Monday, October 31, 2011

CMS finalizes 2012 Medicare home health payment changes

Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs


For Immediate Release:                                                                     Contact:  CMS Office of Media Affairs
October 31, 2011                                                                                                    202-690-6145

CMS finalizes 2012 Medicare home health payment changes

The Centers for Medicare & Medicaid Services (CMS) today issued a final rule to update the Home Health Prospective Payment System (HH PPS) rates for Calendar Year (CY) 2012. Payments to home health agencies (HHAs) are estimated to decrease by approximately 2.31 percent or $430 million in CY 2012, the net effect of a 1.4 percent payment update, the wage index update, and the case-mix coding adjustment. 

This final rule reflects the ongoing efforts of CMS to support Medicare beneficiary access to home health services while continuing to improve payment accuracy.  

The Affordable Care Act applies a 1 percentage point reduction to the CY 2012 home health market basket amount.  As the CY 2012 market basket is equal to 2.4 percent, the payment update for HHAs in CY 2012 will be 1.4 percent. 
CMS also reduced HH PPS rates in CY 2012 to account for additional growth in aggregate case-mix that is unrelated to changes in patients’ health status.  CMS has finalized a 3.79 percent reduction to the home health PPS rates for CY 2012 and an additional 1.32 percent reduction for CY 2013. 

This rule also finalizes structural changes to the HH PPS by removing two hypertension codes from the case-mix system, lowering payments for high therapy episodes, and recalibrating the HH PPS case-mix weights to ensure that these changes result in the same amount of total aggregate payments.  These changes are intended to increase payment accuracy and reduce the growth in aggregate case-mix that is unrelated to changes in patients’ health status. 
Under current Medicare policy, a certifying physician or an allowed non-physician practitioner must see a patient prior to certifying a patient as eligible for the home health benefit.  The rule also finalizes added flexibility to allow physicians who cared for the patient in an acute or post-acute facility to inform the certifying physician of their encounters with the patient in order to satisfy the requirement.

Finally, this rule describes planned improvements to the home health publicly reported quality measures.   

To qualify for the Medicare home health benefit, a Medicare beneficiary must be under the care of a physician, have an intermittent need for skilled nursing care, or need physical or speech therapy, or continue to need occupational therapy. The beneficiary must be homebound and receive home health services from a Medicare approved home health agency.
Medicare pays HHAs through a system of prospective payments that pays at higher rates to care for those beneficiaries with greater needs.  Payment rates are based on relevant data from patient assessments conducted by clinicians as currently required for all Medicare-participating HHAs. 

Home health payment rates are updated annually by the home health market basket percentage increase.  CMS uses the home health market basket index, which measures (and tracks) inflation in the prices of an appropriate mix of goods and services included in home health services. 

Section 5201(c) of the Deficit Reduction Act (DRA) of 2005 provides for an adjustment to the home health market basket percentage update for CY 2007 and subsequent years depending on HHAs submission of quality data.  HHAs that submit the required quality data would receive payments based on a payment update of 1.4 percent for CY 2012.  If an HHA does not submit quality data, the home health market basket percentage increase is to be reduced by 2 percentage points, resulting in a payment update of -0.6 percent for CY 2012.

The final rule went on display at 4:15 pm today (10/31/2011) at the Federal Register.  The rule can be located at:  
More information about the Home Health Prospective Payment System can be located at:

Seniors: No, You Cannot Keep Your Plan, Even If You Like It

Both as a candidate and since taking office, President Obama has repeatedly promised that health care reform will have no downside for people who have health insurance and are satisfied with their plan, and in particular that Medicare for seniors will be protected. He famously said, “If you like your health care plan, you can keep your health care plan.” He has similarly promised to protect Medicare from cuts.
However, the health care reform law the President touted and signed into law does the exact opposite, on both counts. If you like your health plan, you most likely will not be able to keep it – especially if you’re on Medicare. And even if you are one of the lucky few who can keep your health plan, your benefits will be cut so much that it will only be the same plan in name.
The broken promise to America’s seniors comes about mainly through changes to the Medicare Advantage (MA) program. Medicare Advantage is the “private option” within Medicare in which private health insurers are paid a fixed monthly fee to provide at least the same minimum health benefits to their enrollees as “traditional” fee-for-service (FFS) Medicare. However, by delivering care more efficiently, most MA plans offer more benefits, often with lower co-pays and deductibles, and some provide a rebate on the normal Medicare Part B premium. Applicants for MA cannot be rejected, and they pay the same premium regardless of their age, sex, or pre-existing conditions. All Medicare beneficiaries have the right to select any MA plan offered in their area, and about 24 percent take advantage of this option – a percentage that has grown every year, and was projected to increase even further.
Regrettably, changes included in the so-called “Affordable Care Act” drastically cut payments to Medicare Advantage plans starting in 2013, driving many MA plans out of business, and forcing the surviving plans to slash benefits. According to a recent study I wrote with Michael Ramlet, these cuts will cause the beneficiaries in the average county (MA plans are offered on a county-level basis) to lose two-thirds of their MA plan choices by the time the new payment formula is fully phased in in 2017. Surviving MA plans will have to cut health care benefits, increase cost-sharing, or increase premiums (or some combination of these) to stay within the constraints imposed by the payment formula, making the program less beneficial to patients and thus further reducing enrollment.
From the beneficiaries’ perspective, the cuts reduce the level of access to health care services by reducing the value of the MA plans that survive the cuts, and by eliminating desired MA plans, which forces some patients into the FFS system that they otherwise would have rejected. Overall, 50% of beneficiaries (7.4 million people), who would have been in MA plans will transition to the fee-for-service plan which they otherwise would have rejected as insufficient for their needs, and which itself will be the subject of only slightly less drastic cuts. The average beneficiary – considering both those who stay in the stripped-down MA program, and those who transition out of it – will incur an average cut of more than $3,700 in benefits per year by 2017.
The decline in both plan offerings and in enrollment will vary substantially across the country. In Texas, for example, beneficiaries will face an average loss of more than three quarters of plan offerings per county by 2017. Similarly, Louisiana will experience an average county percentage loss of 84% of MA plans by 2017. Lesser impacts are observed in other states, but even Arizona, the state experiencing the least degree of change, will experience an average 57.5% decrease.
There are also regional variations in the enrollment and benefit cuts. The percentage of beneficiaries pushed out of the program ranges from 38 percent in Montana to a 67 percent in Washington, D.C., and 84 percent in Puerto Rico. Average benefit losses range from a low of $2,780 in Montana to a high of $5,092 in Louisiana.
These cuts are substantial, real, and already enacted into law. If you are a Medicare beneficiary who has chosen a Medicare Advantage plan, you will probably not be able to keep it, no matter how much you like your plan. Even if you can keep your plan in name, the plan you like now will be a shell of its former self.

Friday, October 28, 2011

Most Retirees Will Not See Full COLA in 2012 Social Security Checks

October 19, 2011
The Bureau of Labor Statistics has unveiled a  3.6% cost of living adjustment for Social Security recipients, but most retirees will not see the full benefit increase in 2012.

The Bureau of Labor Statistics, Washington, D.C.,says this is due to the expected increase in Medicare Part B premiums, which are deducted from recipients’ Social Security payments. This will affect the approximately 75% of Social Security recipients who were exempted from Part B premium increases in 2010 and 2011 when there was no COLA.

“It is evident that Americans can no longer rely solely on Social Security and pensions to provide guaranteed income through retirement,” said Cathy Weatherford, chief executive officer of the Insured Retirement Institute, Washington, commenting on the bureau’s announcement. “It is vitally important for all Americans to create holistic retirement plans that will truly guarantee retirement income.

“As an historic number of Americans approach retirement, we are seeing growing uncertainty in sources of retirement income that have traditionally been considered a ‘guarantee,’ such as Social Security and pensions,” she added. “This has left many boomers concerned about retirement.”

Does Cigna’s Planned HealthSpring Buy Signal More Managed Care M&A?

By Jonathan Block - October 26, 2011
Even though health insurers are always looking for ways to add new members, it surprised many on Monday when Cigna Corp. announced it would buy Medicare managed care provider HealthSpring, Inc. in a $3.8 billion deal. The move gives Cigna 340,000 Medicare Advantage (MA) members, as well as 700,000 customers from HealthSpring’s Medicare prescription drug business.

Most analysts and industry observers have lauded the deal so far. Why? MA represents one of the largest growth areas for health insurers in the coming years. Commercial business is likely to lag in the future as rising health care costs are causing some employers to drop health insurance coverage for their workers or shift more of the expenses onto them, while the number of Americans eligible for Medicare is expected to increase significantly.

Although MA accounts for only 25% of overall Medicare enrollment, that figure is expected to increase, according to Jefferies & Co. analyst David Windley. Wedbush Securities analyst Sarah James adds that 50% of Medicare enrollees could be in managed care plans in the next five years.

Several analysts noted that more Medicare-focused providers (e.g., WellCare Health Plans, Inc. and Universal American Corp.) could be in the sights of other large insurers. “This may signal a renewed wave of consolidation, especially for commercial-focused plans to increase government exposure,” wrote Credit Suisse analyst Charles Boorady.

Along similar lines, Citigroup Global Markets equity analyst Carl McDonald said, “The deal should have positive implications for the other smaller players in the industry…as there are still a few larger plans in the industry that want to become bigger Medicare players,” adding that there are relatively few Medicare plans with more than 50,000 lives.

But it’s not just Medicare-focused companies that could be up for grabs. Yesterday. Amerigroup Corp. said it would buy Health Plus, one of the largest Medicaid managed care providers in New York with 320,000 members, for $85 million. And today, Coventry Health Care, Inc. said it would buy Children's Mercy's Family Health Partners, gaining 210,000 Medicaid members in Kansas and Missouri. Given the move by many states recently to have HMOs handle Medicaid administration, could Centene Corp and Molina Healthcare Inc. be next?

Buoyed by strong earnings over many quarters, most health insurers are flush with cash, though the uncertainties of health care reform has led most of them to hold off on large-scale M&A activity. However, given Cigna’s move and the growth Medicare and Medicaid represents, do you think insurers might start opening up their wallets more?

Thursday, October 27, 2011


CMS Banner
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs


FOR IMMEDIATE RELEASE                       Contact: CMS Media Relations Group
October 27, 2011                                                                     (202) 690-6145



Medicare Part A premiums will be increasing by just $1 per month, and the deductible will increase by just $24.  For Medicare Part A, which pays for inpatient hospital, skilled nursing facility, and some home health care, about 99 percent of Medicare beneficiaries do not pay a premium since they or their spouses have at least 40 quarters of Medicare-covered employment.

However, some enrollees age 65 and over and certain persons with disabilities who have fewer than 30 “quarters of coverage” obtain Part A coverage by paying a monthly premium set according to a statutory formula. This premium will be $451 for 2012, an increase of $1 from 2011. Those who have between 30 and 39 “quarters of coverage” may buy into Part A at a reduced monthly premium rate which is $248 for 2012, the same amount as in 2011. The Part A deductible paid by a beneficiary when admitted as a hospital inpatient will be $1,156 in 2011, an increase of $24 from this year's $1,132 deductible.  The Part A deductible is the beneficiary's cost for up to 60 days of Medicare-covered inpatient hospital care in a benefit period. Beneficiaries must pay an additional $289 per day for days 61 through 90 in 2012, and $578 per day for hospital stays beyond the 90th day in a benefit period. For 2011, per day payment for days 61 through 90 was $283, and $566 for beyond 90 days. For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $144.50 in 2012, compared to $141.50 in 2011.


The standard Medicare Part B monthly premium will be $99.90 in 2012, a $15.50 decrease over the 2011 premium of $115.40.  However, most Medicare beneficiaries were held harmless in 2011 and paid $96.40 per month. The 2012 premium represents a $3.50 increase for them.

Medicare Part B covers a portion of the cost of physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. By law, the standard premium is set to cover one-fourth of the average cost of Part B services incurred by beneficiaries aged 65 and over, plus a contingency margin. The contingency margin is an amount to ensure that Part B has sufficient assets and income to (i) cover Part B expenditures during the year, (ii) cover incurred-but-unpaid claims costs at the end of the year, (iii) provide for possible variation between actual and projected costs, and (iv) amortize any surplus assets.  Most of the remaining Part B costs are financed by Federal general revenues.  (In 2012, about $2.9 billion in Part B expenditures will be financed by the fees on manufacturers and importers of brand-name prescription drugs under the Affordable Care Act.)

The largest factor affecting the contingency margin for 2012 is the current law formula for physician fees, which will result in a payment reduction of about 29 percent in 2012.  For each year from 2003 through 2011, Congress has acted to prevent smaller physician fee reductions from occurring. The 2012 reduction is almost certain to be overridden by legislation enacted after Part B financing has been set for 2012. In recognition of the strong possibility of increases in Part B expenditures that would result from similar legislation to override the decrease in physician fees in 2012, it is appropriate to maintain a significantly larger Part B contingency reserve than would otherwise be necessary.  The asset level projected for the end of 2012 is adequate to accommodate this contingency. 

In 2012, Social Security monthly payments to enrollees will increase by 3.6 percent.   The dollar increase in benefit checks is expected to be large enough on average to cover the increase in the Part B premium of $3.50 that most beneficiaries will experience. For those who were paying the standard premium of $115.40, their benefits checks will only increase.


The estimate for the average 2012 Part D premium for basic coverage is $30.  This is slightly lower than the actual average for 2011 of $30.76.  The estimate for the average 2012 Part D premium for supplemental coverage is $8.  The estimate for the average 2012 total Part D premium is $38.


On average, Medicare Advantage premiums will be 4 percent lower in 2012 than in 2011, and plans project enrollment to increase by 10 percent.  Of people with Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage plan, and benefits remain consistent with those offered in 2011. 


As required in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, beginning in 2007 the Part B premium a beneficiary pays each month is based on his or her annual income.  Specifically, if a beneficiary’s “modified adjusted gross income” is greater than the legislated threshold amounts ($85,000 in 2012 for a beneficiary filing an individual income tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return) the beneficiary is responsible for a larger portion of the estimated total cost of Part B benefit coverage.

In addition to the standard Part B premium, affected beneficiaries must pay an income-related monthly adjustment amount.  These income-related amounts were phased-in over three years, beginning in 2007.  About 4 percent of current Part B enrollees are expected to be subject to these higher premium amounts.

The 2012 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are shown in the following table:

Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
Less than  or equal to $85,000
Less than or equal to $170,000
Greater than $85,000 and less than or equal to $107,000
Greater than $170,000 and less than or equal to $214,000
Greater than $107,000 and less than or equal to $160,000
Greater than $214,000 and less than or equal to $320,000
Greater than $160,000 and less than or equal to $214,000
Greater than $320,000 and less than or equal to $428,000
Greater than $214,000
Greater than $428,000

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at any time during the taxable year are as follows:

Beneficiaries who are married but file a separate tax return from their spouse:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal to $85,000
Greater than $85,000 and less than or equal to $129,000
Greater than $129,000

As a result of the Medicare Modernization Act, the Part B deductible was increased to $110 in 2005 and is indexed thereafter by the annual percentage increase in the Part B actuarial rate for aged beneficiaries.  In 2012, the Part B deductible will be $140, a decrease of $22 from 2011.  (The actuarial rate is set by law at one-half of the total estimated per-enrollee cost of Part B benefits and administrative expenses, adjusted as necessary to maintain an adequate contingency reserve.)

Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. On average Medicare Advantage premiums will be 4 percent lower in 2012 than in 2011, and plans project enrollment will increase.

Beginning in 2011, the Affordable Care Act required Part D enrollees whose incomes exceed the same thresholds that apply to Part B enrollees to pay an income-related monthly adjustment amount, in addition to their Part D plan premium. The 2012 income-related monthly adjustment amounts to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are shown in the following table:

Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Income-related monthly adjustment amount
Less than or equal to $85,000
Less than or equal to $170,000
Greater than $85,000 and less than or equal to $107,000
Greater than $170,000 and less than or equal to $214,000
Greater than $107,000 and less than or equal to $160,000
Greater than $214,000 and less than or equal to $320,000
Greater than  $160,000 and less than or equal to $214,000
Greater than $320,000 and less than or equal to $428,000
Greater than $214,000
Greater than $428,000

In addition, the income-related monthly adjustment amounts to be paid by Part D beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at any time during the taxable year are as follows:

Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax return from their spouse:
Income-related monthly adjustment amount
Less than or equal to $85,000
Greater than $85,000 and less than or equal to $129,000
Greater than $129,000

As noted above, states have programs that pay some or all of beneficiaries' Part A and Part B premiums and coinsurance for certain people who have Medicare and a limited income.  Medicare provides similar assistance with premiums and cost-sharing for low-income Part D enrollees.  Information is available at 1-800-MEDICARE (1-800-633-4227) and, for hearing and speech impaired, at TTY/TDD: 1-877-486-2048.

Monday, October 24, 2011

What Gets Paid Gets Improved

James Gutman - October 14, 2011

The situation may have been akin to that of a student who knew a college scholarship rested on his or her performance on a test. MA plans faced with the knowledge that bonuses needed to offset declining CMS payment rates for MA plans beginning in 2012 depended on the outcomes of star ratings, so they "studied" hard and did better on the "test" than they did when it mattered less a year ago. The improvement on average scores was mainly across the board, according to CMS, but all of the five-star plans again were provider-affiliated. That fact, plus the other aspects of the stars program, leads to a few tough questions, even though many MA plans favor the star-ratings program's recent changes toward more use of actual outcomes rather than process measures.

Are the star ratings, for the most part, measuring the right things in terms of improving quality? Is the program's structure fair to all kinds of MA plans, even ones not provider affiliated or located in rural areas in the South? Is the likely thinning of the MA ranks that the star ratings may foster in the best interest of beneficiaries? And are the gains clearly recorded by many MA plans an indisputable sign of improving quality, or instead perhaps more an indicator of "studying to the test"?

Advanced Primary Care Practice Demonstration

October 24, 2011                (202) 690-6145

Medicare Federally Qualified Health Center
Advanced Primary Care Practice Demonstration


On October 24, 2011, the Centers for Medicare and Medicaid Services announced that 500 Federally Qualified Health Centers (FQHC) have been selected for the FQHC Advanced Primary Care Practice (APCP) demonstration project from over 800 applicants.  The initiative is designed to evaluate the impact of the advanced primary care practice model, also known as the patient-centered medical home, on improving health, improving quality of care, and lowering the cost of care provided to Medicare beneficiaries served by FQHCs. 

The demonstration was developed by the Center for Medicare and Medicaid Innovation (Innovation Center) in cooperation with the Health Resources Services Administration (HRSA).  This initiative will provide health care opportunities for nearly 200,000 Medicare beneficiaries aimed at improving their quality and coordination of care while lowering costs.

This fact sheet provides a general description of the Federally Qualified Health Center Advanced Primary Care Practice demonstration. 


The Innovation Center was created by the Affordable Care Act to test new models of health care delivery and payment, offer technical support to providers to improve the coordination of care, and diffuse lessons learned and best practices widely throughout the healthcare system.  It is committed to transforming the Medicare, Medicaid and CHIP programs to deliver better care for individuals, better health for populations, and slower growth in expenditures through improvement for Medicare and Medicaid beneficiaries. 

The Affordable Care Act provides a number of new tools and resources to help improve health care and lower costs for all Americans.  The Advanced Primary Care Practice is a physician-based or nurse practitioner-led medical practice that provides continuous, comprehensive, coordinated, and patient-centered medical care.  An APCP links multiple points of health delivery by utilizing a team approach with the patient at the center.  It is designed to encourage doctors, hospitals, and other healthcare providers to work together to better coordinate care for Medicare patients. 


On December 9, 2009, President Barack Obama directed the Secretary of Health and Human Services (HHS) to implement a Medicare Federally Qualified Health Center Advanced Primary Care Practice demonstration designed to improve quality and coordination of care, and to reduce preventable hospitalizations.  The 3 year demonstration will test the effectiveness of doctors and other health professionals working in teams to improve the care coordination for Medicare patients at FQHCs.  CMS will conduct an independent evaluation of the demonstration that will determine whether FQHCs that deliver advanced primary care improve access and quality, promote appropriate use of services, and reduce health care costs. 

The FQHC APCP demonstration will assess the impact of Medicare paying a care coordination fee to participating FQHC practices, in addition to the established “all inclusive per visit payment amount,” for the FQHC to provide care coordination and management services as would typically be provided in an advanced primary care practice.  The care management fee would apply to all Medicare beneficiaries who receive medical care from participating FQHCs as long as the beneficiaries remain eligible to participate.  CMS will monitor practice changes over time to determine how well participating FQHCs are progressing in providing and expanding the delivery of continuous, comprehensive, and coordinated primary health care.

Becoming an APCP requires that a medical practice change the way it delivers medical care to its patients.  This transformation requires considerable thought and planning by a medical practice and may require various levels of investments in both time and money.  Practices must shift from an acute care complaint-driven primary care paradigm that fragments health care delivery to one that is geared to maintain the patient’s overall health and anticipates when additional services or coordination needs to occur.  

For example, an APCP practice must be able to offer enhanced access to care through expanded hours, same day appointments, or priority appointments so the patient does not need to seek urgent care through more expensive means, such as the emergency department.  In addition, APCP practices are likely to employ a team approach, sometimes consisting of nurse coordinators, physician assistants, pharmacists, and social workers, to coordinate health care and other services, all of which are overseen by a physician or nurse practitioner.  In the end, the APCP is based on the relationship between the physician-led or nurse practitioner-led medical team and the patient.  Through this relationship the team is aware of all the medical services the patient needs and uses, even if the APCP does not provide those services directly (i.e., specialty care, hospitalizations, emergency care). 

The patient participates in all decision making and communicates with the team about his or her individual health needs, experiences and treatments.  The patient shares information with the team on symptoms or health concerns, as well as visits to other health care providers so that all parties can decide how best to proceed.  The APCP team is responsible for coordinating the overall care of the patient across providers and settings to facilitate compliance with the agreed-upon treatment plan.

CMS expects that FQHC practices participating in the demonstration not only will have an interest in serving as medical homes to their Medicare patients but also are willing to make the necessary practice transformations to become fully functioning advanced primary care practices.

A description of the functions of a medical home can be found in the Joint Principles of the Patient Centered Medical Home which were adopted in February of 2007, by the American College of Physicians (ACP), the American Academy of Family Physicians (AAFP), the American Osteopathic Association (AOA, and the American Academy of Pediatrics (AAP). 

Eligibility Requirements:

To participate in the FQHC APCP demonstration, FQHCs must have met certain eligibility requirements.  Specifically, an FQHC:
•     Must be in an individual (brick and mortar) physical location.
•     Must be a current FQHC with a valid Provider Transaction Account (PTAN) number from CMS.
•     Must not currently be under a corrective action plan for serious financial or safety issues according to HRSA.
•     Must be a physician-based or nurse practitioner-led practice.  (Clinical decisions and oversight are provided by one of these clinicians.)
•     Must be providing primary care services (as opposed to only providing specialty service, such as dental or vision care). 
•     Must provide primary care services to a general population and not exclusively to migrant workers or to the homeless.
•     Must have provided medical services to at least 200 unique, qualified fee-for-service Medicare beneficiaries (with both Part A and Part B coverage, not Medicare Advantage) in the most recent 12 months for which CMS has data, including those with both Medicare and Medicaid (dual eligible) coverage.
•     Must not be participating in another Medicare medical home of advanced primary care practice demonstration. 
•     Must agree to participate in the evaluation of the demonstration.

Medicare Beneficiaries:
•     Beneficiaries, including dually eligible Medicare/Medicaid beneficiaries, must be enrolled in the Medicare Part A and Part B fee-for-service program, during the initial 12 month look-back period, and must not be currently in hospice care or under treatment for end-stage renal disease.
•     Beneficiaries enrolled in Medicare Advantage are not eligible to participate in this Demonstration.
•     Attribution of beneficiaries to an FQHC will be based on Medicare administrative data for beneficiaries for whom CMS has a claim in the look-back period.
•     Beneficiary eligibility is verified each quarter prior to payments being made. Participating FQHCs will receive an updated roster of attributed beneficiaries along with the quarterly fee payment.


•     Participating FQHCs will receive a monthly care management fee of $6.00 for each eligible Medicare beneficiary attributed to their practice to help defray the cost of transformation into a person-centered, coordinated, seamless primary care practice.  This payment, which will be made quarterly, is in addition to the usual all-inclusive payment FQHCs receive for providing Medicare covered services.
•     The fee will be paid automatically without the need to submit a claim.
•     Payment can only be made via Electronic Funds Transfer (EFT).

Terms and Conditions:

As a condition of participation in the FQHC APCP demonstration, FQHCs must have agreed to:
•     Pursue Level 3 PCMH recognition from the National Committee for Quality Assurance (NCQA) by the end of the Demonstration;
•     Remain in the Demonstration for the 3-year duration beginning November 1, 2011.
•     Submit a completed Application to participate by 11:59 pm (ET) on Friday, September 9, 2011, and to submit an initial Patient Centered Medical Home (PCMH) Readiness Assessment as part of the application process by 11:59 pm (ET) on Friday, September 16, 2011.
•     Submit a revised Readiness Assessment every 6 months for the duration of the Demonstration.
•     Cooperate with the organization CMS engages to evaluate the Demonstration. This may include providing additional information or data.
•     Comply with all monitoring requirements. This includes repeating the Readiness Assessment every 6 months throughout the Demonstration.

Additionally, FQHCs must:
•     Attest that it is not currently under a corrective action plan from HRSA for serious safety or financial issues.
•     Acknowledge that CMS can terminate participation in the Demonstration for failure to progress toward PCMH recognition based on periodic Readiness Assessment scores.
•     Acknowledge that CMS can terminate participation in the Demonstration by any FQHC that has committed Medicare fraud.
•     Agree to participate in learning cooperatives and other technical assistance that is offered by CMS and HRSA.
•     Acknowledge that failure to comply with all terms and conditions may result in disqualification from the Demonstration.

The terms and conditions are subject to change in the interest of improving results under the demonstration.  Such changes would require the consent/approval of both parties and at least 30 days’ advance notice to facilitate their implementation.

Demonstration Implementation:

The three-year demonstration will begin on November 1, 2011.  

Beneficiary Verification and Attribution Process:

CMS will review Medicare administrative claims data of participating FQHCs to identify beneficiaries who have received services from those FQHCs in the most recent 12-month period (look-back period). These beneficiaries will then be attributed to the appropriate FQHC.  In order to be eligible for attribution to an FQHC, Medicare beneficiaries must meet the following criteria:
•     Must be enrolled in Medicare Part A and Part B fee-for-service, or be covered as a dually eligible beneficiary during the most current look-back period.
•     Must not be covered under a Medicare Advantage plan or Medicaid Managed Care (for dually eligible beneficiaries) during the most current look back period.
•     Must receive the majority of their primary care from the FQHC site with which they are attributed over the past 12 consecutive months.
•     Must receive advanced primary care services from only one participating FQHC practice

In the event that a beneficiary has received services from more than one participating FQHC in the past 12-month period, the beneficiary will be assigned to the FQHC where the majority of their care was received.  If a beneficiary has the same number of visits for more than one participating FQHC in the past 12-month period the beneficiary will be assigned to the most recently visited FQHC.  Each participating FQHC will be provided with a roster of their assigned beneficiaries using this attribution methodology.

Each participating FQHC will receive a roster of eligible Medicare beneficiaries who are assigned to their practice and for whom they will receive a care management fee.  CMS assumes responsibility for the assignment of beneficiaries to participating FQHCs.  Participating FQHCs will not be permitted to contest these assignments.

On a quarterly basis, CMS will repeat the administrative claims data review process to add new beneficiaries seen by the FQHC and remove beneficiaries that have become ineligible since the last look-back period from assignment rosters.

Management Fee Payments:

Each participating FQHC will receive a quarterly prospective care management fee of $18 for each beneficiary identified by CMS and attributed to the FQHC. The quarterly fee payment does not require a claim to be submitted and is in addition to, and exclusive of the usual all inclusive per visit payment amount for Medicare covered services. The fee will be paid regardless of whether a beneficiary utilizes any FQHC services during any given month. It will automatically be paid for each enrolled beneficiary as long as the beneficiaries remain eligible to participate in the demonstration. Fees will be electronically transferred to the practice account each quarter after each beneficiary’s eligibility has been verified. Quarterly prospective care management fee payments will begin November 15, 2011. 

Technical Assistance:

CMS and HRSA will provide technical assistance to all participating FQHCs to help with developing PCMH capabilities for the recognition process and to help with practice transformation. All participating FQHCs are expected to actively participate in available trainings and transformational learning systems to reach the goal of Level 3 NCQA recognition by the end of the Demonstration.

CMS and HRSA will make technical assistance available to participating FQHCs to support their transformation and achieve NCQA recognition as a PCMH.

HRSA, through a contract with NCQA, has developed a series of technical assistance and training resources that highlight successful strategies for obtaining and maintaining PCMH recognition status. The training and educational resources that will be available to participating FQHCs include among others:
•     Educational and training sessions
•     Webinar(s) on NCQA PCMH recognition standards

Educational and training sessions, and webinars will focus on understanding NCQA standards, and mock surveys to gain experience with the NCQA PCMH recognition process and documentation requirements.  In addition, CMS is developing transformational learning systems to assist participating FQHCs to successfully transform their practice into a recognized patient-centered medical home.

Technical assistance will be provided at no cost to participating FQHCs. Core training modules will be provided on specific topics essential to performing as a patient-centered medical or health home.  Topics may include patient-centered care, team-based delivery, the use of data/performance feedback for continuous quality improvement, and improving care transitions.  Learning communities or collaboratives will also be created where groups of FQHCs, either identified by geographic area, areas of interest for transformation, or some other criteria participate in a series of webinars, conference calls, or face-to-face meetings to receive additional training, share implementation experiences, and provide support to each other in their transformation.

Demonstration Monitoring and Evaluation:

Participating FQHCs will be accountable for implementing practice changes necessary to transform into advanced primary care practices. CMS will monitor each participating FQHC’s transformation progress by comparing readiness assessment scores at baseline with readiness assessment scores updated every 6 months. In addition, CMS will conduct random site audits to assure that assessment responses are accurate and true. CMS expects that each FQHC will invest the financial resources generated from the quarterly fees paid to facilitate the transformational areas they have chosen.

CMS will also provide cost and utilization data to participating FQHCs periodically throughout the demonstration so each FQHC can monitor the effect of their transformation on Medicare beneficiary outcomes and Medicare costs.

Demonstration Evaluation:

CMS will evaluate the results of the Demonstration by analyzing practice change over time. A baseline status will be established using a supplemental survey questionnaire which is administered as part of the application process and initial Readiness Assessment responses.  Changes in Readiness Re-Assessments every 6 months and changes in practice characteristics from baseline will constitute evaluation measurements over time.