AMRPA Magazine May 2017 by AMRPA

May 2017 â&#x20AC;¢ Vol. 20, No. 5

STRONGER TOGETHER

Working together to protect the patient

Volume 20, Number 5

Contributors Bruce Gans, MD Chair, AMRPA Board of Directors, Executive Vice President and Chief Medical Officer, Kessler Institute for Rehabilitation, and National Medical Director for Rehabilitation, Select Medical Martha Kendrick, JD Partner, Akin Gump Strauss Hauer & Feld LLP Peter Thomas, JD Counsel to the AMRPA Consumer and Clinical Affairs Committee, Principal, Powers Pyles Sutter & Verville, PC Lisa Werner, MBA, MS, SLP Director of Consulting Services for FlemingAdvanced Outcomes Design

Letter from the Chair........................................................................................... 3 AMRPA Legislative Update................................................................................. 4 Participating Physicians Had a Relatively Small Number of ACO Patients on Their Panels, Commonwealth Fund Reports............................................... 7 PCORI Awards 34 Million to Support Patient-Centered Comparative Clinical Effectiveness Research.................................................... 8 Major IRH/U Win in Federal District Court has Implications for All IRH/U ALJ Appeals...................................................................................... 10 CMS Transmittals of Interest for Medical Rehabilitation Providers .............. 12

Carolyn Zollar, MA, JD Executive Vice President for Government Relations and Policy Development, AMRPA

Waiting for the Next Shoe to Dropâ&#x20AC;&#x201D;Next Phase in Implementing the IMPACT Act................................................................................................. 14

Jonathan M. Gold, JD Regulatory and Government Relations Counsel*, AMRPA

The Difference Between Documentation and a Score................................... 17

Mimi Zhang Policy and Research Associate, AMRPA Lovelyn Robinson Editorial and Research Assistant, AMRPA *Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar

CMMI Announces Three-Day Hospital Stay Waiver for BPCI Model 2......... 19 MedPAC Recommends Unified PAC Payment System to Begin in 2021 with Lower Payment Levels.................................................................. 21 Recap: AMRPA Members Converge on Washington, DC for Leadership Forum and Congressional Fly-In ................................................. 24 Latest Statistics ................................................................................................. 27

AMRPA Magazine, Volume 20, Number 5. AMRPA Magazine is published monthly by the American Medical Rehabilitation Providers Association (AMRPA). AMRPA is the national voluntary trade association representing inpatient rehabilitation hospitals and units, hospital outpatient departments and settings independent of the hospital, such as comprehensive outpatient rehabilitation facilities, rehabilitation agencies and skilled nursing facilities. SUBSCRIPTION RATES: Member institutions receive the AMRPA magazine as part of their membership dues. Individuals who are employees of member institutions may subscribe to the magazine for $100 annually. Nonmember individual subscriptions are $500 per year. Send subscription requests to AMRPA, 529 14th Street, NW, Washington, DC 20045 USA. Make checks payable to AMRPA.

New Study Finds Bundled Payments Reduce Costs, Improve Care ............ 29 Recovery Audit Contractor Program Updates ............................................... 31 AMRPA Submits Comments to Senate Finance Committee on Draft Version of AFIRM Act ........................................................................ 33 Post-Acute Care Coalition Submits Letter to House Committee Members on Medicare Post-Acute Care Value-Based Purchasing Act ........ 36

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AMRPA Magazine May 2017

LETTER FROM THE CHAIR

Letter from the Chair Bruce M. Gans, MD, Executive Vice President and Chief Medical Officer, Kessler Institute for Rehabilitation and National Medical Director for Rehabilitation, Select Medical bgans@kessler-rehab.com

“AMRPA must stay engaged on both the legislative and regulatory advocacy fronts and continue to educate our membership so that you all can remain effective as advocates for your hospitals, patients and the field as a whole.”

ust when we thought the Affordable Care Act was toast, political considerations and divides in Congress, along with strong grassroots outcries from citizens and state governments, led to withdrawal (at least temporarily) of the proposed American Health Care Act. AMRPA focused its advocacy on a specific concern about preserving rehabilitation and habilitation services and devices as a required component of the list of Essential Health Benefits. We know, however, from all indications, that there is still interest in Congress and the Administration in doing something “in the healthcare space” ( do I ever hate that term), which will require keen diligence on the part of our Association to protect our patients, hospitals and facilities. So the vigilance and activism needs to continue in Washington. In addition, we must be prepared for the potential for aggressive regulatory changes coming from CMS, which could create serious challenges for our patients having access to our services and care. AMRPA is actively engaged with the agency in an effort to continue sharing our views on your behalf and trying to prevent harmful actions.

AMRPA must stay engaged on both the legislative and regulatory advocacy fronts and continue to educate our membership so that you all can remain effective as advocates for your hospitals, patients and the field as a whole. Our recent Spring Leadership Forum provided a rich environment and opportunity to have Association members make more than 60 Hill visits to educate Members and staff about our concerns and point of view. The AMRPA Board held a strategic planning session at this meeting as well, and recommitted themselves and the Association to a strong and nimble plan to sustain our advocacy and efforts to protect our patients and hospitals while advocating for constructive modernization and changes to how we deliver our services in conjunction with the entire post-acute care continuum of settings and providers. As I have said many times, membership in AMRPA and subscription to eRehabData® are two essential acts that every rehab hospital or unit should do to support our collective efforts. Thank you for belonging; now convince your associates and competitors to do the same!

AMRPA LEGISLATIVE UPDATE

By Martha M. Kendrick, Esquire, Partner, Akin Gump Strauss Hauer & Feld LLP

ouse Republican Leaders’ plans for health reform fell into disarray after they were forced to cancel a planned vote on the American Health Care Act (H.R. 1628). Leadership came up short on votes on March 24, 2017. While the President sought to blame the failure of the legislative effort on Democrats and the conservative House Freedom Caucus,

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On April 6, House Republican Leaders announced that the Rules Committee would vote later that day to consider a new amendment to the American Health Care Act (AHCA) to establish a federal

The amendment, which was approved by the Rules Committee by a vote of 9-2, represents one area of limited agreement in the broader AHCA debate. Conservative House members are likely to support it to the extent it shifts authority and funding to the states to help keep premiums down, and moderates are likely to support it because it would add a layer of protection for individuals with pre-existing conditions. Arguably this

On March 24, 2017, House Speaker Paul Ryan (R-WI) canceled a planned vote on the American Health Care Act (H.R. 1628) after Leadership “came up short” on votes. House Leadership attempted to revive the bill before the two-week recess but only oversaw a House Rules Committee vote on an amendment that would establish a federal risk-sharing fund and appropriate $15 billion for a high-risk pool program from 2018 to 2026. On April 6, the Medicare Payment Advisory Commission (MedPAC) voted unanimously to support draft recommendations for a unified payment system for post-acute care (PAC) in 2021. The Centers for Medicare and Medicaid Services (CMS) issued its second 60-day delay of the Cardiac Rehabilitation Incentive Payment Model and the expansion of the Comprehensive Care for Joint Replacement Model (CJR) on March 20. CMS announced that the Pre-Claim Review Demonstration for Home Health Services will be put on hold in Illinois for at least 30 days beginning April 1, 2017. Further, the demonstration will not expand to Florida on April 1, as previously planned.

Democrats quickly shifted their focus to drug pricing proposals and the Supreme Court nomination. The week before the two-week Easter recess, Republicans renewed their discussions on health reform in meetings at the White House, led by Vice President Pence and including Speaker Ryan (RWI) and Members of the House Freedom Caucus. Freedom Caucus Members reportedly narrowed their demands, opting to give governors the authority 4

to seek a waiver to eliminate “essential health benefits” and the community rating requirement, which prevents insurers from charging higher rates to sick people.

risk-sharing fund and appropriate $15 billion for a high-risk pool program from 2018 to 2026. The amendment, which aims to reduce premiums for those with pre-existing conditions, is sponsored by Reps. Gary Palmer (R-AL) and Dave Schweikert (R-AZ), both Members of the House Freedom Caucus. The program is reportedly modeled after a successful initiative in Maine. The federal government will run the program initially, but each state will have the ability to take over the high-risk pool after three years.

is not a significant amount of funding for the timeframe and requirements; it is unclear whether the level of funding appropriated will be sufficient to meet the need. The development is not evidence of a breakthrough, however, and negotiations appear far from over. Rather, this is perceived as a strategic move by House Republican leaders to signal progress in the Affordable Care Act (ACA) repeal-and-replace debate AMRPA Magazine May 2017

before lawmakers headed home for the two-week Congressional recess. It also is unclear whether the amendment will have any impact on the broader areas of disagreement between the House and Senate regarding the timing, substance and process for ACA repeal. Within the Republican Party, factions still are apparent. As Members reached their districts for recess, the Club for Growth announced $1 million in ads initially targeting 10 moderate Republican House members poised to vote no on the legislation.

Continuing Resolution (CR) before April 28, when the current CR expires. The House recently advanced the FY 2017 Defense spending bill to the Senate, and discussions are ongoing. It may serve as the vehicle for an “omnibus” appropriations package. MedPAC Votes to Support Unified PAC Payment System The Medicare Payment Advisory Commission’s (MedPAC) June report is expected to focus heavily on post-acute care (PAC). On April 6, the Commission met and voted unanimously in support of a draft recommendation to:

Chairman Francis Crosson urged that the changes outlined in the recommendation should occur “as quickly as possible” so that the system can “move aggressively in the right direction.” While the Commissioners all supported the recommendation, several members urged the panel to ensure that regulatory requirements change along with the payment model. Commissioner Warner Thomas cautioned that the 5-percent reduction is “pretty significant” and should perhaps be implemented over time to allow providers to adapt. He added that a new PAC PPS will definitely create “winners” and “losers.” Commissioner David Nerenz opined that payment reform coupled with regulatory relief could open the door to more innovation in post-acute care.

Speaker Ryan indicated that work will continue “in the days and weeks ahead,” • Implement a unified PAC payment suggesting a longer timeframe for any system beginning in 2021, with a legislative action beyond the vote in three-year transition; the House Rules Committee. Regardless • Reduce aggregate payments by 5 of the outcome, the Administration will percent; CMS Delayed Expansion of Pre-claim continue working to change regulatory • Begin to align setting-specific Review for Home Health requirements under the ACA as “phase regulatory requirements; and On March 31, the Centers for Medicare two” of Republicans’ efforts to reform and Medicaid Services (CMS) the health care system. The announced that the Preoutlook for “phase three” Claim Review Demonstration remains uncertain, since for Home Health Services it would require Congress We need AMRPA members to will be put on hold in Illinois to work on a bipartisan educate their elected officials for at least 30 days, as of basis to advance legislation April 1, 2017. Additionally, addressing the stability of the about the value of care provided in the demonstration will not health insurance markets. inpatient rehabilitation hospitals and expand to Florida on April 1, as previously planned. Health Trump Administration units (IRFs). and Human Services (HHS) Releases FY 2018 Skinny Secretary Tom Price expressed Budget concern about the program On March 16, the last year when he was a Congressman Administration released a Fiscal Year (FY) • Periodically revise and rebase and sent a letter to CMS, along with 2018 Budget Blueprint that proposes payments to keep them aligned with other Members of Congress, urging the shifting $54 billion in discretionary the cost of care. Agency to halt implementation of the funds from the non-defense portion program. The three-year demonstration of the budget to defense spending, Staff suggested that the recommendation program was meant to test whether prerepresenting a roughly 10-percent would lower spending by between $5 claim review decreases Medicare fraud decrease. The so-called “skinny budget” billion and $10 billion at the five-year occurring among Home Health Agencies proposes a $15.1 billion (or 16.2 percent) mark, assuming no behavioral changes (HHAs). Additionally, CMS wanted to decrease for the Department of Health by providers. Savings will depend in analyze whether expenditures were and Human Services (HHS), of which part on whether providers are allowed reduced while maintaining or improving that decrease includes an 18.3-percent to bypass the transition and how many quality of care. cut in funding for the National Institutes elect this option. of Health (NIH) and cuts to health Expanded CJR Model Delayed Again professions and nursing training Staff also stated that a transition period On March 20, the Centers for Medicare programs. Congressional Appropriations would combine the new PAC prospective and Medicaid Services (CMS) issued an Committee Leaders have indicated they payment system (PPS) and current interim final rule with comment period oppose many of the proposed cuts, setting-specific PPS over multiple years, (IFC) that further delays the effective however. giving providers more time to adjust date of the Advancing Care Coordination their costs and practices. MedPAC staff through Episode Payment Models The President’s full FY 2018 Budget estimated that even with a 5-percent (EPMs), the Cardiac Rehabilitation proposal is expected in May. In the reduction in aggregate payments, Incentive Payment Model, and the interim, Congress must finish work on FY average payments would be 9 percent expansions of the Comprehensive 2017 Appropriations bills or pass another higher than the average of cost of stays. 5

Care for Joint Replacement Model (CJR) from March 21, 2017 until May 20, 2017. CMS is seeking comment on the appropriateness of the delay. HHS Secretary Price was a vocal critic of the mandatory bundled payment program while serving in Congress. HHS Secretary Encourages State Innovation Waivers in Letter to Governors The Administration is signaling its intention to pursue state health reform through two types of waivers, which could allow states to make significant changes to their Medicaid programs and insurance markets. In a letter to governors on March 13, HHS Secretary Price stated he will seek to “empower” states using Section 1332 waivers, also known as State Innovation Waivers. Secretary Price suggested that states could use such waivers to implement high-risk pools and reinsurance programs. A second letter to governors, signed by Secretary Price and CMS Administrator Seema Verma, encouraged the use of Section 1115 waivers to make Medicaid program changes and indicated the Administration is willing to work with states to implement work requirements and premium/contribution requirements. President Trump’s Executive Orders Remain Focused on Regulatory Reform On March 13, President Trump signed an Executive Order calling for a “thorough examination” of each Executive Branch department and agency to identify potential cost savings and determine where programs can be eliminated or modified. The order will give agency

heads 180 days to draft reorganization plans, and Congress would have the final say on any planned reorganization. Office of Management and Budget (OMB) Director Mick Mulvaney will lead the effort to develop a comprehensive reorganization plan to present to the President.

opioid overutilization. Finally, CMS is releasing a Request for Information for continued feedback on Medicare Advantage and Part D. Comments are due April 24, 2017.

On April 6, the White House released a memorandum providing additional guidance on Executive Order 13771, which requires federal agencies to identify two rules for elimination for each new regulation issued. The memo, which supplements Office of Management and Budget (OMB) interim guidance issued on February 2, clarifies how agencies can comply with the order and explains which new regulations must be offset. The memo also notes that federal spending regulatory actions that cause only income transfers between taxpayers and beneficiaries (such as regulations associated with Medicare spending) and those that establish new fees or penalties without imposing any new costs, do not need to be offset.

We urge AMRPA members to contact their Members of Congress to request a meeting or submit an invitation to tour your hospital or unit over the next few months. We need AMRPA members to educate their elected officials about the value of care provided in inpatient rehabilitation hospitals and units (IRFs). Congress is likely to resume consideration of an ACA repeal and replace bill after the recess and AMRPA remains opposed to any dilution or gutting of Essential Health Benefits (EHBs) requirements, as currently proposed. We also need to ask Members of Congress to commit to opposing flawed Medicare value-based purchasing (VBP) policies. Printed in this magazine is the April Post-Acute Coalition letter circulated to House Members of the Ways and Means Committee expressing strong concerns about the draft legislative approach. The Ways and Means Committee is still planning to address post-acute care reform this year; therefore, AMRPA must remain vigilant!

CMS Finalized 2018 Payment Rates for Medicare Advantage and Part D On April 3, CMS released final payment and policy updates for Medicare Advantage and Part D Prescription Drug Plans for 2018. Medicare Advantage plans will see an uptick of 0.45 percent. Plans can expect a total increase in revenue of 2.95 percent after accounting for expected growth in coding acuity. The updated policies also aim to provide additional flexibility for organizations to develop new plan offerings. CMS is also finalizing policies intended to combat

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Regards, Martha M. Kendrick

AMRPA Magazine May 2017

PARTICIPATING PHYSICIANS HAD A RELATIVELY SMALL NUMBER OF ACO PATIENTS ON THEIR PANELS, COMMONWEALTH FUND REPORTS

study of one of the nation’s largest Medicare accountable care organizations (ACOs) found that participating physicians see a relatively small number of patients who are actually part of the ACO population: less than 5 percent of a typical patient panel consists of ACO patients. ACOs also experience substantial physician turnover, and when physicians leave the ACO, most of their attributed beneficiaries leave as well, according to a report entitled: “Substantial Physician Turnover and Beneficiary “Churn” in a Large Medicare Pioneer ACO.” To increase provider accountability for the cost and quality of patient care, health care systems, including the Medicare and Medicaid programs, have begun to move away from fee-forservice (FFS) and toward ACOs and other alternative payment models (APMs) that encourage more efficient and effective care delivery. With the ongoing implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the numbers of physicians and provider organizations entering APMs, such as ACOs, are expected to rapidly increase. However, according to the report, evidence to date indicates that ACOs have achieved limited success in attaining their goals. Even though physicians play a decisive role in whether ACOs are able to deliver on their promise, there has been limited research on the physicians who work in ACOs and their experiences with patients. The Commonwealth Fund–supported researchers studied a large Medicare Pioneer ACO to learn about the stability of physician participation and beneficiary enrollment, and this article includes

some of the key findings. The researchers used the following data sources for their analysis: •

a list of beneficiaries aligned to Partners HealthCare’s ACO;

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a list of physicians affiliated with the ACO during that period;

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databases that captured the number of years a physician was affiliated with the ACO, physician specialty, and other factors; and

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Medicare claims data.

Key Findings •

The ACO experienced substantial turnover among physicians: only 52 percent were affiliated over the entire three-year contract period.

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Most (88%) physicians had at least some beneficiaries attributed to them, but these patients accounted for just a small part of their panels, which averaged 1,700 patients per panel. Half (50%) of physicians had just 70 or fewer attributed beneficiaries. ACO enrollees accounted for less than 5 percent of the median physician’s patient panel.

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About half (49%) of beneficiaries who joined the ACO in contract year 2 or 3 did so because their physician had joined the ACO. When physicians left the ACO in year 2 or 3, 90 percent of their assigned beneficiaries also left.

The study’s findings suggest that two factors can dampen an ACO’s potential to reach its financial targets: (1) a relatively low number of enrollees attributed to participating physicians, and (2) the loss of patients when physicians leave the ACO. To the extent that there is patient turnover, the ACO’s incentives also are

Highlights: •

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High physician turnover was found in a large study of Medicare ACOs Financial incentives provided by ACOs to provide better, more efficient care may not be sufficient to attract physicians, given the small numbers of ACO beneficiaries they tend to serve

dampened with respect to investments that require more than a few months to achieve any payoff. The authors also note that having the ability to select participating physicians each year creates a temptation for ACOs to improve their risk profile—and thereby increase their opportunity for shared savings—by dropping the small number of physicians whose patients have the most unfavorable risk mix (e.g., those with very high treatment costs). They also noted that Centers for Medicare and Medicaid Services (CMS) could put policies in place that would reduce the incentive to game the risk pool. Conclusion The authors found that the financial incentives provided by ACOs to provide better, more efficient care may not be sufficient to attract physicians, given the small numbers of ACO beneficiaries they tend to serve. Physicians might instead respond better to comparable incentives that are linked to having a larger number of patients on their panels, although this would require standardizing incentives across payers. Health systems could also reconsider how they link beneficiaries to primary care physicians to concentrate 7

care among a smaller number of physicians, creating a critical mass of patients that might encourage and facilitate practice pattern changes. The authors concluded that a low number of attributed enrollees per physician and substantial physician turnover may help explain the impact that accountable care organizations have had thus far.

The study authors were John Hsu, Christine Vogeli, Mary Price, Richard Brand, Michael E. Chernew, Namita Mohta, Sreekanth, K. Chaguturu, Eric Weil, and Timothy G. Ferris. Citation: J. Hsu, C. Vogeli, M. Price et al., “Substantial Physician Turnover and Beneficiary ‘Churn’ in a Large Medicare

Pioneer ACO,” Health Affairs, April 2017 36(4):640–48. The Commonwealth report can be accessed here: http://www. commonwealthfund.org/publications/ in-the-literature/2017/apr/physicianturnover-beneficiary-churn-medicare-aco

PCORI AWARDS 34 MILLION TO SUPPORT PATIENT-CENTERED COMPARATIVE CLINICAL EFFECTIVENESS RESEARCH

he Patient-Centered Outcomes Research Institute (PCORI) Board recently awarded $34 million to fund three large comparative clinical effectiveness research (CER) studies and research to enhance the methods for conducting CER. The funds will support studies on a range of conditions. One study will compare approaches to hospital discharge care for patients with moderate to severe traumatic brain injuries (TBIs). The majority of these patients are receiving ongoing care in inpatient rehabilitation hospitals and units (IRH/Us). Two studies will examine treatment for people with opioid use disorders and whether surgery or physical therapy leads to better pain reduction and improved function for people age 50 or older with rotator cuff tears. 1. Improving Transition from Acute to Post-Acute Care following Traumatic Brain Injury The University of Washington, Seattle, was awarded $12.7 million to support a study comparing approaches to hospital discharge care for patients with moderate to severe traumatic brain injuries. Rehabilitation professionals now give such patients information, reassurance, advice and referral resources when they leave the hospital. This study will compare this standard approach to an optimized transition care strategy involving a care coordinator. The coordinator provides case management and social and vocational 8

assistance to patients and caregivers for six months after hospital discharge. The study will evaluate whether the optimized strategy affects rehabilitation results and improves quality of life for patients, caregivers and their families. Each year, about 3.5 million people sustain traumatic brain injuries in the United States, and at least 25 percent of these injuries are classified as moderate to severe. Nearly one-half of those hospitalized for TBI have long-term disability, and many have psychological, physical, social or work-related problems, which often become chronic. Providers are not always prepared to care for TBI-related problems, leaving many TBI survivors with unmet healthcare needs. These issues are made worse by the many problems caused by brain injury, making self-managed health care even more challenging. Currently, inpatient rehabilitation providers assist patients and their families with TBI information, reassurance, advice and referral resources. Some promising ways of helping people with TBI include using telephone and other mobile devices to reach patients after they leave the hospital, to regularly assess their individual needs and help them coordinate their health care, and to provide the information and resources that they need. These new strategies may lead to earlier return to activities and improved quality of life. No studies

Highlights: •

The main goal of the TBI project is to find out how improving the transition from the hospital to outpatient care can improve the lives of people with moderate to severe TBI and achieve better results.

have compared the standard approach to discharge care with an approach that uses telecare to provide information and care coordination after discharge. The main goal of this project is to find out how improving the transition from the hospital to outpatient care can improve the lives of people with moderate to severe TBI and achieve better results that are important to patients with TBI, their families and healthcare providers. In this study, patients with TBI who are discharged from inpatient rehabilitation at one of six national TBI Model Systems sites will be randomized to: (1) Standardized Discharge Care (SDC) or (2) SDC plus a telecare program called Optimized Transition Care (OTC). The project team will compare functioning and quality of life at 3, 6, 9 and 12 months after hospital discharge in these two groups. The researchers have formed a team of TBI patient and family stakeholders who AMRPA Magazine May 2017

have helped define the study aims, study population, treatments and outcome measures and will take part in all phases of the research. The project team has also found clinical, health system, policy/advocacy and payer stakeholders to work on this project and help the researchers apply and distribute results in order to raise standards of care and improve healthcare systems for people with TBI. 2. A Simple Large Trial of Patient-Centered Care for Opioid Use Disorders in Federally Qualified Healthcare Centers and Specialty Care Settings The second award for $13 million will fund a study of treatment for people with opioid use disorders who receive care at federally qualified health centers (FQHC). The study will compare standard care, which includes support from a social worker and referrals to local outpatient community treatment programs, with a program called

Personalized Addiction Treatment to Health (PATH). PATH involves onsite treatment at a FQHC and uses several evidence-based practices, such as cognitive-behavioral relapse prevention and medication-assisted treatment. The goal is to determine whether integrating treatment into primary care settings is effective for the low-income patients treated at FQHCs. The study will be led by a team at the Treatment Research Institute in Philadelphia.

them is one of the fastest-growing ambulatory surgery procedures. Currently, patients and providers have little information about which patients should have arthroscopic shoulder surgery. The study will examine whether surgery or physical therapy leads to better pain reduction and improved function for people age 50 or older with rotator cuff tears. The project will be led by a research team based at Vanderbilt University in Nashville.

3. Operative versus Non-Operative Treatment for Atraumatic Rotator Cuff Tears: A Multicenter Randomized Controlled Pragmatic Trial A third award, for $7.5 million, will support a study that will provide valuable evidence to help patients with rotator cuff tears decide whether to undergo shoulder surgery. Rotator cuff tears represent one of the most common reasons to seek musculoskeletal care in the United States, and surgery to correct

Each of the awards was approved pending a business and programmatic review by PCORI staff and issuance of formal contracts. Details of all the approved projects can be found on PCORI’s website. More information about PCORI’s pragmatic clinical studies initiative can be found at http://www.pcori.org/sites/default/ files/PCORI-Pragmatic-Clinical-StudiesInitiative.pdf.

THINK ABOUT IT…

Are you receiving your Off the Record (OTR), Action Alerts and other email from AMRPA? On January 1, AMRPA changed vendors for the distribution of its Off the Record, Action Alerts, and other email communication and we want to make sure you aren’t missing these important messages. Our email analytics show that a few institutions’ servers are blocking AMRPA email, probably without knowing it. Don’t miss important deadlines, events or AMRPA news, whitelist (or add to your safe sender list) the following elements to ensure AMRPA email gets to you. • Whitelist the return email address: info@amrpa.org • Whitelist these domains: @informz.net and @informz.ca (Informz is our new email system) • Whitelist the IP address that these emails are coming from: 64.128.232.14 If you know there are multiple AMRPA contacts at your institution, ask your IT staff to help you do this whitelisting at the institutional level so that your colleagues can receive the same benefit! Keep your membership up to date – current members receive AMRPA magazine, the weekly enewsletter and other benefits – renew today if you haven’t already.

MAJOR IRH/U WIN IN FEDERAL DISTRICT COURT HAS IMPLICATIONS FOR ALL IRH/U ALJ APPEALS

federal district court recently issued a stunning decision that may have major implications on cases pending before Administrative Law Judges (ALJs) involving the services of inpatient rehabilitation hospitals and units (IRH/ Us). The case involved two Medicare beneficiaries who received inpatient hospital rehabilitation from Cumberland County Hospital System in North Carolina, doing business as Cape Fear Valley Health System. CMS and its contractors denied the claims based on a failure of the preadmission screening and other documentation to demonstrate the medical necessity of the care provided. The court held that a portion of the Medicare Benefit Policy Manual (MBPM), chapter 1, addressing the preadmission screening is not enforceable as a binding requirement. The court held that certain language in the MBPM constitutes a “substantive rule” that may not be applied as a mandatory coverage requirement because the MBPM was not issued in compliance with the notice and comment requirements of the Administrative Procedure Act. The court went on to hold that the Departmental Appeals Board (DAB) (the fourth level of administrative appeal) should have viewed the preadmission screening in conjunction with the admission order when evaluating whether the preadmission documentation requirements had been met. The Issue in Dispute Medicare manuals can interpret regulations, but manuals cannot add substantive requirements to regulations. In general, CMS must go through the notice and comment process for creating regulations in order to establish mandatory coverage and payment 10

policies. The MBPM passage in question adds several requirements to the preadmission screening: The preadmission screening documentation must indicate the patient’s prior level of function (prior to the event or condition that led to the patient’s need for intensive rehabilitation therapy), expected level of improvement and the expected length of time necessary to achieve that level of improvement. It must also include an evaluation of the patient’s risk for clinical complications, the conditions that caused the need for rehabilitation, the treatments needed (i.e., physical therapy, occupational therapy, speech-language pathology or prosthetics/orthotics), expected frequency and duration of treatment in the IRF, anticipated discharge destination, any anticipated postdischarge treatments and other information relevant to the care needs of the patient. The court stated that the criteria of this passage cannot be applied mandatorily because they go well beyond the requirements of the regulation. This MBPM passage does not merely interpret the regulation—rather, it adds substantive requirements that go beyond the regulation, the court held. The court further described the problem as follows:

(2) it includes a detailed and comprehensive review of the patient’s condition and medical history, id. § 412.622(a)(4)(i)(B); (3) it serves as the basis for the initial determination of whether the patient meets the requirements for an IRF admission to be considered reasonable and necessary, id. § 412.622(a)(4)(i)(C); (4) it is used to inform a rehabilitation physician who reviews and documents concurrence with the findings

ABOUT THE AUTHORS

Peter W. Thomas Principal, counsel to the AMRPA Consumer and Clinical Affairs Committee

On their face, the [MBPM] criteria go well beyond 42 C.F.R. § 412.622(a)(4) in setting requirements for preadmission documentation. Specifically, ... 42 C.F.R. § 412.622(a)(4) requires documentation of a “comprehensive preadmission screening” that meets the following five requirements: (1) it is conducted by a licensed clinician within 48 hours prior to admission, id. § 412.622(a)(4)(i)(A);

Ronald S. Connelly Principal, the Powers Firm AMRPA Magazine May 2017

and results of the screening, id. § 412.622(a)(4)(i)(D); and, (5) it is retained in the patient’s medical record, id. § 412.622(a)(4)(i)(E). The criteria in the MBPM are far more detailed and impose significantly greater documentation burdens on those who must prepare the preadmission screening documents. The court continued as follows:

medical necessity. In this second case, one of the MBPM standards was still not met, but the court nonetheless ordered payment based on its prior holding that the MBPM is not mandatory.

addition, the court’s reasoning should also apply to other MBPM provisions that add substantive requirements to the IRF regulations, and so its impact could extend well beyond the preadmission screening.

The government has until May 17, 2017 to appeal the case to the Fourth Circuit Court of Appeals. Given the potential impact this case may have on IRH/U appeals pending in the ALJ backlog, it seems quite possible that the federal government will appeal this ruling.

This case generally stands for the proposition that detailed MBPM provisions may not be mandatory if they impose substantive requirements on IRH/U providers that go beyond the regulatory requirements. The case can also be used to show ALJs that the Medicare Administrative Contractor that Potential Implications of this Decision denied an IRH/U claim—or decisionfor IRH/Us makers at the redetermination or This decision is not likely to alter the reconsideration levels of appeal—did practices of CMS or its audit contractors, not make reasonable inferences about but it will be important for IRH/Us to the medical necessity of the treatment reference this case when appealing in question in light of other documents denials of inpatient rehabilitation in the file. In the Cumberland case, hospital claims. CMS’s policy is that a the court noted that the DAB failed to district court decision applies only to make reasonable inferences that the the plaintiff(s) in that case and not to all treatment was medically necessary by considering the admission orders when examining any potential deficiencies in the preadmission screening case is a huge win for IRH/Us documents.

The list of criteria in the MBPM does not merely clarify or interpret the requirements in the regulation, but creates a new standard by specifying particular items of information not provided for in the regulation. Significantly, these criteria are not simply precatory, that is, a list of factors that should be considered in applying 42 C.F.R. § 412.622(a)(4). Had they been, they would be merely interpretive. Rather, the MBPM states that they are mandatory. It provides that the preadmission screening documentation “must This indicate” certain matters grappling with technical denials and and “must also include” other overpayment determinations the remaining matters specified. MBPM ch. 1 § based on allegedly insufficient 110.1.1.

This case is a huge win for IRH/Us grappling with technical denials and other documentation of medical necessity. overpayment determinations based on allegedly insufficient The court stated that the documentation of medical Departmental Appeals Board necessity. The case should be widely Medicare providers nationwide. When a could have used the MBPM criteria as used by the IRH/U community at the ALJ federal court of appeals issues a decision, non-mandatory guidance, but because level and higher levels of appeal. CMS usually only applies that decision the DAB treated them as mandatory, the to providers located in that circuit. In court reversed the denial of payment for this case, the Fourth Circuit includes the claims at issue. Maryland, Virginia, West Virginia, North Carolina and South Carolina. Therefore, The Court then went on to evaluate if CMS appeals to the Fourth Circuit, and whether the cases had actually met the if the hospital wins, the decision then MBPM criteria on the preadmission would likely apply in those states only. screening documentation. The case concerned two different IRH/U appeals. Nonetheless, the district court decision In the first, the court stated the DAB had should be cited by IRH/Us in any appeals failed to draw reasonable inferences that concern the MBPM preadmission from the preadmission documentation screening requirements. The decision showing that the criteria had been will be persuasive authority for ALJs, who met. In the second case, the court held are not required to follow the MBPM that the DAB should have viewed the but often will out of deference to CMS. admission order in conjunction with ALJs can deviate from the MBPM if they the preadmission screening, effectively explain their reasons for doing so, and holding that the admission order can the decision in this case will provide constitute part of the preadmission them with the needed rationale. In screening for purposes of determining

CMS TRANSMITTALS OF INTEREST FOR MEDICAL REHABILITATION PROVIDERS

May 2017

Note: The Centers for Medicare and Medicaid Services (CMS) daily publishes official transmittals used for communicating reminder items, requests for action or information to fiscal intermediaries and carriers. In this section of the AMRPA magazine you will find specifically selected transmittals listed that would be of interest to medical rehabilitation providers. To view the entire lists please see: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017-Transmittals.html Transmittal #

Issue Date

Subject

Implementation Date

2017-04-11

Notice of New Interest Rate for Medicare Overpayments and Underpayments -3rd Qtr Notification for FY 2017

2017-04-18

2017-04-07

Update to Common Working File (CWF) Blood Editing on Medicare Advantage (MA) Enrollees' Inpatient Claims for Indirect Medical Education (IME) Payment

2017-10-02

2017-04-07

Enrollment Data Base (EDB) and Common Working File (CWF) Data Resync Analysis and Design

2017-10-02

2017-04-07

July 2017 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files

2017-07-03

2017-04-07

Implement the International Classification of Diseases, Tenth Revision (ICD-10) 2018 General Equivalence Mappings (GEMs) Tables in the Common Working File (CWF) for Purposes of Processing Non-Group Health Plan (NGHP) Medicare Secondary Payer (MSP) Records and Claims

2017-10-02

2017-03-31

Shared System Enhancement 2015: Identify Inactive Medicare Demonstration Projects Within the Common Working File (CWF)

2018-01-02

2017-03-30

Shared System Enhancement 2014 â&#x20AC;&#x201C; Identification of Fiscal Intermediary Standard System (FISS) Obsolete Reports - Analysis Only

2018-01-02

2017-03-24

Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Order Requirements for Changing Suppliers

2017-04-24

R1808OTN

2017-03-24

Advanced Provider Screening (APS) Phase 1 Go-Live

2017-05-15

R1809OTN

2017-03-24

Client Letter v5.2 Upgrade - DME MAC Training and Testing

2017-04-24

R282FM R1819OTN R1817OTN R3746CP

R119MSP

R1813OTN R1814OTN R705PI

R704PI R1806OTN R234BP R3733CP

2017-03-17

Home Health (HH) Language in Pub. 100-8

2017-04-17

2017-03-14

Health Insurance Portability and Accountability Act (HIPAA) Electronic Data Interchange (EDI) Front End Updates for July 2017

2017-07-03

2017-03-10

Clarification of Admission Order and Medical Review Requirements

2017-06-12

2017-03-10

Quarterly Update for the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) - July 2017

2017-07-03

Updated as of April 15, 2017

AMRPA Magazine May 2017

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WAITING FOR THE NEXT SHOE TO DROP— NEXT PHASE IN IMPLEMENTING THE IMPACT ACT By Carolyn C. Zollar, MA, JD, Executive Vice President of Government Relations and Policy Development, AMRPA

s we are all aware, the Centers for Medicare and Medicaid Services (CMS) have been busily at work over the past two years in developing, proposing and then implementing quality and resource measures to be used by the four postacute care (PAC) providers, inpatient rehabilitation facilities (IRFs), home health agencies (HHAs), long term care hospitals (LTCH), and skilled nursing facilities (SNFs). The majority, if not all, of this beehive of activity is pursuant to the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act of 2014). The result of these efforts so far is to expand the Inpatient Rehabilitation Facility Patient Assessment Instrument to now include eighteen (18) measures (and 18 pages) as part of the IRF Quality Reporting Program (IRF QRP). CMS is currently pilot testing a measure pertaining to transfer of health information. The Act contained several objectives. Developing the quality chronologically the first objective and included three phases. CMS has almost completed development of the mandated measures and moved to the third phase with institution of the IRF public reporting program in 2016. Concurrently, CMS is addressing the developmental work required to implement another key objective of the Act, which is the collection of standardized patient assessment data. The key contractors for this project are the RAND Corporation and Abt Associates. The law states that the standardized assessment data include the following categories: 14

(See slide #11 in the MLN Connects-National Provider Call IMPACT Act: Standardized Patient Assessment Data Activities dated March 29, 2017) •

Function (e.g., self-care and mobility)

•

Cognitive function (e.g., express and understand ideas; mental status, such as depression and dementia)

•

Special services, treatments and interventions (e.g., need for ventilator, dialysis, chemotherapy, and total parenteral nutrition)

•

Medical conditions and comorbidities (e.g., diabetes, heart failure, and pressure ulcers)

•

Impairments (e.g., incontinence; impaired ability to hear, see, or swallow)

The quality measure domains include standardized data are:

that

•

Functional status, cognitive function and changes in function and cognitive function

•

Skin integrity and changes in skin integrity

•

Medication reconciliation

•

Incidence of major falls

•

Communicating and providing for the transfer of health information and care preferences of an individual when the individual transitions

The objective is to find the “sweet spot” of overlapping data elements for all the data assessment instruments. Another part of the Act directs the Secretary of HHS to send a report to Congress two years after the data have been collected for two years. The report is to outline a prototype for a post-acute care prospective payment system (PAC PPS). Hence, what data is collected and how it is collected becomes increasingly important. Essentially, the data elements under discussion as described below will be the bricks upon which any new payment system could be built. AMRPA Magazine May 2017

Therefore it is exceedingly important for the rehabilitation field and all other postacute care providers to be cognizant of this requirement and to participate in the design, development and testing of all data items. In order to develop these data, RAND engaged in required information gathering through last fall and this Spring that includes a literature review, multiple Technical Expert Panels, focus groups and reaching out to various stakeholders including AMRPA. In evaluating a data element, RAND looked at its ability to improve quality, to be valid and reliable and to be feasible to be used across all four settings and its utility in describing case mix.

assessed the reliability of each item and the amount of time it took to complete them. They also sought feedback regarding the elements. While the reliability of all the items was very high, medication reconciliation was deemed to need considerably more work, as it was extremely time-consuming and complicated in that it involved five steps to complete and had eleven items. The next steps are as follows: 1) revise the data elements and instructions based on what was learned in Connecticut, and 2) seek comments on some of the revised data elements via public comment in late spring. According to CMS, there will be another opportunity for public comment on the data elements included in the Alpha 1 testing. This comment period may solicit input on additional data elements that require feasibility test and

o depressed mood; o a revised pain element; and o cognitive function. One of the goals for testing the cognitive area is to identify and test the additional items that will explore executive function, ability to perform everyday activities, safety and judgement and other factors. Ideally, data elements will be identified, which could categorize those patients/ residents with no impairment and those with various levels of cognitive impairment. The Alpha 2 analyses will include the feasibility of the items based on the same criteria used for Alpha 1, such as correspondence between research and facility nurse assessors; time to complete; and qualitative feedback from assessors. CMS expects to provide a report of the results in early fall. It will also hold a webinar for the providers who participated to review the results and lessons learned from the field.

To accomplish these goals, the project includes three tracks. The first track included literature reviews, focus groups, two TEP meetings and continuously reaching The third track is to conduct out to various stakeholders a Beta test nationwide from including AMRPA. AMRPA One of the goals for testing the October 2017 to May 2018. has several of its nominees CMS is seeking a nationally on the TEP. It also issued cognitive area is to identify and test representative sample in this a report for comment last the additional items that will explore step. The items selected will year upon which AMRPA commented. That report executive function, ability to perform be taken from the Alpha 1 and Alpha 2 test results and sought public comment on everyday activities, safety and information received from public several data elements in judgement and other factors. comment. The goal is to have the areas required including a national sample of 210 PAC cognitive function and mental providers from 14 geographic status, medical conditions, areas with an average of 2 IRFs, 2 LTCHs, specifically pain, the impairments of need further development and consensus 6 SNFs and 5 HHAs per market area. The hearing and vision, special services, building. Meanwhile CMS is moving to providers will be randomly selected, and treatment and interventions. In Track 2 the next step, which is to conduct an the project will include admission and CMS/ RAND conducted an Alpha 1 test Alpha 2 test this spring. Providers will discharge assessments. Furthermore, a of various data elements as identified by be contacted in Houston, Chicago and subset of patients will be double assessed the TEP last year but which were found Denver. A total of 16 providers will be by research and facility staff to evaluate to require feasibility testing in the various signed up —four from each type —and reliability. Providers will receive a payment PAC settings. This test was conducted involve 120 observational assessments, (unlike the prior Post-Acute Care Payment in eight (8) providers in Hartford, 120 interview admit assessments and 60 Reform Demonstration) and participants Connecticut. The data elements included discharge assessments. Data elements will be debriefed in the summer of 2018. cognitive executive function items, care to be included in the Alpha 2 testing will preferences, medication reconciliation, include: The 14 markets are: bowel and bladder continence, • Revised medication reconciliation additional vision and hearing impairment and care preferences; • Boston, MA items, and medical conditions, • New items on cognitive function, • Chicago, IL specifically pain, and care preferences. A anxiety, behavioral symptoms and • Dallas, TX list of the specific elements is included in function; • Durham, NC the March 29, 2017 MLN Nation Provider • Fort Lauderdale, FL Call presentation by CMS “IMPACT • Observation items for patients • Harrisburg, PA Act: Standardized Patient Assessment who are unable to communicate to • Houston, TX Data Activities. The contractors then assess:

• • • • • • •

Kansas City, MO Los Angeles, CA Nashville, TN Philadelphia, PA Phoenix, AZ St. Louis, MO San Diego, CA

According to CMS, the benefits of participating are: •

Understand/influence crosssetting PAC assessment items with implications for quality reporting and value-based payment

•

Increase staff skills in quality improvement, use of data to improve care, and support professional development/retention for high value employees

•

Internal and external publicity to emphasize your commitment to quality and participation in national standard setting/showcase innovation in post-acute care

•

National visibility/networking with peer organizations and national stakeholders participating in the testing and rollout

•

Research experience to support future grant applications, potential for additional collaboration with national stakeholders and policymakers, and recruitment of candidates for key staff positions

One area that the project is focusing on extensively—which is important and needed—is cognition-related data elements. The challenge within IRFs and other PAC providers is that patients’ cognitive status is a multi-faceted situation that requires precise assessment across many sub areas that may be challenging to some PAC settings. There needs to be a balance between long, complete and possibly exhausting assessments and those that are too short and fail to capture necessary information. Areas that need to be addressed include skills for daily decision-making, impaired communication, executive function, attention and memory. To enhance current assessments, certain gaps need to be addressed, such as safety and judgement, executive function, self-reported cognitive status and ability to perform every day activities. As with the Alpha 1 testing,

the issues to consider are how the data element might affect case mix, quality measure, care transition plans/support for clinical decision making; applicability across all PAC settings; feasibility to administer each data element; and the value of the collection versus collection burden. And is it necessary to asses each aspect of cognition? It would be interesting to see if there is a hierarchy within the realm of cognition that could lead to some skip logic. The project is also exploring how to assess patients who are unable to communicate. This assessment will need to be based on observations, gathering additional information from staff on multiple shifts, medical charts, etc. The information gathered may address cognitive status, mood and pain. As noted above, RAND and Abt are actively recruiting hospitals to participate in the Beta test. AMRPA encourages providers to participate. You will be on the cutting edge of what is occurring in the post-acute care arena and have the opportunity to influence its outcome and your future!

AMRPA Magazine May 2017

THE DIFFERENCE BETWEEN DOCUMENTATION AND A SCORE By Lisa Werner, MBA, MS, CCC-SLP

uring my years conducting FIM training, it has become clear that clinicians don’t always understand what’s expected of them with regard to documentation. We have some rules around IRF-PAI completion that make it tricky to include only the IRF-PAI items in the documentation. In fact, it may be more appropriate to include questions in the documentation that will lead the PPS coordinator to a FIM score. The two best examples of this are the use of zero, and bladder and bowel accidents.

document the number of accidents on the shift while others ask them to document the cumulative number. Again, this means that the PPS coordinator needs to understand what has been documented in order to properly capture the number of accidents for the FIM function modifier for frequency of bladder and bowel accidents. I advocate for documenting number of accidents per shift and making the PPS coordinator responsible for adding up the accidents in the first three days plus those recorded prior to admission in the preadmission screening in order to determine the final number of accidents.

providers try to avoid assigning numbers to describe function so there would be no confusion between FIM scores and QI codes. This is not unlike what I advocate for in the examples above.

My recent audits have revealed that we are asking therapists to bear the burden of documenting level of function for the majority new quality measures. The result is that the IRF-PAI is reporting a higher level of function on the QI codes than on the FIM for similar items. Granted, the items do not correlate exactly, and the FIM instrument applies a different methodology to scoring burden of care, but the differences are Be sure that your documentation allows glaring to me as I audit records. For Two things are certain: The PPS coordinator the clinician a way to express that there example, when a nurse transfers a patient must be the most knowledgeable person was no assessment. The only person overnight, the bed-to-chair transfer who needs to understand that “no may be a one because two assessment” translates to a people were required to safely score of zero on the IRF-PAI complete the transfer. During is the PPS coordinator. The the day, the patient is able to lack of assessment could be Staff must be trained, and the transfer in physical therapy with documented as “not assessed” moderate assistance. If the PT rather than recording a zero. most effective training may be that is the person responsible for I know this is a semantic which explains how to complete documenting the quality items difference, but the confusion the documentation rather than (and often is, from what I have that I have seen repeatedly is seen), the QI code for bed to that when items are scored as understand the quality indicator chair transfers will be three, zero on a FIM flowsheet, a new coding system. but the FIM score for that item or unfamiliar PPS coordinator would be one. If the quality confuses them with an IRF-PAI indicator data is used in the score. Instead of recording a future to determine appropriate payment in the hospital or unit when it comes to score from another shift, they use the zero or identify patients who require inpatient IRF-PAI completion, and the clinicians to represent the burden of care. For CMG rehabilitation services, I fear that the must have clear instructions on what to calculation purposes, the zero becomes information we are providing will reflect document. a one, which indicates a higher burden a higher level of function than what is our of care than what might be accurate. real burden across the 24-hour period. Of course, I bring up this topic now The cost to care for the patient could be because the new quality items added valued more than actual, which may result For the sake of gathering the complete to the IRF-PAI last October, and the in overpayment. picture of burden of care, consider bringing new documentation requirements that nursing into the QI documentation for resulted, have increased confusion for The other area where documentation and at least a few key items that are already clinicians. Most providers have added new FIM scores may not support the same being documented for FIM, such as items to their documentation that collect burden of care is in counting accidents. bed-to-chair transfers, toilet transfers, more details about function. Logically, Some flowsheets ask the clinicians to 17

toileting and eating. Nursing input is vital to reflecting the burden of care prior to the introduction of therapy and use of compensatory strategies. It is clear that the nursing coding of the quality indicators is invaluable. I understand that we need to make this easy because nurses are already overwhelmed with documentation. If you set up your documentation to pull the scores from the description of level of function, then both a FIM score and a QI code can be derived. Once again, the PPS coordinator is the key staff member in the process. He/she must understand the nuances of each scoring system.

Staff must be trained, and the most effective training may be that which explains how to complete the documentation rather than understand the quality indicator coding system. Be sure they understand what should be considered when coding such items as lower body dressing for quality indicators. For example, the amount of assistance needed to apply compression stockings is considered with the quality indicators but not FIM.

embedded in your medical record. Allow the interpretation of the documentation to fall to the PPS coordinators. The more complicated the IRF-PAI becomes, the more we will rely on the documentation to accurately record the burden of care – and on the PPS coordinator to interpret the documentation into scores for each system that represent the true burden of care, whether you’re looking at the FIM or Quality Indicators.

In summary, I believe there is significant value in providing instruction to staff on how to complete the documentation that is

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EDUCATION , COMMUNICATION, PARTICIPATION & OPERATIONAL ASSISTANCE AMRPA: Working Together To Preserve Access To Medical Rehabilitation Maggie Ramirez · VP ofTogether Membership Services · 347-573-3732 · mramirez@amrpa.org AMRPA: Working to Preserve Access to Medical Rehabilitation Rachel Koresky, AMRPA Member Services Coordinator | 202-591-2469 | rkoresky@amrpa.org

AMRPA Magazine May 2017

CMMI ANNOUNCES THREE-DAY HOSPITAL STAY WAIVER FOR BPCI MODEL 2

he Center for Medicare & Medicaid Innovation (the Innovation Center) recently announced a waiver of the 3-Day Hospital Stay Requirement for Skilled Nursing Facility (SNF) Payment under the Bundled Payment for Care Improvement (BPCI) Initiative Model 2: Retrospective Acute & Post Acute Care Episode. Model 2 is ongoing and currently has 539 participants. The waiver is now available to Model 2 BPCI Awardees testing the episode payment model that spans the acute care hospitalization and post-discharge care for an episode length of stay (LOS) that can range from 30 to 90 days. Background Model 2 involves a retrospective bundled payment arrangement where actual expenditures are reconciled against a target price for an episode of care. Under this payment model, Medicare continues to make fee-for-service (FFS) payments to providers and suppliers furnishing services to beneficiaries in Model 2 episodes. The total expenditures for a beneficiary’s episode is later reconciled against a bundled payment amount (the target price) determined by CMS. A payment or recoupment amount is then made by Medicare reflecting the aggregate performance compared to the target price. In Model 2, the episode of care (EOC) includes a Medicare beneficiary’s inpatient stay in the acute care hospital, post-acute care (PAC) and all related services during the episode of care, which ends either 30, 60 or 90 days after hospital discharge. Awardees select up to 48 different clinical episodes to test in the model. Under the Waiver, the requirement in Section 1861(i) of the Social Security Act for a three-day inpatient hospital stay prior to Medicare Part A SNF services is waived for Model 2 Awardees, given certain provisions and requirements are met. The Waiver allows Model 2 BPCI beneficiaries who

are discharged from an inpatient hospital stay of less than three days to receive post-hospital care from SNFs, covered under Medicare Part A, as long as all other coverage requirements are satisfied. The Waiver is made available to Awardees that provide a list of their SNF partners to CMS, where a majority of the SNF partners for a specified period of time had a quality rating of three or more stars under the CMS 5-Star Quality Rating System. Model 2 Awardees On January 31, 2013, the first cohort of BPCI participants was announced. By October 1, 2013, some BPCI participants entered into Awardee Agreements with CMS. In November 2013, CMS offered a second Open Period for current Awardees to add additional Episode Initiators or clinical episodes in BPCI Model 2. The second cohort of participants began their performance period on January 1, 2014. CMS offered a third Open Period in February 2014 seeking additional organizations to participate in BPCI Model 2. The Open Period ended April 18, 2014 and resulted in many new participants joining BPCI initiative through the summer and fall of 2014. Additional cohorts began on January 1, April 1 and July 1, 2015. In December 2014, a timeline for transition to Phase 2 of BPCI was instituted. According to the timeline, every episode initiating organization, regardless of whether the Episode Initiator is directly bearing risk (as an Awardee) or is participating under an Awardee Convener, had to transition at least one Clinical Episode to Phase 2 by July 1, 2015 in order to remain in BPCI. The transition of all clinical episodes for all participants into Phase 2 was completed on September 30, 2015, at which point Phase 1 of BPCI ended. Phase 2 was previously scheduled to end after each participant completed a three-year period of performance for each clinical episode entered into Phase 2. The BPCI initiative will be extended until September 30, 2018 for all BPCI Model 2, 3 and 4 Awardees that choose to sign an amendment extending

Highlights: •

•

The Waiver allows Model 2 BPCI beneficiaries who are discharged from an IRH/U stay of less than 3 days to receive post-hospital care from SNFs with certain coverage requirements. The BPCI initiative will be extended until September 30, 2018.

their period of performance for all clinical episodes for up to two years. As of January 1, 2017, BPCI Model 2 has 577 Participants in Phase 2. The 577 Participants comprise 177 Awardees and 400 Episode Initiators involved in care redesign. For Model 2, “Episode Initiator” means an acute care hospital or a physician group practice that triggers an episode of care. The breakdown of participants by provider type is as follows: Acute Care Hospitals (335) and Physician Group Practices (204). Some Awardees are not initiating episodes in BPCI and, therefore, are not included in the breakdown of participants by provider type. The Three-Day Hospital Stay Waiver document (PDF) reflects Model 2 Awardees that are currently eligible to utilize the Three-Day Hospital Stay Requirement for SNF Payment waiver, their Episode Initiators and Model 2 episodes for which the Waiver can be used. The list is available at: https://innovation.cms.gov/Files/x/ BPCIModel2-HospStayWaiver.pdf. For more information on the other models, visit the BPCI Initiative: Model 1 web page, BPCI Initiative: Model 3 web page, or BPCI Initiative: Model 4 web page. For the announcement please see: https:// innovation.cms.gov/initiatives/BPCIModel-2/

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AMRPA Magazine May 2017 For20more information, please contact Deb Curington at dcurington@firminc.com or at (217) 753-1190

MEDPAC RECOMMENDS UNIFIED PAC PAYMENT SYSTEM TO BEGIN IN 2021 WITH LOWER PAYMENT LEVELS By Mimi Zhang, Policy and Research Associate, AMRPA

he Medicare Payment Advisory Commission (MedPAC) met recently in Washington, D.C. to review its recommendations to Congress on a unified post-acute care (PAC) prospective payment system (PPS). The issue has been a topic of discussion at MedPAC’s spring meetings in advance of a June 2017 Commission report to Congress on a unified PPS. The Commission issued its first set of PAC PPS recommendations to Congress in June 2016, as mandated by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014. Over the past year, MedPAC has continued its work using more contemporaneous data. The forthcoming June report details updated analysis and lays out the Commission’s second set of recommendations. In April, MedPAC Commissioners unanimously supported recommendations for Congress to implement a PAC PPS in 2021, lower aggregate PAC payments by 5 percent and revise setting-specific PAC regulations. Specifically, the recommendations read: “The Congress should direct the Department of Health and Human Services (HHS) to: •

Implement a PAC PPS in 2021, with a three-year transition.

•

Lower aggregate payments to PAC providers by 5 percent, absent prior reductions to the level of payments. o If Congress has already lowered payments to PAC providers, Congress should compare the reduction already taken with

the recommended amount [five percent] and make an additional reduction to reach the five percent. o Providers should be allowed to bypass the transition, and thus the payment reduction should be applied at the beginning of the transition (i.e. 2021). •

Concurrently, begin to align settingspecific regulatory requirements.

•

Periodically revise and rebase payments, as needed, to keep them aligned with the cost of care. o MedPAC will continue to monitor beneficiary access to care and provider performance, and make subsequent recommendations necessary.”

MedPAC estimates its recommendations would reduce Medicare’s PAC spending between $5 billion and $10 billion over five years, assuming no behavioral changes by providers. Provider profitability under a PAC PPS is expected to be more uniform across different types of stays and reduce the “incentive to selectively admit” certain types of patients.” Ultimately, however, Medicare’s savings would depend in part on providers’ behavior in response to shifting payment incentives. Under a PAC PPS, payments would shift from therapy and rehabilitation stays to more intensive, medical stays. MedPAC has long stressed that therapy and rehabilitation services are over-utilized in the skilled nursing facility (SNF) and home health agency (HHA) PPSs. The Commission has called on Congress to enact significant reforms to the SNF and HHA PPSs, to little avail to date.

Highlights: •

•

MedPAC supports implementing a uniform post-acute care PPS in 2021, concurrent with reducing aggregate PAC payments by 5 percent. MedPAC will next focus on how to reform setting-specific PAC regulations

MedPAC: PAC PPS Implementation Timeline is Uncertain The IMPACT Act requires PAC providers [inpatient rehabilitation hospitals and units (IRH/Us), skilled nursing facilities (SNFs), home health agencies (HHAs) and long-term care hospitals (LTCHs)] to begin collective standardized patient assessment information no later than October 2018 for IRH/Us, LTCHs and SNFs and January 2019 for HHAs. After two years of data have been collected, the Secretary of HHS must submit to Congress a prototype PAC PPS design that incorporates the patient assessment data. MedPAC must then propose its own (second) prototype design by June 30 of the following year. MedPAC projects the HHS report to be issued in 2022 and expects to issue its report in 2023. Because the Act does not require the implementation of a PAC PPS, MedPAC’s view is that it is “unlikely” a unified payment system would be implemented before 2024. In June 2016, the Commission issued a mandated report to Congress on the feasibility of a unified PAC PPS. MedPAC had developed a prototype PAC PPS model using data from the Post-Acute 21

Care Payment Reform Demonstration (PAC PRD) and tested it against 2013 Medicare administrative data. The IMPACT Act mandated that MedPAC use PAC PRD data for this analysis. MedPAC concluded that not only was a PAC PPS feasible to develop based on existing Medicare data, but it could be implemented sooner than the timetable indicated in statute. Furthermore, MedPAC recommended that a PAC PPS did not need to include functional assessment data before implementation but could be revised to include the data when they became available. AMRPA did not support this recommendation. Aggregate PAC Payments Not Aligned With Costs MedPAC found that Medicare fee-forservice (FFS) payments exceeded PAC providers’ costs by 19 percent in 2013. MedPAC’s analysis aggregates all PAC spending and costs for IRH/Us, SNFs, HHAs and LTCHs (although there is an adjustment to account for HHAs’ differing costs structures, as compared to those in institutional PAC settings). More recently, MedPAC estimated that for 2017 the average aggregate PAC payment remain above costs, at 14 percent higher than the average cost of a stay. After modeling payment reductions between 2 percent and 5 percent, MedPAC found that the payment across all PAC stays would still remain “substantially” more than costs in those scenarios, ranging from 9 percent to 12 percent higher. Hence, MedPAC believes that payments should be a lowered in a unified PPS and recommends a 5 percent cut. Calling for lowered PAC payments reiterates the Commission’s payment update recommendations for IRF, SNF, LTCH and HHA PPSs in recent years. According to MedPAC, the payment incentives under a uniform PAC PPS would redistribute payments from stays with high amounts of therapy “unrelated to patient characteristics” to stays with medical needs and services. This would in turn increase the “equity” of payments across different clinical conditions by narrowing differences in profitability. A 5 percent payment reduction would apply to PAC settings across the board. MedPAC asserts that even with this cut,

the average PAC payment would be 9 percent higher than the average cost of stays across various PAC patient groups. However, staff also noted at the March meeting that payments for stays in IRH/ Us and LTCHs are estimated be below costs under a PAC PPS. It remains to be seen if the June report will provide additional details on how a 5 percent reduction would differentially impact PAC settings. Other Implementations Issues The June 2017 report will focus on key issues Congress should consider in implementing a PAC PPS. Given the scope of reform in moving from siloed settings to a unified system, MedPAC recommends providers be allowed a three-year transition period. During this time, PAC payment rates would be a blend of the new PAC PPS rates and current setting-specific rates. MedPAC acknowledges that this would extend the current endemic inequities in the SNF and HHA PPSs. Providers could also have the option to bypass the transition and immediately adopt PAC PPS rates. However, cost savings to the Medicare program will ultimately depend on how many providers choose to wholly bypass the transition. MedPAC expects providers to change their costs, patient mix and practice patterns to maintain or increase their profitability in a uniform PPS. As such, it recommends that Congress grant the HHS Secretary the authority to conduct required maintenance over time and refine the PPS to keep payments aligned with costs. These include the authority to revise the relative payments across stays and rebase payments if the costs of care change. Need for Regulatory Changes Over the next year, MedPAC plans to do a deeper dive into the regulatory framework of a PAC PPS to determine what setting-specific regulations should be waived or altered to make costs more uniform across PAC settings. These regulations could include the 60 percent rule, the intensive therapy requirement for IRH/Us and the 25-day length of stay for LTCHs. While the Secretary currently has the authority to revise some regulations, others would necessitate

changes to the statute. Hence, the Commission recommends that Congress grant the Secretary the authority to make these changes as he deems necessary. In the short term, MedPAC intends to identify which regulations need to be waived when payments begin to be uniform at the PAC PPS’ outset. In the long term, MedPAC envisions aligning the Conditions of Participation (CoPs) for institutional PAC providers and would address HHAs separately. The Commission is also considering a core set of “PAC requirements” for all providers and then additional subsets of requirements if providers want to treat specific patient populations. For example, if a SNF wanted to treat ventilator patients, it would need to have the necessary equipment and staff training. Several commissioners have urged MedPAC staff to focus on the regulatory and operational aspects of a PAC PPS. As hospital executives and administrators, they spoke firsthand of the challenges of moving patients through different levels of care without regulatory flexibility. They also pressed the importance of pilot testing a PAC PPS model before 2021, recommending that the Commission explore what regulatory flexibility needs to be in place even before a unified PPS is implemented so that providers can volunteer as pilot sites. Next Steps MedPAC will issue its PAC PPS report to Congress in June 2017, and it will be available here: http://medpac.gov/documents-/reports. The Commission will kick off its 20172018 meeting cycle with its next public meeting in September 2017. For more information on all meetings including presentation slides and meeting transcripts, please see: http://medpac. gov/-public-meetings-

AMRPA Magazine May 2017

15TH ANNUAL AMRPA EDUCATIONAL CONFERENCE & EXPO

OCTOBER 23-25, 2017 • SWISSÔTEL NEVER STOP IMPROVING THE REHAB INDUSTRY! Save the date for the 15th Annual AMRPA Educational Conference and Expo, October 23-25, 2017 in Chicago!

Registration will be available in May at www.amrpa.org AMRPA members influence this fast-paced industry by sharing their knowledge, which allows us to provide better services, stay informed and increase our collective leverage! Join us in Chicago next October for educational sessions on these and many more compelling topics:

Questions? Please contact Rachel Koresky, AMRPA Member Services Coordinator, at rkoresky@amrpa.org. 23

AMRPA MEMBERS CONVERGE ON WASHINGTON, DC, FOR LEADERSHIP FORUM AND CONGRESSIONAL FLY-IN By Jonathan M. Gold, JD, Regulatory and Government Relations Counsel*, AMRPA

he American Medical Rehabilitation Providers Association (AMRPA) held its annual Leadership Forum on March 20 and 21, where attendees heard from current and former health officials, policy experts and other leaders on developments in the rehabilitation field. The forum was a unique opportunity for attendees to hear about the ongoing implementation of the various quality reporting programs, reform of Medicare and Medicaid payment systems and many other issues. On the second day of the conference, AMRPA arranged for attendees to visit Capitol Hill to meet with the offices of their Member of Congress to advocate on behalf of their facilities and the industry. Throughout the forum, AMRPA Board Chair Bruce M. Gans, M.D., served as moderator and offered

his insights into on the importance of the issues discussed. Quality Reporting Updates The forum began with a briefing by Center for Medicare and Medicaid Services (CMS) officials on the latest progress in implementing The Improving Medicare Post-Acute Care Transformation (IMPACT) Act. The Act, passed in 2014, requires development of quality measures and standardized patient assessment data across post-acute care (PAC) settings to enable improvements and comparisons among different PAC providers. The CMS representatives emphasized the various opportunities for public input as the quality measures and data elements are determined and implemented, which include technical expert panels, public comment periods and participation in pilot testing. CMS then provided an update on the organizationâ&#x20AC;&#x2122;s Experience of Care Survey. The surveyâ&#x20AC;&#x2122;s goal is to

Left: Mary Beth Walsh, MD , CEO, Burke Rehabilitation Hospital, and Phil Loverso, PhD, President and CEO, Casa Colina Hospital and Centers for Healthcare. Right: Bob Krug, MD, President of Mount Sinai Rehabilitation Hospital and Co-chair of the AMRPA Clinical and Consumer Affairs Committee, and Bruce Gans, MD, AMRPA Board Chair, Executive Vice President and Chief Medical Officer for the Kessler Institute for Rehabilitation and National Medical Director for Rehabilitation for Select Medical.

measure patient experience in Inpatient Rehabilitation Facilities (IRFs) and LongTerm Care Hospitals (LTCHs) by collecting feedback on the use of goal-setting, care from various types of providers, the hospital environment, discharge preparedness and overall ratings. Field testing at select inpatient rehabilitation hospitals and units took place this winter, and CMS is in the process of analyzing the results of the field testing. This summer, CMS will begin mode-testing and is actively recruiting facilities to participate. CMS informed attendees it plans on surveying April and May discharges for mode testing and have the responses collected by late August. The next step, according to CMS, is to implement a national voluntary dry run of the survey. Before that, the survey will need Office of Management and Budget approval, refining of survey techniques and measures, vendor training and the production of a manual. Attendees also received updates on the IRF Compare site, which was mandated by the Affordable Care Act and launched in December 2016. CMS officials went over the four new quality measures that will be posted and incorporated into the Compare site in Fall 2017, which include National Healthcare Safety Network (NHSN) Facility-wide Inpatient Hospitalonset Methicillinresistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure, NHSN Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure, and Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine and Influenza Vaccination Coverage among Healthcare Personnel. AMRPA Magazine May 2017

The CMS staff also covered the various non-public reports available to providers through the IRF Quality Reporting Program (IRF QRP), which can provide feedback on facilities with up-to-date Quality Measure Reports and Provider Preview Reports. CMS explained that some of the reports are on demand and can include provider’s most recently submitted data, regardless of the last reporting deadline. Recovery Audit Program Updates Commander Brian Elza, who serves as the Director of the Division of Recovery Audit Operations at CMS, provided an update on Recovery Audit Contractor (RAC) program requirements. Newly awarded contracts were effective Oct. 31,2016, and included program enhancements that Elza says are designed to reduce provider burden, enhance CMS oversight and increase program transparency. The new program changes are further explained in another article in this edition. Following Elza, Latesha Walker of CMS’ Provider Relations Division presented on the efforts underway in her department to work with providers to ensure higher rates of proper payments and lessen the burden of provider appeals. According to Walker, their efforts focus on four main areas: increased transparency, improved documentation requests, providing adequate feedback and reducing the economic impact of audits. Some of the specific initiatives already underway include preventing multiple providers from reviewing a provider at the same time and making audit notifications and requests

more clear and specific. Further, Walker covered the topic of MAC denials on the basis of failure to meet therapy intensity requirements and denial due to use of group therapy without accompanying justification. Walker heard feedback from attendees who were experiencing denials for use of group therapy despite proper accompanying justification and requested examples of such denials in order to facilitate discussion between contractors, CMS and providers to improve the process. As a supplement to these updates from

CMS, Laurence Wilson, the Acting Deputy Director in the Center for Medicare at CMS presented on the second day of the conference. In his presentation, Wilson covered updates to a number of CMS programs, including CMS’ study of the use of group and concurrent therapy in inpatient rehabilitation settings. Wilson also addressed the transition to ICD-10 and the new Recovery Audit Contracts. AMRPA Public Policy Priorities Martha Kendrick J.D., Partner at Akin Gump Strauss Hauer & Feld, and Kendall Hussey, Policy Advisor at the firm, gave attendees a refresher on techniques for advocating

Dr. Bruce Gans

before their members of Congress, as well as an overview of AMRPA’s policy priorities for the 115th Congress. In highlighting AMRPA’s top priorities, Kendrick began with how proposed legislation that would implement Value Based Purchasing for PAC settings would disrupt the timeline laid out by the IMPACT Act. AMRPA’s position is that PAC payment reform should be informed by the evidence by waiting until IMPACT Act measures are shown to be accurately measuring quality across settings.

Left: Latesha Walker, Provider Relations Coordinator at the Center for Program Integrity at CMS Middle: Brian Elza, Director of the Division of Recovery Audit Operations at the Center for Program Integrity at CMS Right: Barbara Gage, Ph.D., Co-Director of the IMPACT Act Standardized Assessment Data Project at RAND and Research Professor at the George Washington University School of Medicine

Trump Administration has made regulatory relief a priority and that AMRPA will use that opportunity to pursue these changes.

system. Another article in this edition provides further detail on MedPAC’s recommendations for the PAC sector. Following Miller, attendees heard from When the conference commenced for its Carolyn C. Zollar J.D., Executive Vice second day, attendees heard from Mark President for Policy Development and E. Miller, Ph.D., Executive Director of the Government Relations at AMRPA on Medicare Payment Advisory Commission current public policy impacting AMRPA (MedPAC) on the group’s recent reports members. The topics included the relating to the PAC sector. Miller covered distinction between Medicare payment MedPAC’s concerns about different systems among PAC provider settings, the payment rates across PAC settings despite current system of auditors and contractors examining PAC Medicare claims, and the status of Health and Human Services’ appeals backlog for Medicare payment denials. forum was a unique opportunity

Kendrick also covered concerns expressed by providers that Medicare Advantage beneficiaries are being improperly denied access to hospital rehabilitation care due to plans substituting proprietary guidelines in place of Medicare coverage criteria, which violates beneficiaries’ legal entitlement to the same services covered The under traditional, fee-forservice Medicare coverage. for attendees to hear Kendrick urged attendees to about the ongoing implementation raise this issue in meetings with members of Congress, of the various quality reporting along with requesting relief programs, reform of Medicare for therapy cap requirements, and Medicaid payment systems which AMRPA believes should be repealed. and many other issues. Next Kendrick discussed areas where AMRPA would like to see regulatory changes. The rules that AMRPA has targeted for administrative relief include the 60 percent rule for admissions, the three-hour rule for therapy intensity (specifically the lack of guidance on which types of therapy qualify under the rule) and the rules in which Recovery Auditors and other contractors operate that result in wrongly denied claims and resourceextensive appeals. Kendrick noted that the 26

the provision of similar services and MedPAC’s desire to standardize these PAC payments. Miller noted MedPAC’s findings of high average margins across PAC settings, and their belief that coding practices may be contributing to excess profits. Miller said that ultimately MedPAC would like to see an accelerated timetable for a uniformed PAC payment

The second day of the conference adjourned in the early afternoon so that attendees could spend the remainder of the day meeting with their members of Congress on behalf of AMRPA and discussing the policy issues covered in the forum. In total, 60 meetings took place between attendees and members of Congress and their staff during the afternoon. *Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar

AMRPA Magazine May 2017

LATEST STATISTICS 2017 PPS-EXCLUDED REHABILITATION HOSPITALS, UNITS, LONG-TERM CARE HOSPITALS AND CORFS AND BEDS BY STATE (AS OF MAY 2017) STATE

REHAB HOSPITALS

REHAB HOSPITAL BED COUNT

REHAB UNITS

REHAB UNIT BED COUNT

LTC LTCH HOSPITALS BED COUNT

CORFS

ALASKA

ALABAMA

383

292

ARIZONA

566

361

ARKANSAS

508

348

CALIFORNIA

324

2,144

COLORADO

266

262

CONNECTICUT

DISTRICT OF COLUMBIA

137

DELAWARE

FLORIDA

1,182

1,349

GEORGIA

324

547

HAWAII

100

IDAHO

114

ILLINOIS

445

1,273

INDIANA

394

677

IOWA

232

KANSAS

356

195

KENTUCKY

288

395

LOUISIANA

578

600

122

MAINE

100

MARYLAND

146

MASSACHUSETTES

722

MICHIGAN

174

974

MINNESSOTA

331

MISSISSIPPI

348

STATE

REHAB HOSPITALS

REHAB HOSPITAL BED COUNT

REHAB UNITS

REHAB UNIT BED COUNT

LTC LTCH HOSPITALS BED COUNT

CORFS

MONTANA

107

MISSOURI

410

653

NEBRASKA

151

NEVADA

181

336

NEW HAMPSHIRE

185

NEW JERSEY

781

293

NEW MEXICO

230

123

NEW YORK

150

1,951

NORTH CAROLINA

213

746

NORTH DAKOTA

109

OHIO

624

1,022

OKLAHOMA

148

472

OREGON

148

PENNSYLVANIA

1,526

1,468

PUERTO RICO

RHODE ISLAND

SOUTH CAROLINA

420

355

SOUTH DAKOTA

103

TENNESSE

564

601

TEXAS

3,284

1,713

257

UTAH

124

167

VERMONT

VIRGINIA

409

446

WASHINGTON

102

324

WEST VIRGINIA

290

WISCONSIN

171

393

WYOMING

TOTAL

276

17,195

910

22,804

424

1,530

167

Source: Centers for Medicare & Medicaid Services OSCAR Report, May 2017

AMRPA Magazine May 2017

NEW STUDY FINDS BUNDLED PAYMENTS REDUCES COSTS, IMPROVES CARE

study published by the Altarum Institute and the Centers for Medicare and Medicaid Services (CMS) found that bundled payments improve quality and lower costs of care while maintaining or lowering the volume of the episodes of care despite previous findings. The study “Debunking the Argument that the Bundled Payment for Care Improvement Program (BPCI) Contributed to Higher Procedure Volumes” covered Medicare’s Bundled Payment for Care Improvement (BPCI) Initiative results for the past four years and includes the Medicare hip and knee replacement bundled care program. The study examined the total number of hip and knee replacements for Medicare beneficiaries performed at any hospital in the United States between 2010 and 2015. The researchers compared the number of procedures in BPCI and non-BPCI hospitals pre- and post-BPCI initiation, and found that there was not a statistically significant increase in volume for BPCI participants compared to nonparticipants. Therefore, they concluded that BPCI could not be responsible for any increase in the volume of procedures between pre-BPCI and BPCI years. Previous Studies A study published in the Journal of the American Medical Association (JAMA) on the effects of Medicare’s Bundled Payment for Care Improvement for participating hospitals focused on lower extremity joint replacements. Compared to a matched cohort, the study concluded that post-acute care costs had decreased from baseline and that quality outcomes had remained the same. While the volume of procedures increased in the performance year as compared to baseline for both participants and the matched cohort, the authors reported that the growth was not statistically significant.

An accompanying JAMA editorial disputed the findings and argued that the BPCI program actually incented physicians to perform unnecessary treatments, therefore increasing Medicare costs. The editorial focused on the differences in procedure volumes between the intervention and matched cohorts, as well as the increase in volume in the intervention cohort. These increases, the author argued, were significant and, when taken into account, point to a net increase in Medicare spend and supports the argument that procedure-focused bundled payment programs may encourage the production of unnecessary procedures. Alatrum and CMS’s Response The Alatrum study revealed that providers who participated in the Center for Medicare and Medicaid Innovation’s (CMMI) BPCI Initiative did not perform more procedures under the value-based payment model than non-participants. The authors, Andrew Wilson and François de Brantes of Alatrum’s Center for Payment Innovation and Patrick Conway, Chief Medical Officer of CMS, conducted the study seeking to respond to the JAMA editorial penned in September 2016 by Elliot Fisher, Director of the Dartmouth Institute for Health Policy and Clinical Practice. The authors of the Altarum Study hoped to respond

Highlights: •

The study revealed that providers who participated BPCI did not perform more procedures under the value-based payment model than non-participants.

to—and successfully counter—Fisher’s criticism of bundled payments. The Altarum researchers point out that any increase in volume during the test period can be attributed to regional demographics and common market forces, such as the effect of hospital consolidations and the opening of new joint replacement facilities. The study’s results also mirror those of an earlier study, which found that participation in BPCI did not have a significant effect on any change in volume. The researchers also pointed out several shortcomings of Fisher’s editorial, notably that he failed to take into account changes in the underlying count of Medicare beneficiaries in the local area, as well as potential differences in regional prevalence rates. The Altarum study showed that the initial group of BPCI participants, those that went into the program in October

Table 1. Comparison of Increases in Yearly Lower Joint Replacement Volume between BPCI Participants and Others Year

BPCI Participants in October 2013 & Oct 2014

BPCI Participants through 2015

Participants

Others

Participants

Others

2010

13, 370

436,597

26,985

422,982

2011

13,095

426,689

25,996

413,788

2012

13,568

439,580

27,368

425,780

2013

14,155

460,377

28,956

445,576

2014

14,169

464,500

28,604

450,065

2015

13,704

479,015

28,954

463,765

2010-2015

2.5%

9.7%

7.3%

9.6%

2011-2015

4.7%

12.3%

11.4%

12.1%

% Change

2013 and January 2014, experienced a significantly lower rate of increase in the volume of procedures between baseline and performance years than the national average (Table 1). The second group of BPCI participants, those that started in early 2015, experienced a larger increase in volume between 2012 and 2015, although the study found that that the increase was not attributable to the effects of the BPCI program since none of these facilities was enrolled in BPCI until the beginning of 2015. Study Limitations The authors noted that their analysis had several potential limitations. The number of BPCI participants was small relative to non-participants, and while this limited sample size may have contributed to the non-significant result in the difference-indifferences model, the findings mirror of those of the earlier evaluation of the BPCI program that looked at its effect on volume.

identified from CMS public use files (innovation.cms.gov/Files/x/ bpcianalyticfile.xlsx). Included in the cohort of BPCI hospitals were those that began the program in either October 2013 or January 2014 for lower joint replacement procedures. All remaining hospitals, including those participating in later years, were included in the comparison group. Hospital Referral Region Characteristics The total number of Medicare Feefor-Service (FFS) beneficiaries, percent of beneficiaries enrolled in Medicare Advantage, average age of beneficiaries, percentage of female beneficiaries, percentage of non-white beneficiaries, and average patient severity based on Hierarchical Condition Category (HCC) scores for each Health Readiness Record (HRR) were obtained from CMS public use files for 2011 and 2014.

2015. As such, a difference-in-differences model applied to hospitals that enrolled in 2015 would be irrelevant because any differences in volume would be the result of factors other than BPCI enrollment. As a result, January 2011 through December 2013 was the baseline period and January 2014 to December 2015 was the implementation period. Results The average number of lower joint replacements performed annually among BPCI participants (n=47) was higher than non-participants (n=2,592) in the baseline period. While the adjusted average annual volumes increased by 1.7% (95% CI: 0.9%, 2.6%) among nonparticipants after the start of BPCI, the increases among participants was not significantly higher (difference-indifferences estimate 4.8%, 95% CI: -1.5%, 11.0%). Thus, the BPCI program had no effect on the number of procedures. The authors concluded that the bundled payments programs being tested by Medicare reduce health care costs while improving the quality of care. And contrary to another recent study, this report did not find any increase in the volume of procedures during the study period.

The study disputes any The authors concluded that the assertion that the BPCIbundled payments programs being participating hospitals tested by Medicare reduce health contributed to a higher volume of procedures as a result of care costs while improving the quality that participation, as the rate of care. And contrary to another of increase in the volume of procedures was significantly recent study, this report did not lower than in the rest of the find any increase in the volume of The complete report, country. These findings point procedures during the study period. Debunking the Argument to the potential of bundled that the Bundled Payment for payment to improve quality Care Improvement Program and lower costs of care while Statistical Analysis maintaining or lowering the volume of (BPCI) Contributed to Higher Procedure The authors examined demographic the episodes of care. Volumes, Andrew Wilson, MPH, MA, and market trends associated with Franรงois de Brantes, MS, MBA, Patrick increases in joint replacement procedure H. Conway, MD, MS, February 2017 is Methods in HRRs between 2011 and 2014. To reavailable at The authors used Medicare Part A test the impact of BPCI participation http://altarum.org/sites/default/files/ claims to count the total annual number on hospital procedure volumes, they uploaded-publication-files/BPCI_ of inpatient-based major lower joint used a difference-in-differences model Report_Final_0.pdf replacement procedures performed at to compare changes in hospitalany hospital in the years 2011 through specific average annual volumes of 2015 based on Medicare severity joint replacement procedures following related diagnosis groups (MS-DRGs implementation of BPCI between 469 and 470). The data were pulled by hospitals that participated in BPCI and CareSet Labs directly from the Medicare those that did not. The study focused data warehouse, and due to data use on the hospitals that had enrolled in the restrictions, hospitals performing fewer program in October 2013 or January than 11 procedures in a given year were 2014. Only one hospital enrolled in excluded. July of 2014, and the balance of BPCI participating hospitals enrolled during Hospitals participating in BPCI were 30

AMRPA Magazine May 2017

RECOVERY AUDIT CONTRACTOR PROGRAM UPDATES By Jonathan M. Gold, JD, Regulatory and Government Relations Counsel*, AMRPA

t this year’s AMRPA Spring Leadership Conference, Commander Brian Elza, who serves as the Director of the Division of Recovery Audit Operations at the Centers for Medicare and Medicaid Services (CMS), provided an update on recent Recovery Audit Contractor (RAC) program changes. Newly awarded contracts were effective Oct. 31, 2016, and included program enhancements that Elza says are designed to reduce provider burden, enhance CMS oversight and increase program transparency. Among the most closely watched enhancements will be the requirement that RACs have an accuracy rate of at least 95 percent and an appeal overturn rate of less than 10 percent at the first level of appeal. CMS also included financial incentives that reward contractors who exceed the minimum accuracy rate. The new contracts also stipulate that contractors will not be paid a contingency fee until after the second level of appeal, which is determined by Qualified Independent Contractors (QICs). Elza also covered the new rules regarding Additional Documentation Request (ADR) Limits for RAC contractors, which became effective Jan. 1, 2016. The new system gives RACs two options from which to choose when calculating a provider specific ADR limit. The first option, called the baseline limit method, is 0.5 percent of claims submitted for the previous 12 months. Since ADR letters are sent on a 45-day cycle, the baseline annual ADR limit is divided by eight to establish the ADR cycle limit, which is the maximum number of claims that can be included in a single 45-day period request. Recovery Auditors who choose to review a provider using the 0.5 percent baseline annual ADR limit must review under a 3-year look-back period. The second option RACs may choose when determining a provider’s ADR limit

is a risk-based Adjusted ADR Limit. To come up with the Adjusted ADR limit, a RAC will track a provider’s denial rate for three 45-day ADR cycles. The ADR limit for these initial three cycles will be the aforementioned baseline limit. The observed denial rate during these three cycles will then be used to determine the new Adjusted ADR Limit based on the below chart for the next three 45day cycles. The limit can range from 5 percent of total claims for providers with a denial rate between 91 percent and 100 percent to as low as no permitted ADR for providers with a denial rate at 3 percent or below. After three cycles, the limit is recalculated again on a cumulative basis. In the case of a favorable appeal decision for the provider, the ADR limit must be adjusted for the new denial rate. Recovery Auditors who choose to review a provider using their Adjusted ADR Limit must review under a six-month look-back period based on the claim paid date. Of important note, CMS has made clear that limits must be proportionately adjusted within types of claims within a facility, so one type of claim is not requested at a disproportionately higher rate than claims submitted by that facility for that type of service. Denial Rate (Range)

Adjusted ADR Limit (% of Total Paid Claims)

91-100%

5.0%

71-90%

4.0%

51-70%

3.0%

36-50%

1.5%

21-35%

1.0%

10-20%

0.5%

4-9%

0.25%

0-3%

No reviews for 3 (45-day) review cycles

Highlights: •

•

RACs do not collect contingency fees until after the 2nd level of appeal. New ADR limits can be calculated based on provider’s denial rate.

claims in 2014. The provider’s baseline annual ADR limit would be 255,000 x 0.005, which is 1,276. The ADR cycle limit would be 1,276/ 8, which is 159.375, and would be rounded to 159 additional documentation requests per 45 days. •

Adjusted Method: After three (3) 45-day review cycles, Provider B had 144 claims containing improper payments, out of a total of 477 reviewed claims. The Denial Rate would be 144 ÷ 477, which is 30.18% (rounded to 30%1). During this timeframe, Provider B also received Fully Favorable appeal decisions on 48 previously-reviewed claims. Therefore, the Denial Rate would actually be (144 – 48) ÷ 477, which is 20%. Using Table 1 above, the Adjusted ADR limit would be 0.5%, which is the same as the baseline annual ADR limit. This Adjusted ADR limit would then apply to the next three (3) review cycles, after which the Denial Rate would be recalculated.

*Admitted Only in Illinois. Supervision by Carolyn C. Zollar, J.D., a member of the D.C. Bar.

CMS provided the following examples of the new ADR limits: •

Baseline Method: Provider B billed and was paid for 255,000 Medicare 31

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AMRPA Magazine May 2017

AMRPA SUBMITS COMMENTS TO SENATE FINANCE COMMITTEE ON DRAFT VERSION OF AFIRM ACT Editor’s Note: On April 7, 2017, the American Medical Rehabilitation Providers Association (AMRPA) submitted recommendations to members of the Senate Finance Committee on the draft Audit & Appeal Fairness, Integrity and Reforms in Medicare (AFIRM) Act on ways to prevent and combat fraud, waste and abuse (FWA) in the Medicare and Medicaid programs. The letter expresses AMRPA’s concerns regarding some of the provisions that may possibly create barriers for rehabilitation providers and impede Medicare beneficiaries’ access to care. The complete letter is provided below.

Administrative Contractors (MACs), Recovery Audit Contractors (RACs), Zone Program Integrity Contractors (ZPICs), Comprehensive Error Rate Testing (CERT) Contractors, and Supplemental Medical Review Contractors (SMRCs). The inpatient rehabilitation field has experienced extensive auditing over the past decade as a result of what we consider overly aggressive auditing activities by RACs, as well as other Medicare contractors, based on second-guessing of medical necessity and insufficient documentation, as opposed to outright fraud, upcoding, and more egregious types of provider behavior.

April 7, 2017 The Honorable Orrin Hatch The Honorable Ron Wyden Chairman Ranking Member Committee on Finance Committee on Finance United States Senate United States Senate 219 Dirksen Senate Office Bldg 219 Dirksen Senate Office Bldg Washington, DC 20510 Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden: The American Medical Rehabilitation Providers Association (AMRPA) appreciates this opportunity to comment on the most recent draft of the Audit & Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act and to provide recommendations on how to prevent and combat fraud, waste, and abuse (FWA) most effectively in the Medicare and Medicaid programs. AMRPA is the national trade association whose members provide rehabilitation services across the spectrum of health care settings including inpatient rehabilitation facilities (IRFs), hospital outpatient departments (HOPDs), and settings independent of the hospital, such as comprehensive outpatient rehabilitation facilities (CORFs), rehabilitation agencies, long-term care hospitals (LTCHs), and skilled nursing facilities (SNFs). AMRPA members help patients maximize their health, functional skills, independence, and participation in society so they can return to home, work, or an active retirement. AMRPA is committed to eliminating FWA in the Medicare and Medicaid programs, and we support legislative efforts to increase oversight of auditors and improve the appeals system. We draw a distinction between fraud and abuse and overpayment determinations based on medical necessity and minor documentation deficiencies. The vast bulk of overpayment determinations against inpatient rehabilitation hospitals and units consists of these latter types of cases. The current panoply of FWA programs is complex, redundant, overly burdensome, and inadvertently creates barriers to access to care for rehabilitation patients. The Medicare program contracts with numerous private companies with overlapping, redundant responsibilities to audit claims. These contractors include Medicare

Moreover, the current Medicare appeals morass offers little hope of any timely resolution of disputes over claims disallowed by contractors. Since a prior version of the AFIRM Act was reported out by the Senate Finance Committee, the average processing time for administrative law judge (ALJ) appeals at the Office of Medicare Hearings and Appeals (OMHA) has increased from 662 to 1042 days, despite statutory requirements that ALJ and Medicare Appeals Council (MAC) decisions be rendered within 90 days. As of March 5, 2017, there were 667,326 pending appeals at OMHA. On March 7, the Centers for Medicare and Medicaid Services (CMS) informed the D.C. District Court that it would not be able to meet court-ordered deadlines for reducing the backlog of Medicare appeals. See American Hospital Association v. Price, No. 14-851 (D.D.C.) (March 6, 2017 Status Report), available at https:// dlbjbjzgnk95t.cloudfront.net/0898000/898981/status.pdf. Instead, CMS reported that the backlog at OMHA will continue to increase as follows by the end of each fiscal year (FY): •

FY 2017: 687,382

•

FY 2018: 714,347

•

FY 2019: 788,493

•

FY 2020: 882,437

•

FY 2021: 1,009,768

These numbers are clearly unacceptable and underscore the need for immediate legislative action to address the issue of unduly burdensome contractor audits and the resulting explosion in the number of Medicare appeals. AMRPA applauds the Senate Finance Committee’s efforts to ensure that federal FWA resources are appropriately targeted and that provider appeals are heard in a timely and fair fashion. To that end, AMRPA supports numerous provisions in the AFIRM Act draft, including those that would: •

penalize inaccurate contractors by reducing their ability to request additional documentation from providers and suppliers;

•

provide a one-year exemption from post-payment review of 33

claims to providers and suppliers that achieve a low rate of claim denials over a two- year period;

prepayment review of claims, statutorily mandating this additional level of review would appear to be unwanted and unwarranted, and lacking an evidentiary basis.

•

establish a method to exempt compliant providers and suppliers from audits;

•

develop qualification standards for Medicare contractors to use medical doctors with relevant knowledge of Medicare policy to conduct or approve prepayment and post-payment review of claims, for example, a medical director reviewing IRF claims should have training and experience in providing medical rehabilitation care in an IRF;

•

provide additional resources for OMHA and the Departmental Appeals Board of Health and Human Services (HHS) to increase the volume of adjudications and decrease processing times;

•

review and improve contractor knowledge and application of Medicare policies;

•

create an independent Medicare Provider and Supplier Ombudsman for Reviews and Appeals to assist in resolving complaints by appellants and those considering appeal; and

•

create an optional alternative dispute resolution process with the goal of alleviating the backlog of appeals claims.

Section 4: Remanding Appeals to the Redetermination Level with the Introduction of New Evidence

AMRPA is concerned, however, that some provisions in the draft could erect barriers for rehabilitation providers and impede Medicare beneficiaries’ access to much-needed care. In particular, AMRPA strongly opposes inclusion of the newly-proposed provision that would require the HHS Secretary to enter into agreements with RACs to perform prepayment review of claims, adding another layer of review. The provision would task RACs with determining whether payment should be made and, if so, what the correct amount of such payment should be. RACs would be paid from amounts recovered during such reviews on a contingent basis for identifying overpayments and claims that should not be paid. The Secretary would determine how to compensate them for identifying underpayments during prepayment review.

AMRPA recommends that the Senate Finance Committee strike Section 4, which would remand cases for a de novo redetermination when new evidence is offered at the reconsideration level or at any subsequent higher level of appeal. This proposal fails to take into account the difficulties some providers and suppliers face in obtaining timely medical records and other justification from other providers.

This prepayment review provision would invariably increase the total number of Medicare appeals and could significantly compound the backlog problem that has been adjudged unlawful and is currently out of compliance with a federal court order. The significantly high reversal rate RACs experience on appeal calls into question the reliability of their judgment in assessing claims. The provision would cede too much unchecked authority to RACs to determine appropriate payment amounts while financially incentivizing them to find ways to reduce payments to providers. It would impose a fundamentally unfair “guilty before proven innocent” standard that subjects providers to extensive up-front documentation requirements absent any proven claim deficiencies. Such a practice could create years of financial instability for providers and inevitably would harm patient access to medically necessary rehabilitation. Moreover, the evidence to date does not support moving forward with prepayment review. CMS previously conducted what was supposed to be a three-year prepayment review demonstration beginning in September 2012 in eleven states but opted to suspend it after only 17 months. Per the agency’s 2015 RAC Report, although CMS saw modest savings from the demo, system limitations hampered the prepayment review process and CMS opted not to extend the demonstration. Because CMS tried, and voluntarily discontinued, 34

For these reasons, AMRPA urges the Senate Finance Committee not to include the proposed prepayment review provision in the AFIRM Act. In addition, we respectfully request that the Committee refine and modify the draft legislation as recommended below to ensure that auditors more effectively target program integrity high-risk areas while reducing burdens on providers that negatively affect patient care. Section 3: Establishment of Medicare Magistrate Review and Revision of Amount in Controversy Thresholds AMRPA recommends that the Senate Finance Committee: (1) modify the proposed magistrate review process to make it voluntary rather than mandatory; (2) clarify that Medicare Magistrates operate independently from CMS; and (3) add statutory language detailing the authority and responsibilities of the Medicare Magistrates.

AMRPA supports the current treatment of providers who submit new evidence at the ALJ level and would also support this same treatment at the reconsideration level. Such providers must demonstrate “good cause” to augment the record with additional evidence. Remanding cases to the redetermination level when new evidence is offered would exacerbate the problems of timely determinations at all levels of administrative appeal. It would also force providers to make a difficult choice between returning to square one after they have already waited months or years to resolve their claims, or proceeding with an appeal without all the relevant evidence to support the appropriateness of the disputed claim. Given that the current average OMHA appeals processing time is now approaching three years, the remand provision seems ill-advised at best and punitive at worst. Section 10: Review Program Improvements The current draft of the AFIRM Act would require the Secretary of HHS to “designate a point of contact to oversee and undertake” a determination [w]hether additional punitive actions against ineffective review contractors could be taken and what, if any, financial incentives or disincentives could be used to promote the accuracy of a review contractor’s reviews. (proposed Section 1893(i)(2)(J) of the Social Security Act). AMRPA strongly urges that the draft be amended to include specific provisions to promote increased contractor integrity and accountability and penalize contractors that have a high rate of their denials overturned on appeal. AMRPA Magazine May 2017

Since the Senate Finance Committee reported out a prior version of the AFIRM Act in 2015, HHS has modified RAC contracts to: •

Require RACs to maintain an overturn rate of less than 10 percent at the first level of appeal, failure of which could lead to reductions in a RAC’s Additional Documentation Request (ADR) limits;

•

Establish a 95 percent RAC accuracy requirement, failure of which could also lead to progressive reductions in ADR limits;

•

Limit the look-back period for patient status claims to six months for providers who submit claims within three months of the date of service; and

•

Require each RAC to have a physician serve as Contractor Medical Director and be available to discuss claims denials with physicians.

The Committee should consider including these provisions in the legislation. In addition, HHS modified ADR limits in May 2016 to adjust the number of ADRs that can be submitted to providers based on their appeal denial rates. The baseline annual ADR limit is 0.5 percent of a provider’s total number of paid Medicare claims from a previous 12-month period. Depending on the provider’s appeal denial rate, after three 45-day ADR cycles, an Adjusted ADR Limit is calculated which ranges from zero to five percent. A RAC who chooses to review a provider using their Adjusted ADR Limit must review under a six-month look-back period, based on the date the claim is paid. However, if a RAC instead chooses to review a provider using the baseline 0.5 percent baseline annual ADR limit, they must utilize a three-year look- back period. While these requirements address some areas of AMRPA concerns, unless they are explicitly incorporated into statute, HHS remains free to modify them through future changes to RAC contracts. AMRPA therefore recommends that the Senate Finance Committee amend the draft bill to codify reasonable ADR limits tied to providers’ appeal denial rates. These limits should apply to all Medicare audit contractors, not just RACs. This would afford providers who consistently pursue successful appeals protection from burdensome “fishing expeditions.” In addition, AMRPA recommends that the draft be amended to penalize contractors that have a high rate of denials overturned on appeal by limiting their ability to issue ADRs and subjecting them to potential reductions in their contingency fees or other compensation where there is a repeated pattern of overturned claims denials. Congress needs to protect against incentivizing Medicare contractor “bounty hunting.” Therefore, AMRPA further urges the Senate Finance Committee to consider adding additional language to the draft that would eliminate the contingency fee structure for RACs altogether. The current draft merely calls for the Department of Health and Human Services to report back to Congress on ways to modify the incentive-based payment system in a budget neutral manner. The current contingency fee payment structure incentivizes overlyaggressive behavior by RACs, such as opportunistic audits focused on minor technical documentation flaws in the medical record that result in payment denials for medically necessary care without regard

to the actual appropriateness of the care provided or any evidence of improper intent or fraud. In addition, contractors should be prohibited from using isolated documentation or minor technical irregularities as the principal basis for denying payment for medically necessary services. Despite contrary assurances from CMS in the past, contractors have misconstrued 42 C.F.R. § 412.622 to impose an absolute requirement that each document identified in regulation be completed exactly as specified, including rigid timelines for each. The CERT contractor uses this standard when auditing contractor performance and, thus, MACs are held to a standard of documentation purity that does not reflect the realities of clinical practice. As a result, minor deficiencies in the medical record result in wholesale denials of completely legitimate claims for services that were medically necessary, provided to Medicare patients, and produced quality outcomes. Yet, the provider has no option but to repay the Medicare program for the claim and wait years for a fair hearing before an ALJ. Congress could dramatically reduce the ALJ backlog without compromising CMS’s program integrity efforts by establishing a de minimis standard for documentation deficiencies in the medical record, and explicitly instructing Medicare Administrative Contractors to use clinical inference in deciding whether to pay or deny Medicare claims. Section 13: Incentives and Disincentives for Medicare Contractors, Providers, and Suppliers In addition to the one-year protection from audits by review contractors for providers and suppliers with a low rate of denied claims, AMRPA recommends that the Senate Finance Committee add language that would extend similar protection to providers who secure high rates of overturned denials. *** AMRPA appreciates the opportunity to provide comments on this important draft legislation. We would be pleased to engage in further discussions with you and/or additional Senate Finance Committee staff as you move forward and refine the AFIRM Act. For more information or any questions you may have, please contact Carolyn Zollar at (202) 223-1920 or czollar@amrpa.org, or Martha Kendrick at (202) 887-4215 or mkendrick@akingump.com. Thank you again for the opportunity to respond. Sincerely,

Bruce M. Gans, MD Chair, AMRPA Board of Directors Executive Vice President and Chief Medical Officer, Kessler Institute for Rehabilitation National Medical Director for Rehabilitation, Select Medical

POST-ACUTE CARE COALITION SUBMITS LETTER TO HOUSE COMMITTEE MEMBERS ON MEDICARE POST-ACUTE CARE VALUE-BASED PURCHASING ACT Editor’s Note: On April 7, 2017, members of the post-acute care community submitted comments to members of the House Ways and Means Committee regarding revisions to the design of an evidence-based Post-Acute Care Value-Based Purchasing Act (PAC VBP) program. The complete letter is provided below.

April 7, 2017 The Honorable Kevin Brady Chairman House Committee on Ways and Means 1102 Longworth House Office Building Washington, D.C. 20515

The Honorable Ron Kind U.S. House of Representatives 1502 Longworth House Office Building Washington, D.C. 20515

The Honorable Pat Tiberi Chairman House Committee on Ways and Means Subcommittee on Health 1104 Longworth House Office Building Washington, D.C. 20515

Dear Chairmen Brady and Tiberi and Representative Kind: On behalf of the post-acute care (PAC) provider community, the undersigned organizations write to provide our comments on the updated discussion draft of H.R. 3298, the Medicare Post-Acute Care Value-Based Purchasing Act, shared in December 2016. 36

Collectively, our organizations represent the entire continuum of the PAC sector. On behalf of our members, PAC providers and patients, we thank you for your leadership on Medicare PAC reform and continue to appreciate the iterative process by which you and your staff are developing this legislation. In addition to the specific comments below, we want to take the opportunity to express appreciation and recognize some of the positive changes in this most recent draft of the legislation. Specifically, we believe the following revisions are important to the design of an evidence-based PAC VBP program: •

Recognizing provider improvement: The revised discussion draft would recognize both attainment and improvement in evaluating quality and resource use performance.

•

Reinvestment of savings: Other than the shifting across PAC payment systems, we appreciate the discussion draft’s more earnest commitment to budget neutrality by reinvesting all withheld payments in the form of valuebased incentive payments.

While we appreciate the numerous substantive changes from the prior version of the bill, we continue to have fundamental concerns with the structure, implementation, and quality AMRPA Magazine May 2017

measurement underlying the proposed value-based purchasing (VBP) program. Our organizations—collectively and individually —are committed to meaningful Medicare payment reform, including but certainly not limited to VBP. In particular, we think that the new programmatic structure is needlessly complex and leaves far too many of the key details for the Centers for Medicare and Medicaid Services (CMS) to resolve. In assessing provider performance, “value” remains too narrowly focused on cost-containment as marked by the dominance of resource use measures and the elimination of the clinically meaningful quality domain of function. Fundamentally, we feel that assessing value should be built upon the lessons of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act, and that budgetneutrality must exist not only for the legislation overall, but also within each individual payment system of the PAC sector. While we remain committed to advancing incremental payment reform in Medicare, including VBP, we are unable to support the current discussion draft. As you’re thinking about payment reform and quality improvement in the PAC progresses, we offer the following principles that we feel would need to be included as part of any PAC VBP program. With the following revisions to the bill, we will be better able to achieve support from our respective memberships. 1. VBP scores should be focused on patient outcomes, not resource use. As we noted in our joint letter in September of 2016, the PAC VBP Act places a disproportionate over-emphasis on resource use. While we appreciate your willingness to revisit the measures, still far too much weight is concentrated in the resource use domain, and the Medicare Spending Per Beneficiary (MSPB) measure in particular. In fact, since the prior iteration of the bill, MSPB has actually increased its weight as a total percent of the composite score, in the initial years of the program and in perpetuity. Further, the “geographic measures,” as we understand them, are simply the same mandatory measures applied across all PAC providers within a hospital referral region. Thus, the flawed MSPB measure could ultimately account for greater than 60 percent if the Secretary opts to include these measures, and will in essence be counted twice. These geographic measures raise other concerns, discussed below. As leaders in health care payment policy, you can surely appreciate that value is about much more than costcontainment alone. Value is really a function of outcome per unit of cost. Thus, patient-centered care improvement should be the principal focus of any program designed to enhance the value of health care services delivered. A program truly focused on value—and especially one designed to be budget-neutral—should place greater emphasis on quality outcomes than on resource use. As noted, the Hospital VBP program weights resource use far less than quality. And even in that context, the evidence indicates that the inclusion of MSPB is in fact resulting in low-quality hospitals being financially rewarded based on the weight of resource use metrics alone—a problematic result for a program

aimed at balancing program costs with patient care. We had previously recommended that resource use be weighted no more than 10 percent of a provider’s composite score, and reiterate that recommended scoring weight—particularly as it applies to the more comprehensive measure set in years three and after. Relatedly, it is imperative that providers not be held accountable for expenditures that are beyond their control within the resource use domain. Because PAC providers are unable to influence “upstream” spending that occurs during an acute care hospitalization, initiation of PAC services should be the trigger of the episode for measurement purposes. We would need to see a directive to CMS along these lines in order to support the legislation. 2. Ensure the VBP program is budget-neutral across and within each PAC subsector. As we have consistently stated, the PAC VBP program must be budget-neutral within each PAC provider payment system. We perceive that you have heard our concerns regarding the challenge of valuing and aligning providerspecific regulatory relief with potential payment cuts. We thus appreciate the fact that the VBP program has been redesigned to reinvest all savings back into the program in the form of value-based incentive payments. However, we strongly oppose cross-subsidization that could shift resources from one PAC payment system to another. This potential shift is a problem with both the VBP program’s scoring methodology and also the inclusion of geographic measures, which compare performance across provider types. As we have previously stated, evaluating performance across PAC subsectors would be comparing apples to oranges. It is premature to presuppose that the IMPACT Act measures will be able to accurately sort out the intrinsic and critical differences between provider types and that there will not be systemic inherent performance biases, even if unintended, within and across different measures and domains. Without accounting for the intrinsic and critical differences between the unique cost structures, utilization patterns, and regulatory requirements of each PAC provider type, the PAC VBP programmatic structure itself could impose systemic biases in how it values and measures provider performance, biases which could result in major and unintended consequences. For example, lengths of stay are consistently higher among lower-acuity PAC settings. Conversely, spending per day is consistently higher among higher-acuity PAC settings. These differences hold true across all resource use levels between each provider type and there is no indication these differences are tied to patient outcomes. There is simply no basis to assume that such intrinsic differences could be adequately controlled for in a program that compares resource use across these very different care settings. Our organizations supported the IMPACT Act, which begins the process of establishing linkages across different quality reporting programs, and could support public reporting of the proposed geographic measures. However, we oppose 37

tying payment to performance on geographic measures, which compare across PAC provider type and essentially “double count” the underlying resource use measurement. Further, we continue to urge that the PAC VBP program be budget-neutral within each provider payment system, just like the Hospital VBP program is budget-neutral within the inpatient prospective payment system. 3. Post-acute care payment reform should be based on the most meaningful quality indicators as informed by the evidence It is imperative that any PAC VBP program center on the measures that are most meaningful to patients. As currently drafted, your legislation would defer to CMS to determine which quality domains, if any, should be included and when. While some administrative discretion is unavoidable to ensure CMS has the flexibility to adapt the program to changing circumstances, our organizations could not support legislation that fails to provide a more definitive blueprint for the quality domains and measures that should be used to evaluate performance. Not all measures are created equal, and there are clearly certain domains that are an indispensable part of the overall quality picture. For example, function is a key determining factor in whether an individual returns to or remains at home, or will require skilled services to prevent decline, and thus must be a central part of any program designed to incentivize high-quality PAC outcomes. With medical complexity considerations, measuring clinical improvements and stability are important. Identifying and equitably rewarding high-value care related to function must include measures that do not include an “improvement bias” which could unintentionally create access issues, but instead reflect the individual’s patientcentered care needs. This necessitates functional measures that reflect outcomes for the achievement of meaningful improvements in cognitive and motor function for beneficiaries with recovery potential, as well as outcomes for successfully maintaining function or delaying decline in beneficiaries with chronic and progressive conditions. In general, the PAC VBP measure set should track the quality domains included in the Hospital VBP Program. Implementation of the PAC VBP program should be delayed until the outcomes measures, called for by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, are implemented and shown to be reliable indicators of quality across settings. So while CMS should not have a completely blank slate to determine which quality domains to include and exclude from the VBP program, the agency should retain the ability to delay implementation until the IMPACT Act measures are shown to be highly indicative of quality and reliable across all PAC settings. More broadly, the IMPACT Act set forth a timeline to standardize quality measurement in the PAC sector, 38

standardize patient assessment data across different PAC settings, and study and report on modernization of the disparate PAC payment systems. Our organizations supported the IMPACT Act based on this sequential framework and we remain committed to ensuring the process is carried out in accordance with the law’s general timeline. We therefore ask that changes be made to the PAC VBP Act so that it adheres to the IMPACT Act’s implementation timetable and ensures that requisite cross-setting measures have been fully developed, validated, collected, and vetted before they are cemented into the VBP program. 4. Establish reasonable and fair withhold amounts and simplify the structure of the program. The PAC VBP program should adopt a reasonable withhold percentage that puts PAC providers on a level playing field with other providers, such as acute care hospitals. The additive approach of considering a range of distinct Medicare initiatives to justify the bill’s higher withhold percentages is unworkable and unfair, and the bill should instead ensure parity across the VBP programs specifically. Moreover, because this program would not replace other initiatives with payment withholds, some PAC subsectors could be subject to an annual withhold of 10 percent or greater. Simply put, that is neither fair nor sustainable. While we appreciate the Committee’s movement from prior drafts, we simply cannot support a VBP program that withholds 5 percent of Medicare payments. As previously stated, we support a withhold of 2 percent, consistent with the Acute Care Hospital VBP program’s withhold. In addition, we believe the two-track performance-risk system is needlessly complex and completely lacks any sound evidentiary basis. Although we appreciate the intention to consider the compounded effect of participating in multiple initiatives, it is simply too convoluted to assign providers to different risk tracks with different withhold amounts in each year. This framework is admittedly difficult for our organizations (with considerable policy expertise) to follow, and we feel it would be unreasonably burdensome for the average PAC provider to try to disentangle and understand, much less adjust to the financial impact year-over-year. This is especially the case for those PAC subsectors that would have to simultaneously participate in multiple VBP programs. While we all share the goal of “regulatory relief,” we cannot support it at the expense of considerable newfound regulatory complexity. Moreover, we do not believe that the criteria used to differentiate between the high- and low-risk tracks are intuitive or appropriate. For one thing, the list of initiatives that qualify a provider for the low-risk track is a hodgepodge of mandatory and voluntary and temporary and permanent programs that each carry different trajectories and prospects in the future. Some of them tie up a considerable percentage of Medicare payments while others do not. This would result in PAC providers on the same risk track having highly variable proportions of their overall payment “as risk.”

AMRPA Magazine May 2017

In general, we do not think it makes sense for these tracks to be permanently tied in statute to participation in potentially fleeting programs like the Comprehensive Care for Joint Replacement (CJR) or the Bundled Payments for Care Improvement (BPCI) initiatives. As you know, the CJR in particular faces staunch opposition both in Congress and with the new Secretary of HHS. Moreover, the participation of PAC providers in the CJR is not necessarily transparent since the program is designed around two discrete acute care diagnostic related groups (DRGs) within the area of lower extremity joint replacements. Other alternative payment models, such as accountable care organizations, may be a more meaningful indicator of PAC providersâ&#x20AC;&#x2122; engagement in downside risk payment. We simply do not know which initiatives will be in force during the proposed duration of the two-track risk framework from FY 2020 to FY 2026. Although there is presumably a way to replace these specifically identified initiatives with more permanent criteria regarding downside risk, we view this two-track risk framework as needlessly complicated and potentially unworkable. Instead, we encourage you to utilize a single risk track with the withhold amounts currently assigned to the low-risk track, and to eliminate the competing VBP programs, as prior versions of the bill would have done.

*** We appreciate your consideration of our suggested further changes to the PAC VBP Act. Although considerable differences remain, we are committed to working with the Committee and hopeful about the opportunity to find common ground on this important issue. More than ever, the PAC provider community supports the concept of a fairly designed, evidence-based value-based payment design and respectfully requests the Committee address our remaining concerns. Sincerely,

American Health Care Association American Medical Rehabilitation Providers Association American Academy of Physical Medicine & Rehabilitation LeadingAge National Association for Home Care & Hospice National Association for the Support of Long Term Care National Association of Long Term Hospitals National Center for Assisted Living Partnership for Quality Home Healthcare Visiting Nurse Associations of America

cc: Members of the House Committee on Ways and Means

AMRPA Magazine May 2017