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Focus on Regulation

CMS Releases Final Rules on Home Health, Primary Care and Dialysis Facility Payments

In a busy week leading up to the election, CMS released several final rules, including final rules pertaining to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS), Medicaid payments made to certain primary care physicians and the Home Health Prospective Payment System.

ESRD PPS Final Rule

In a final rule released on November 2nd, CMS set forth its policy for ESRD payments and incentives.  Calendar year 2013 represents the third year of a transition period, in which some dialysis facilities are paid based on a combination of 75% of the ESRD PPS amounts and 25% of the composite rate system amounts.  All facilities will be fully transitioned to ESRD PPS in calendar year 2014. The final rule will increase ESRD PPS rates for outpatient maintenance dialysis treatment by 2.3% as of January 1, 2013.

In addition, the final rule contains some changes to the ESRD Quality Incentive Program (QIP).  Under this program, a facility’s performance on certain measures during a prior performance period can impact its payment in a future payment year (PY). The final rule establishes calendar year 2013 as the performance period for the PY 2015 ESRD QIP.

Finally, this rule implements the provisions of The Middle Class Tax Extension and Job Creation Act of 2012 concerning the reduction in the percentage of allowable bad debt attributable to beneficiary deductible and coinsurance obligations.

Final Rule Regarding Medicaid Payments to Certain Primary Care Physicians

CMS released a final rule to implement the requirement established by the Patient Protection and Affordable Care Act (PPACA) that Medicaid reimburse primary care providers (i.e., family medicine, general internal medicine, pediatric medicine, and related subspecialties) at not less than Medicare levels during 2013 and 2014.  Notably, the increase in payment rates will be funded entirely by the federal government, meaning that no matching payments will be required of the states. 

Home Health PPS Final Rule

Lastly, the Home Health PPS final rule updates the prospective payment rates for CY 2013, using the methodology described in last year’s final rule. Payments are expected to remain essentially unchanged from CY 2012 levels, declining about approximately 0.01%. 

The final rule also provides CMS with the authority to use alternative sanctions – instead of, or in addition to, termination of Medicare participation – to pressure home health care agencies to comply with Conditions of Participation.