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(Public Law 106-554, December 21, 2000)
The Medicare, Medicaid and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA), enacted as part of the appropriations
bill for the Departments of Labor and Health and Human Services
(Public Law 106-554, 12/21/2000), includes changes to Medicare
coverage, payment mechanisms, and appeals procedures. Some of the
provisions, such as coverage for additional preventive benefits and
a clarification of the definition of "homebound," for the home
health benefit, should increase access to care for many
beneficiaries. Other provisions, including increased payments to
HMOs, may have little or no direct effect on beneficiaries.
The following materials summarize the relevant sections of the Act:
NEW MEDICARE HOME HEALTH PROVISIONS
Sections 501-508 of the Medicare, Medicaid and SCHIP Benefits Improvement and
Protection Act of 2000 amend 42 U.S.C. Section 1395f(n), 1395(n), 1395fff(b),
1395(x)(v) to modify the Medicare home health benefit. (Public Law 106-554,
12/21/2000.) The new provisions modify eligibility criteria, clarify coverage of
the use of telehealth to deliver services, increase payments to home health
agencies, and call for a variety of studies that would further clarify payment
and coverage issues.
Homebound Definition
The new statutory language clarifies and broadens the homebound eligibility
criterion in two ways:
Absences attributable to the need to receive health care treatment,
including regular absences to participate in therapeutic, psychosocial, or
medical treatment at a licensed or accredited adult day-care program, will
not disqualify a beneficiary from being considered homebound. For many years
beneficiaries who attended adult day-care programs were routinely denied
home health services.
Absences for the purpose of attending a religious service are deemed to be
absences of infrequent or short duration. (Generally, a beneficiary whose
absences from the home are not considered infrequent or of short duration
will not be considered to be homebound.)
These changes became effective upon date of enactment, December 21, 2000.
Use of Telehealth to Deliver Home Health Services
A home health agency may furnish services via a telecommunication system if
the services:
Are not used in lieu of an in-person home health service ordered under a
plan of care;
Are not considered a home health visit for purposes of eligibility or
payment. Thus, a beneficiary whose only skilled service is provided via
telecommunication would not be eligible for home health services because the
beneficiary would not be receiving a skilled nursing service.
Increased Payments to Home Health Agencies
Payments to home health agencies are increased through:
An additional year's delay in the 15 percent reduction on payment limits
for home health services;
Restoration of full home health market basket update for determination of
payment to home health agencies;
Allowing a temporary two-month periodic interim payment as a transition for
some home health agencies that had been receiving periodic interim payments
before the prospective payment system (PPS) went into effect.
A 24-month increase, beginning April 1, 2001, for services furnished in
rural areas
Reports and Studies
The Comptroller General must report to Congress:
By August 15, 2001 the results of a study on the costs to home health
agencies of purchasing non-routine medical supplies, and include a
recommendation of whether payment for non-routine medical supplies should be
made separately from the PPS payment.
By January 1. 2002 the results of a study on supervision and quality of
services in branch offices in isolated rural areas.
No later than one year after the date of enactment the effect of the
amendment of the homebound definition on cost of and access to Medicare home
health services.
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NEW PROCESS
FOR REVIEW OF MEDICARE COVERAGE DETERMINATIONS
Section 522 of the Medicare, Medicaid and SCHIP Benefits Improvement and
Protection Act of 2000 amends 42 U.S.C. Section 1395ff to create a new process
for reviewing national coverage determinations (NCDs) and local coverage
determinations (LCDs). (Public Law 106-554, 12/21/2000.) The section also
defines the terms NCD and LCD and codifies the process for seeking establishment
of a NCD.
Definitions
- National coverage determination - a determination by the Secretary of
HHS regarding whether a particular item or service is covered nationally
under Medicare. The term does not include a determination of what code, if
any, is assigned to an item or service or a determination regarding the
amount of payment.
- Local coverage determination - a determination by a fiscal intermediary
or carrier regarding whether or not a particular item or service is covered
on an intermediary- or carrier-wide basis, in accordance with section
1862(a)(1)(A) [payment for services that are reasonable and necessary.]
Standing
- Only beneficiaries who need an item or service that is the subject of
the coverage determination may seek review of a NCD or LCD.
Review of National Coverage Determinations
- As under previous law, administrative law judges are precluded from
reviewing NCDs.
- NCDs are not subject to review for failure to comply with Administrative
Procedure Act notice and comment provisions.
- The bill creates a new procedure for review by the Departmental Appeals
Board of a complaint filed by an aggrieved party to challenge to a NCD. The
DAB may:
1. Review the record, permit discovery and take evidence to evaluate
the reasonableness of the determination, if the DAB determines the
record is incomplete or inadequate to support the validity of the
determination.
2. Consult with appropriate scientific and clinical experts.
3. Defer only to reasonable findings of fact, interpretations of law,
and applications of fact to the law by HCFA.
- HCFA has 30 days to implement a decision by the DAB.
- A decision by the DAB is a final agency action subject to judicial
review.
- If there are no material facts in dispute and the only issue is the
constitutionality of a provision of law or regulations, the moving party can
go straight to court.
Review of Local Coverage Determinations
- There is a new procedure for review by an ALJ of a complaint by an
aggrieved party challenging a LCD. The ALJ may:
1. Review the record, permit discovery and take evidence to evaluate
the reasonableness of the determination, if the ALJ determines the
record is incomplete or inadequate to support the validity of the
determination.
2. Consult with appropriate scientific and clinical experts.
3. Defer only to reasonable findings of fact, interpretations of law,
and applications of fact to the law by HCFA.
- An aggrieved party may appeal the ALJ decision to the DAB.
- If there are no material facts in dispute and the only issue is the
constitutionality of a provision of law or regulations, the moving party can
go straight to court.
- HCFA has 30 days to implement a decision of the ALJ or DAB.
- A decision by the DAB is a final agency action subject to judicial
review.
Pending National Coverage Determinations
- An aggrieved party may request HCFA to issue a national coverage
determination.
- HCFA has 90 days in which to:
1. Issue a NCD.
2. Issue a national non-coverage determination.
3. Issue a decision that no NCD or non-coverage determination is
appropriate,
4. Issue a notice saying review is not complete, describing the
remaining steps and the deadline for completion.
- Determinations must include an explanation of the basis for the
determination.
Miscellaneous Provisions
- Hearing decisions regarding NCDs are to be made public and published on
the internet, with information identifying individuals, suppliers and
providers removed.
- HCFA is to file yearly reports, starting Dec. 1, 2001, on the time
periods to complete and implement NCDs, and to publish the reports on the
internet.
- HCFA is to establish a process for affording public notice and comment
before implementation of recommendations of the advisory committees.
- Advisory committees relating to the coverage determination process must
assure full participation of nonvoting members in the deliberation of the
advisory committee.
Effective Date
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NEW MEDICARE
APPEALS PROVISIONS IN THE TRADITIONAL PROGRAM
The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of
2000, included in H.R. 4577, the Labor/ HHS Appropriations Bill, made changes to
the traditional Medicare appeals system, effective for initial determinations
made on or after October 1, 2002. Section 521 of the Bill, amending 42 U.S.C.
Section 1395ff, creates one appeals system for Part A and Part B claims,
establishes time frames for action at all levels of review, and adds a new layer
of review by an independent review entity.
Initial Determinations
- Fiscal intermediaries (FI s) and carriers will still make initial
determinations of Part A and Part B claims, respectively.
- Initial determinations involve:
1. Whether an individual is entitled to benefits
2. The amount of benefits
3. Any other initial determination with respect to a claim for
benefits, including that payment not be made, no longer be made; and an
initial determination by a PRO.
- Decisions must be made within 45 days of receiving the claim, and notice
of the determination must be mailed to the individual filing the claim
before the end of the 45 days.
- A beneficiary may file a notice for redetermination of the initial
determination within 120 days of receipt of the initial determination.
- Redeterminations must be made within 30 days of request, and mailed
before the conclusion of the 30 days.
- Beneficiaries must exhaust the determination stage before appealing
further.
Expedited Determinations
- Available where provider notifies the individual of plan to
1. Terminate services, and a physician certifies that failure to
continue service is likely to place the individual's health at risk
2. Discharge the individual from service
- Can request in writing or orally
- Applies to both initial determinations and reconsiderations
Reconsideration
- The bill creates a new level of review, conducted by a new entity, the
qualified independent contractor (QIC).
- HCFA will contract with at least 12 QICs around the country. The QIC
can't be a FI or carrier.
- Beneficiaries have 180 days to request reconsideration.
- If the issue on reconsideration involves a question as to whether
services are reasonable and necessary, then a panel of physicians or other
health care professionals will review the information and consider clinical
experience, and medical, technical and scientific evidence. A
physician who treats the patient can't be involved in the reconsideration.
- National coverage determinations are binding, but local coverage
determinations are not.
- Decisions must be made within 30 days, though the beneficiary may
request a 14-day extension. If time line not met, a beneficiary can request
an ALJ hearing.
- Decision on expedited reconsideration must be made within 72 hours of
receiving the request and the medical records needed to make the
determination.
- The written reconsideration decision must include a detailed explanation
of the decision, a discussion of pertinent facts and regulations and, where
the issue is reasonable and necessary services, an explanation of the
medical and scientific rationale.
- The QIC must notify the entity responsible for payment of the claim of
the decision.
- QICS must make all decisions available to FI s, contractors, PROs,
Medicare+Choice plans
- QICs must ensure consistency of decisions and meet data collection
requirements.
Administrative Law Judge Hearings
- A beneficiary is entitled to an ALJ hearing if the amount in controversy
is $120. The rules about aggregation of claims
remain the same.
- ALJ decisions must be made no later than 90 days after the hearing
request, thought the party seeking the hearing may waive the time period. If
the time line is not met, the beneficiary may seek Departmental Appeals
Board Review
- The QIC is now a party to the ALJ hearing
1. QIC prepares such information as is required for the appeal,
including, as necessary, explanation of the issues and the relevant
policies.
2. QIC participates in the hearings as required by HCFA.
Departmental Appeals Board Review
- The DAB reviews the case de novo.
- The DAB must make a decision within 90 days of the request. If the
deadline isn't met, the beneficiary may seek judicial review.
Judicial Review
- $1180 jurisdictional amount remains.
Miscellaneous Provisions
- Conditions for provider representation of beneficiaries
- Outreach to beneficiaries, providers and suppliers of appeal rights,
including use of the 1-800-Medicare number.
- Continuing education for QICs and ALJs concerning coverage of items and
services
- Annual report to Congress on the number of appeals, identifying issues
that require administrative or legislative action
- Survey every 5 years of beneficiaries who filed appeals, providers and
suppliers, to determine satisfaction with process.
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NEW SKILLED NURSING FACILITY
PROVISIONS
Title III, Subtitle B of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (Public Law 106-554, 12/21/2000) makes
adjustments to the prospective payment system's (PPS) payments for skilled
nursing facilities (SNFs). The new law also includes some other changes related
to SNFs and Medicare SNF coverage. The new provisions include the following:
Section 311 eliminates the reduction in the market basket update of PPS rates
for SNFs
- The Balanced Budget Act reduced the market basket update by 1%. That
reduction is reduced to 2 % for fiscal years 2002 and 2003. For the first
half of fiscal year 2001, the 1% reduction continues; for the second half,
the 1% reduction is replaced by a 1% increase.
- Section 311(c) also explicitly confirms that the change in the market
basket does not affect the 20% increase for 15 of the 44 RUGs categories
that was authorized by the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999. (However, as described below, section 314 deletes
three of the 15 RUG-III categories from the list of resident classifications
receiving the 20% increase.)
Section 312 increases the nursing component of the PPS federal rate
- An increase of 16.66% is applied to the nursing component of the PPS
rates that was published in the July 31, 2000 Federal Register (65 Fed. Reg.
4677), effective for services furnished on or after April 1, 2001 and before
October 1, 2002. The 16.66% increase will also be applied to subsequent
updates of the PPS rates.
This increase is monitored by the GAO (see below).
Section 313 limits consolidated billing requirements
- The Balanced Budget Act required SNFs to submit bills to Medicare for
all services to beneficiaries that were covered by Medicare, whether the
services were provided under Part A or Part B. In the final rules published
on July 30, 1999, HCFA required consolidated billing for beneficiaries
during a Part A stay but indefinitely postponed consolidated billing for
beneficiaries receiving Medicare coverage under Part B only. 64 Fed. Reg.
41,644, at 41,670 (Jul. 30, 1999). Section 313 amends the law to require
consolidated billing for beneficiaries during a Part A stay and for
beneficiaries receiving therapy services during either Part A- or Part
B-covered stays.
Section 313(d) requires oversight by the Office of Inspector General (see
below).
Section 314 increases by 6.7% the payment for certain specified
rehabilitation groups under the RUG-III categories
- The section increases the Medicare payment for 14 RUG-III categories
specified in Tables 3 and 4 of the final rule that was published on July 31,
2000 (65 Fed. Reg. 46770). Payment for these increases is made by
eliminating the 20% increase for three RUG-III categories, as provided by
the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999.
- Section 314(c) requires oversight by the Office of Inspector General
(see below).
Section 315 authorizes the Secretary to establish a process for geographic
reclassification of a SNF for purposes of PPS payments
- The Secretary may establish a procedure to reclassify a SNF and may use
the method for geographic reclassification for in-patient hospitals. The
Secretary may not establish this procedure until he/she has collected data
to establish an area wage index for SNFs.
Title IX, Subtitle E, requires skilled nursing facilities and nursing
facilities to post information on nursing facility staffing
- Section 941 requires SNFs and nursing facilities (certified under
Medicaid) to "post daily for each shift the current number of licensed and
unlicensed nursing staff directly responsible for resident care in the
facility."
- The information must be displayed in a "uniform manner (as specified by
the Secretary)" and "in a clearly visible place." SNFs must also make this
information to the public on request.
- The effective date of these requirements is January 1, 2003.
Section 621 requires Medicare + Choice Organizations (MCOs) to cover
post-hospital SNF care in an enrollees "home skilled nursing facility" under
certain circumstances
- Effective for MCO contracts entered into or renewed on or after
12/21/2000, MCOs must cover post-hospitalization SNF care through an
enrollees "home skilled nursing facility" if the plan has a contract with
the facility or if the home facility agrees to accept "substantially similar
payment" under the same terms and conditions that apply to similarly
situated SNFs that are under contract with the MCO.
- A "home skilled nursing facility" is defined as:
1. One in which the enrollee resided at the time of the hospital
admission that triggered eligibility for SNF care upon discharge, or;
2. The facility that is providing such services through the continuing
care retirement community in which the enrollee resided at the time of
hospital admission, or;
3. The facility in which the spouse of the enrollee is residing at the
time of the enrollee's hospital discharge.
- Home skilled nursing facilities are permitted to refuse to accept MCO
enrollees and to impose conditions on their acceptance of such enrollees
- The Medicare Payment Advisory Commission (MedPAC) is required to analyze
and to report to Congress within 2 years of enactment regarding the effects
of this provision on the scope of benefits, the costs incurred by MCOs, and
the contractual relationships between the MCOs and SNFs
GAO Reports
- Section 311(d) requires the GAO to issue a report on the adequacy of SNF
payment rates and to report to Congress by July 1, 2002.
- The report must consider how Medicare's rates contribute to facilities'
"financial viability" and must consider "the role of private payors,
Medicaid, and case mix."
- Section 312(b) requires the GAO to audit nursing staff ratios and to
report to Congress by August 1, 2002.
- The report must cover selected states, include a broad representation of
providers ("with respect to size, ownership, location and Medicare volume"),
and include payroll records and Medicaid cost reports. The report must
assess the impact of the increased payments for nurse staffing made by
section 312 and make recommendations about whether the increased payments
should be continued.
HCFA Reports
- Section 311(e) requires HCFA to study the classification system for
Medicare SNF residents and to report to Congress by January 1, 2005.
HHS' Office of Inspector General Oversight
- Section 313(d) requires the HHS' Office of Inspector General to monitor
payments made under Part B to beneficiaries who are not receiving Part A
coverage for their stay. The purpose of the oversight is "to ensure that
there is not duplicate billing for services or excessive services provided."
- Section 314(c) require the HHS' Office of Inspector General to review
the payment structure for services classified within the RUG-III
rehabilitation groups "to assess whether payment incentives exist for the
delivery of inadequate care." OIG must report to Congress by October 1,
2001.
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NEW MEDICARE PREVENTIVE
BENEFIT PROVISIONS
Sections 101-105 of the Medicare, Medicaid, and SCHIP Benefits Improvement
Protection Act of 2000 (BIPA) (H.R. 5661, Pub. Law 106-554, 12/21/2000) add
coverage for screening glaucoma services, screening colonoscopy services, and
medical nutrition therapy services for beneficiaries who have diabetes or renal
disease. In addition, these provisions provide for biennial screening pap smears
and pelvic exams. Effective dates and citations are included in the summaries
that follow.
Section 101 - Coverage of Biennial Screening Pap Smear and Pelvic Exams
- The Medicare law is amended to provide that Medicare coverage is
available for Screening Pap Smears every 2 years, an increase from the
current coverage of every three years. 42 U.S.C. Section 1395x(nn)(1).
- A "screening pap smear" means a diagnostic laboratory test consisting of
a routine exfoliative cytology test (Papanicolaou test) provided to a woman
for the purpose of early detection of cervical or vaginal cancer and
includes a physician's interpretation of the results of the test, if the
individual has not had such a test during the preceding 2 years, or during
the preceding year in the case of a woman of childbearing age who has had a
test as described in any of the preceding 3 years that indicated the
presence of cervical or vaginal cancer or other abnormality.
- The Medicare law is amended to provide that Medicare Screening Pelvic
Exams are available every 2 years, an increase from the current coverage of
every three years. 42 U.S.C. Section1395x(nn)(2).
- A "screening pelvic exam" means a pelvic examination provided to a woman
if the woman involved has not had such an examination during the preceding 2
years, or during the preceding year in the case of a woman of childbearing
age who has had a test as described during any of the previous 2 years that
indicated the presence of cervical or vaginal cancer or other abnormality,
and includes a clinical breast examination.
- Effective Date - Effective for both Pap Smears and Pelvic Exams for
services furnished on or after July 1, 2001
Section 102 - Coverage of Screening for Glaucoma for high risk beneficiaries
- The law provides new coverage for screening for glaucoma for individuals
determined to be at high risk for glaucoma, individuals with a family
history of glaucoma, and individuals with diabetes. 42 U.S.C.Section
Section1395x(s)(2),
- "Screening for Glaucoma" means a dilated eye examination with an
intraocular pressure measurement, and a direct ophthalmoscopy or a slit-lamp
biomicroscopic examination for the early detection of glaucoma which is
furnished by or under the direct supervision of an optometrist or
ophthalmologist who is legally authorized to furnish such services under
State law (or the State regulatory mechanism provided by State law) of the
State in which the services are furnished, as would otherwise be covered if
furnished by a physician or as an incident to a physician's professional
service, if the individual involved has not had such an examination in the
preceding year.
- Effective Date - Applies to services furnished on or after January 1,
2002.
Section 103 - Coverage of Screening Colonoscopy for Average Risk Individuals
- The new law sets out frequency limits and payment amounts for Colorectal
Cancer Screening Tests. It provides coverage for screening colonoscopy for
individuals who are not at high risk for colorectal cancer. Payment is
available if the procedure is performed within ten years after a previous
screening colonoscopy. Further, payment is available for other individuals
if the procedure is performed within ten years after a previous screening
colonoscopy or within 4 years after a previous screening flexible
signmoidoscopy. 42 U.S.C. Section1395m(d)
- The law defines a "colorectal cancer screening test" as a Screening
Colonoscopy. It also defines an "individual at high risk for colorectal
cancer" as an individual who, because of family history, prior experience of
cancer or precursor neoplastic polyps, a history of chronic digestive
disease condition (including inflammatory bowel disease, Crohn's Disease, or
ulcerative colitis), the presence of any appropriate recognized gene markers
for colorectal cancer, or other predisposing factors, faces a high risk for
colorectal cancer. 42 U.S.C. Section 1395x(pp).
- Effective Date - Applies to colorectal cancer screening services
provided on or after July 1, 2001.
Section 104. Modernization of Screening Mammography Benefit
- The law sets out rules for the requisite age of the beneficiary and the
frequency of the service required to obtain coverage for screening
mammographies. No coverage is available for screening mammographies for
women under 35 years of age; only one screening mammography will be covered
for women between 35 and 40 years of age. Women who are 40 years old or
more, can continue to get coverage for an annual screening mammography.
- Future revisions of frequency criteria - With respect to the revision of
frequency, the Secretary, in consultation with the Director of the National
Cancer Institute, shall review periodically the appropriate frequency for
performing screening mammography, based on age and such other factors as the
Secretary believes to be pertinent. Based on this review, the Secretary may
revise from time to time the frequency with which screening mammography may
be paid for under this subsection.
- Effective Dates - The frequency revisions apply to screening
mammographies furnished on or after January 1, 2002.
- Payment for new technologies for Services Furnished in 2001- Payment are
increased for screening mammographies furnished from April 1, 2001 through
December 31, 2001 that use new technology.
- New technology defined - For purposes of this subsection, a new
technology with respect to a mammography is an advance in technology with
respect to the test or equipment that results in the following: (a) a
significant increase or decrease in the resources used in the test or in the
manufacture of the equipment; (b) a significant improvement in the
performance of the test or equipment; (c) a significant advance in medical
technology that is expected to significantly improve the treatment of
Medicare beneficiaries.
- Consideration of new CPCS code for new technologies after 2001 - The
Secretary shall determine, for such mammographies performed after 2001,
whether the assignment of a new HCPCS code is appropriate for mammography
that uses a new technology. If the Secretary determines that a new code is
appropriate for such mammography, the Secretary shall provide for such new
code for such tests furnished after 2001.
- HCPCS code defined - The term "HCPCS code" means a code under the Health
Care Financing Administration Common Procedure Coding System (HCPCS).
Section 105 Coverage of Medical Nutrition Therapy Services for Beneficiaries
with Diabetes or Renal Disease
- Coverage will be available for medical nutrition therapy services for
beneficiaries who have diabetes or renal disease who have not received
diabetes outpatient self-management training services within a time period
determined by the Secretary; are not receiving maintenance dialysis for
which Medicare payment is being made, and who meet such other criteria
determined by the Secretary. 42 U.S.C. Section 1395x(s)(2).
- The term "medical nutrition therapy services" means nutritional
diagnostic, therapy, and counseling services for the purpose of disease
management which are furnished by a registered dietitian or nutrition
professional (as defined below) pursuant to a referral by a physician as
defined in the Medicare statute.
- "Registered dietitian or nutrition professional" means
1. An individual who: (a) holds a baccalaureate or higher degree
granted by a regionally accredited college or university in the United
States (or an equivalent foreign degree) with completion of the academic
requirements of a program in nutrition or dietetics, as accredited by an
appropriate national accreditation organization recognized by the
Secretary for this purpose; (b) has completed at least 900 hours of
supervised dietetics practice under the supervision of a registered
dietitian or nutrition professional; and (c) is licensed or certified as
a dietitian or nutrition professional by the State in which the services
are performed; or if there is nor state licensing or certification,
meets such other criteria as the Secretary establishes.
2. Note: The requirements listed in section 1(a)-(c) above do not apply
to individuals who, as of the date of the enactment of this subsection,
are licensed or certified as dietitians or nutrition professionals by
the State in which medical nutrition therapy services are performed.
- Payment - Medical nutrition therapy services shall be 80% of the lesser
of the actual charge for the services or 85% percent under the physician fee
schedule for the same services when they are provided by a physician. 42
U.S.C. Section 1395l(a)(1)
- Application of Limits on Billing - The law is amended to provide that a
"registered dietitian or nutrition professional" is a practitioner who can
bill for services under the Medicare statute. 42 U.S.C.
Section1395u(b)(18)(C)
- Effective Date - The Amendments made by this section shall apply to
services furnished on or after January 1, 2002.
- HCFA Study - By July 1, 2003, HCFA is required to report to Congress a
report its recommendations regarding the expansion of the medical nutrition
therapy services benefit to other Medicare beneficiary populations.
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MEDICARE+CHOICE AND
OTHER MANAGED CARE REVISIONS
Sections 601-623 of the Medicare, Medicaid and SCHIP Benefits Improvement
and Protection Act of 2000 (BIPA) amend 42 U.S.C. Sections 1395r, 1395s,
1395w-21, 1395w-22, 1395w-23, 1395w-24, 1395w-26, 1395w-27, 1395ss to
provide more funding for, and less oversight of, the Medicare+Choice program
( Medicare Part C, which includes Medicare HMOs and one private
fee-for-service plan). (Public Law 106-554, 12/21/2000.) The law increases
funding for the Medicare+Choice program by $10 billion over five years
without increasing the length of the plans' contracts with Medicare or
placing any other restrictions on the plans' ability to leave the Medicare
market each year. The HMOs contended that they needed $15 billion over five
years. (Jo Thomas, New York Times, December 31, 2000).
Payment Reforms
- Establish as the minimum payment to M+C plans in the 50 states and the
District of Columbia for 2001, effective March 1, 2001:
1. $ 525 for Metropolitan Statistical Areas with a population of more
than 250,000;
2. $ 475 for other areas.
3. The same payment amounts apply to territories, except that the
minimum amount can't exceed 120% of the 2000 minimum amount.
- Effective March 1, apply a 3% minimum payment update for 2001; in
subsequent years the increase reverts to 2%.
- Clarify implementation of risk adjustment methodologies:
1. Through 2003,10% of payments would be based on the risk-adjusted
data.
2. Phase in risk adjustment at 30% in 2004, 50% in 2005, 75% in 2006,
and 100% in 2007. 3. For 2001 only, phase in full implementation of risk
adjustment for enrollees with congestive heart failure.
- Require HCFA to announce revised capitation rates for 2001
by January 4, 2001.
- By January 18, 2001:
1. Plans that terminated or reduced service areas may rescind
termination or reduction notices and submit new adjusted community rate
(ACR) information to HCFA.
2. Plans that would receive higher payments as a result of the Act must
submit revised ACRs and use additional funds to:
a. Reduce premiums,
b. Reduce cost sharing,
c. Enhance benefits,
d. Utilize stabilization funds.
3. Notwithstanding increased rates, M+C organizations will continue to
receive fee for service payments for new national coverage
determinations that are made mid-year.
- Require HCFA to publish in final form by July 1, 2001 increased payment
rates for ESRD patients enrolled in M+C plans. The rates would be effective
January 2002.
- Expand application of the bonus for M+C plans that enter new areas to
include areas that had no M+C plan as of January 1, 2001, based on notice of
other M+C plans' non-renewal of their contracts, provided by October 3,
2000.
- Require payment adjustments if a legislative change requiring coverage
of additional benefits resulted in significant increased costs, similar to
the adjustment made for national coverage determinations.
Easing of regulatory "burdens"
- Effective with the date of enactment, new regulatory requirements may
not take effect other than at the beginning of a calendar year.
- Where a M+C organization uses HCFA's model language for marketing
materials, HCFA must modify or approve the materials within 10 days, rather
than 45 days. This provision is effective for marketing materials submitted
on or after January 1, 2001.
- Expand Medicare preemption of state managed care laws by:
1. Clarifying that Medicare preempts state law cost-sharing
requirements;
2. Preempting state requirements relating to marketing materials and
summaries and schedules of benefits.
- If a M+C plan's service area includes areas subject to different local
coverage policies (LCP), the M+C plan may choose to apply throughout its
service area the LCP most favorable to beneficiaries.
- Effective in 2001, waive or modify requirements that hinder the design
of, offering of, or enrollment in M+C plans under contract between M+C
organizations and employers or labor unions. The goal is to make the M+C
program compatible with employer or union group health plans.
Improvements for beneficiaries
- Effective in 2003, a M+C plan may choose to offer reduced Medicare Part
B premiums as an additional benefit to its enrollees:
1. The plan could reduce the Part B premium up to 100%.
2. The reduction would have to apply uniformly to each enrollee of the
plan.
3. Information about Part B premium reductions would be included with
the information beneficiaries receive about plans during the annual open
enrollment period.
- Effective June 1, 2001, an election to enroll in or disenroll from a M+C
plan becomes effective the month after the month in which the election is
made, regardless of the date of the election.
- Enrollees who develop end stage renal disease (ESRD) while in an M+C
plan may enroll in another M+C plan if they lose coverage due to the
termination or reduction in service area of their health plan. This
provision is retroactive to include individuals with ESRD whose enrollment
in a M+C plan was terminated involuntarily on or after December 31, 1998.
Quality Assurance and plan accountability
- Expand quality assurance programs to require M+C plans to include a
separate focus on racial and ethnic minorities.
- Effective May 1, 2001, require the Chief Actuary of HCFA to review
actuarial assumptions and data used by M+C organizations in submitting their
ACR amounts.
- Provide for a civil monetary penalty of $100,00, or such higher amount
as set by regulation, against a M+C organization that terminates its M+C
contract other than at the proper time and after providing HCFA with the
proper notice.
Reports
- Report to Congress within two years after date of enactment how M+C plan
quality assurance programs focus on racial and ethnic minorities.
- Report to Congress by January 1, 2003 on how to phase-in the costs of
military facility services furnished by the Departments of Defense and
Veterans Affairs.
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ELIMINATION OF THE 24 MONTH WAITING PERIOD FOR PERSONS WITH A.L.S.
Section 115 of the Medicare, Medicaid,and SCHIP Benefits Improvement
Protection Act of 2000 (BIPA) (H.R. 5661, Pub. Law 106-554, 12/21/00),
removes the 24-month waiting period for persons with Amyotrophic Lateral
Sclerosis (ALS, also known as Lou Gehrig's Disease) and allows those persons
to begin receiving Medicare benefits in the first month of disability,
effective for benefits beginning July 1, 2001.
Section 115 - Waiver of 24-Month Waiting Period for Medicare Coverage of
Individuals Disabled with Amyotrophic Lateral Sclerosis (ALS)
The law is amended to provide that for persons who have been medically
determined to have Amyotrophic Lateral Sclerosis (ALS), there shall be a
waiting period of no longer than a month after disability has been
established and that entitlement to benefits shall begin with the first
month (rather than the twenty-fifth month) of entitlement or status. 42
U.S.C. Section 426.
Further, the law is amended by adding a new subsection (j) to conform
with the Social Security Act provisions to provide that the initial
enrollment period for Medicare for purposes of persons with ALS shall begin
on the first day of the first month in which the individual is eligible for
Medicare benefits; and that the initial enrollment period begins on the
first day of the first month of entitlement to disability insurance
benefits. 42 U.S.C. Section 1395p.
Effective Date.
This provision applies to benefits beginning July 1, 2001.
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MEDIGAP ENROLLMENT CHANGES
Section 618 of the Medicare, Medicaid. SCHIP Benefits Improvement Act of 2000
(BIPA) (H.R. 5661, Public Law 106-554, Dec. 21, 2000) amends 42 U.S.C.
Section1395ss(s) to clarify the time periods in which a Medicare beneficiary is
guaranteed issuance of a Medicare Supplemental Insurance (Medigap) plan. The
amendment also extends the time periods for "guaranteed issue" of a Medigap
policy in certain circumstances.
Time Periods for Enrollment
A beneficiary is guaranteed issuance of a Medigap policy if s/he enrolls:
- Termination of employer-sponsored coverage: Within 63 days of receiving
notice of termination of employer-sponsored supplemental health insurance,
or of receiving notice that a claim has been denied because of the
termination of that insurance.
- Termination of HMO: During the time period starting with the date the
beneficiary receives notice of the termination of the HMO or other
Medicare+Choice plan and ending 63 days after the date HMO coverage is
terminated. This provision closes the gap in the "guaranteed issue"
protection that was inadvertently created by the Balanced Budget Refinement
Act of 1999.
- Bankruptcy/insolvency of Medigap policy: During the time period starting
with (1) the date the beneficiary receives notice of the bankruptcy or
insolvency of a Medigap issuer, or (2) receives notice of the termination of
the policy and (3) the date coverage is terminated, and ending 63 days after
Medigap coverage is terminated.
- Voluntary disenrollment: A beneficiary who voluntarily disenrolls, in
certain circumstances, is guaranteed issuance of a Medigap policy beginning
60 days before the effective date of the disenrollment and ending 63 days
after the effective date of the disenrollment. This provision applies when a
beneficiary voluntarily disenrolls from:
1. An employer-sponsored supplemental plan that is about to terminate;
2. A Medigap plan that substantially violates a material provision of
its policy;
3. A Medigap plan when the issuer or agent engages in marketing
violations;
4. A Medicare+Choice plan or other Medicare HMO that terminates its
Medicare contract;
5. A Medicare+Choice plan that substantially violates a material
provision of its contract or engages in marketing violations.
- Other: For beneficiaries whose Medigap, employer-supplemental insurance,
or HMO coverage terminates but who don't fall within the above categories,
63 days from the effective date of disenrollment.
What Medigap policy is guaranteed?
- Individuals who enrolled in a Medicare+Choice plan upon first becoming
eligible for Medicare at age 65: are guaranteed issuance of any Medigap
policy, A-J.
- Individuals who canceled a Medigap policy to try a Medicare+Choice plan:
may return to the Medigap policy they canceled before enrolling in the
Medicare+Choice plan if available from the same insurer. If the policy
is not available, they may enroll in Policies A, B, C, and F.
- All other beneficiaries covered by the guaranteed issue protection: may
enroll in Medigap policies A, B, C, and F.
Extended guaranteed issuance of a Medigap policy for beneficiaries who try
Medicare+Choice
Individuals who enrolled in a Medicare+Choice plan upon first becoming
eligible for Medicare, and individuals who canceled a Medigap policy to try
a Medicare+Choice plan are
- Guaranteed issuance of a Medigap policy (the type of policy is discussed
above) during the first twelve months of the trial period, and
- Are guaranteed issuance of a Medigap policy for another twelve months -
for a total of two years from the date the individuals first enrolled in a
Medicare+Choice plan - if
1. The Medicare+Choice plan in which they enroll terminates its
contract, or the beneficiaries are otherwise involuntarily disenrolled
from the plan, during the first twelve months of enrollment, and
2. They enroll in another Medicare+Choice plan after they are
disenrolled from the first plan.
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NEW PROVISIONS AFFECTING DUAL
ELIGIBLES
Various sections of the Medicare, Medicaid and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA) (Public Law 106-554, 12/21/2000) address issues
that have arisen from the so-called buy-in programs through which Medicaid pays
some or all of Medicare cost-sharing for certain low-income Medicare
beneficiaries. These provisions do not change benefits in any way; rather, they
direct federal agencies to take certain actions.
Section 911 - Outreach on Availability of Medicare Cost-Sharing Assistance
to Eligible Low-Income Medicare Beneficiaries
- This provision directs the Commissioner of the Social Security
Administration to conduct outreach to identify low-income Medicare
beneficiaries who may be eligible for Medicaid assistance with their
Medicare cost-sharing and to notify those individuals of their potential
eligibility.
- The notice must include language that informs individuals that to
receive benefits they must meet eligibility criteria and must provide the
State information about their income and assets (in states that use an
assets test for such benefits).
- In addition to conducting outreach, the Commissioner must provide each
State Medicaid agency and other appropriate agency with names and addresses
of individuals residing in the State whom the Commissioner has identified as
potentially eligible for benefits and must update such information at least
annually. Annual updates shall include information on individuals who
might be eligible because of a decrease in Title II (Social Security)
benefits.
- The General Accounting Office is directed to study the impact of these
provisions on enrollment in the programs and report its findings to the
Congress within 18 months of when the Commission begins conducting outreach,
which must be by December 21, 2001.
Section 709 - Development of Uniform QMB/SLMB Application Form
- The Secretary of the Department of Health and Human Services is directed
to develop and distribute to States a nationally uniform application for use
by individuals applying for Medicaid to pay for Medicare cost-sharing.
States may elect to use the form or not.
- In developing the form, the Secretary is to consult with States and with
beneficiary groups. The form "shall be easily readable" by applicants.
- The provision is effective December 21, 2001, but the form must be
developed by September 21, 2001.
Section 125 - Study on Limitation on State Payment for Medicare
Cost-Sharing Affecting Access to Services for Qualified Medicare
Beneficiaries
- The Secretary of the Department of Health and Human Services is directed
to conduct a study of the affect on access to services of a provision in
current law allowing states to forego paying Medicare cost-sharing to the
extent the entire payment, including the Medicare portion, exceeds the
Medicaid rate for the same service. The study will include analysis of the
effect of such policies on providers who serve a disproportionate share of
Qualified Medicare Beneficiaries.
- The study shall be submitted to Congress by December 21, 2001 and shall
include recommendations for changes in the law needed to assure access to
services.
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OUTPATIENT DEPARTMENT SERVICES UNDER PROSPECTIVE PAYMENT SYSTEM
Section 111 - Accelerates the reduction of beneficiary co-payments for
hospital outpatient department services (OPDS) under the outpatient hospital
prospective payment system (PPS).
Upper limits: The co-payment for any given OPD can=t be more than the
hospital deductible for that year. The hospital deductible amount for 2005
is $840 for any given service.
Caps: The statute sets caps on the percentage of the co-insurance as
follows:
1. For procedures preformed on or after April 1, 2001, 57%.
2. For procedures performed in 2002 or 2003, 55%.
3. For procedures performed in 2004, 50%.
4. For procedures performed in 2005, 45%.
5. For procedures performed in 2006 and thereafter, 40%.
- Hospital may waive the co-insurance where the co-insurance amount was
increased by PPS.
- The GAO has to report to Congress by April 1, 2004 the effect on Medigap
premiums of the reduction in OPDs co-insurance.
PART B COVERAGE OF CERTAIN DRUGS AND BIOLOGICALS
Drugs and biologicals that are usually not self-administered
Section 112 - Deletes reference to a regulatory determination of drugs that
cannot be self-administered and instead provides coverage for drugs and
biologicals which are not usually self-administered by the patient.
(Emphasis added) The Amendment is effective December 21, 2000.
Immunosuppressive drugs
Section 113 - Removes the time and budget limit on coverage of
immunosuppressive drugs, effective Dec. 21, 2000. Thus, beneficiaries who
use immunosuppressive drugs will have Part B coverage for the rest of their
lives, or as long as they remain eligible for Medicare.
Mandatory assignment
Section 114 - Requires, effective January 1, 2001, that payment under Part
B for drugs or biologicals be made only on an assignment-related basis.
DEMONSTRATION PROJECTS AND STUDIES
BIPA requires a variety of demonstration projects and studies concerning
the effect of different kinds of treatments.
Section 121 - Establishes a demonstration project to look at the impact on
cost and health outcomes of disease management for beneficiaries with
advanced-stage congestive heart failure, diabetes or coronary heart disease.
Section 122 - Establishes at least 9 demonstrations to address cancer
prevention and treatment for ethnic and racial minorities.
Sections 123-128 - Require studies on:
1. Medicare coverage of routine thyroid screening;
2. The use of Consumer Coalitions in the marketing of Medicare + Choice
plans. Consumer Coalitions are nonprofit consumer-based group of
organizations that provide information to beneficiaries about Medicare and
their options and that negotiate benefits and premiums for beneficiaries
with M+C organizations, Medigap plans, etc.;
3. Preventive interventions in primary care for older Americans;
4. Medicare coverage of cardiac and pulmonary rehabilitation services;
5. Lifestyle modification programs.
Section 429 - Requires the GAO to study reimbursement for drugs and
biologicals under the current Medicare payment methodology and report back
it=s findings, including recommendations on revised payment methods, by
September 21, 2001.
THERAPY CAPS
Section 421 - Extends for another year the moratorium on therapy caps that
limit the amount of Medicare reimbursement for certain therapy services.
ORTHOTICS AND PROSTHETIC DEVICES
Section 427 - Establishes special payment provisions for custom fabricated
orthotics.
1. A custom fabricated orthotic
$ Requires education, training and experience to custom-fabricate,
$ Is included in a list established by HCFA
$ Is individually made for the patient over a positive model of the
patient, and
$ Doesn=t include shoes or shoe inserts.
2. It must be made by a qualified practitioner, i.e., a qualified
physical therapist or occupational therapist who meets state licensing
requirements or other education requirements, and supplied by an entity that
meets accreditation requirements.
3. No later than December 21, 2001, HCFA must promulgate a rule to
implement this provision using negotiated rule-making.
4. The GAO should conduct a study of HCFA Ruling 96-1, which
distinguished orthotics from durable medical equipment and report back by
June 21, 2001.
Section 428 - Makes it easier to replace prosthetic devices and parts.
Replacement may be made based on a doctor=s order showing a change in the
physiological condition of the device, or the cost of repairs would exceed
60% of the cost of replacement. If the device or device part is less than 3
years old, HCFA may require confirmation of the necessity of replacement.
The amendment is effective for prosthetic devices and parts replaced on or
after April 1, 2001.
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MEDICARE HOSPICE PROVISIONS
Sections 321-323 of the Medicare, Medicaid, and SCHIP Benefits Improvement
Protection Act of 2000 (BIPA) (H.R. 566, Pub. Law 106-554, 12/21/2000)
modify the Hospice Care benefit and provide for certain studies of the
effectiveness of these modifications. The effective dates of these
modifications are included in the summaries that follow:
- Section 322 - Provides that the certification regarding terminal illness
of an individual shall be based on the physician=s or medical director=s
clinical judgement regarding the normal course of the individual=s illness.
In addition, the Secretary is to conduct a study to examine the
appropriateness of the certification regarding terminal illness, and the
effect of this certification requirement, and is to submit a report on the
study to Congress not later than 2 years after the date of enactment of this
Act.
Effective date. The amendment shall apply to certifications made on or
after the date of the enactment of this Act, 12/21/2000.
- Section 321 - Provides a 5 percent increase in the payment base for
hospice care for fiscal year 2001 and applies to hospice care furnished on
or after April 1, 2001. The temporary rate increase authorized in BBRA 99
for FY2001 and FY2002 (.5 percent and .75 percent, respectively) is not
effected. In addition, the Secretary is to use 1.0043 as the hospice wage
index value for the Wichita, Kansas Metropolitan Statistical Area (MSA) in
calculating payments for hospice programs in that MSA during fiscal year
2000. The Secretary may provide for an appropriate timely lump some payment
in addressing this payment.
Effective date. In applying this provision beginning with fiscal year
2002, the payment rates in effect under this provision during the period
beginning on April 1, 2001, and ending on September 30, shall be treated as
the payment rates in effect during fiscal year 2001.
- Section 323 - Requires the Medicare Payment Advisory Commission (MEDPAC)
to conduct a study to examine the factors affecting the use of hospice
benefits under the Medicare program, including a delay in the time (relative
to death) of entry into a hospice program, and the differences in use
between urban and rural hospice programs and the presenting condition of the
patient.
Effective date. The provision requires a report on the study to be
submitted to Congress 18 months after enactment.
Please click here to find more
information about Hospice Coverage under Medicare.
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