News to Note – February 2024

  • The Centers for Medicare and Medicaid (CMS) Program for Evaluating Payment Patterns Electronic Report (PEPPER) website went dark in November of last year.  The 2023 quarter three PEPPER was due for release in early December of last year, but it was a no-show.  In mid-January, CMS updated the website indicting they are putting PEPPER on hold until Fall of this year and that when it returns, it will be in an updated format.
  • Starting January 1, Medicare Advantage (MA) plans have been required to follow the Medicare Two Midnight Rule.  As expected, this has brought on a number of topics which likely will be under discussion for the rest of the year:
    • It’s important to remember that the Medicare Two Midnight Rule does not simply mean Inpatient status is supported if a patient remains hospitalized for two midnights.  
      • Always review MA-denied cases to ensure the two midnights were medically necessary.  If they were and the Rule is met, consider including the following in any appeal, “Thank you for your opinion but I disagree.  This case meets the provisions of the Two Midnight Rule. I will be filing a complaint with CMS about your violation of the federal regulations found at 42 CFR 422.101(b)(2).”  Consider also, asking for the payor medical director’s area of expertise to determine if they meet the standard set at 42 CFR 422.629(k)(3) for issuing an adverse organization determination.
      • Keep a list of these cases and periodically send an e-mail to your CMS regional office with the number of cases and the payer names, offering to provide case details and request that CMS takes action.  Will this strategy help decrease these kinds of denials?  It’s unclear, but it might convince the regional offices to push the higher-ups in Baltimore to set up a formal process of assessment and corrective actions for the payors.
    • There is not one mention of Long Term Acute Care Hospitals (LTACHs) in the 2024 MA Rule.  
      • We know that CMS requires MA plans provide equal access to skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and home health care services, so why doesn’t CMS mention LTACHs?  After all, LTACHs are like IRFs and provide inpatient care.  Although CMS rarely shares the rationale they use in making their determinations, in this case, it is likely that CMS does not view LTACHs as they do IRFs because LTACHs provide the same care as regular hospitals but differ in that their patients have a much longer length of stay.  In other words, a regular hospital can generally do what an LTACH can do, so CMS gives them no special consideration.  
      • This is supported by data.  In the MA appeal database of cases reviewed by the qualified independent contractor, there were over 18,000 appeals to gain access to LTACH and only 74 (0.4%) were decided in favor of the patient. 
      • How can you get your MA patient transferred to an LTACH?  First, determine why transfer is requested.  If your finance team wants the transfer since you have already spent the whole DRG payment, forget it.  But, if LTACH care is needed for specialty care, like weaning a patient who you could not get off the ventilator or healing a wound that has progressed despite your best care, then that’s the argument to make.  
    • Along with LTACHs, another setting that is not addressed is Ambulatory Surgery Centers (ASCs).  For traditional Medicare patients, a surgery must be on the ASC-covered procedure list in order for the surgery to be performed at an ASC.  This list was developed by CMS to protect the safety of patients by not allowing surgeries with long stays and high risk of bleeding in ASCs which do not have the extensive resources of a hospital.  MA plans can no longer claim that the Medicare Inpatient only list does not apply to them, but there is a significant loophole in between the inpatient only list and the ASC-covered procedure list.
      • CMS-4201 made no mention of the applicability of the ASC-covered procedure list. That means that for MA patients, there is no place of service restriction.  If the surgery is not on the inpatient only list, and most importantly, the surgeon has determined it would be safe for the surgery to be performed in an ASC, the Medicare Advantage plan may allow it. 
      • Nina Youngstrom, the editor of the Report on Medicare Compliance, confirmed with CMS that this is permitted and that MA plans may offer access to ASCs as a supplemental benefit.  More likely than not, MA plans will take advantage of this since the facility fee at an ASC is significantly lower than at a hospital as outpatient and of course as inpatient. 
      • Unfortunately, this ruling by CMS makes no sense.  How can they restrict certain surgeries from ASCs for traditional Medicare patients because of safety concerns, yet allow Medicare Advantage patients to have the same surgeries in an ASCs?  Will this have a significant effect on hospitals?  That is difficult to know but it certainly demonstrates how carefully we must analyze new regulations to find not only the new limitations, but also the loopholes.