CMS

September 10, 2020

Posted on by hortyspringer

QUESTION:        I heard that the Centers for Medicare & Medicaid Services (“CMS”) recently announced a new payment model, referred to as the “Community Health Access and Rural Transformation (“CHART”) Model.”  Can you provide a brief overview of this?  Is participation mandatory or voluntary?

 

ANSWER:          CHART is a voluntary payment model intended to improve health care quality in participating rural communities.  Participating rural communities have the option to choose between one of two different “tracks.”  The first is labeled the Community Transformation Track, which builds upon certain lessons learned from the Maryland Total Cost of Care Model and the Pennsylvania Rural Health Model.  To participate, communities must identify a Lead Organization (such as a local public health department or health system).  In exchange for spearheading efforts to implement health care redesign in the targeted community, the Lead Organization is eligible to receive up to $5 million in funding.  This track is scheduled to begin in July of 2021.

The second is the ACO Transformation Track.  This enables rural accountable care organizations (“ACOs”) to receive advance shared savings payments.  CMS hopes that these advance payments will encourage rural ACOs to advance more quickly into models that involve downside risk (i.e., two-sided risk models).  This track is scheduled to begin in January of 2022.

It is important to keep in mind that the CMS Innovation Center is designed to test and experiment with various payment and service delivery models, which means that its initiatives often involve significant risk and uncertainty.  CHART is no different.  Although the agency hopes that this will result in improved health care quality at reduced cost, there are key obstacles that the agency (and the participants) will need to overcome.  For example, what sorts of entities are well-qualified to serve as a community’s Lead Organization (responsible for developing a strategy to redesign the community’s health care delivery system)?  How effective will the participants be in redesigning their health care delivery systems while simultaneously juggling the demands of the COVID-19 pandemic?  Assuming that rural ACOs do choose to accept downside risk, how resilient will they be if obstacles or mistakes cause them to fall short of their goals?

If participants are able to navigate through and ultimately overcome these obstacles, it will be a promising sign for the future of large-scale efforts to promote value-based payment systems nationwide.

August 27, 2020

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QUESTION:        Are there new Medicare Conditions of Participation (“COPs”) for hospitals and critical access hospitals (“CAHs”)?

ANSWER:          Yes. As background, on March 4, 2020, CMS issued guidance stating that hospitals should inform certain individuals and entities regarding persons who have COVID-19. This week, as alluded to in Your Government at Work, CMS issued an interim final rule (“IFC”) which requires hospitals and CAHs to report data regarding COVID-19 in a standardized format. The new COPs are at §§ 482.42(e) for hospitals and 485.640(d) for CAHs, and the purpose is to track the incidence and impact of COVID-19 to help public health officials detect outbreaks.

The IFC emphasizes that the new COPs “do not relieve a hospital or a CAH, respectively, of its obligation to continue to comply with §§ 482.42(a)(3) or 485.640(a)(3), each of which requires a facility to address any infection prevention and control issues identified by public health authorities.”

The new COPs will become effective once the IFC is published in the Federal Register.

August 6, 2020

Posted on by hortyspringer

QUESTION:        I heard that CMS has proposed to extend some of the new telehealth flexibilities.  Can you provide a little more information on this?

ANSWER:            On Tuesday morning, the Centers for Medicare & Medicaid Services (“CMS”) submitted a proposed rule regarding revisions to payment policies under the Physician Fee Schedule.  This proposed rule is available for public inspection in the Federal Register and is scheduled for publication on August 17th, 2020.  The proposed rule addresses a wide range of topics.  Among other things, CMS has proposed adding certain services to the Medicare Telehealth Services list permanently and has suggested that certain flexibilities will remain in place through the calendar year in which the public health emergency ends.  Furthermore, CMS has expressed a willingness to solicit and use input from practitioners to determine whether further permanent changes should be made to the Medicare telehealth services list.

In the proposed rule, CMS noted that it had received a significant number of requests to add physical therapy, occupational therapy, and speech-language pathology services to the Medicare telehealth services list permanently.  The agency explained that even though there are waivers in effect during the current public health emergency, its authority would be limited to some degree by statute.

CMS also reiterated its policy that telehealth rules do not apply when the beneficiary and the practitioner are in the same location, even if audio-visual technology assists in furnishing a service.  This was done in response to a number of questions about whether services should be reported as telehealth when the individual physician or practitioner furnishing the services is in the same location as the beneficiary.

In addition, CMS addressed questions about payment for audio-only telehealth services.  The agency explained that it was also limited in this area by statutory requirements relating to telehealth services (which typically require an interactive telecommunications system that includes two-way, audio-visual communication technology).  The agency noted its willingness to explore other potential improvements, and invited comment on certain kinds of telephone-only check in services.

Notably, this is only a brief overview of some of the changes included in the proposal.  It is important to emphasize that these policies are not yet finalized and may change significantly in the following weeks.  Nevertheless, the proposed rule does indicate that the agency is focusing its attention on making certain telehealth flexibilities permanent, to the extent its authority will allow.  For a fact sheet that discusses the proposed rule, click here.  To review the full proposed rule, click here.

July 9, 2020

Posted on by hortyspringer

QUESTION:        We’ve had some debate over who can order therapeutic diets.  Can you help explain the rules on this issue?

 

ANSWER:            Historically, CMS has restricted the ability to order therapeutic diets to “practitioners responsible for the care of the patient.”  This generally meant physicians.  However, CMS changed its position on this matter in its Final Rule dated May 12, 2014 by revising 42 C.F.R. §482.28(b)(2) to read “All patient diets, including therapeutic diets, must be ordered by a practitioner responsible for the care of the patient, or by a qualified dietician or qualified nutrition professional as authorized by the medical staff and in accordance with State law governing dieticians and nutrition professionals.” (Emphasis added.)

This change came about largely in recognition of the fact that registered dietitians are trained to order patient diets independently, without requiring the approval or supervision of a physician.  In order to give hospitals more flexibility in this area, CMS noted that “[i]n order for patients to have access to the timely nutritional care that can be provided by [registered dieticians], a hospital must have the regulatory flexibility either to appoint [registered dieticians] to the medical staff and grant them specific nutritional ordering privileges or to authorize the ordering privileges without appointment to the medical staff, all through the hospital’s appropriate medical staff rules, regulations, and bylaws.”  This means that in order for a dietician to order patient diets independently, clinical privileges must be granted and monitored by the medical staff.

We have not seen any medical staffs elect to make dieticians full members.  Instead, the most common approach we have seen is to adopt a stand-alone policy that states that any requests for ordering privileges would be processed through the Medical Staff process, while the rest of the dietician’s practice would continue to be monitored through HR.

Of course, your state law may still limit a dietician’s scope of practice, so be aware of any restrictions at the state law level.

June 18, 2020

Posted on by hortyspringer
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QUESTION:        Does our Utilization Review Committee have to be a Medical Staff committee, or can it be a Hospital committee?

ANSWER:           In our experience, some hospitals do have a utilization review committee set up as a Medical Staff committee, but many do not.  There is no explicit regulatory requirement or accreditation standard obligating a hospital to have a Medical Staff utilization review committee.  For example, the Centers for Medicare & Medicaid Services (“CMS”) Conditions of Participation for Hospitals require hospitals to have a utilization review plan and a utilization review committee.  The committee, per the Conditions of Participation, has to be a “staff committee of the institution” with at least two physicians as members.  The requirement can be satisfied by “a group outside the institution” such as one established by local medical societies.  CMS includes the utilization review requirements in the Conditions of Participation in a separate section from the medical staff requirements.  The Medical Staff sections of the Conditions of Participation do not even mention utilization review.  Even though the Conditions of Participation note that a utilization review committee has to be a “staff committee,”  this is different from a “medical staff committee.” CMS knows how to signify when something falls under the purview of the medical staff and the fact that CMS left out “medical staff” when describing the requirements for the utilization review committee is significant.  Furthermore, the Conditions of Participation state that the committee has to be a committee of the “institution,” which signifies “hospital” as opposed to Medical Staff.  The fact that the utilization review committee requirement can be satisfied by a “group outside the institution” (that would not be a medical staff committee) also demonstrates that it does not need a medical staff committee.  Keep in mind that if you decide to have the utilization review committee as a hospital committee, we recommend that you confirm that your state does not require that the committee be a medical staff committee.

That being said, we are aware of at least one client who received feedback from the CMS Survey & Certification Group, Division of Acute Care Services that the utilization review committee “must be a committee or subcommittee of the medical staff.”  Nonetheless, this feedback, as noted above, is not consistent with the Conditions of Participation and we are not aware of CMS citing any hospital for having a Hospital utilization review committee.  It is also not consistent with current practice of many hospitals whose utilization review committees are multi-disciplinary hospital committees with membership comprised of both practitioners and administrative personnel such as directors of coordinated care, billing staff, and internal audit staff.

June 11, 2020

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QUESTION: In response to COVID-19, we recently relocated a hospital provider-based department to a patient’s home.  What information do we need to provide to the CMS Regional Office?

ANSWER: For the duration of the COVID-19 public health emergency, CMS has expanded its extraordinary circumstances relocation exception policy.  According to its April 30, 2020 Final Interim Rule, CMS will permit hospitals to relocate excepted off-campus and on-campus provider-based departments (“PBD”) to off-campus locations.  This includes the ability to expand or relocate a department into a patient’s home.

A hospital that relocates its PBD off-campus must submit a relocation request by email to its CMS Regional Office providing notice and details of its relocation efforts. Specifically, the hospital’s request should include the following information:

  1. The hospital’s CMS Certification Number (“CCN”)
  1. The address of the current PBD
  1. The address of the relocated PBD
  1. The date on which the hospital began furnishing services at the new PBD
  1. A brief justification for the relocation and the role of the relocation in the hospital’s response to COVID-19
  1. An attestation that the relocation is not inconsistent with their state’s emergency preparedness/pandemic plan

Note that a hospital’s justification for relocation should explain why the new PBD location is an appropriate location to furnish outpatient services. In an effort to preserve patient confidentiality, however, the hospital should refrain from referencing patient names of diagnoses in its submissions.

A hospital that relocates a PBD to an off-campus location, such as a patient’s home, will have 120 days from the date on which they began furnishing and billing for services at the relocated site to submit notification to CMS.  In addition, hospitals may include multiple relocation notifications in one e-mail, so long as each submission falls within the 120-day requirement.

May 14, 2020

Posted on by hortyspringer

QUESTION:  We run an acute care hospital.  In order to prevent the spread of COVID-19, we have allowed some of our practitioners to provide services to Medicare beneficiaries via telehealth.  These Medicare beneficiaries are receiving services in their homes that they would normally receive in the hospital’s outpatient department.  What does the recent interim final rule from CMS say about the practitioner’s ability to bill for this sort of arrangement?

 

ANSWER:  Effective March 1, 2020, when a practitioner who ordinarily practices in a hospital outpatient department furnishes a telehealth service to a patient who is located at home, they may submit a professional claim with the place of service code indicating that the service was furnished in the hospital’s outpatient department.  Medicare will then pay the practitioner under the Physician Fee Schedule at the facility rate (as though the service had been provided in the hospital’s outpatient department).

The interim final rule contains further details about the hospital’s ability to bill for its services.  To access the interim final rule, click here.  For a general overview of recent Medicare telehealth developments, click here.

February 13, 2020

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QUESTION:            We are revising our Medical Staff Bylaws and a question has come up about whether we could add a “years of service” exemption that let’s physicians opt-out of their ED call obligations if they have been on the Medical Staff for more than 20 years. Is this okay under EMTALA?

ANSWER:            It is. CMS recognized the practice of giving age or year’s of service based exemptions in the 2003 Preamble to the updated EMTALA Regulations, stating:

“We understand that some hospitals exempt senior medical staff physicians from being on call. This exemption is typically written into the hospital’s medical staff bylaws or the hospital’s rules and regulations, and recognizes a physician’s active years of service (for example, 20 or more years) or age (for example, 60 years of age or older), or a combination of both. We wish to clarify that providing such exemptions to members of hospitals’ medical staff does not necessarily violate EMTALA. On the contrary, we believe that a hospital is responsible for maintaining an on-call list in a manner that best meets the needs of its patients as long as the exemption does not affect patient care adversely. Thus, CMS allows hospitals flexibility in the utilization of their emergency personnel.” (Emphasis added).

Obviously, the highlighted language indicates that while such exemptions are permissible under EMTALA, the exemptions cannot interfere with a hospital’s ability to maintain adequate on-call services.

Therefore, we recommend the MEC approve any request for such an exemption, since allowing an exemption to take effect automatically could create EMTALA problems, depending on the number of remaining physicians in the specialty.  Furthermore, we also recommend including language that states the MEC can require a physician who was previously given an exemption to return to the call schedule (on a temporary or permanent basis) if the needs of the Hospital change.

January 9, 2020

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QUESTION:        Why can’t someone come up with a straightforward definition of what it means for a physician’s compensation to vary with, or take into account, the volume or value of the physician’s referrals to a hospital?

ANSWER:          Good question.  CMS is trying, but the federal courts continue to make this analysis much more complicated than Congress intended when it adopted the Stark Law.

Some courts have mistakenly held that if a physician is employed by a hospital in a hospital-based service, and is paid on an RVU basis, then since the more professional services that the physician personally performs, the more referrals they will make to the hospital and as a result, the physician’s compensation varies or takes into account the physician’s referrals to the hospital.

This is incorrect and is part of the reason that the Third Circuit had to reissue its decision in U.S. ex rel. Bookwalter v. UPMC (discussed in this week’s HLE).

CMS has apparently heard these concerns.  On October 17, 2019, CMS published proposed Stark regulations that will provide clear, helpful guidance on this and many other aspects of the Stark Law if they are adopted in final form as proposed.

As CMS has repeatedly stated, the requirement that compensation not vary with or take into account the volume or value of physician referrals, which appears in a number of statutory or regulatory exceptions, should be uniformly interpreted wherever it appears.  Such uniform interpretation is essential.  However, as pointed out in the Preamble to the Proposed Regulation, some courts have interpreted the volume or value standard to consider the subjective intent of the parties, rather than applying an objective “bright line” test as Congress intended, making compliance with the statute much more difficult and uncertain than intended by the statute.

CMS wants to address this confusion by proposing a much clearer definition of the volume or value standard in the regulations.  CMS has stated that this vital term should be interpreted to mean that the volume or value standard will be violated only if the amount paid to the physician or the amount due from the physician (i.e., a rental payment) will increase or decrease in correlation to the referrals that the physician makes to the hospital.

* * *

CMS then gave the following examples of the types of compensation arrangements that will violate the Stark Law.

To illustrate, assume a physician leases medical office space from a hospital.  Assume also that the rental charges are $5000 per month and the arrangement provides that the monthly rental charges will be reduced by $5 for each diagnostic test ordered by the physician and furnished in one of the hospital’s outpatient departments.  Under proposed § 411.354(d)(6)(i), the compensation (that is, the rental charges) would take into account the volume or value of the physician’s referrals to the hospital.  The mathematical formula that illustrates the rental charges paid by the physician to the hospital would be:  Compensation = $5000 – ($5 x the number of designated health services referrals).  The policy at § 411.354(d)(6)(ii)(A) with respect to when compensation from a physician (or immediate family member of the physician) to an entity takes into account other business generated would operate in the same manner.

* * *

As another example, assume that a physician leases medical office space from a hospital and the rental charges are as follows:  $2000 per month if the physician is in the top 25 percent of admitting physicians at the hospital (measured by the gross charges per inpatient admission); $2500 per month if the physician  is in the second quartile of admitting physicians on the hospital’s medical staff (measured by the gross charges per inpatient admission); and $3500 per month if the physician is in the bottom half of admitting physicians at the hospital (measured by the gross charges per inpatient admission).  Under our proposed additional approach to the volume or value standard and other business generated standard, the compensation (that is, the rental charges) would be determined in a manner that takes into account the value of the physician’s referrals and other business generated for the hospital.

These proposed amendments to the Stark Volume or Value Standard, as well as the proposed definition of fair market value and commercial reasonableness (which recognized that it does not violate the law to lose money on a physician’s practice and that published salary surveys are to be used as benchmarks only), will make compliance with the Stark Law much more straightforward.  These proposed regulations also provided valuable guidance on value-based arrangements and recognize that the fair market value of the physician’s input and cooperation with a value-based enterprise is generally not reflected in the hourly payment rates for the services actually performed by the physician.

The comment period for these proposed regulations ended on December 31, 2019.  We have urged CMS to issue the proposed regulations in final form without delay so that providers and the federal courts can begin to take advantage of this guidance.

If you want to learn more about value-based compensation, these regulations or the proposed Safe Harbor regulations that were issued on the same day, join Dan and Henry in Chicago on April 23-25 for the Hospital Physician Contracts Clinic.

November 21, 2019

Posted on by hortyspringer

QUESTION:        We need to employ physicians in order to provide the care needed by our patients.  The main reasons that private practice is no longer a viable option for many physicians are the ever increasing costs of operating a practice (especially malpractice insurance and EHR costs) while professional reimbursement keeps decreasing.  However for the same reasons, we rarely break even on a physician practice.  Does anyone in the government understand this or do they assume that we overpay physicians to get their referrals?

ANSWER:          Unfortunately, many courts do not understand your dilemma.  Some courts seem to take the position that a hospital paying a physician more than the physician generates in professional fees is evidence of unreasonable compensation that violates the Stark Law.

However, help is on the way.  In the October 19, 2019, proposed Stark Regulations, CMS has provided an excellent description of the analysis that should be followed when assessing whether the compensation paid to a physician violates the Stark Law.

For the first time, CMS has included a definition of the term “commercially reasonable” that specifically states that an arrangement may be commercially reasonable even if “it does not result in a profit for one or more of the parties.”  CMS has also substantially revised the definition of “fair market value” and has made it clear that in order to violate the “volume or value” standard there must be a direct correlation between the physician referrals and the amount to be paid to the physician.

CMS also stated that salary surveys are to be treated as benchmarks, not the last word on physician compensation and even provided easy to understand examples such as the following in order to make this point crystal clear:

By way of example, assume a hospital is engaged in negotiations to employ an orthopedic surgeon.  Independent salary surveys indicate that compensation of $450,000 per year would be appropriate for an orthopedic surgeon in the geographic location of the hospital.  However, the orthopedic surgeon with whom the hospital is negotiating is one of the top orthopedic surgeons in the entire country and is highly sought after by professional athletes with knee injuries due to his specialized techniques and success rate.  Thus, although the employee compensation of a hypothetical orthopedic surgeon may be $450,000 per year, this particular physician commands a significantly higher salary and the general market value (or market value) of the transaction may, therefore, be well above $450,000.  The statute requires that the compensation is the value in an arm’s length transaction, but that value must also be consistent with the general market value (or market value) of the subject transaction.  In this example, compensation substantially above $450,000 per year may be fair market value.

The proposed rules also provide much needed guidance on value-based arrangements.

The comment period will end on December 31, 2019.  We hope that CMS will finalize these proposed regulations as soon as possible after that date and that the federal courts begin to adopt CMS’s analysis.