthCare Partners Orlando, Tampa Bay, and surrounding South Florida
17. Michigan Pioneer ACO Southeastern Michigan
18. Monarch Healthcare Orange County, CA
19. Mount Auburn Cambridge Independent Practice Association (MACIPA) Eastern Massachusetts
20. North Texas ACO Tarrant, Johnson and Parker counties in North Texas
21. OSF Healthcare System Central Illinois
22. Park Nicollet Health Services Minneapolis, MN Metropolitan Area
23. Partners Healthcare Eastern Massachusetts
24. Physician Health Partners Denver, CO Metropolitan Area
25. Presbyterian Healthcare Services – Central New Mexico Pioneer Accountable Care Organization Central New Mexico
26. Primecare Medical Network Southern California (San Bernardino and Riverside Counties)
27. Renaissance Medical Management Company Southeastern Pennsylvania
28. Seton Health Alliance Central Texas (11 county area including Austin)
29. Sharp Healthcare System San Diego County
30. Steward Health Care System Eastern Massachusetts
31. TriHealth, Inc. Northwest Central Iowa
32. University of Michigan Southeastern Michigan
The Innovation Center
The Innovation Center was created by the Affordable Care Act to test new models of health care delivery and payment. The Center also offers technical support to providers to improve the coordination of care and share lessons learned and best practices throughout the health care system. It is committed to refining the Medicare, Medicaid and CHIP programs to deliver better care for individuals, better health for populations, and lower growth in expenditures.
Payment Arrangement and Beneficiary Alignment
The first performance period begins in January 1st, 2012. In the first two performance years, the Pioneer Model tests a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program. These shared savings would be determined through comparisons against an ACO’s benchmark, which is based on previous CMS expenditures for the group of patients aligned to the Pioneer ACO
In year three of the program, those Pioneer ACOs that have shown savings over the first two years will be eligible to move to a population-based payment model. Population-based payment is a per-beneficiary per month payment amount intended to replace some or all of the ACO’s fee-for-service (FFS) payments with a prospective monthly payment.
Additionally, during the application process, organizations were invited to propose alternative payment arrangements. CMS established two alternatives to the core payment arrangement discussed above based on this input. Both of these alternatives follow a shared savings model in years one and two, and provide an option for a partial population based payment that removes limits on rewards and risks in year three. These arrangements will allow Pioneer ACOs more flexibility in the speed at which they assume financial risk.
Under the Pioneer ACO Model, CMS will prospectively align beneficiaries to ACOs, allowing care providers to know at the beginning of a performance period for which patients’ cost and quality they will be held accountable.
Beneficiary Protections and Quality Measures
Providing the beneficiary with a better care experience is one of the central focuses of the Pioneer ACO Model. Under the Pioneer ACO Model, beneficiaries will maintain the full benefits available under traditional Medicare (fee-for-service), as well as the right to receive services from any healthcare provider accepting Medicare patients.
To ensure beneficiaries receive high quality care and enjoy a positive experience, CMS has established robust quality measures that will be used to monitor the quality of care provided and beneficiary satisfaction. These measures mirror those in the Shared Savings Program. For more information, visit www.cms.gov/sharedsavingsprogram and view the fact sheet entitled “Improving Quality of Care for Medicare Patients: Accountable Care Organizations.”
More information about beneficiary protections and quality measures is available in the fact sheet entitled “The Pioneer ACO Model: A Better Care Experience Through a New Model of Care.”
Eligibility Criteria/Program Requirements
To be eligible to participate in the Pioneer ACO Model, organizations are required to be providers or suppliers of services structured as:
1) ACO professionals in group practice arrangements;
2) Networks of individual practices of ACO professionals;
3) Partnerships or joint venture arrangements between hospitals and ACO professionals;
4) Hospitals employing ACO professionals; or
5) Federally Qualified Health Centers (FQHC).
Health Information Technology
By the end of 2012, Pioneer ACOs must attest and CMS will confirm that at least 50% of the ACO’s primary care providers have met requirements for meaningful use of certified electronic health records (EHR) for receipt of payments through the Medicare and Medicaid EHR Incentive Programs.
Minimum Number of Aligned Beneficiaries
Beneficiaries are aligned to ACOs through the healthcare providers that choose to participate. CMS will review where a beneficiary has been receiving the plurality of his/her primary care services, and use that information to establish which beneficiaries are aligned to a participating provider. If a primary care provider chooses to participate in an ACO, the beneficiaries aligned to him or her through this process would be aligned to the ACO. If a beneficiary receives less than 10 percent of their care from a primary care provider, CMS will review where a beneficiary has been receiving the majority of his/her specialty services to determine alignment.
Participants generally must have a minimum of 15,000 aligned beneficiaries unless located in a rural area, in which case are to have a minimum of 5,000 beneficiaries. In order to be aligned, beneficiaries must be enrolled in original, fee for service Part A and B Medicare. They cannot be participating in Medicare Advantage plans.
Participation of Other Payers
The Innovation Center believes that Pioneer ACOs will be more effective in producing improvements in three part aim of better care for individuals, better health for populations, and slower growth in expenditures if they fully commit to a business model based on financial and performance accountability. The Innovation Center therefore requires Pioneer ACOs to enter similar contracts with other payers (such as insurers, employer health plans, and Medicaid) such that more than 50 percent of the ACO’s revenues will be derived from such arrangements by the end of the second Performance Period.
Selection Process
CMS conducted a lengthy, open and competitive application process to select the final participants in the Pioneer ACO Model. CMS released a Request for Applications (RFA) in May 2011 that detailed the selection criteria. Applicants were required to submit both a Letter of Intent and Application. Applications were reviewed by a panel of experts from the Department of Health and Human Services as well as from external organizations, with expertise in the areas of provider payment policy, care improvement and coordination, primary care, and care of vulnerable populations. These panels assessed the applications based on the criteria detailed in the RFA. Applicants with the highest scores were invited to participate in interviews with Innovation Center leadership at the CMS facility in Baltimore. Based on these interviews, CMS chose a pool of finalists. The Pioneer ACOs announced in December 2011 were those finalists choosing to sign a final agreement with CMS.
Pioneer ACO Model and the Shared Savings Program
The Pioneer ACO Model is distinct from the Shared Savings Program. The Shared Savings Program fulfills a statutory obligation set forth by the Affordable Care Act to establish a permanent program that develops a pathway forward for groups of health care providers to become ACO’s, while the Pioneer ACO Model is an initiative designed to test the effectiveness of a particular model of payment. Final rules for the Shared Savings Program were published in November 2011. More information is available at www.cms.gov/sharedsavingsprogram.
The Pioneer ACO Model differs from the Medicare Shared Savings Program in the following ways, among others:
• The first two years of the Pioneer ACO Model are a shared savings payment arrangement with higher levels of savings and risk than in the Shared Savings Program.
• Starting in year three of the initiative, those organizations that have earned savings over the first two years will be eligible to move to a population-based payment arrangement and full risk arrangements that can continue through optional years four and five.
• Pioneer ACOs are required to develop similar outcomes-based payment arrangements with other payers by the end of the second year, and fully commit their business and care models to offering seamless, high quality care.
Additional Information
Additional information about the Pioneer ACO Model is available on the Pioneer ACO Model website - http://www.innovations.cms.gov/initiatives/aco/pioneer
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
FOR IMMEDIATE RELEASE Contact: HHS Press Office
Monday, December 19, 2011 (202) 690-6343
Affordable Care Act helps 32 health systems improve care for patients, saving up to $1.1 billion
Leading health care providers will be Pioneer Accountable Care Organizations
Thirty-two leading health care organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative made possible by the Affordable Care Act, HHS Secretary Kathleen Sebelius announced today. The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.
Under this initiative, operated by the Centers for Medicare & Medicaid Services (CMS) Innovation Center (Innovation Center), Medicare will reward groups of health care providers that have formed ACOs based on how well they are able to both improve the health of their Medicare patients and lower their health care costs.
“Pioneer ACOs are leaders in our work to provide better care and reduce health care costs,” said Secretary Sebelius. “We are excited that so many innovative systems are participating in this exciting initiative – and there are many other ways that health care providers can get involved and help improve care for patients.”
The Pioneer ACO initiative is just one of a menu of options for providers looking to better coordinate care for patients and use health care dollars more wisely. The Pioneer ACO model is designed specifically for groups of providers with experience working together to coordinate care for patients. The Medicare Shared Savings Program and the Advance Payment ACO Model, both announced in October 2011, are also ACO options for providers. More information about the full menu of options for providers and how to apply to participate is available here.
“We know that health care providers are at different stages in their work to improve care and reduce costs,” said Marilyn Tavenner, acting Administrator of CMS. “That’s why we’ve developed a menu of options for Medicare to meet doctors, hospitals, and other healthcare providers where they are, and begin the conversation of how to enhance the care they are offering to people with Medicare.”
The 32 Pioneer ACOs underwent a rigorous competitive selection process by the Innovation Center, including extensive review of applications and in-person interviews.
The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These payment models will allow organizations that are successful in achieving better care and lower cost growth to move away from a payment system based on volume under the fee-for-service model, towards one where the ACO is paid based on the value of care it provides.
The Pioneer ACO model requires ACOs to engage other payers in similar efforts to reward health care providers that deliver high-quality care. The Pioneer ACO model also includes strict beneficiary protections, including the ability for patients to seek care from any Medicare provider they wish.
Selected Pioneer ACOs include physician-led organizations and health systems, urban and rural organizations, and organizations in various geographic regions of the country, representing 18 States and the opportunity to improve care for about 860,000 Medicare beneficiaries.
The first performance period of the Pioneer ACO Model will begin January, 1st 2012.
For the final list of participating Pioneer ACOs and more information about the Pioneer ACO Model, a fact sheet is posted at http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4225
or you can visit: http://innovations.cms.gov/initiatives/aco/pioneer
The Pioneer ACO Model is one of several initiatives underway at CMS designed to support the formation of ACOs. For more information, visit www.cms.gov/aco.
For more information about the CMS Innovation Center, visit innovations.cms.gov.
###
Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.
CMS FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
December 19, 2011 (202) 690-6145
Pioneer Accountable Care Organization Model:
General Fact Sheet
The Pioneer ACO Model is a CMS Innovation Center initiative designed to support organizations with experience operating as Accountable Care Organizations (ACOs) or in similar arrangements in providing more coordinated care to beneficiaries at a lower cost to Medicare. The Pioneer ACO Model will test the impact of different payment arrangements in helping these organizations achieve the goals of providing better care to patients, and reducing Medicare costs.
Accountable Care Organizations
Accountable Care Organizations (ACOs) are one way CMS is working to ensure better health care, better health, and lower growth in expenditures through continuous improvement.
The Medicare Shared Savings Program provides incentives for ACOs that meet standards for quality performance and reduce cost while putting patients first. Established by the Affordable Care Act, CMS published final rules for the Shared Savings Program on November 2, 2011. More information is available at www.cms.gov/sharedsavingsprogram.
Working in concert with the Shared Savings Program, the Innovation Center is testing an alternative ACO model, the Pioneer ACO Model. The Innovation Center is also testing the Advance Payment ACO Model, which will provide additional support to physician-owned and rural providers participating in the Shared Savings Program who would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.
More information on all of these initiatives is available on the Innovation Center website at www.innovations.cms.gov.
The Pioneer ACO Model and Selected Organizations
The Pioneer ACO Model was designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements. The selected organizations were chosen for their significant experience offering this type of quality care to their patients, along with other criteria listed in the Request for Applications (RFA) document available at www.innovations.cms.gov. These organizations were selected through an open and competitive process from a large applicant pool that included many qualified organizations.
The 32 organizations participating in the Pioneer ACO Model:
Organization Service Area
1. Allina Hospitals & Clinics Minnesota and Western Wisconsin
2. Atrius Health Eastern and Central Massachusetts
3. Banner Health Network Phoenix, Arizona Metropolitan Area (Maricopa and Pinal Counties)
4. Bellin-Thedacare Healthcare Partners Northeast Wisconsin
5. Beth Israel Deaconess Physician Organization Eastern Massachusetts
6. Bronx Accountable Healthcare Network (BAHN) New York City (the Bronx) and lower Westchester County, NY
7. Brown & Toland Physicians San Francisco Bay Area, CA
8. Dartmouth-Hitchcock ACO New Hampshire and Eastern Vermont
9. Eastern Maine Healthcare System Central, Eastern, and Northern Maine
10. Fairview Health Systems Minneapolis, MN Metropolitan Area
11. Franciscan Alliance Indianapolis and Central Indiana
12. Genesys PHO Southeastern Michigan
13. Healthcare Partners Medical Group Los Angeles and Orange Counties, CA
14. Healthcare Partners of Nevada Clark and Nye Counties, NV
15. Heritage California ACO Southern, Central, and Costal California
16. JSA Medical Group, a division of HealthCare Partners Orlando, Tampa Bay, and surrounding South Florida
17. Michigan Pioneer ACO Southeastern Michigan
18. Monarch Healthcare Orange County, CA
19. Mount Auburn Cambridge Independent Practice Association (MACIPA) Eastern Massachusetts
20. North Texas ACO Tarrant, Johnson and Parker counties in North Texas
21. OSF Healthcare System Central Illinois
22. Park Nicollet Health Services Minneapolis, MN Metropolitan Area
23. Partners Healthcare Eastern Massachusetts
24. Physician Health Partners Denver, CO Metropolitan Area
25. Presbyterian Healthcare Services – Central New Mexico Pioneer Accountable Care Organization Central New Mexico
26. Primecare Medical Network Southern California (San Bernardino and Riverside Counties)
27. Renaissance Medical Management Company Southeastern Pennsylvania
28. Seton Health Alliance Central Texas (11 county area including Austin)
29. Sharp Healthcare System San Diego County
30. Steward Health Care System Eastern Massachusetts
31. TriHealth, Inc. Northwest Central Iowa
32. University of Michigan Southeastern Michigan
The Innovation Center
The Innovation Center was created by the Affordable Care Act to test new models of health care delivery and payment. The Center also offers technical support to providers to improve the coordination of care and share lessons learned and best practices throughout the health care system. It is committed to refining the Medicare, Medicaid and CHIP programs to deliver better care for individuals, better health for populations, and lower growth in expenditures.
Payment Arrangement and Beneficiary Alignment
The first performance period begins in January 1st, 2012. In the first two performance years, the Pioneer Model tests a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program. These shared savings would be determined through comparisons against an ACO’s benchmark, which is based on previous CMS expenditures for the group of patients aligned to the Pioneer ACO
In year three of the program, those Pioneer ACOs that have shown savings over the first two years will be eligible to move to a population-based payment model. Population-based payment is a per-beneficiary per month payment amount intended to replace some or all of the ACO’s fee-for-service (FFS) payments with a prospective monthly payment.
Additionally, during the application process, organizations were invited to propose alternative payment arrangements. CMS established two alternatives to the core payment arrangement discussed above based on this input. Both of these alternatives follow a shared savings model in years one and two, and provide an option for a partial population based payment that removes limits on rewards and risks in year three. These arrangements will allow Pioneer ACOs more flexibility in the speed at which they assume financial risk.
Under the Pioneer ACO Model, CMS will prospectively align beneficiaries to ACOs, allowing care providers to know at the beginning of a performance period for which patients’ cost and quality they will be held accountable.
Beneficiary Protections and Quality Measures
Providing the beneficiary with a better care experience is one of the central focuses of the Pioneer ACO Model. Under the Pioneer ACO Model, beneficiaries will maintain the full benefits available under traditional Medicare (fee-for-service), as well as the right to receive services from any healthcare provider accepting Medicare patients.
To ensure beneficiaries receive high quality care and enjoy a positive experience, CMS has established robust quality measures that will be used to monitor the quality of care provided and beneficiary satisfaction. These measures mirror those in the Shared Savings Program. For more information, visit www.cms.gov/sharedsavingsprogram and view the fact sheet entitled “Improving Quality of Care for Medicare Patients: Accountable Care Organizations.”
More information about beneficiary protections and quality measures is available in the fact sheet entitled “The Pioneer ACO Model: A Better Care Experience Through a New Model of Care.”
Eligibility Criteria/Program Requirements
To be eligible to participate in the Pioneer ACO Model, organizations are required to be providers or suppliers of services structured as:
1) ACO professionals in group practice arrangements;
2) Networks of individual practices of ACO professionals;
3) Partnerships or joint venture arrangements between hospitals and ACO professionals;
4) Hospitals employing ACO professionals; or
5) Federally Qualified Health Centers (FQHC).
Health Information Technology
By the end of 2012, Pioneer ACOs must attest and CMS will confirm that at least 50% of the ACO’s primary care providers have met requirements for meaningful use of certified electronic health records (EHR) for receipt of payments through the Medicare and Medicaid EHR Incentive Programs.
Minimum Number of Aligned Beneficiaries
Beneficiaries are aligned to ACOs through the healthcare providers that choose to participate. CMS will review where a beneficiary has been receiving the plurality of his/her primary care services, and use that information to establish which beneficiaries are aligned to a participating provider. If a primary care provider chooses to participate in an ACO, the beneficiaries aligned to him or her through this process would be aligned to the ACO. If a beneficiary receives less than 10 percent of their care from a primary care provider, CMS will review where a beneficiary has been receiving the majority of his/her specialty services to determine alignment.
Participants generally must have a minimum of 15,000 aligned beneficiaries unless located in a rural area, in which case are to have a minimum of 5,000 beneficiaries. In order to be aligned, beneficiaries must be enrolled in original, fee for service Part A and B Medicare. They cannot be participating in Medicare Advantage plans.
Participation of Other Payers
The Innovation Center believes that Pioneer ACOs will be more effective in producing improvements in three part aim of better care for individuals, better health for populations, and slower growth in expenditures if they fully commit to a business model based on financial and performance accountability. The Innovation Center therefore requires Pioneer ACOs to enter similar contracts with other payers (such as insurers, employer health plans, and Medicaid) such that more than 50 percent of the ACO’s revenues will be derived from such arrangements by the end of the second Performance Period.
Selection Process
CMS conducted a lengthy, open and competitive application process to select the final participants in the Pioneer ACO Model. CMS released a Request for Applications (RFA) in May 2011 that detailed the selection criteria. Applicants were required to submit both a Letter of Intent and Application. Applications were reviewed by a panel of experts from the Department of Health and Human Services as well as from external organizations, with expertise in the areas of provider payment policy, care improvement and coordination, primary care, and care of vulnerable populations. These panels assessed the applications based on the criteria detailed in the RFA. Applicants with the highest scores were invited to participate in interviews with Innovation Center leadership at the CMS facility in Baltimore. Based on these interviews, CMS chose a pool of finalists. The Pioneer ACOs announced in December 2011 were those finalists choosing to sign a final agreement with CMS.
Pioneer ACO Model and the Shared Savings Program
The Pioneer ACO Model is distinct from the Shared Savings Program. The Shared Savings Program fulfills a statutory obligation set forth by the Affordable Care Act to establish a permanent program that develops a pathway forward for groups of health care providers to become ACO’s, while the Pioneer ACO Model is an initiative designed to test the effectiveness of a particular model of payment. Final rules for the Shared Savings Program were published in November 2011. More information is available at www.cms.gov/sharedsavingsprogram.
The Pioneer ACO Model differs from the Medicare Shared Savings Program in the following ways, among others:
• The first two years of the Pioneer ACO Model are a shared savings payment arrangement with higher levels of savings and risk than in the Shared Savings Program.
• Starting in year three of the initiative, those organizations that have earned savings over the first two years will be eligible to move to a population-based payment arrangement and full risk arrangements that can continue through optional years four and five.
• Pioneer ACOs are required to develop similar outcomes-based payment arrangements with other payers by the end of the second year, and fully commit their business and care models to offering seamless, high quality care.
Additional Information
Additional information about the Pioneer ACO Model is available on the Pioneer ACO Model website - http://www.innovations.cms.gov/initiatives/aco/pioneer
Cracking Down on Fraud
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
December 13, 2011
Campaign to Cut Waste: Vice President Biden Announces U.S. Will Halt Production of Excess Dollar Coins and Department of Justice Recovered a Record $5.6 Billion in Fraud in 2011
Department of Health and Human Services Takes New Steps to Prevent Medicare Fraud
As part of the Obama Administration’s Campaign to Cut Waste, Vice President Biden today announced the U.S. Mint would suspend the production of Presidential dollar coins for circulation. Today, nearly 1.4 billion surplus dollar coins are sitting in Federal Reserve vaults due to lack of demand for the coins. By halting this unnecessary production, the Administration will save taxpayers at least $50 million per year in production and storage costs. The Vice President made today’s announcement at a Cabinet meeting focused on the President’s commitment to cut waste and eliminate misspent dollars across the Federal government.
The Vice President also announced significant progress in cracking down on fraud, including that the Department of Justice recovered more than $5.6 billion in fraud government-wide in 2011, a 167 percent increase in recovery from 2008 and a new record, and that the Department of Health and Human Services will prevent Medicare fraud by telling prescription drug plans to withhold payment when they see signs of suspicious activity related to OxyContin, Percocet, and other narcotics and painkillers.
Vice President Biden said, “Today’s announcements, from putting an end to the wasteful production of Presidential dollar coins to recovering over $5 billion in fraud, demonstrate the Administration’s continued commitment to cutting waste and protecting taxpayers.”
Halting Production of Excess Dollar Coins
The Vice President and Secretary Geithner announced the Administration’s plan to stop the wasteful production of $1 coins for circulation. In 2005, Congress enacted the Presidential $1 Coin Act, which mandated that the United States Mint issue new Presidential $1 Coins with the likeness of every deceased President. But more than 40 percent of the $1 coins that the United States Mint has issued have been returned to the Federal Reserve, because nobody wants to use them.
As a result, nearly 1.4 billion excess dollar coins are already sitting unused in Federal Reserve Bank vaults – enough to meet demand for more than a decade. But until today, the Mint was on pace to produce an additional 1.6 billion dollar coins through 2016.
To put a stop to this waste the Administration will halt the production of Presidential $1 Coins for circulation. The Administration will still be required, by law, to continue to produce a relatively small number of the coins to be sold to collectors, at no cost to taxpayers. Instead of producing 70-80 million coins per President, the United States Mint will now only produce as many as collectors want. Regular circulating demand for $1 coins will be met through the Federal Reserve Banks' existing inventory, which will be drawn down over time. Overall, this step will save at least $50 million annually over the next several years.
“At the Treasury Department, we’re continuing to work hard in support of President Obama and Vice President Biden’s efforts to cut waste and streamline government,” said Treasury Secretary Tim Geithner. “Putting a stop to the minting of surplus $1 coins represents a significant opportunity to reduce costs and improve efficiency. In these tough times, Americans are making every dollar count, and they deserve the same from their government. We simply shouldn’t be wasting taxpayer money on money that taxpayers aren’t using.”
Cracking Down on Fraud
At the meeting, the Vice President and the Deputy Attorney General announced the Department of Justice (DOJ) recovered over $5.6 billion in total fraud in 2011, an increase of over 167% since 2008. This includes almost $3.4 billion in civil fraud, and over $2.2 billion in criminal fraud. For example, a company called American Grocers was buying expired (and, therefore, deeply discounted) food, altering the dates on the food, and selling the food at a steep markup to the government to serve to American troops serving in Iraq. The owner of the company was sentenced to 24 months in prison, and the Department of Justice reached a $15 million settlement with the company.
Of the $5.6 billion recovered by DOJ in 2011, over $2.9 billion was in health care fraud alone. This was driven in part by unprecedented cooperation between the Department of Justice and the Department of Health and Human Services to detect and halt fraud earlier. Specifically, the Obama Administration has greatly expanded the use of Medicare Fraud Strike Forces, specialized teams of agents and prosecutors who focus on catching health care fraud. The teams monitor Medicare data in real time and work together to prosecute fraud much more quickly than before. It now often takes months, not years, to bring a case to resolution. At the start of the Administration, there were two Strike Force teams. Now, there are Strike Force teams in nine different cities. And they have been effective: in 2008, they brought cases involving $384 million in fraudulent claims. This year, they brought cases involving over $1 billion in fraudulent claims. For every dollar spent on this effort, the Administration has recovered seven dollars.
The Department of Justice has also recovered $15 billion in total fraud since 2009. Some of this money has gone back to states, whistleblowers, or into strengthening important programs like Medicare and Medicaid. Other funds have been returned to the Treasury for deficit reduction. Of the $15 billion recovered since 2009, $8.4 billion was in health care fraud alone.
The Department of Justice also announced they doubled fraud recoveries between 2008 and 2011 in twenty-one states, the District of Columbia, and the Virgin Islands. This includes Alaska, Arkansas, Colorado, Florida, Georgia, Kansas, Massachusetts, Maryland, Michigan, Minnesota, Mississippi, Nevada, Ohio, Oklahoma, South Dakota, Tennessee, Virginia, Vermont, Washington, West Virginia, and Wisconsin, as well as the District of Columbia and the Virgin Islands. In fact, 15 of these states quadrupled recoveries and 19 of these tripled recoveries. Click HERE to see the state by state numbers.
This increase in recovering fraud comes as the Administration is decreasing the amount of fraud that occurs in the first place. Government-wide improper payment rates – which include fraudulent payments and other types of errors – were cut by 11 percent this year, keeping $18 billion in taxpayer funds from going to the wrong people or for the wrong purposes.
“All across the country, the Department of Justice continues to move aggressively to protect the American people from fraud. In this past fiscal year, we recovered more money from fraudsters than ever before, over $5.6 billion,” said Deputy Attorney General James Cole. “These efforts not only send the message that those who commit fraud will be held to account, they also result in more dollars in the national treasury and demonstrate a high rate of return on the American taxpayers’ investment in the Justice Department.”
New Steps to Prevent Fraud with OxyContin, Percocet, and Other Prescription Drugs
As a next step in an aggressive campaign to crack down on Medicare fraud, the Department of Health and Human Services (HHS) will direct all Medicare prescription drug plans to use every tool at their disposal to prevent fraud. Patients sometimes “doctor shop,” visiting numerous doctors to get multiple prescriptions for OxyContin, Percocet, and other painkillers and narcotics. In some cases, these medicines are abused by the patients. In others, patients sell the extra drugs.
OxyContin and Percocet abuse, prescription drug fraud, and so-called “doctor shopping” are major problems. The Government Accountability Office recently reported that “170,000 Medicare beneficiaries received prescriptions from five or more” doctors for drugs that are frequently abused, like OxyContin and Percocet.
While not all of these cases are fraudulent, some are. In 2008, for example, one Medicare beneficiary “received prescriptions for a total of 3,655 oxycodone pills [such as OxyContin]…from 58 different prescribers.”
Today, HHS announced they have urged insurance companies to take every step possible to prevent such fraud. Specifically, HHS’ guidance tells prescription drug plans to withhold payment on suspicious claims, including when enrollees use multiple doctors to obtain painkillers and narcotics. Companies that offer prescription drug plans already process each of a patient’s prescriptions. While HHS generally requires prompt payment, today’s guidance clarifies that if a plan sees signs of suspicious activity, it should withhold payment to pharmacies until it verifies the claim is valid.
This guidance to prescription drug plans also explains how plans can use tools like prior authorization, retrospective medical review, and prescribing for less than 30 days (with the cooperation of prescribing practitioners) to root out fraud and ensure appropriate coverage in Medicare.
“Prescription drug misuse has a serious human and financial cost,” said Health and Human Services Secretary Kathleen Sebelius. “The Obama Administration is making unprecedented strides in cracking down on fraud that contributes to this problem while costing taxpayers dollars. With these actions, we are going to continue to stop fraud before it happens and make sure that those who do defraud taxpayers are held accountable.”
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CMS FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
December 13, 20111 (202) 690-6145
The Obama Administration and Expanded Efforts to Fight Fraud
Today, the Obama Administration announced recovery of over $5.6 billion in fraudulent payments in fiscal year 2011, a 167 percent increase from 2008. President Obama’s health care reform law includes new resources and tools to help fight fraud in Medicare and Medicaid, and to protect taxpayer dollars. In addition, the Centers for Medicare & Medicaid Services (CMS) is taking steps to strengthen controls to identify and prevent prescription drug fraud and abuse in the Medicare Part D program.
CMS released a notice to Part D prescription drug plan sponsors that contains information and guidance to immediately take steps to stop prescription drug misuse and fraud. Pain killers like OxyContin are the fifth most filled classes of drugs in Medicare, with spending in 2009 totaling $3.9 billion. Recently, the Government Accountability Office identified evidence of fraud and drug abuse in Medicare for these types of drugs, which pose a threat to public health as well as the federal budget. Among the messages conveyed to the plans:
Investigate and Stop Payment for Suspect Claims
• Medicare’s requirement that pharmacies receive prompt payment for prescription drugs does not prevent sponsors from investigating suspect claims and withholding payment for fraudulent claims.
• When a sponsor suspects fraud with respect to a particular claim, payment need not be made until the claim has been investigated further to determine that it is not fraudulent.
Use Tools to Help Manage Proper Utilization of Drugs
• Prior authorization requirements are a common tool employed by Part D sponsors to ensure appropriate utilization and coverage under the Medicare Part D program.
• Part D sponsors may implement reasonable prior authorization requirements for drugs, such as opioids, that are more susceptible to abuse and diversion.
Limit Prescriptions to 30-Day Doses
• The guidance encourages Plan sponsors to work with doctors to prescribe less than 30 days supplies for drugs that are more susceptible to abuse or diversion.
CMS has also been proactive in identifying other opportunities to strengthen controls to stop fraud and abuse in the Part D program. The agency is implementing additional controls on the use of prescriber identifiers submitted with Part D claims and has proposed to further strengthen the requirement in 2013. CMS has also considered enhanced drug utilization tools and has engaged Part D sponsors to identify other approaches for appropriately identifying and controlling overutilization of pain medications.
These actions are designed to be transparent to the Medicare beneficiary and should not stop anyone from receiving the medications they need to maintain their health.
These efforts build on significant progress already made by the Obama Administration to fight fraud across the health care sector – progress that has been sped up by resources from the Affordable Care Act, the health care law of 2010. This progress has contributed to the 167 percent increase in fraud recoveries since 2008.
Tough New Rules and Sentences for Criminals
The Affordable Care Act increases the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses, establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture any funds acquired through fraudulent practices. The law also makes it easier for the Department of Justice to investigate potential fraud or wrongdoing at facilities like nursing homes.
New Resources to Fight Fraud
The Affordable Care Act provides an additional $350 million over 10 years to ramp up anti-fraud efforts, including increasing scrutiny of claims before they have been paid, investments in sophisticated data analytics, and more “feet on the street” law enforcement agents and others to fight fraud in the health care system.
These efforts build on our recently awarded predictive modeling contract under which CMS is using the kind of technology used by credit card companies to stop fraud. Since June 30th of this year, CMS has been using this technology to help identify potentially fraudulent Medicare claims and uncover fraudulent providers and suppliers, flagging both for investigation and for referrals to law enforcement. This new tool allows CMS for the first time to spot suspect claims and take action to stop fraudulent payments before they are paid.
Better Coordination across Government
Many of the Affordable Care Act provisions increase coordination between states, CMS, and its law enforcement partners at the Office of the Inspector General and the Department of Justice.
• The law deters fraudulent providers and suppliers from moving from State to State or between Medicare and Medicaid by requiring all states to terminate anyone who has been terminated by Medicare or by another State.
• Under the Affordable Care Act, CMS must work hand-in-hand with the Office of the Inspector General on suspending payments to suspect providers. CMS is also helping to provide the Office of the Inspector General and the Department of Justice improved real-time data access to enable investigators and law enforcement agents to more quickly detect and prosecute fraud schemes.
• In addition, the Senior Medicare Patrol program, led by the Administration on Aging, empowers seniors to identify and fight fraud through increased awareness and understanding of Federal health care programs. Since the program’s inception, the program has educated over 4 million beneficiaries in group or one-on-one counseling sessions and has reached almost 25 million people through community education outreach events.
Sharing Data across Government
Building on the Obama Administration initiatives to improve coordination across the agencies charged with stopping fraud, the Affordable Care Act requires certain claims data from Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), the Veterans Administration, the Department of Defense, the Social Security Disability Insurance program, and the Indian Health Service to be centralized, making it easier for agency and law enforcement officials to identify criminals and prevent fraud on a system-wide basis. The health care law, and new initiatives like the interagency Health Care Fraud Prevention and Enforcement Action Team (HEAT) Task Force between DOJ and HHS, have already improved access to data for law enforcement. DOJ and OIG continue to benefit from improved access to Medicare data to help identify criminals and fight fraud while protecting patient privacy.
Enhanced Penalties to Deter Fraud and Abuse
The Affordable Care Act provides the Department of Health and Human Services’ Office of the Inspector General (OIG) with the authority to impose stronger civil and monetary penalties on those found to have committed fraud. The Secretary also is provided new authority to prevent problematic providers from participating in Medicare, Medicaid or CHIP. Under the new law:
• Providers and suppliers who lie on their application to enroll in Medicare, Medicaid, or CHIP may be excluded from the programs;
• Providers who identify an overpayment from Medicare or Medicaid but do not return it within 60 days may be subject to new fines and penalties; and
• Providers who are terminated from Medicare, a State’s Medicaid program, or both will be terminated from Medicaid programs in other states.
Enhanced Screening and Other Enrollment Requirements
On January 24, 2011, CMS announced some of the Affordable Care Act’s most powerful new fraud prevention tools, including new screening requirements for all Medicare, Medicaid, and CHIP providers and suppliers. These new rules require all providers to go through licensure checks and subject those who pose higher levels of risk to undergo site visits and in some cases, FBI criminal background checks before being allowed to bill the Medicare program.
One of the most powerful new tools is the new authority to suspend Medicare payments to providers or suppliers while investigating a credible allegation of fraud. The new rules also give the Secretary new authority to impose a temporary moratorium on newly enrolling providers or suppliers in certain geographic areas to prevent or combat waste, fraud and abuse. These new tools are also available to states to enhance their program integrity efforts in the Medicaid program and CHIP. Already, revocations, payment suspensions and enrollment denials have taken place as a result of this increased scrutiny.
Targeting High Risk Entities
The Affordable Care Act also imposes more stringent payment and enrollment requirements to target high risk items and entities. On November 17, 2010, CMS published final rules requiring a face-to-face meeting for Medicare home health and Medicare hospice. On July 12, 2011, CMS published a proposal to expand the face-to-face requirement to Medicaid. CMS also issued a final rule on May 5, 2010 to require providers and suppliers who order and refer certain items or services for Medicare beneficiaries to enroll in Medicare and maintain documentation on those orders and referrals.
New Focus on Compliance and Prevention
Under the new law, providers and suppliers must establish compliance programs ensuring they are aware of anti-fraud requirements and good governance practices and have incorporated these into their operations. Nursing homes are also subject to new compliance and ethics plan requirements. Other preventive measures focus on certain categories of providers and suppliers that historically have presented concerns, including Home Health agencies, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies suppliers, and Community Mental Health Centers.
Raising the Bar on DME Suppliers through Expanded Competitive Bidding and Prior Authorization
As part of competitive bidding, CMS is implementing new stricter requirements for DME suppliers, which have historically presented a high risk of fraud. Last month, CMS announced that it is expanding the DME Competitive Bidding program to an additional 91 areas of the country, including 21 areas that are the result of an expansion of DME competitive bidding under the Affordable Care Act. By 2013, the program will cover 100 areas of the country, and over 18 million Medicare fee-for-service beneficiaries living in these areas can save money through this new program, while continuing to have access to quality medical equipment from accredited suppliers they can trust. The program is anticipated to save the Medicare program and beneficiaries approximately $28 billion over the next ten years. This includes more than $17 billion in savings for Medicare, and over $11 billion for beneficiaries as a result of lower coinsurance and premium payments.
In addition, under a demonstration announced in November, Medicare will implement a prior authorization process for all power mobility device claims in 7 high risk states, guaranteeing that beneficiaries receive access to the services they need but preventing payment in cases where medical need is not established. This will make it more difficult to get fraudulent claims through Medicare’s claims payment systems.
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
December 13, 2011
Campaign to Cut Waste: Vice President Biden Announces U.S. Will Halt Production of Excess Dollar Coins and Department of Justice Recovered a Record $5.6 Billion in Fraud in 2011
Department of Health and Human Services Takes New Steps to Prevent Medicare Fraud
As part of the Obama Administration’s Campaign to Cut Waste, Vice President Biden today announced the U.S. Mint would suspend the production of Presidential dollar coins for circulation. Today, nearly 1.4 billion surplus dollar coins are sitting in Federal Reserve vaults due to lack of demand for the coins. By halting this unnecessary production, the Administration will save taxpayers at least $50 million per year in production and storage costs. The Vice President made today’s announcement at a Cabinet meeting focused on the President’s commitment to cut waste and eliminate misspent dollars across the Federal government.
The Vice President also announced significant progress in cracking down on fraud, including that the Department of Justice recovered more than $5.6 billion in fraud government-wide in 2011, a 167 percent increase in recovery from 2008 and a new record, and that the Department of Health and Human Services will prevent Medicare fraud by telling prescription drug plans to withhold payment when they see signs of suspicious activity related to OxyContin, Percocet, and other narcotics and painkillers.
Vice President Biden said, “Today’s announcements, from putting an end to the wasteful production of Presidential dollar coins to recovering over $5 billion in fraud, demonstrate the Administration’s continued commitment to cutting waste and protecting taxpayers.”
Halting Production of Excess Dollar Coins
The Vice President and Secretary Geithner announced the Administration’s plan to stop the wasteful production of $1 coins for circulation. In 2005, Congress enacted the Presidential $1 Coin Act, which mandated that the United States Mint issue new Presidential $1 Coins with the likeness of every deceased President. But more than 40 percent of the $1 coins that the United States Mint has issued have been returned to the Federal Reserve, because nobody wants to use them.
As a result, nearly 1.4 billion excess dollar coins are already sitting unused in Federal Reserve Bank vaults – enough to meet demand for more than a decade. But until today, the Mint was on pace to produce an additional 1.6 billion dollar coins through 2016.
To put a stop to this waste the Administration will halt the production of Presidential $1 Coins for circulation. The Administration will still be required, by law, to continue to produce a relatively small number of the coins to be sold to collectors, at no cost to taxpayers. Instead of producing 70-80 million coins per President, the United States Mint will now only produce as many as collectors want. Regular circulating demand for $1 coins will be met through the Federal Reserve Banks' existing inventory, which will be drawn down over time. Overall, this step will save at least $50 million annually over the next several years.
“At the Treasury Department, we’re continuing to work hard in support of President Obama and Vice President Biden’s efforts to cut waste and streamline government,” said Treasury Secretary Tim Geithner. “Putting a stop to the minting of surplus $1 coins represents a significant opportunity to reduce costs and improve efficiency. In these tough times, Americans are making every dollar count, and they deserve the same from their government. We simply shouldn’t be wasting taxpayer money on money that taxpayers aren’t using.”
Cracking Down on Fraud
At the meeting, the Vice President and the Deputy Attorney General announced the Department of Justice (DOJ) recovered over $5.6 billion in total fraud in 2011, an increase of over 167% since 2008. This includes almost $3.4 billion in civil fraud, and over $2.2 billion in criminal fraud. For example, a company called American Grocers was buying expired (and, therefore, deeply discounted) food, altering the dates on the food, and selling the food at a steep markup to the government to serve to American troops serving in Iraq. The owner of the company was sentenced to 24 months in prison, and the Department of Justice reached a $15 million settlement with the company.
Of the $5.6 billion recovered by DOJ in 2011, over $2.9 billion was in health care fraud alone. This was driven in part by unprecedented cooperation between the Department of Justice and the Department of Health and Human Services to detect and halt fraud earlier. Specifically, the Obama Administration has greatly expanded the use of Medicare Fraud Strike Forces, specialized teams of agents and prosecutors who focus on catching health care fraud. The teams monitor Medicare data in real time and work together to prosecute fraud much more quickly than before. It now often takes months, not years, to bring a case to resolution. At the start of the Administration, there were two Strike Force teams. Now, there are Strike Force teams in nine different cities. And they have been effective: in 2008, they brought cases involving $384 million in fraudulent claims. This year, they brought cases involving over $1 billion in fraudulent claims. For every dollar spent on this effort, the Administration has recovered seven dollars.
The Department of Justice has also recovered $15 billion in total fraud since 2009. Some of this money has gone back to states, whistleblowers, or into strengthening important programs like Medicare and Medicaid. Other funds have been returned to the Treasury for deficit reduction. Of the $15 billion recovered since 2009, $8.4 billion was in health care fraud alone.
The Department of Justice also announced they doubled fraud recoveries between 2008 and 2011 in twenty-one states, the District of Columbia, and the Virgin Islands. This includes Alaska, Arkansas, Colorado, Florida, Georgia, Kansas, Massachusetts, Maryland, Michigan, Minnesota, Mississippi, Nevada, Ohio, Oklahoma, South Dakota, Tennessee, Virginia, Vermont, Washington, West Virginia, and Wisconsin, as well as the District of Columbia and the Virgin Islands. In fact, 15 of these states quadrupled recoveries and 19 of these tripled recoveries. Click HERE to see the state by state numbers.
This increase in recovering fraud comes as the Administration is decreasing the amount of fraud that occurs in the first place. Government-wide improper payment rates – which include fraudulent payments and other types of errors – were cut by 11 percent this year, keeping $18 billion in taxpayer funds from going to the wrong people or for the wrong purposes.
“All across the country, the Department of Justice continues to move aggressively to protect the American people from fraud. In this past fiscal year, we recovered more money from fraudsters than ever before, over $5.6 billion,” said Deputy Attorney General James Cole. “These efforts not only send the message that those who commit fraud will be held to account, they also result in more dollars in the national treasury and demonstrate a high rate of return on the American taxpayers’ investment in the Justice Department.”
New Steps to Prevent Fraud with OxyContin, Percocet, and Other Prescription Drugs
As a next step in an aggressive campaign to crack down on Medicare fraud, the Department of Health and Human Services (HHS) will direct all Medicare prescription drug plans to use every tool at their disposal to prevent fraud. Patients sometimes “doctor shop,” visiting numerous doctors to get multiple prescriptions for OxyContin, Percocet, and other painkillers and narcotics. In some cases, these medicines are abused by the patients. In others, patients sell the extra drugs.
OxyContin and Percocet abuse, prescription drug fraud, and so-called “doctor shopping” are major problems. The Government Accountability Office recently reported that “170,000 Medicare beneficiaries received prescriptions from five or more” doctors for drugs that are frequently abused, like OxyContin and Percocet.
While not all of these cases are fraudulent, some are. In 2008, for example, one Medicare beneficiary “received prescriptions for a total of 3,655 oxycodone pills [such as OxyContin]…from 58 different prescribers.”
Today, HHS announced they have urged insurance companies to take every step possible to prevent such fraud. Specifically, HHS’ guidance tells prescription drug plans to withhold payment on suspicious claims, including when enrollees use multiple doctors to obtain painkillers and narcotics. Companies that offer prescription drug plans already process each of a patient’s prescriptions. While HHS generally requires prompt payment, today’s guidance clarifies that if a plan sees signs of suspicious activity, it should withhold payment to pharmacies until it verifies the claim is valid.
This guidance to prescription drug plans also explains how plans can use tools like prior authorization, retrospective medical review, and prescribing for less than 30 days (with the cooperation of prescribing practitioners) to root out fraud and ensure appropriate coverage in Medicare.
“Prescription drug misuse has a serious human and financial cost,” said Health and Human Services Secretary Kathleen Sebelius. “The Obama Administration is making unprecedented strides in cracking down on fraud that contributes to this problem while costing taxpayers dollars. With these actions, we are going to continue to stop fraud before it happens and make sure that those who do defraud taxpayers are held accountable.”
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CMS FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
December 13, 20111 (202) 690-6145
The Obama Administration and Expanded Efforts to Fight Fraud
Today, the Obama Administration announced recovery of over $5.6 billion in fraudulent payments in fiscal year 2011, a 167 percent increase from 2008. President Obama’s health care reform law includes new resources and tools to help fight fraud in Medicare and Medicaid, and to protect taxpayer dollars. In addition, the Centers for Medicare & Medicaid Services (CMS) is taking steps to strengthen controls to identify and prevent prescription drug fraud and abuse in the Medicare Part D program.
CMS released a notice to Part D prescription drug plan sponsors that contains information and guidance to immediately take steps to stop prescription drug misuse and fraud. Pain killers like OxyContin are the fifth most filled classes of drugs in Medicare, with spending in 2009 totaling $3.9 billion. Recently, the Government Accountability Office identified evidence of fraud and drug abuse in Medicare for these types of drugs, which pose a threat to public health as well as the federal budget. Among the messages conveyed to the plans:
Investigate and Stop Payment for Suspect Claims
• Medicare’s requirement that pharmacies receive prompt payment for prescription drugs does not prevent sponsors from investigating suspect claims and withholding payment for fraudulent claims.
• When a sponsor suspects fraud with respect to a particular claim, payment need not be made until the claim has been investigated further to determine that it is not fraudulent.
Use Tools to Help Manage Proper Utilization of Drugs
• Prior authorization requirements are a common tool employed by Part D sponsors to ensure appropriate utilization and coverage under the Medicare Part D program.
• Part D sponsors may implement reasonable prior authorization requirements for drugs, such as opioids, that are more susceptible to abuse and diversion.
Limit Prescriptions to 30-Day Doses
• The guidance encourages Plan sponsors to work with doctors to prescribe less than 30 days supplies for drugs that are more susceptible to abuse or diversion.
CMS has also been proactive in identifying other opportunities to strengthen controls to stop fraud and abuse in the Part D program. The agency is implementing additional controls on the use of prescriber identifiers submitted with Part D claims and has proposed to further strengthen the requirement in 2013. CMS has also considered enhanced drug utilization tools and has engaged Part D sponsors to identify other approaches for appropriately identifying and controlling overutilization of pain medications.
These actions are designed to be transparent to the Medicare beneficiary and should not stop anyone from receiving the medications they need to maintain their health.
These efforts build on significant progress already made by the Obama Administration to fight fraud across the health care sector – progress that has been sped up by resources from the Affordable Care Act, the health care law of 2010. This progress has contributed to the 167 percent increase in fraud recoveries since 2008.
Tough New Rules and Sentences for Criminals
The Affordable Care Act increases the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses, establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture any funds acquired through fraudulent practices. The law also makes it easier for the Department of Justice to investigate potential fraud or wrongdoing at facilities like nursing homes.
New Resources to Fight Fraud
The Affordable Care Act provides an additional $350 million over 10 years to ramp up anti-fraud efforts, including increasing scrutiny of claims before they have been paid, investments in sophisticated data analytics, and more “feet on the street” law enforcement agents and others to fight fraud in the health care system.
These efforts build on our recently awarded predictive modeling contract under which CMS is using the kind of technology used by credit card companies to stop fraud. Since June 30th of this year, CMS has been using this technology to help identify potentially fraudulent Medicare claims and uncover fraudulent providers and suppliers, flagging both for investigation and for referrals to law enforcement. This new tool allows CMS for the first time to spot suspect claims and take action to stop fraudulent payments before they are paid.
Better Coordination across Government
Many of the Affordable Care Act provisions increase coordination between states, CMS, and its law enforcement partners at the Office of the Inspector General and the Department of Justice.
• The law deters fraudulent providers and suppliers from moving from State to State or between Medicare and Medicaid by requiring all states to terminate anyone who has been terminated by Medicare or by another State.
• Under the Affordable Care Act, CMS must work hand-in-hand with the Office of the Inspector General on suspending payments to suspect providers. CMS is also helping to provide the Office of the Inspector General and the Department of Justice improved real-time data access to enable investigators and law enforcement agents to more quickly detect and prosecute fraud schemes.
• In addition, the Senior Medicare Patrol program, led by the Administration on Aging, empowers seniors to identify and fight fraud through increased awareness and understanding of Federal health care programs. Since the program’s inception, the program has educated over 4 million beneficiaries in group or one-on-one counseling sessions and has reached almost 25 million people through community education outreach events.
Sharing Data across Government
Building on the Obama Administration initiatives to improve coordination across the agencies charged with stopping fraud, the Affordable Care Act requires certain claims data from Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), the Veterans Administration, the Department of Defense, the Social Security Disability Insurance program, and the Indian Health Service to be centralized, making it easier for agency and law enforcement officials to identify criminals and prevent fraud on a system-wide basis. The health care law, and new initiatives like the interagency Health Care Fraud Prevention and Enforcement Action Team (HEAT) Task Force between DOJ and HHS, have already improved access to data for law enforcement. DOJ and OIG continue to benefit from improved access to Medicare data to help identify criminals and fight fraud while protecting patient privacy.
Enhanced Penalties to Deter Fraud and Abuse
The Affordable Care Act provides the Department of Health and Human Services’ Office of the Inspector General (OIG) with the authority to impose stronger civil and monetary penalties on those found to have committed fraud. The Secretary also is provided new authority to prevent problematic providers from participating in Medicare, Medicaid or CHIP. Under the new law:
• Providers and suppliers who lie on their application to enroll in Medicare, Medicaid, or CHIP may be excluded from the programs;
• Providers who identify an overpayment from Medicare or Medicaid but do not return it within 60 days may be subject to new fines and penalties; and
• Providers who are terminated from Medicare, a State’s Medicaid program, or both will be terminated from Medicaid programs in other states.
Enhanced Screening and Other Enrollment Requirements
On January 24, 2011, CMS announced some of the Affordable Care Act’s most powerful new fraud prevention tools, including new screening requirements for all Medicare, Medicaid, and CHIP providers and suppliers. These new rules require all providers to go through licensure checks and subject those who pose higher levels of risk to undergo site visits and in some cases, FBI criminal background checks before being allowed to bill the Medicare program.
One of the most powerful new tools is the new authority to suspend Medicare payments to providers or suppliers while investigating a credible allegation of fraud. The new rules also give the Secretary new authority to impose a temporary moratorium on newly enrolling providers or suppliers in certain geographic areas to prevent or combat waste, fraud and abuse. These new tools are also available to states to enhance their program integrity efforts in the Medicaid program and CHIP. Already, revocations, payment suspensions and enrollment denials have taken place as a result of this increased scrutiny.
Targeting High Risk Entities
The Affordable Care Act also imposes more stringent payment and enrollment requirements to target high risk items and entities. On November 17, 2010, CMS published final rules requiring a face-to-face meeting for Medicare home health and Medicare hospice. On July 12, 2011, CMS published a proposal to expand the face-to-face requirement to Medicaid. CMS also issued a final rule on May 5, 2010 to require providers and suppliers who order and refer certain items or services for Medicare beneficiaries to enroll in Medicare and maintain documentation on those orders and referrals.
New Focus on Compliance and Prevention
Under the new law, providers and suppliers must establish compliance programs ensuring they are aware of anti-fraud requirements and good governance practices and have incorporated these into their operations. Nursing homes are also subject to new compliance and ethics plan requirements. Other preventive measures focus on certain categories of providers and suppliers that historically have presented concerns, including Home Health agencies, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies suppliers, and Community Mental Health Centers.
Raising the Bar on DME Suppliers through Expanded Competitive Bidding and Prior Authorization
As part of competitive bidding, CMS is implementing new stricter requirements for DME suppliers, which have historically presented a high risk of fraud. Last month, CMS announced that it is expanding the DME Competitive Bidding program to an additional 91 areas of the country, including 21 areas that are the result of an expansion of DME competitive bidding under the Affordable Care Act. By 2013, the program will cover 100 areas of the country, and over 18 million Medicare fee-for-service beneficiaries living in these areas can save money through this new program, while continuing to have access to quality medical equipment from accredited suppliers they can trust. The program is anticipated to save the Medicare program and beneficiaries approximately $28 billion over the next ten years. This includes more than $17 billion in savings for Medicare, and over $11 billion for beneficiaries as a result of lower coinsurance and premium payments.
In addition, under a demonstration announced in November, Medicare will implement a prior authorization process for all power mobility device claims in 7 high risk states, guaranteeing that beneficiaries receive access to the services they need but preventing payment in cases where medical need is not established. This will make it more difficult to get fraudulent claims through Medicare’s claims payment systems.
CMS announces first results for program to improve care for dialysis patients
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
MEDICARE NEWS
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
Dec. 15, 2011 (202) 690-6145
CMS announces first results for program to improve care for dialysis patients
The Centers for Medicare & Medicaid Services (CMS) today released the first results for a new Federal pay-for-performance or “value-based purchasing” program for dialysis facilities that is designed to give facilities payment incentives to improve the quality of care furnished to patients diagnosed with End-stage Renal Disease (ESRD). Nearly 70 percent of dialysis facilities that were evaluated under the program will receive no payment reduction in payment year (PY) 2012, while the remaining 30 percent will receive reductions ranging from 0.5 percent to 2.0 percent depending on their final performance scores.
The ESRD Quality Incentive Program (QIP) evaluates dialysis facility performance on a set of quality measures which reflect key areas of dialysis care. Facilities that fail to meet the QIP performance standards during a performance year received a reduction in their payment rates for dialysis services under the ESRD Prospective Payment System (PPS) in the upcoming year.
Authorized by the Medicare Improvements for Patients and Providers Act of 2008, the ESRD QIP enables Medicare to pay dialysis facilities based on the quality of care provided to Medicare patients with ESRD, rather than simply based on the amount of care provided. This release includes quality data that reflects the performance of dialysis facilities in 2010 and is designed to complement existing CMS initiatives that seek to incentivize improved clinical outcomes by measuring the quality of care provided to Medicare patients on dialysis.
“The real purpose of value-based purchasing is to raise the bar on quality and that’s exactly what CMS is aiming to do for Medicare patients who have ESRD,” said CMS Acting Administrator Marilyn Tavenner. “This is one of many efforts CMS is making to drive quality improvement in all settings in communities across the country.”
For the PY 2012 program, CMS assessed a facility’s performance during 2010 on a total of three quality measures: two measures of anemia management and one of dialysis adequacy:
• Percentage of Medicare patients with an average hemoglobin less than 10 grams per deciliter (g/dL) (low percentage desired)
• Percentage of Medicare patients with an average hemoglobin greater than 12 g/dL (low percentage desired)
• Percentage of Medicare patients with an average Urea Reduction Ratio (URR) of at least 65 percent (high percentage desired)
For the first year of the ESRD QIP, the performance of each facility on each measure in 2010 was assessed against the lesser of the performance “norm” for dialysis facilities across the country during 2008 or the facility’s own performance during 2007.
Facilities that fail to meet the performance standards will receive a Medicare payment reduction of up to 2 percent during 2012. Medicare patients, as well as their families and caregivers, will benefit from this program and will have access to the performance results through public reporting.
For the PY 2012 ESRD QIP, 4,939 facilities were assessed and received a Total Performance Score, which determines if the facility met the requirements under the program and can avoid receiving a payment reduction. Of these facilities, over two-thirds (69.1 percent) will receive no payment reduction as a result of achieving a high enough Total Performance Score, which for 2012 is 26 out of 30 points.
The payment reductions for the remaining facilities are as follows:
• 16.6 percent will receive a 0.5 percent reduction
• 6.0 percent will receive a 1.0 percent reduction
• 7.7 percent will receive a 1.5 percent reduction
• 0.6 percent will receive a 2.0 percent reduction
An additional 625 facilities (11.2 percent of all facilities) did not receive a Total Performance Score due to insufficient data. These facilities will not receive a payment reduction.
Each dialysis facility is required to post a certificate displaying its performance on the ESRD QIP measures in a prominent location accessible to the public. In addition, performance information will be posted on the Dialysis Facility Compare website (link below). CMS encourages Medicare beneficiaries to discuss these results with their dialysis care team and hopes that this information will help these patients to make informed decisions about their care.
“The ESRD QIP program’s overarching goal is the continual improvement of dialysis care provided to Medicare beneficiaries nationwide to drive better outcomes,” said Patrick Conway, M.D., Chief Medical Officer and Director of the CMS Office of Clinical Standards and Quality. “The ESRD QIP will evolve over time to include additional measures that promote high quality of care and outcomes for Medicare beneficiaries.”
The data for the PY 2012 ESRD QIP can be found at: https://www.cms.gov/center/esrd.asp.
# # #
CMS FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
Dec. 15, 2011 (202) 690-6145
Medicare releases data about first year of End-stage Renal Disease Quality Incentive Program (ESRD QIP)
OVERVIEW
The Centers for Medicare & Medicaid Services (CMS) released data on Dec. 15, 2011, that reflects the performance of dialysis facilities in the United States under the Payment Year (PY) 2012 End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP). Under the QIP, payments to dialysis facilities are reduced if they do not achieve a high enough total performance score based on their performance on measures that assess the quality of dialysis care. The ESRD QIP was mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).
BACKGROUND
Over the past 35 years, CMS has instituted a series of quality initiatives to improve dialysis care. The ESRD QIP builds upon and enhances CMS’ commitment to improve quality by allowing CMS for the first time to tie payments to dialysis facilities to their performance on quality measures. The QIP is designed to improve patient outcomes by establishing payment incentives for dialysis facilities to meet performance standards established by CMS.
By law, the QIP must include measures of dialysis adequacy and anemia management. These measures were incorporated for the payment year (PY) 2012 program. Low facility performance on those measures could affect payments for services furnished by these facilities beginning on Jan. 1, 2012. CMS finalized in a recent rule the adoption of measures (including some of these measures) for the PY 2013 and PY 2014 ESRD QIP.
DETERMINING FACILITY PERFORMANCE UNDER THE QIP
For the ESRD QIP, CMS evaluates dialysis facility performance on a set of quality measures which reflect key areas of dialysis care. For the PY 2012 program, CMS assessed a facility’s performance during the 2010 performance period on a total of three measures, two measures of anemia management and one of dialysis adequacy, described below:
• Percentage of Medicare patients with an average hemoglobin less than 10 grams per deciliter (g/dL) (low percentage desired)
• Percentage of Medicare patients with an average hemoglobin greater than 12 g/dL (low percentage desired)
• Percentage of Medicare patients with an average Urea Reduction Ratio (URR) of at least 65 percent (high percentage desired)
For the first year of ESRD QIP, the facility’s performance on these measures was assessed against the lesser of the performance “norms” for dialysis facilities across the country in 2008 or the facility’s own performance in 2007. Facilities that fail to achieve a high enough total performance score will receive a payment reduction of up to 2 percent during 2012. The intent of these reductions is to provide an incentive for facilities to work to improve the care they provide to Medicare patients who have ESRD.
ESRD QIP RESULTS
For the PY 2012 ESRD QIP, 4,939 facilities were assessed and received a Total Performance Score, which determines if the facility will receive a payment reduction in 2012. Of these facilities:
• 69.1 percent will receive no payment reduction
• 16.6 percent will receive a 0.5 percent reduction
• 6.0 percent will receive a 1.0 percent reduction
• 7.7 percent will receive a 1.5 percent reduction
• 0.6 percent will receive a 2.0 percent reduction
An additional 625 facilities (11.2 percent of all facilities) did not receive a score due to insufficient data. These facilities did not have an adequate number of patients who met the clinical characteristics for their care to be captured by the QIP measures. As such, CMS did not have enough data about the care delivered at these facilities to be able to make an accurate measurement of care quality. These facilities will not receive a payment reduction.
ESRD QIP TRANSPARENCY PROVISIONS
Each dialysis facility is required to post a certificate displaying its performance on the ESRD QIP in a prominent location accessible to the public. In addition, performance information will be posted on the Dialysis Facility Compare website (link below). CMS encourages Medicare patients to discuss these results with their dialysis care team and hopes that this information will help these patients to make informed decisions about their care.
The ESRD QIP supports the importance of a meaningful relationship between clinicians, caregivers, and Medicare patients with ESRD. As a result of the ESRD QIP, Medicare patients might notice a change at their facility, such as staff seeking better ways to do their jobs safely and efficiently. However, the ESRD QIP will not affect Medicare patient rights, such as the power of a patient to decide how and where to be treated. Medicare patients should also expect that dialysis facilities will continue to respect their rights and address their concerns. For more information about resources for Medicare patients with ESRD, please visit Medicare’s Dialysis Facility Compare website at http://www.medicare.gov/dialysis.
For more information about the ESRD QIP, please see: http://www.cms.gov/esrdqualityimproveinit/.
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs
MEDICARE NEWS
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
Dec. 15, 2011 (202) 690-6145
CMS announces first results for program to improve care for dialysis patients
The Centers for Medicare & Medicaid Services (CMS) today released the first results for a new Federal pay-for-performance or “value-based purchasing” program for dialysis facilities that is designed to give facilities payment incentives to improve the quality of care furnished to patients diagnosed with End-stage Renal Disease (ESRD). Nearly 70 percent of dialysis facilities that were evaluated under the program will receive no payment reduction in payment year (PY) 2012, while the remaining 30 percent will receive reductions ranging from 0.5 percent to 2.0 percent depending on their final performance scores.
The ESRD Quality Incentive Program (QIP) evaluates dialysis facility performance on a set of quality measures which reflect key areas of dialysis care. Facilities that fail to meet the QIP performance standards during a performance year received a reduction in their payment rates for dialysis services under the ESRD Prospective Payment System (PPS) in the upcoming year.
Authorized by the Medicare Improvements for Patients and Providers Act of 2008, the ESRD QIP enables Medicare to pay dialysis facilities based on the quality of care provided to Medicare patients with ESRD, rather than simply based on the amount of care provided. This release includes quality data that reflects the performance of dialysis facilities in 2010 and is designed to complement existing CMS initiatives that seek to incentivize improved clinical outcomes by measuring the quality of care provided to Medicare patients on dialysis.
“The real purpose of value-based purchasing is to raise the bar on quality and that’s exactly what CMS is aiming to do for Medicare patients who have ESRD,” said CMS Acting Administrator Marilyn Tavenner. “This is one of many efforts CMS is making to drive quality improvement in all settings in communities across the country.”
For the PY 2012 program, CMS assessed a facility’s performance during 2010 on a total of three quality measures: two measures of anemia management and one of dialysis adequacy:
• Percentage of Medicare patients with an average hemoglobin less than 10 grams per deciliter (g/dL) (low percentage desired)
• Percentage of Medicare patients with an average hemoglobin greater than 12 g/dL (low percentage desired)
• Percentage of Medicare patients with an average Urea Reduction Ratio (URR) of at least 65 percent (high percentage desired)
For the first year of the ESRD QIP, the performance of each facility on each measure in 2010 was assessed against the lesser of the performance “norm” for dialysis facilities across the country during 2008 or the facility’s own performance during 2007.
Facilities that fail to meet the performance standards will receive a Medicare payment reduction of up to 2 percent during 2012. Medicare patients, as well as their families and caregivers, will benefit from this program and will have access to the performance results through public reporting.
For the PY 2012 ESRD QIP, 4,939 facilities were assessed and received a Total Performance Score, which determines if the facility met the requirements under the program and can avoid receiving a payment reduction. Of these facilities, over two-thirds (69.1 percent) will receive no payment reduction as a result of achieving a high enough Total Performance Score, which for 2012 is 26 out of 30 points.
The payment reductions for the remaining facilities are as follows:
• 16.6 percent will receive a 0.5 percent reduction
• 6.0 percent will receive a 1.0 percent reduction
• 7.7 percent will receive a 1.5 percent reduction
• 0.6 percent will receive a 2.0 percent reduction
An additional 625 facilities (11.2 percent of all facilities) did not receive a Total Performance Score due to insufficient data. These facilities will not receive a payment reduction.
Each dialysis facility is required to post a certificate displaying its performance on the ESRD QIP measures in a prominent location accessible to the public. In addition, performance information will be posted on the Dialysis Facility Compare website (link below). CMS encourages Medicare beneficiaries to discuss these results with their dialysis care team and hopes that this information will help these patients to make informed decisions about their care.
“The ESRD QIP program’s overarching goal is the continual improvement of dialysis care provided to Medicare beneficiaries nationwide to drive better outcomes,” said Patrick Conway, M.D., Chief Medical Officer and Director of the CMS Office of Clinical Standards and Quality. “The ESRD QIP will evolve over time to include additional measures that promote high quality of care and outcomes for Medicare beneficiaries.”
The data for the PY 2012 ESRD QIP can be found at: https://www.cms.gov/center/esrd.asp.
# # #
CMS FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
Dec. 15, 2011 (202) 690-6145
Medicare releases data about first year of End-stage Renal Disease Quality Incentive Program (ESRD QIP)
OVERVIEW
The Centers for Medicare & Medicaid Services (CMS) released data on Dec. 15, 2011, that reflects the performance of dialysis facilities in the United States under the Payment Year (PY) 2012 End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP). Under the QIP, payments to dialysis facilities are reduced if they do not achieve a high enough total performance score based on their performance on measures that assess the quality of dialysis care. The ESRD QIP was mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).
BACKGROUND
Over the past 35 years, CMS has instituted a series of quality initiatives to improve dialysis care. The ESRD QIP builds upon and enhances CMS’ commitment to improve quality by allowing CMS for the first time to tie payments to dialysis facilities to their performance on quality measures. The QIP is designed to improve patient outcomes by establishing payment incentives for dialysis facilities to meet performance standards established by CMS.
By law, the QIP must include measures of dialysis adequacy and anemia management. These measures were incorporated for the payment year (PY) 2012 program. Low facility performance on those measures could affect payments for services furnished by these facilities beginning on Jan. 1, 2012. CMS finalized in a recent rule the adoption of measures (including some of these measures) for the PY 2013 and PY 2014 ESRD QIP.
DETERMINING FACILITY PERFORMANCE UNDER THE QIP
For the ESRD QIP, CMS evaluates dialysis facility performance on a set of quality measures which reflect key areas of dialysis care. For the PY 2012 program, CMS assessed a facility’s performance during the 2010 performance period on a total of three measures, two measures of anemia management and one of dialysis adequacy, described below:
• Percentage of Medicare patients with an average hemoglobin less than 10 grams per deciliter (g/dL) (low percentage desired)
• Percentage of Medicare patients with an average hemoglobin greater than 12 g/dL (low percentage desired)
• Percentage of Medicare patients with an average Urea Reduction Ratio (URR) of at least 65 percent (high percentage desired)
For the first year of ESRD QIP, the facility’s performance on these measures was assessed against the lesser of the performance “norms” for dialysis facilities across the country in 2008 or the facility’s own performance in 2007. Facilities that fail to achieve a high enough total performance score will receive a payment reduction of up to 2 percent during 2012. The intent of these reductions is to provide an incentive for facilities to work to improve the care they provide to Medicare patients who have ESRD.
ESRD QIP RESULTS
For the PY 2012 ESRD QIP, 4,939 facilities were assessed and received a Total Performance Score, which determines if the facility will receive a payment reduction in 2012. Of these facilities:
• 69.1 percent will receive no payment reduction
• 16.6 percent will receive a 0.5 percent reduction
• 6.0 percent will receive a 1.0 percent reduction
• 7.7 percent will receive a 1.5 percent reduction
• 0.6 percent will receive a 2.0 percent reduction
An additional 625 facilities (11.2 percent of all facilities) did not receive a score due to insufficient data. These facilities did not have an adequate number of patients who met the clinical characteristics for their care to be captured by the QIP measures. As such, CMS did not have enough data about the care delivered at these facilities to be able to make an accurate measurement of care quality. These facilities will not receive a payment reduction.
ESRD QIP TRANSPARENCY PROVISIONS
Each dialysis facility is required to post a certificate displaying its performance on the ESRD QIP in a prominent location accessible to the public. In addition, performance information will be posted on the Dialysis Facility Compare website (link below). CMS encourages Medicare patients to discuss these results with their dialysis care team and hopes that this information will help these patients to make informed decisions about their care.
The ESRD QIP supports the importance of a meaningful relationship between clinicians, caregivers, and Medicare patients with ESRD. As a result of the ESRD QIP, Medicare patients might notice a change at their facility, such as staff seeking better ways to do their jobs safely and efficiently. However, the ESRD QIP will not affect Medicare patient rights, such as the power of a patient to decide how and where to be treated. Medicare patients should also expect that dialysis facilities will continue to respect their rights and address their concerns. For more information about resources for Medicare patients with ESRD, please visit Medicare’s Dialysis Facility Compare website at http://www.medicare.gov/dialysis.
For more information about the ESRD QIP, please see: http://www.cms.gov/esrdqualityimproveinit/.
Medicare General Enrollment Begins January 2nd
An Opportunity for Some Individuals and States to Expand QMB Coverage
The 2012 Medicare Part A and B general enrollment period runs from January 2nd through March 31, 2012. Medicare Part A enrollment (to purchase Part A – for those who are not entitled to receive it premium free) has become particularly important for low-income older people. In addition to the important benefits covered under this component of Medicare (primarily hospital, skilled nursing facility and some home health coverage), Part A entitlement triggers eligibility for assistance with Medicare cost-sharing expenses for certain low-income people. The assistance comprises payment of all Medicare Part A and Part B premiums and cost-sharing and nearly all of Part D premiums and cost-sharing. This assistance is available, directly and indirectly, through the Qualified Medicare Beneficiary (QMB) program.
Attention advocates for residents of the following states: Alabama, Arizona, California, Colorado, Illinois, Kansas, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, South Carolina, Utah and Virginia. According to the Centers for Medicare & Medicaid Services (CMS), your state does not have a Medicare Part A Buy-In Agreement that allows individuals to enroll in Medicare Part A at any time during the year to become eligible for help with Medicare cost-sharing under the Qualified Medicare Beneficiary (QMB) program.
If your (potentially QMB-eligible) clients do not currently have Medicare Part A, they must enroll in Part A (and in Part B, if they do not already have Part B) before March 31, 2012 to be entitled to QMB benefits in 2012. QMB, in turn, will entitle them to the full Part D Low-Income Subsidy (LIS). For those who cannot afford the Part A premium, a conditional application process, described below, is available to protect them from financial liability.
What is QMB?
Eligibility - Under the QMB program, states pay all Medicare premiums, deductibles and co-insurance for aged and disabled people with countable incomes below 100% of Federal Poverty Levels (FPL) and with countable resources below $6,940 for an individual and $10,410 for a couple. (Some states allow larger amounts of resources or have no resource limit at all. Check your state's rules.) The current income eligibility limit for QMBs in the 48 contiguous states and the District of Columbia is $927.50 per month for an individual and $1,245.83 per month for a couple (amounts are higher for Alaska and Hawaii). This amount includes a universal $20 income disregard. The monthly income eligibility changes each year after the publication of annual income poverty guidelines; thus these amounts are likely to change early in 2012.
Benefits - QMB benefits for 2012 include payment of $1,198.80 in Part B premiums, the hospital deductible of $1,156 per spell of illness (note some beneficiaries may incur more than one Part A hospital deductible in a year, depending on whether subsequent hospital admissions during the year constitute a new spell of illness), $144.50/day co-payment for skilled nursing facility services after the 20th day, the Part B annual deductible of $140, as well as the 20% co-insurance on most Part B services. For those without premium-free Part A, they also include payment of between $2,976 and $5,412 in Part A premiums (depending on the individual's earnings record in the Social Security system). The full Medicare Part D low-income subsidy is also available through QMB; it is estimated by the Social Security Administration (SSA) to have an average value of about $4,000 for 2012.
Connection to Medicare Part A – Eligibility for the QMB program is dependent upon an individual's entitlement to Part A Medicare benefits. Most Medicare beneficiaries receive Part A benefits without payment of a premium as a result of having participated in Medicare-covered employment. People age 65 and over who are not so entitled but who elect to purchase Part B coverage (or for whom Part B premiums are paid by the State Medicaid program) may also purchase Part A, but it is very expensive - $451/month for those with 29 or fewer quarters of Social Security coverage and $248/month for those with 30-39 quarters. The full payment is nearly 50% of the monthly income of one who is financially eligible for the QMB program.
Procedure for Purchasing Part A
Typically, after their Initial Enrollment Period, individuals are entitled to enroll in Part A or Part B only during the Medicare General Enrollment Period that runs from January 2 through March 31 of each year. Eligibility begins July 1 of the same year for those enrolling during the General Enrollment Period. Except in special circumstances, a financial penalty of 10% increase in the monthly premium is assessed for enrollment after the Initial Enrollment Period. The penalty is assessed for a finite number of months.
Conditional Part A Application Process for Potential QMB Participants
A "conditional application" process has been created to address the dilemma of people who wish to enroll in Part A and to participate in QMB, but who cannot afford to pay the Part A premium. Under conditional enrollment, the individual is considered to be enrolled in Part A for QMB purposes, but if s/he is found not eligible for QMB, the Part A enrollment is dropped so that s/he is not personally liable for the premium. Benficiaries in this situation should call both their local Social Security office and state Medicaid agency to learn specifics of how the process works in a given state. Information on Social Security's role in conditional enrollment is available at http://www.ssa.gov/regulations/. Click on Program Operations Manual System (POMS), then on Table of Contents, then on HI and look for HI 00801.137 and HI 00801.140.
Even if unable to get a clear answer, one might pursue such enrollment as follows:
Secure a Form 795 from the Social Security Administration (SSA) (available online at www.ssa.gov/online/ssa-795.pdf) and type into the large blank (lined) space the following: "I wish to enroll for Hospital Insurance under Medicare on a monthly premium basis, which is in addition to my current coverage for Medical Insurance (or "I also wish to apply for Medical Insurance" if the client does not have Part B). I understand that the State will pay my premium based on my eligibility for Medicaid (Medical Assistance) as a Qualified Medicare Beneficiary. I also understand that if I am terminated under Medicaid (Medical Assistance) as a Qualified Medicare Beneficiary, I will have to pay my premium if I want to keep my Medicare Hospital Insurance." The beneficiary should give the form to SSA with her/his application for Part A, but also make a copy for her/himself to take to the Medicaid agency to apply for QMB benefits.
Part A Buy-in States/Group Payer States
States are authorized by the Social Security Act to enter into formal "buy-in" agreements with CMS to pay Medicare premiums for low-income beneficiaries. One benefit of having such an agreement is that individuals can be enrolled in Part A (and subsequently in the QMB program) at any time during the year and penalties that are otherwise assessed for late enrollment are waived. Most states have such agreements; they are called Part A Buy-in States.
Individuals without Part A who are otherwise eligible for QMB benefits and reside in the states named at the beginning of this Alert are, unfortunately, penalized by the fact that these states have no buy-in agreement. These states are called Group Payer States. Opportunities for program participation by beneficiaries in Group Payer States are more circumscribed than those of individuals in Part A Buy-in States.
Individuals in Group Payer States who did not enroll in Part A when they were first eligible to do so can only enroll in Part A during the General Enrollment period described above. This period will end on March 31st for 2012. Individuals who do not enroll in Part A by March 31, 2012 will have to wait until January 2013 to do so; their QMB eligibility will be postponed until July 1, 2013 at the absolute earliest.
Beneficiaries who believe they have been given erroneous information by SSA concerning Medicare Part A, such as not being told of the possibility of conditional enrollment, may be able to have their enrollment date moved back by seeking equitable relief from the agency. See HI 00830.005 of the POMS for more detail.
The conditional enrollment process described above may apply even in Part A Buy-in States, but the process can be used at any time, not just during the General Enrollment period. It is only applicable if the individual must also enroll in Part B. See SSA Program Operations Manual System HI 00801.140. See also EM 08071 https://secure.ssa.gov/apps10/public/reference.nsf/links/08112008035226PM, which instructs District Offices on how to process an enrollment outside the General Enrollment Period.
Consequences of Failure to Enroll in Part A
The possible consequences of not obtaining Medicare Part A coverage increased in 2006 with the advent of Medicare Part D. As noted earlier, QMB status entitles the beneficiary to automatic qualification for the Medicare Part D full Low-Income Subsidy (LIS) to help pay for prescription drugs. This significant subsidy requires minimal co-payments, no premium or deductible and no donut hole coverage gap. In addition, under the Part D program, coverage is not available for drugs covered by Parts A or B, even if the particular beneficiary needing such drugs does not have Parts A or B. (Note that QMB is not the only path to the Part D Low Income Subsidy; anyone can apply directly to the Social Security Administration for that benefit.)
Conclusion
The processes described in this Alert are not necessarily easy to use. Advocates from both Group Payer States and Part A Buy-in States report difficulties in finding state and SSA personnel who are actually familiar with conditional enrollment. Clients, too, may be skeptical of taking this action, especially if agency personnel cannot reassure them they will not be billed. In addition, individuals without Part B must also enroll in Part B in order to enroll in Part A. There is no conditional enrollment for Part B, so the individual may be concerned about having to pay Part B premiums, even though the QMB benefit will cover those once it is in place. Regulations direct that Part B becomes effective when QMB becomes effective, so there should be no personal financial liability.
The Center for Medicare Advocacy is interested in the myriad challenges of QMB enrollment and would appreciate hearing from advocates about their experiences with SSA and their state Medicaid agencies relating to it.
In the meantime, advocates wishing to create an information piece for beneficiaries might want to look at the example, created by Legal Services of Eastern Missouri, which we have posted at http://140.174.89.214/news/WeeklyAlerts/AlertPDFs/2006/06_12.28.TipSheet.pdf. Please note that this document has 2007 information as well as information specific to Missouri; it must be carefully updated and adapted to meet your needs. If your organization has created a similar flier, with more up to date information, we would be delighted to have a copy to post on our website.
For more information, contact attorney Patricia Nemore (pnemore @ medicareadvocacy.org) in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.
The 2012 Medicare Part A and B general enrollment period runs from January 2nd through March 31, 2012. Medicare Part A enrollment (to purchase Part A – for those who are not entitled to receive it premium free) has become particularly important for low-income older people. In addition to the important benefits covered under this component of Medicare (primarily hospital, skilled nursing facility and some home health coverage), Part A entitlement triggers eligibility for assistance with Medicare cost-sharing expenses for certain low-income people. The assistance comprises payment of all Medicare Part A and Part B premiums and cost-sharing and nearly all of Part D premiums and cost-sharing. This assistance is available, directly and indirectly, through the Qualified Medicare Beneficiary (QMB) program.
Attention advocates for residents of the following states: Alabama, Arizona, California, Colorado, Illinois, Kansas, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, South Carolina, Utah and Virginia. According to the Centers for Medicare & Medicaid Services (CMS), your state does not have a Medicare Part A Buy-In Agreement that allows individuals to enroll in Medicare Part A at any time during the year to become eligible for help with Medicare cost-sharing under the Qualified Medicare Beneficiary (QMB) program.
If your (potentially QMB-eligible) clients do not currently have Medicare Part A, they must enroll in Part A (and in Part B, if they do not already have Part B) before March 31, 2012 to be entitled to QMB benefits in 2012. QMB, in turn, will entitle them to the full Part D Low-Income Subsidy (LIS). For those who cannot afford the Part A premium, a conditional application process, described below, is available to protect them from financial liability.
What is QMB?
Eligibility - Under the QMB program, states pay all Medicare premiums, deductibles and co-insurance for aged and disabled people with countable incomes below 100% of Federal Poverty Levels (FPL) and with countable resources below $6,940 for an individual and $10,410 for a couple. (Some states allow larger amounts of resources or have no resource limit at all. Check your state's rules.) The current income eligibility limit for QMBs in the 48 contiguous states and the District of Columbia is $927.50 per month for an individual and $1,245.83 per month for a couple (amounts are higher for Alaska and Hawaii). This amount includes a universal $20 income disregard. The monthly income eligibility changes each year after the publication of annual income poverty guidelines; thus these amounts are likely to change early in 2012.
Benefits - QMB benefits for 2012 include payment of $1,198.80 in Part B premiums, the hospital deductible of $1,156 per spell of illness (note some beneficiaries may incur more than one Part A hospital deductible in a year, depending on whether subsequent hospital admissions during the year constitute a new spell of illness), $144.50/day co-payment for skilled nursing facility services after the 20th day, the Part B annual deductible of $140, as well as the 20% co-insurance on most Part B services. For those without premium-free Part A, they also include payment of between $2,976 and $5,412 in Part A premiums (depending on the individual's earnings record in the Social Security system). The full Medicare Part D low-income subsidy is also available through QMB; it is estimated by the Social Security Administration (SSA) to have an average value of about $4,000 for 2012.
Connection to Medicare Part A – Eligibility for the QMB program is dependent upon an individual's entitlement to Part A Medicare benefits. Most Medicare beneficiaries receive Part A benefits without payment of a premium as a result of having participated in Medicare-covered employment. People age 65 and over who are not so entitled but who elect to purchase Part B coverage (or for whom Part B premiums are paid by the State Medicaid program) may also purchase Part A, but it is very expensive - $451/month for those with 29 or fewer quarters of Social Security coverage and $248/month for those with 30-39 quarters. The full payment is nearly 50% of the monthly income of one who is financially eligible for the QMB program.
Procedure for Purchasing Part A
Typically, after their Initial Enrollment Period, individuals are entitled to enroll in Part A or Part B only during the Medicare General Enrollment Period that runs from January 2 through March 31 of each year. Eligibility begins July 1 of the same year for those enrolling during the General Enrollment Period. Except in special circumstances, a financial penalty of 10% increase in the monthly premium is assessed for enrollment after the Initial Enrollment Period. The penalty is assessed for a finite number of months.
Conditional Part A Application Process for Potential QMB Participants
A "conditional application" process has been created to address the dilemma of people who wish to enroll in Part A and to participate in QMB, but who cannot afford to pay the Part A premium. Under conditional enrollment, the individual is considered to be enrolled in Part A for QMB purposes, but if s/he is found not eligible for QMB, the Part A enrollment is dropped so that s/he is not personally liable for the premium. Benficiaries in this situation should call both their local Social Security office and state Medicaid agency to learn specifics of how the process works in a given state. Information on Social Security's role in conditional enrollment is available at http://www.ssa.gov/regulations/. Click on Program Operations Manual System (POMS), then on Table of Contents, then on HI and look for HI 00801.137 and HI 00801.140.
Even if unable to get a clear answer, one might pursue such enrollment as follows:
Secure a Form 795 from the Social Security Administration (SSA) (available online at www.ssa.gov/online/ssa-795.pdf) and type into the large blank (lined) space the following: "I wish to enroll for Hospital Insurance under Medicare on a monthly premium basis, which is in addition to my current coverage for Medical Insurance (or "I also wish to apply for Medical Insurance" if the client does not have Part B). I understand that the State will pay my premium based on my eligibility for Medicaid (Medical Assistance) as a Qualified Medicare Beneficiary. I also understand that if I am terminated under Medicaid (Medical Assistance) as a Qualified Medicare Beneficiary, I will have to pay my premium if I want to keep my Medicare Hospital Insurance." The beneficiary should give the form to SSA with her/his application for Part A, but also make a copy for her/himself to take to the Medicaid agency to apply for QMB benefits.
Part A Buy-in States/Group Payer States
States are authorized by the Social Security Act to enter into formal "buy-in" agreements with CMS to pay Medicare premiums for low-income beneficiaries. One benefit of having such an agreement is that individuals can be enrolled in Part A (and subsequently in the QMB program) at any time during the year and penalties that are otherwise assessed for late enrollment are waived. Most states have such agreements; they are called Part A Buy-in States.
Individuals without Part A who are otherwise eligible for QMB benefits and reside in the states named at the beginning of this Alert are, unfortunately, penalized by the fact that these states have no buy-in agreement. These states are called Group Payer States. Opportunities for program participation by beneficiaries in Group Payer States are more circumscribed than those of individuals in Part A Buy-in States.
Individuals in Group Payer States who did not enroll in Part A when they were first eligible to do so can only enroll in Part A during the General Enrollment period described above. This period will end on March 31st for 2012. Individuals who do not enroll in Part A by March 31, 2012 will have to wait until January 2013 to do so; their QMB eligibility will be postponed until July 1, 2013 at the absolute earliest.
Beneficiaries who believe they have been given erroneous information by SSA concerning Medicare Part A, such as not being told of the possibility of conditional enrollment, may be able to have their enrollment date moved back by seeking equitable relief from the agency. See HI 00830.005 of the POMS for more detail.
The conditional enrollment process described above may apply even in Part A Buy-in States, but the process can be used at any time, not just during the General Enrollment period. It is only applicable if the individual must also enroll in Part B. See SSA Program Operations Manual System HI 00801.140. See also EM 08071 https://secure.ssa.gov/apps10/public/reference.nsf/links/08112008035226PM, which instructs District Offices on how to process an enrollment outside the General Enrollment Period.
Consequences of Failure to Enroll in Part A
The possible consequences of not obtaining Medicare Part A coverage increased in 2006 with the advent of Medicare Part D. As noted earlier, QMB status entitles the beneficiary to automatic qualification for the Medicare Part D full Low-Income Subsidy (LIS) to help pay for prescription drugs. This significant subsidy requires minimal co-payments, no premium or deductible and no donut hole coverage gap. In addition, under the Part D program, coverage is not available for drugs covered by Parts A or B, even if the particular beneficiary needing such drugs does not have Parts A or B. (Note that QMB is not the only path to the Part D Low Income Subsidy; anyone can apply directly to the Social Security Administration for that benefit.)
Conclusion
The processes described in this Alert are not necessarily easy to use. Advocates from both Group Payer States and Part A Buy-in States report difficulties in finding state and SSA personnel who are actually familiar with conditional enrollment. Clients, too, may be skeptical of taking this action, especially if agency personnel cannot reassure them they will not be billed. In addition, individuals without Part B must also enroll in Part B in order to enroll in Part A. There is no conditional enrollment for Part B, so the individual may be concerned about having to pay Part B premiums, even though the QMB benefit will cover those once it is in place. Regulations direct that Part B becomes effective when QMB becomes effective, so there should be no personal financial liability.
The Center for Medicare Advocacy is interested in the myriad challenges of QMB enrollment and would appreciate hearing from advocates about their experiences with SSA and their state Medicaid agencies relating to it.
In the meantime, advocates wishing to create an information piece for beneficiaries might want to look at the example, created by Legal Services of Eastern Missouri, which we have posted at http://140.174.89.214/news/WeeklyAlerts/AlertPDFs/2006/06_12.28.TipSheet.pdf. Please note that this document has 2007 information as well as information specific to Missouri; it must be carefully updated and adapted to meet your needs. If your organization has created a similar flier, with more up to date information, we would be delighted to have a copy to post on our website.
For more information, contact attorney Patricia Nemore (pnemore @ medicareadvocacy.org) in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.
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