Medicare Update Brian S. Werfel, Esq. Werfel & Werfel, PLLC

1. Medicare UpdateBrian S. Werfel, Esq.Werfel & Werfel, PLLC

2. Ambulance Inflation Factor CPI Update: 3.56% Change from July 2010 – June 2011 MFP: 1.2% 2.4% Increase for 2012 2012 Medicare Rates

3. GPCIs • 2010 – Revision to formula used to calculate GPCIs • Resulted in overall movement of all GPCIs closer to 1.0 • “Hold Harmless” for GPCIs over 1.0 • Expired in 2011

4. MFP = 10-year moving average of the Private Nonfarm Business Multi-Factor Productivity Index Bureau of Labor Statistics metric For 2011 and beyond, annual update to Medicare Ambulance Fee Schedule will be equal to: AIF = CPI-U – MFP Productivity Adjustment

5. Effect on Future Updates

6. Temporary Adjustments • Current temporary adjustments: • 2% urban • 3% rural • 22.6% super-rural • “hold harmless” for air ambulance • Initially scheduled to expire on December 31, 2011

7. Temporary Adjustments • December 23, 2011 • Adjustments extended through February 29, 2011 • Temporary “payroll tax” holiday • Middle Class Tax Relief and Job Creation Act • February 23, 2012 • Adjustments extended through December 31, 2012

8. Debt Limit Compromise • Budget Control Act of 2011 • 8/2/11 • Raised the debt ceiling • Congressional “Super Committee” • 12-member panel • Tasked with finding $1.2 Trillion in budget cuts • Must make recommendations by 11/23/11 • If Congress does not act on recommendations by 12/23/11, 2% across the board reductions in spending result • This would include a 2% reduction in Medicare reimbursement

9. Sequestration • Joint Select Committee on Deficit Reduction • “Super Committee” • Tasked with finding $1.2 trillion in savings over 10 years • Fails to reach agreement • 2% “sequestration” of Medicare payments • Starting January 1, 2013 • Issue unlikely to be resolved prior to Presidential election

10. Permanent Ambulance Relief • Medicare Ambulance Access Preservation Act (MAAPA) • 6% increase for urban and rural transports • 22.6% increase for super-rural • 2012 – 2016 • On July 6, 2011, the A.A.A. sent a letter to President Obama and Congressional leaders from both parties • Asking for support of MAAPA

11. H.R. 1005

12. S. 424

13. GAO Report • Middle Class Tax Relief and Job Creation Act • Updated GAO Report on Medicare payments for ambulance • A.A.A. had call with GAO to discuss structure of survey • Survey expected to go out 2Q 2012 • 2007 GAO Report • Medicare pays an average of 6% below cost • 17% below cost in super-rural areas

14. MedPAC • Middle Class Tax Relief and Job Creation Act • MedPAC to study ambulance reimbursement • Appropriateness of temporary adjustments • Need to reform current payment structure • Inclusion of temporary adjustments in payment for base rates • Report due June 15, 2013

15. 2010 Medicare Payment Data

16. FY 2010

17. FY 2010 v. FY 2009

18. FY 2010 v. FY 2009

19. Dialysis

20. Dialysis

21. Initial Implementation Date: January 1, 2012 Enforcement Delays: Through March 30, 2012 Through June 30, 2012 Medicare compliance: 70% of Part A claims 90% of Part B claims ANSI 5010

22. Problems: Clearinghouses Zirmed – 27% of payers (~ 1000 payers) still sent claims in 4010 format Gateway – 20 pages of non-compliant payers Medicaid Programs Commercial payers ANSI 5010

23. Medicare Contracting Reform

24. 15 Existing MAC Jurisdictions being reduced to 10 “Super MACs” Transition period: 2010 – 2014 Medicare Contracting Reform

25. Current MAC Jurisdictions

26. Consolidated MAC Jurisdictions

27. Awarded to Noridian Administrative Services AL, AZ, ID, MT, ND, OR, SD, UT, WA, WY Transition completed February 2012 Jurisdiction F

28. Awarded to Highmark Medicare Services November 8, 2011 AR, CO, LA, MI, NM, OK, TX Protest has been denied, transition moving forward Highmark Medicare sold to Diversified Service Options Renamed “Novitas Solutions, Inc.” Jurisdiction H

29. 1099 Repeal • On April 5, 2011, Congress passed a bipartisan repeal of the provision of ACA requiring companies to report payments of more than $600 to any particular vendor • President Obama signed it into law on April 14, 2011 • First repeal of any provision of ACA

30. CLASS ACT • Community Living Assistance Services and Support Act • Long-term care insurance regime • Part of ACA • February 8, 2012 • House of Representatives votes to repeal • Secretary Sebelius previously suspended implementation • Acknowledgement that it could not be adequately funded

31. IPAB • Independent Payment Advisory Board • Board would oversee Medicare costs • Will have authority to recommend policy • If Congress does not act on their recommendations, the IPAB recommendations become policy • March 22, 2012 • House votes (223 – 181) to repeal IPAB • Unlikely Senate will vote before election

32. 2012 House Budget • March 29, 2012 • 228 – 191 vote • Split basically along party lines • 10 Republicans voted “no” • Medicare • Would raise Medicare eligibility age to 67 • Those 55 and under would get a “premium support” payment • To be used to purchase private insurance

33. Proposed Rule On Return of Overpayments

34. Section 6402(a) of the Affordable Care Act New 60 day requirement to report and return overpayments False Claims Act liability Proposed Rule (Feb. 16, 2012) Background

35. Overpayment must be returned: 60 days after it has been “identified” By next cost report An overpayment is “identified”: Provider has “actual knowledge”, or Acts in “reckless disregard or deliberate ignorance” of overpayment Contents of Proposed Rule

36. “In some cases, a provider or supplier may receive information concerning a potential overpayment that creates an obligation to make a reasonable inquiryto determine whether an overpayment exists… failure to make a reasonable inquiry, including failure to conduct such inquiry with all deliberate speed after obtaining the information, could result in the provider knowingly retaining an overpayment because it acted in reckless disregard or deliberate ignorance of whether it received such an overpayment.”

37. Incorrect coding of claims Services provided by an unlicensed or excluded individual Results of an audit by a Medicare contractor Significant increase in Medicare reimbursement, without any obvious explanation Examples of Identified Overpayment

38. A.A.A. submitted a comment letter asking CMS to clarify when an overpayment has been “identified” in the context of a post-payment audit What if you agree only in part with the auditor’s findings? Do you return portion you agree with? A.A.A. is asking that the overpayment not be “identified” until the later of: Exhaustion of appeal rights Expiration of time to appeal to next level A.A.A. submitted second comment letter on issue of “scienter” A.A.A. Comment Letter

39. Patient Signature Requirement

40. CMS Claims Processing Manual (Pub. 100-04), Chapter 1, Section 50.1.3 When a person signs on patient’s behalf, Manual seems to imply that you must list the address of the person that signs WPS announced that it will enforce this requirement CMS is aware of requirement, but not focused on its enforcement at this time CMS looking into changing Manual requirement Authorized Representative

41. Common Problems

43. Lifetime Signature

44. Contractors that currently do not accept lifetime signature WPS Palmetto GBA Railroad Medicare Q2 Administrators QIC for Southern half of country Contractor Interpretation

45. Q2A Decision

46. The Catch-22 • The current regulation clearly indicates that ambulance services can use a lifetime signature • CMS says the signature proves a trip was done But how can a signature you get today prove that you did a trip a year from now?

47. Solution for Repetitive Patients • Contractors are interpreting regulation to state that a signature cannot be used for future trips • No prohibition on using signature for past trips • A possible approach: • Make sure your signature language includes a reference to past claims • Hold claims for patient until you get actual patient’s signature

49. Medicare Revalidation • CMS has indicated that it will require all existing Medicare providers and suppliers to “revalidate” their Medicare enrollment information • Original target date: March 2013 • Extension: March 2015 • Medicare contractors given discretion on when to revalidate various provider groups

50. PECOS • Provider Enrollment, Chain and Ownership System • Medicare’s electronic enrollment database • CMS has indicated that it wants all providers and suppliers enrolled in PECOS by the end of this year • Medicare contractors implementing this policy by requiring providers/suppliers to “revalidate”