As a result of a new rule published on February 1, 2023, at 88 Fed. Reg. 6643, Medicare Advantage (MA) organizations soon will be facing enhanced exposure from Risk Adjustment Data Validation (RADV) audits. Under the new rule, effective for audits of payment years 2018 and after, Centers for Medicare & Medicaid Services (CMS) will use extrapolation to calculate MA organizations’ repayment obligations based on RADV audit findings. While CMS did not adopt any specific extrapolation methodology and plans to use methodologies appropriate to the specific audit, it will be focused on contracts identified as being high-risk for improper payments using statistical modeling, data analytics, or both. CMS does commit to disclosing the extrapolation methodology used in connection with any particular audit so that MA organizations will know how their repayment obligation was calculated. Notwithstanding its prior proposal to do so (https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/recovery-audit-program-parts-c-and-d/Other-Content-Types/RADV-Docs/RADV-Methodology.pdf), CMS did not adopt a Fee-For-Service Adjuster in RADV Audits. Relying on a recent D.C. Circuit decision, CMS takes the position that the obligation to report and return overpayments is not subject to the “actuarial equivalence” provision of the statute (42 U.S.C. § 1395w-23(a)(1)(C)) that applies to the risk adjustment payment methodology. UnitedHealthcare Ins. Co. v. Becerra, 16 F.4th 867, 885-86 (D.C. Cir. 2021), cert denied, 142 S. Ct. 2851 (2022).Continue Reading CMS Issues Final Rule Authorizing Extrapolation as Part of RADV Audits
Medicare
CMS Takes Significant Action to Spur Use of Telehealth Services for Duration of COVID-19 Emergency
By Timothy Hatfield on
On March 13, 2020, President Donald Trump issued a proclamation declaring a national emergency concerning the novel coronavirus disease (the “Emergency Declaration”). The president framed the emergency declaration as empowering the Secretary of Health and Human Services (“HHS”) to waive “laws to enable telehealth,” which gave providers hope that the administration would remove some of the primary regulatory barriers to the broad implementation of telehealth services. In the days since the declaration, the administration has taken increasingly significant steps to do just that.
The Emergency Declaration authorized the Secretary of HHS to exercise his waiver authority under Section 1135 of the Social Security Act (42 U.S.C. § 1320b–5). Section 1135 empowers the Secretary to waive or modify only certain provisions under Medicare, Medicaid, the Children’s Health Insurance Program (“CHIP”), and the Health Insurance Portability and Accountability Act (“HIPAA”) during a national emergency. Congress broadened these waiver authorities in the emergency supplemental appropriations bill, signed into law on March 6, which gave the Secretary additional authority under Section 1135 to loosen Medicare’s telehealth billing standards. It also specifically allowed the Secretary to waive the requirement that the beneficiary live in a rural area and receive the services at an approved remote site, such as a rural hospital.Continue Reading CMS Takes Significant Action to Spur Use of Telehealth Services for Duration of COVID-19 Emergency
AKS and Medicare Advantage Plans: Don’t Kickback and Relax!
By Timothy Hatfield & Ronak Chokhani on
Posted in Anti-Kickback Statute (AKS), Medicare
Health care attorneys have long questioned whether there are significant Anti-Kickback Statute (AKS) risks associated with financial transactions between Medicare Advantage plans and their participating providers. An ongoing case in the Northern District of Illinois could provide Medicare Advantage organizations with a clear answer regarding the nature of such risks.
United States ex rel. Derrick v. Roche Diagnostics Corp., brought by a qui tam relator under the False Claims Act, involves Roche Diagnostics Corp. (“Roche”), a manufacturer of glucose monitoring products, and Humana, Inc. (“Humana”), an issuer of Medicare Advantage plans (collectively the “Defendants”). United States ex rel. Derrick v. Roche Diagnostics Corp., 318 F. Supp. 3d 1106 (N.D. Ill. 2018). The relator alleges that the Defendants violated the AKS when Roche agreed to settle an overpayment owed by Humana for pennies on the dollar in exchange for the exclusive placement of Roche products on Humana’s formularies. This litigation has been ongoing since 2014 and the trial is set for early 2020.
Prior to the events giving rise to this action, Roche sold glucose monitoring products via Humana’s Medicare Advantage formularies. The relator alleges the following sequence of events. First, in March 2013 Humana notified Roche that it would be terminating its supplier contract with Roche and removed Roche’s products from its formularies. After protracted settlement negotiations, Roche agreed to accept only $11 million of the $45 million overpayment. That same week, Humana placed Roche products back on the Humana formularies and, crucially, also agreed to remove from its formularies all products that competed with Roche. Additionally, Roche “reserved the right to recover the full amount owed if Humana did not satisfactorily perform its obligations” under the debt forgiveness agreement. The relator claims that this exchange of debt forgiveness (remuneration) for formulary placement (recommendation/referral) amounted to an AKS violation.
Continue Reading AKS and Medicare Advantage Plans: Don’t Kickback and Relax!
Medicare Advantage Premiums Are Not Subject to Washington Tax
By Chauncey MacLean & Kara Morse on
Posted in Medicare, Washington
Appeals Court ruling supports MA organization request for refund of B&O taxes paid on premiums
On April 1, 2019, the Washington Court of Appeals Division 1 ruled unanimously in a published opinion that premiums received by Medicare Advantage (“MA”) organizations from or on behalf of their members are not subject to Washington’s business and occupation…
Proposed Medicare E/M Payment Overhaul Draws Mixed Reviews
By Kara Morse on
Touted as a major step in its efforts toward Medicare modernization, CMS issued a proposed Physician Fee Schedule rule on July 12, 2018 that would, in part, gut the current five-tier structure for Evaluation and Management (“E/M”) codes and collapse levels 2 through 5 down to one payment rate. The proposed payment overhaul, coupled with changes in the documentation required to support certain claims for reimbursement, is geared toward simplifying the Medicare billing rules and reducing the administrative burden for physicians so that they can focus on patient care.
E/M services comprise about 40% of the charges approved by Medicare under the physician fee schedule, with office visits representing half of that amount. Currently, documentation for these visits must comply with rigorous Documentation Guidelines that require a record of all clinically relevant information, as well as justification for medical necessity and appropriateness. There are five visit levels in each new patient and established patient E/M code family, and documentation must justify the code level being billed. Each visit level is tied to a different reimbursement rate reflecting different levels of service complexity and time spent.
The proposed rule would retain the existing CPT coding structure, but provide for a single, blended reimbursement rate for both new and established patients for outpatient E/M level 2 through 5 office visits. Add-on codes will be available to reflect additional resources involved in providing complex primary care and non-procedural services. The documentation standards for more complex office visits would be reduced to the amount required for a level 2 visit. While many providers would continue to document justification for higher levels of care, in part because of non-Medicare payers, CMS asserts that the change would provide immediate relief from the need to “audit against the visit levels.” The single work RVU for the collapsed office visit category would fall somewhere between the current level 2 and level 5 amounts. The following example is provided in the proposed rule:
Preliminary Comparison of Payment Rates for Office Visits, New Patients
| HCPCS Code | CY 2018 Non-facility Payment Rate |
CY 2018 Non-facility Payment Rate under the proposed methodology |
| 99201 | $45 | $44 |
| 99202 | $76 | $135 |
| 99203 | $110 | |
| 99204 | $167 | |
| 99205 | $211 |
Continue Reading Proposed Medicare E/M Payment Overhaul Draws Mixed Reviews