Washington Report – November, 2016(Covers activity between 11/1/16 and 11/30/16)

Bill Finerfrock, Matt Reiter, Nathan Baugh, Asad Karamally, Carolyn Bounds

Republican Party Sweeps 2016 ElectionCongressional Leadership to Remain Largely UnchangedWhat’s Hot for 2017?Trump Announces Picks for HHS and CMSCMS Publishes 2017 Medicare Physician Fee Schedule Final RuleCMS Announces 2017 Medicare Parts A and B Premiums and Cost Sharing Increases Congress Passes 21 st Century Cures Act Court Delays New Federal Overtime RuleOIG Fraud Recoveries Top $5 Billion in 2016Medicare, Medicaid, and CHIP Enrollment and Revalidation Fee for 2017CMS Publishes List of New Quality Measurements under ConsiderationDate Correction: California’s “Surprise” Medical Bill LawCMS Transmittals

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Republican Party Sweeps 2016 Election

On November 8th, one of the most divisive presidential campaigns in recent history came to an end. To the surprise of almost every political pundit, pollster and observer, Republican presidential candidate Donald Trump prevailed over Democrat Hillary Clinton to become the 45th

President-elect of the United States. Additionally, the Republican Party maintained its Majority in both Chambers of Congress.

Since being elected on November 8th, Trump has been putting together his team of advisors and determining whom he will appoint to lead each federal agency. President-elect Trump has decided to appoint Congressman Tom Price (R-GA) to serve as Secretary of Health and Human Services and Seema Verma as Administrator of the Centers for Medicare and Medicaid Services. Also of note, he has chosen the out-going Chairman of the Republican National Committee, Reince Priebus, to be his White House Chief of Staff.

President-elect Trump and Congressional leaders have also been busy laying out what policies they intend to make a priority in January.

As soon as he is sworn into office, President-elect Trump will have the ability to immediately use his executive authority to undue Executive Orders (EO) issued by the Obama Administration as well as issue new EOs himself. Several of his campaign promises such as temporarily halting the intake of refugees from “high risk” countries in the Middle East could be fulfilled using executive orders. However, it will take legislation passed by Congress to accomplish most of the Trump Administration’s agenda.

As President-elect Trump selects his Cabinet, his transition team is meeting with Agency staff to learn about everything being undertaken or considered by every agency and sub-agency. Earlier this year President Obama had directed each agency to prepare briefing books outlining all proposed or pending policies being contemplated, identifying the reasons behind those proposed or contemplated changes. The intent is that these briefing books would serve as transition documents outlining ever major policy pending within each agency.

As happened when President Obama was elected in 2008, we expect that President Trump will issue a moratorium halting all action on pending Obama Administration proposed rules until President Trumps appointees have an opportunity to further review those proposals and determine whether they want to continue to move them forward.

The Cabinet and other political appointees can stop or change pending regulations leftover from the Obama Administration within the agencies they oversee. The new Administration is not expected to halt implementation or significantly change through rulemaking the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). However, they could make some technical or operational changes to how the Merit-based Incentive Payment System (MIPS) functions such as easing reporting requirements or making it easier to qualify as an Advanced Alternative Payment Model (APM) participant.

Most of the day-to-day operations within the agencies, including CMS, are unlikely to experience a drastic or immediate change under the new Administration. Eventually there could be a reshuffling of senior career staff within different departments which could lead to a shifting of priorities or a new approach to certain programs. However, most of the day-to-day operations that Healthcare Revenue Cycle Management (RCM) companies rely on such as provider enrollment and contractor oversight should continue to operate the same as they have under the current leadership.

The newly elected Congress could also use a tool known as the Congressional Review Act (CRA) to overturn large-scale regulations issued within the previous 60 legislative days by the Obama Administration. The term “legislative days” is critically important because these are not the same as “calendar” days or even “days in session”. Under the CRA process, Congress could actually go back several months and seek to review regulations finalized in the early part of 2016. Although not expected, this is possible.

This CRA option has rarely been used successfully by Congress since it was enacted in the mid-90s because of the likelihood that the President would veto any CRA override and the unlikely prospect that the veto could be overridden. Now, however, the Trump Administration and the GOP Congress could go back to regulations that were finalized in 2016 and attempt to pass a CRA overturning those rules with the knowledge that such legislation would be signed by President Trump.

The newly minted GOP Congress will also have the ability to use a streamlined process to advance some of the Republican Party’s agenda using a procedure known as Budget Reconciliation. Under the rules of Reconciliation, if both Chambers of Congress pass an

identical budget, the Chambers can use the Reconciliation procedure to introduce policies that affect federal spending and revenue.

The reason the “reconciliation process” is important is that a Reconciliation bill cannot be filibustered. A Senate Filibuster requires 60 votes to overcome so in the absence of a so-called super majority, the majority party must secure the support (or acquiescence) of at least 60 Senators to pass most legislation. Republicans will have a simple majority in both Chambers but they do not have a “super majority” of 60 seats in the Senate to overcome a filibuster.

In order to demonstrate how the reconciliation process can be used to repeal major parts of the Affordable Care Act, Congressional Republicans passed a reconciliation bill in late 2015 repealing the heart of the ACA. The bill appeared on President Obama’s desk in early 2016 and, as expected, the President vetoed that bill. Republicans knew the President would veto the bill but they wanted to demonstrate how, if a GOP President were elected, Congress could effectively repeal the ACA.

Republicans have indicated that they intend to again use the Reconciliation process to repeal key provisions of the Affordable Care Act (ACA).

Republicans have vowed to replace the ACA with their own policy. Several ideas have been introduced over the last few years but Congressional leaders have yet to propose an official replacement. House Speaker, Paul Ryan (R-WI), proposed a replacement framework earlier this year as part of his “A Better Way” series of policy proposals he believes should be the House Republican policy platform. Many of the policies in this proposal overlap with President Elect Trump’s campaign proposals for reforming the healthcare system.

A Better Way replaces the ACA exchanges and subsidies with a system that promotes high-deductible health plans and the use of Health Savings Accounts (HSA). The proposal would maintain several popular provisions of the ACA such as allowing young adults to remain on their parent’s health insurance until they are 26. It would also prevent insurers from denying coverage or charging higher rates for preexisting conditions with the added caveat that beneficiaries must maintain “continuous” coverage in order to qualify for these protections. Other ideas in the plan include allowing insurers to sell plans across state lines, tax breaks to individuals for purchasing insurance and improved price transparency for medical services.

A Better Way also calls for Medicare reform but it is unclear if Republicans will focus solely on replacing the ACA or if they will include Medicare reform into their efforts. Medicare reform could always resurface at a later date.

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Congressional Leadership to Remain Largely Unchanged

Shortly after the election, Congressional Republicans announced their support for Paul Ryan to continue as Speaker of the House. Technically, the formal election of the Speaker for the 115th

Congress cannot occur until the new Congress is sworn in on January 3rd. However, by securing the support of his GOP Colleagues, Ryan is assured of being selected re-elected Speaker.

In addition to Ryan, Rep. Kevin McCarthy (R-CA) will again serve as House Majority Leader and Senator Mitch McConnell (R-KY) will reprise his role as Senate Majority Leader. For the Democrats, Nancy Pelosi (D-CA) was chosen to continue leading the House Democrats. Sen. Charles “Chuck” Schumer (D-NY) will replace the retiring Harry Reid (D-NV) as Democratic Leader in the Senate.

Each party added some new faces to their leadership teams in each Chamber. However, aside from Schumer replacing the retiring Reid, the top leadership structure of both Chambers will essentially remain the same. The key difference being that the White House now joins the Congress in being under Republican control.

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What’s Hot for 2017?

Congress will have its hands full in January. Hearings on President Trump’s nominees will begin almost immediately with some moving quickly to confirmation whereas others may take a while to get through the Congressional vetting process.

The 115th Congress will also have to complete work on the 2017 spending bill because of the failure of the current Congress to pass appropriations bill funding the federal government through the remainder of FY 2017. Prior to Sine Die adjournment, the 114th Congress is expected to pass a Continuing Resolution (CR) that will fund the government through the end of April, 2017. Prior to the end of April, the new Congress will have to either pass another CR for the remainder of the Fiscal Year (September 30, 2017) or adopt as many individual agency specific appropriations bills as possible.

President Trump and the new Congress will also have to address the current “Debt Limit” sometime early in 2017. According to the Treasury Department, the federal government will reach the current “debt limit” (the amount of money the government is authorized to borrow) around mid-March or early April of 2017. Failure to extend or raise the debt limit could result in negative financial consequences for the federal government and would potentially result in a shut-down of some “non-essential” parts of government. Many in the GOP have historically opposed legislation raising the debt limit, relying instead on Congressional Democrats to provide the votes to necessary to get a bill to the President’s desk. Now, with the GOP firmly in control of Congress and the White House, it will be interesting to see if Congressional Democrats will be inclined to provide the votes necessary to pass a bill raising the debt ceiling this time around.

There seems to be no question that the individual occupying 1600 Pennsylvania Avenue for the next four years will be very different – both in terms of style and substance – than the person who has occupied that house for the past eight years. If nothing else, it appears that the American people voted for change on November 8th and change they will get.

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Trump Announces Picks for HHS and CMS

For the past several weeks, President-elect Trump has been assembling his cabinet and senior White House staff. Although some in the media initially characterized the Cabinet selection process as “disorganized” it appears that the pace and timing of Cabinet and senior staff announcements are consistent – or in some cases sooner – than previous Administrations.

On November 29th, President-elect Trump announced that he intends to nominate Congressman Tom Price (R-GA) to serve as Secretary of Health and Human Services (HHS). At the same time, he announced his intention to nominate Seema Verma as Administrator for the Centers for Medicare and Medicaid Services (CMS). Both nominees will require Senate confirmation prior to officially taking over these major assignments.

Price has served in Congress since 2005 where he has spent the last several years as Chair of the influential House Budget Committee. Price also sits on the powerful House Ways and Means Committee and is a past chair of the conservative Republican Study Committee. Before serving in Congress, Price was a practicing orthopedic surgeon for almost twenty years. He has therefore been an active voice on healthcare issues as a Congressman. He is a member of the Republican Doctors “Doc” Caucus.

Price has also been a consistent and vocal critic of the complexity of the healthcare delivery system arguing on numerous occasions that physicians are overburdened with unnecessary administrative rules and regulations which detracts from their ability to do what they went to medical school to learn – diagnose and treat patients.

Price is also considered a close friend and political ally of Vice President-elect Mike Pence. They served together in Congress and often worked together on issues, demonstrating similar philosophies and demeanor.

Price has developed a reputation as a conservative thought leader, especially on healthcare issues. He has been and continues to be a critic of the Affordable Care Act (ACA) and has authored his own ACA replacement legislation. Price will undoubtedly play a major role in how Republicans go about repealing and replacing all or parts of the ACA. Organized medicine has generally reacted with optimism that a physician will be leading HHS.

If confirmed, which seems likely, Price would be the second physician to head HHS.

Seema Verma is a health policy consultant who most recently worked with the state of Indiana to reform the state’s Medicaid program. As President of her own health policy consulting firm, Verma has been a key thought leader both in Indiana and other states for developing alternative delivery and payment models for state Medicaid programs.

Verma is generally credited with being a key advisor to Indiana Medicaid officials as they sought and obtained Medicaid Waivers from the Obama Administration for major Medicaid reforms under former GOP Governor Mitch Daniels and current Indiana Governor (and soon-to-be Vice President) Mike Pence.

Verma has been a consultant to several states seeking Medicaid waivers to test innovative models for covering and providing care to low-income individuals. She has been an advocate for greater consumer engagement in the financing of healthcare, promoting a Health Savings Account approach for Medicaid eligible individuals rather than the more traditional models used in most states.

As Administrator of CMS, Verma is expected to continue her focus on giving states greater authority to shape their own Medicaid programs.

Much less is known about Verma’s thoughts with regard to the future of Medicare and in particular, efforts to move Medicare payments from “volume to value”. Although clearly an advocate for innovative changes in how healthcare is delivered and paid for, we will likely have to wait until her confirmation hearings to learn more about what her (and the Trump Administration) vision is for the future of Medicare.

Verma personally believes that Medicaid enrollees should have to pay premiums and copays just like in commercial plans and Medicare. A bit of “good news” is that as part of Indiana’s Medicaid reform reimbursement rates for physicians and hospitals were increased suggesting that she understands that compensating providers adequately for their services is essential to ensuring access to care. Perhaps these will be policies she pursues on a national level as CMS Administrator?

Although both will attract opposition and serious questioning during their respective confirmation hearings, both are expected to be approved in the Senate by the simple majority necessary to confirm Presidential nominees.

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CMS Publishes 2017 Medicare Physician Fee Schedule Final Rule

On November 2, 2016, The Centers for Medicare and Medicaid Services published the Medicare Physician Fee Schedule (MPFS) Final Rule. Most of the payment policy updates made in the final rule are effective on January 1, 2017.

HBMA submitted extensive comments on the Proposed Rule to CMS.

CMS finalized a small increase to the 2017 MPFS Conversion Factor (CF) despite initially proposing a small reduction. The 2017 CF is of 35.8887. Rounded up, this translates to a $0.09 cent increase in payments for each Relative Value Unit (RVU) assigned to a medical service. Under the RVU system, Medicare assigns “value units” to each medical service based on practice expense, physician work and medical malpractice. The service’s RVUs are then multiplied by the CF (along with a few other adjustments) to determine Medicare’s reimbursement for medical services.

Anesthesia services have their own CF. The 2017 Conversion Factor for Anesthesia services is 22.0454, a slight increase over the 2016 Anesthesia CF of 21.9935.

In addition to updates to RVUs and the CF, the Final Rule makes several other updates to the Medicare reimbursement system. In one such notable provision in the Final Rule, CMS is backing off its proposal to require providers to report data on post-operative services provided under 10- and 90-day global surgical codes using a proposed set of G-codes.

CMS is required by Congress to collect information on post-operative services provided during 10- and 90-day global surgical code episodes so that these codes can be revalued to more accurately reflect the amount of follow up and other post-operative visits provided during these episodes. CMS received pushback on its proposal to use G-codes to collect the data because of the 10 minute time valuation for each code and the fact that it might not be the most accurate methodology for capturing the desired information. Instead of using the proposed G-codes, CMS is finalizing that CPT code 99024 will be used for reporting post-operative services.

CMS is also finalizing a delay in when it will begin requiring ordering professionals to document that they consulted Appropriate Use Criteria (AUC) using a Clinical Decision Support Mechanism (CDSM) for advanced diagnostic imaging services. HBMA cautioned CMS that the use of AUC and CDSM undermines the professional skills of practitioners. HBMA also expressed concern that the CDSM claim documentation requirements could be onerous and lead to claims not being paid. HBMA urged CMS to require “only the minimum necessary information” to document the consultation of CDSM. CMS stated in the final rule that it does not expect ordering professionals to consult AUC using CDSMs until June 30, 2017 at the earliest.

CMS acknowledged several other concerns raised by HBMA but did not necessarily act on them. These concerns include the difficulty providers and Revenue Cycle Management (RCM) companies have identifying Qualified Medicare Beneficiaries (QMB). Providers are prohibited from collecting Medicare Part A and B deductibles, coinsurance or copayments from beneficiaries enrolled in the QMB program. CMS acknowledged that there may be difficulty in identifying QMB patients and stated that they are exploring further methods for identifying QMB status.

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CMS Announces 2017 Medicare Parts A and B Premiums and Cost Sharing Increases

The Centers for Medicare and Medicaid Services (CMS) officially released the 2017 premiums and cost-sharing amounts for Medicare Parts A and B. Medicare beneficiaries enrolled in Medicare Part B must pay a monthly premium similar to commercial insurers. For most beneficiaries, the 2017 premium will increase from $104.90 to $109.00. However, about 30 percent of beneficiaries will see a much greater increase in Part B premiums.

Medicare Part B premiums are tied to the annual update to the Social Security cost-of-living adjustment (COLA). Seventy percent of beneficiaries fall under a “hold harmless” provision which protects them from significant premium increases by tying their premium increases to the COLA.

A few months ago, the Obama Administration announced that the COLA would be just 0.3 percent.

Those beneficiaries who do not qualify for the hold harmless provision therefore shoulder the bulk of the necessary premium increases. Since Part B premiums vary based on income, the monthly premium for beneficiaries not covered under the “hold harmless” protection will be anywhere from $134 to $428.60 depending on their income.

According to the CMS announcement, Medicare Part B beneficiaries not protected by the “hold harmless” provision include beneficiaries who do not receive Social Security benefits, those who enroll in Part B for the first time in 2017, those who are directly billed for their Part B premium, those who are dually eligible for Medicaid and have their premium paid by state Medicaid agencies, and those who pay an income-related premium. These groups represent approximately 30 percent of total Part B beneficiaries.

These adjustments come with an increase in annual deductible from $166 to $183 for all Medicare Part B beneficiaries.

Additionally Medicare Part A premiums, which only apply to the one-percent of the population that does not have at least 40 quarters of Medicare-covered employment, will also rise slightly in 2017. Additionally, Part A inpatient deductibles, which apply to the first 60 days of inpatient care, will rise $28 to $1,316 in 2017. Daily coinsurance for inpatient stays from days 61-90 increased from $322 in 2016 to $329 in 2017. The daily coinsurance for lifetime reserve days increased from $644 in 2016 to $658 in 2017.

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Congress Passes 21st Century Cures Act

Congress has been working in a bi-partisan fashion since 2015 on a major medical innovation bill that would increase funding for the National Institutes of Health (NIH) while also reforming and streamlining the Food and Drug Administration’s (FDA) approval process for new drugs and devices. The bill is entitled the 21st Century Cures Act.

On Friday, November 25th, Congressional negotiators announced a new version of the 21st Century Cures Act that had bi-partisan support in both the House and the Senate. Although the House of Representatives passed an initial version of the bill in early 2015, the Senate was not as eager to take up the massive bill as a single piece of legislation and instead, tried to negotiate a scaled down version of the House-passed bill.

The latest version of the bill is the product of the House Senate negotiations.

On December 7th, the Senate passed the 21st Century Cures Act with near unanimous support by a vote of 95-4. Having already been passed by the House of Representatives on November 30th by a vote of 392-26, the bill now goes to President Obama who has publicly indicated he will sign it into law.

The bill features $4.8 billion to continue funding key NIH programs such as the NIH Precision Medicine Initiative, the NIH Cancer Moonshot Initiative and the NIH Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative.

The reforms made to the FDA drug approval process include streamlining data collection for patient experiences with new drugs and an expedited approval pathway to bring “breakthrough” drugs and devices to market sooner. The bill would also boost FDA hiring authority for researchers and product reviewers to help speed the approval process.

The new version also features several other provisions including $1 billion to be awarded as grants to states to combat opioid addiction, a section on mental health reform and several other notable provisions related to the Medicare program.

Although the bill deals primarily with NIH and FDA issues – topics normally outside the scope of HBMA member interests – the bill does tackle some Medicare and Medicaid issues of interest to HBMA.

One notable Medicare provision seeks to improve transparency for local coverage decisions (LCD) made by Medicare Administrative Contractors (MAC). The bill would require MACs to post LCDs in their entirety on a website at least 45 days before the effective date. This posting must include information about when the determination was initially made public, hyperlinks to the proposed determinations and the comments received by the MACS. The posting must also include a summary of the evidence and rationale that was considered in the making of the determination. This section is effective as of 180 days after the bill’s enactment.

The bill also establishes a formal definition of “interoperability” of Electronic Health Records (EHR) as “health information technology that is able to seamlessly function in concert with other health information technology and does not constitute information blocking”. This bill promotes

the use of such technology. Further, it defines information blocking as a practice “that is likely to interfere with or prevent access and exchange of electronic health information.”

Information blocking can be on the part of health information technology developers or health care providers. Information blocking includes any technology that impedes innovation or is likely to lead to fraud, waste, and abuse.

The “Cures” bill also strengthens Medicaid program integrity by requiring states to notify HHS when it terminates a provider from its state Medicaid program.

It also requires CMS to update the Welcome to Medicare package it supplies to soon-to-be eligible Medicare enrollees. CMS would be required to request recommendations from stakeholders on information that should be included in the package within six months of the bill’s passage.

The bill allows physical therapists furnishing outpatient physical therapy services in a health professional shortage area, a medically underserved area, or a rural area to use specified locum tenens arrangements for payment purposes just as such arrangements are used by physicians furnishing substitute physicians services for other physicians.

With regard to the Merit-based Incentive Payment System (MIPS), the bill would exempt eligible clinicians (EC) who provide “substantially” all of their services in an ambulatory surgical center (ASC) from MIPS payment adjustments for the use of Certified EHR Technology (CEHRT) in 2017 and 2018. This adds to the exemption for hospital-based ECs.

The bill clarifies previously passed legislative language that implements a “site neutral” payment policy for off-campus hospital outpatient departments (HOPD). The bill clarifies that HOPDs that were under construction as evidenced by a written, binding contract with a construction company as of November 2, 2015 will receive grandfather status for purposes of applying “site neutral” payments for services provided by HOPDs after November 2, 2015.

Beginning with the 2019 plan year, Medicare Advantage (MA) beneficiaries will be permitted to change their coverage to traditional Medicare Fee-For-Service (FFS) within the first three months of the plan year. Conversely, FFS beneficiaries can change enroll in a MA plan within the first three months as well. Beneficiaries are limited to only one such coverage change each plan year.

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Court Delays New Federal Overtime Rule

In October the Department of Labor (DOL) issued a final rule to expand overtime pay eligibility to more workers. Under current law, salaried employees who make more than $23,660 per year are not eligible to earn overtime pay. The final rule raises the salary threshold for which employees cannot be eligible for overtime pay to salaried employees who earn up to $47,476 per

year. Raising this threshold is estimated to expand overtime pay to about four million new workers.

The final rule was to go into effect on December 1, 2016. However, 21 states filed an emergency motion for preliminary injunction to prevent the rule from going into effect as planned.

The states are arguing that the Department of Labor does not have the authority to increase the threshold by such a large amount nor to provide automatic adjustments every three years as the new rule does. On November 22nd, a federal judge for the Eastern District of Texas granted a preliminary injunction which will prevent the new rule from going into effect while the courts deliberate the case.

The original overtime rule, will remain in effect until the case is resolved in the courts.

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OIG Fraud Recoveries Top $5 Billion in 2016

According to its Semi-Annual Report to Congress, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) expects to recover $5.6 billion in fraudulent spending by the Federal health care programs in FY 2016. This is a significant increase over the $3.2 billion in recoveries in FY 2015.

OIG is increasingly utilizing civil action for recoveries. OIG reported 708 civil actions including federal false claims lawsuits, Civil Monetary Penalty (CMP) settlements, and administrative recoveries from provider self-disclosure matters. According the report, “CMP recoveries have increased almost five-fold over the past three years.” OIG still reported 844 criminal actions against individuals or entities in FY 2016.

OIG intends to focus heavily on prescription drug spending which has drastically increased over the last few years. OIG also plans to continue strengthening its provider enrollment mechanisms to prevent fraud and abuse in the first place. A report from earlier this year found that CMS needs to strengthen its new enhanced enrollment screening tools, which are intended to prevent illegitimate providers from enrolling in Medicare.

Separate from its report on fraud recoveries, on November 21st the OIG released an updated 2017 Work Plan on ongoing audits and evaluations for 2017. The report is a summary of the most significant challenges HHS is facing and descriptions of how the department plans to overcome them. Many of the highlighted issues are longstanding concerns that HHS has been working to resolve or minimize for years, while a few are new issues that have arisen. OIG also recommended that CMS continue giving attention to improper billing such as claims for services provided to unlawfully present beneficiaries.

As the Department continues to track toward a greater reliance on value-based payments, the efficiency and integrity of Medicare and Medicaid are continually being re-evaluated. Additionally, the medical industry is facing technological challenges as HHS encourages a shift to Electronic Health Records (EHRs). The report also addresses modifications and developments that need to be made to ACA-based health insurance exchanges, regardless of President-elect Trump’s plan to repeal and replace this system.

One of the largest areas of concern, historically and currently, is the matter of fraud and abuse in HHS programs. The report highlights Medicare’s 12.1% improper payment rate and suggests policies to help increase oversight in areas such as home health and medical equipment supplies due to their vulnerability to abuse. Also in regard to fraud, the report discusses the many complex payment models being implemented through MACRA and the potential for overbilling through them.

Overall, HHS raises concerns about the increasing complexity of a system that is already dealing with issues related to inappropriate levels of fraud.

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Medicare, Medicaid, and CHIP Enrollment and Revalidation Fee for 2017

On November 7, 2016, CMS published a notice regarding the fee for providers who are initially enrolling or revalidating their enrollment in Medicare, Medicaid, or the Children’s Health Insurance Program. The fee also applies for new Medicare practice locations.

In CY 2016, the fee was $554, and for CY 2017 it will rise to $560. The increase in price is determined through adjustment according to the Consumer Price Index, and is typically between 1-4%.

The fee applies to “institutional providers” defined as “any provider or supplier that submits a paper Medicare enrollment application using the CMS-855A, CMS-855B (not including physician and non-physician practitioner organizations), CMS-855S, or associated Internet-based PECOS enrollment application.” A Medicare physician or non-physician practitioner submitting a CMS-855I is exempt from the fee.

CMS estimates that 10,000 newly enrolling Medicare providers and 43,792 revalidating Medicare providers will be subject to the application fee in CY2017. Additionally, CMS estimates that 9,000 newly enrolling providers and 21,000 revalidating providers in the Medicaid and CHIP programs will be subject to the fee.

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CMS Publishes List of New Quality Measurements under Consideration

The Centers for Medicare and Medicaid Services (CMS) published its list of Measures under Consideration (MUC). This document lists the specific quality measures CMS is considering for adoption across the various Medicare reimbursement systems. CMS is proposing 97 total new measures including 35 for the Merit-based Incentive Payment System (MIPS) and 19 for the Hospital Outpatient Quality Reporting Program.

The MUC list is issued as a partnership with the National Quality Forum, a non-profit organization dedicated to developing, managing and evaluating quality measures in healthcare. The NQF accepts comments on the MUC list. NQF also issues a report to CMS at the end of December recommending which measures from the list should be adopted. The recommendations are non-binding.

CMS must go through the formal rule making process to implement the quality measures. This includes a proposed rule with comment period before issuing a final rule that addresses all comments received.

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Date Correction: California’s “Surprise” Medical Bill Law

In the September, 2016 issue of the Washington Report, we included an article on California passing A.B. 72 which would add protections for consumers from unexpected out-of-network medical bills. We reported that the new law takes effect on January 1, 2017. However, that date is incorrect. The correct effective date for A.B. 72 is July 1, 2017. We apologize for this error. We want to thank Rob Saunders with McKesson Business Performance Services for bringing this to our attention.

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CMS Transmittals

The following Transmittals were released by CMS during the month of October.

Transmittal Number Subject Effective

Date

R1733OTN Modifications to the National Coordination of Benefits Agreement (COBA) Crossover Process 2017-04-03

R1734OTN

Phase 3 - Updating the Fiscal Intermediary Shared System (FISS) to Make Payment for Drugs and Biologicals Services for Outpatient Prospective Payment System (OPPS) Providers

2017-04-03

R1759OTN Changes to the End-Stage Renal Disease (ESRD) Facility 2017-01-03

Transmittal Number Subject Effective

DateClaim (Type of Bill 72X) to Accommodate Dialysis Furnished to Beneficiaries with Acute Kidney Injury (AKI)

R3671CP CY 2017 Update for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule 2017-01-03

R3669CP HCPCS Code Update for Preventive Services 2017-01-03

R103GI Update to Medicare Deductible, Coinsurance and Premium Rates for 2017 2017-01-03

R1727OTN Section 504: Adding a Qualified Reader Preference in Alternate Formats N/A

R3670CP Update to Editing of Therapy Services to Reflect Coding Changes 2017-04-03

R1704OTNImplementing Provider File Updates and PECOS to FISS Interface Via Extract File Updates to Accommodate Section 603 Bipartisan Budget Act of 2015

2017-01-03

R3668CPQuarterly Update for the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) - January 2017

2017-01-03

R3571CP New Revenue Code 0815 for Allogeneic Stem Cell Acquisition Services 2017-01-03

R276FM New Physician Specialty Code for Hospitalist 2017-04-03

R3665CP

Implement Operating Rules - Phase III Electronic Remittance Advice (ERA) Electronic Funds Transfer (EFT): Committee on Operating Rules for Information Exchange (CORE) 360 Uniform Use of Claim Adjustment Reason Codes (CARC), Remittance Advice Remark Codes (RARC) and Claim Adjustment Group Code (CAGC) Rule - Update from Council for Affordable Quality Healthcare (CAQH) CORE

2017-04-03

R3666CP New Waived Tests 2017-01-03

SE1628 Documentation Requirements for the Hospice Physician Certification/Recertification

SE1631 Sample Hospice Notice of Election Statement

R1758OTN Updates for the Shared System Maintainers to implement the Social Security Number Removal Initiative (SSNRI) 2017-04-03

R3663CP Common Edits and Enhancements Modules (CEM) Code Set Update 2017-04-03

R3661CP Claims Status Category and Claims Status Codes Update 2017-04-03

R3660CPRemittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update

2017-04-03

R3662CP Instructions for Downloading the Medicare ZIP Code File for April 2017 2017-04-03

Transmittal Number Subject Effective

Date

R275FM Pub. 100-06, Chapter 3, Section 90 (Provider Liability) Revision 2017-02-21

R1756OTNAnalysis Only - Modification of Process for Handling the Provider Enrollment Chain Ownership System (PECOS) Extract File

2017-04-03

R1755OTN ICD-10 Coding Revisions to National Coverage Determination (NCDs) 2017-04-03

R1745OTN Common Working File and Fraud Prevention System 2.0 Predictive Modeling and Edits, Data Feed Migration 2017-01-03

R1757OTNIssuing Compliance Letters to Specific Providers and Suppliers Regarding Inappropriate Billing of Qualified Medicare Beneficiaries (QMBs) for Medicare Cost-Sharing

2017-03-08

R688PI Update to Pub. 100-08, Chapter 15 2016-07-26

R1752OTN System Specific Enhancement 2014: String Testing Automation N/A

R1753OTN Coding Revisions to National Coverage Determination (NCDs) 2017-01-03

R10P240 Provider Reimbursement Manual N/A

R3656CP Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2017 2016-12-05

R1751OTN Adding a Foreign Language Tagline Sheet to Medicare Summary Notices (MSNs) 2016-12-05

R686PI 2016-12-12

R3650CP Updates to Pub. 100-04, Chapters 8, 13 and 14 to Correct Remittance Advice Messages 2017-02-10

R3649CP Payment for Oxygen Volume Adjustments and Portable Oxygen Equipment 2017-04-03

R124MCM Update of Chapter 1 of the Managed Care Manual 2016-11-10R687PI Extrapolated Overpayments 2016-12-12

R3653CP FISS Implementation of the Restructured Clinical Lab Fee Schedule N/A

R1750OTN

Increasing the Number of Address Fields in MCS to Match the Address Fields in CWF in Order to Improve the Undeliverable Medicare Summary Notices (uMSNs) Situation: Phase One of Improving FFS9372

N/A

R3654CP 2017 Annual Update to the Therapy Code List 2017-01-03

R3655CP Implementation of Policy Changes for the CY 2017 Home Health Prospective Payment System 2017-01-03

SE1629 Guidance to Physician/Practitioner and Supplier Billing Offices that Submit Hard Copy Claims to Medicare to Help Reduce Incidence of Claims Not Crossing Over Due to

Transmittal Number Subject Effective

DateDuplicate Diagnosis Codes and Diagnosis Code Pointers

R1748OTN Adding a Foreign Language Tagline Sheet to Medicare Summary Notices (MSNs) 2016-10-28

R3648CPCalendar Year (CY) 2017 Participation Enrollment and Medicare Participating Physicians and Suppliers Directory (MEDPARD) Procedures

2016-11-08

R229BP

Implementation of Changes in the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) and Payment for Dialysis Furnished for Acute Kidney Injury (AKI) in ESRD Facilities for Calendar Year (CY) 2017

2017-01-03

R1743OTN Modifications to the National Coordination of Benefits Agreement (COBA) Crossover Process 2017-04-03

R1744OTN Audit Trail for Reason Code Edit Changes 2017-07-03R164SOMA Revisions to the State Operations Manual (SOM) Chapter 2 2016-11-04

R1746OTNMedicare Electronic Health Record (EHR) Incentive Program – Analysis of Meaningful Use Hospital Transition into Hospital Quality Reporting System

2017-04-03

R1747OTNIssuing Compliance Letters to Specific Providers and Suppliers Regarding Inappropriate Billing of Qualified Medicare Beneficiaries (QMBs) for Medicare Cost-Sharing

2017-03-08

R1745OTN Part B Detail Line Expansion - Checkpoint Discussion Meetings 2017-04-03

R3646CP Quarterly Update to the Correct Coding Initiative (CCI) Edits, Version 23.0, Effective January 1, 2017 2017-01-03

R161DEMO Shared System Enhancement 2015: Archive/Remove Inactive Medicare Demonstration Projects 2017-04-03

R162DEMOOncology Care Model (OCM) Monthly Enhanced Oncology Services (MEOS) Payment Rate for Certain Non-Physician Practitioners

2017-04-03

R3644CP Therapy Cap Values for Calendar Year (CY) 2017100- 2017-01-03R685PI Incorporation of Cycle 2 Revalidation Policies 2016-09-06R684PI Incorporation of Cycle 2 Revalidation Policies 2016-12-02

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