Three Key Things in Health Care

November 4, 2020

  • The announcement from the Centers for Medicare & Medicaid Services (CMS) regarding delay of loan recoupment for recipients of payments under the Medicare Accelerated and Advance Payments Program (the “Program”) is welcome news to providers and suppliers still suffering from financial woes caused by COVID-19.
    • Generally, the purpose of the Program is to provide necessary funds to Medicare participating providers and suppliers when there is a disruption in claims submission and/or claims processing, which can occur during national emergencies or natural disasters. Program payments accelerate cash flow to impacted health care providers and suppliers, allowing such providers and suppliers to continue providing much needed health care services and supplies.
    • On March 28, 2020, CMS expanded the Program to include all Medicare providers during the COVID-19 public health emergency and, as a result, payments could be requested by hospitals, doctors, durable medical equipment suppliers and other Medicare Part A and Part B providers or suppliers that: (1) billed Medicare for claims within 180 days immediately prior to the date of signature on the request form; (2) are not in bankruptcy; (3) are not under active medical review or program integrity investigation; and (4) do not have any outstanding delinquent Medicare overpayments.
    • As of May 2020, the Program distributed over $100 billion in accelerated payments to Medicare Part A and Part B providers and suppliers, with the lion’s share of payments going to Medicare Part A providers, including short stay hospitals, skilled nursing facilities and critical access hospitals. Furthermore, California, Florida, Pennsylvania, New York and Texas received the greatest amount of Program payments.
    • Providers that received Program payments were originally scheduled to begin making repayments in August 2020. However, under the Continuing Appropriations Act, 2021 and Other Extensions Act (R. 8337), signed into law on October 1, 2020, repayment now begins one year from the date of the first Program payment – delaying the start of the repayment period to 2021.  Once repayment begins, a portion of provider-submitted claims will be used to offset the repayments — 25% of submitted claims during the first eleven months of repayment and 50% of submitted claims during the next six months.  If any amount remains unpaid at the end of the six-month period, interest will accrue at a rate of 4%.
    • Key Takeaway: Delaying the deadline for full recoupment of Program payments is surely welcome news for providers still reeling from the financial pressures caused by the   Recipients of Program payments should be aware that they may request an Extended Repayment Schedule (“ERS”), which may extend the repayment deadline for up to five years, if they are still experiencing financial hardship.  Such providers should contact their Medicare Administrative Contractor for information about obtaining an ERS.
  • In response to feedback from the radiation oncology community, the Centers for Medicare & Medicaid Services (CMS) delayed implementation of its radiation oncology alternative payment model by six months to July 1, 2021, providing more time for stakeholders to adapt to the new model.
    • On September 18, 2020, CMS announced it had finalized a new, mandatory Radiation Oncology (“RO”) Model aimed at promoting quality and financial accountability in the provision of radiation therapy services. Described in a final rule published on September 29, 2020, the RO Model will fundamentally change how Medicare pays for some radiation therapy, testing whether a prospective, episode-based, modality-agnostic, site-neutral payment model can reduce Medicare expenditures while also preserving or enhancing the quality of care furnished to Medicare beneficiaries.  Although originally slated to commence January 1, 2021, CMS announced on October 21, 2020 that it would delay the start of the RO Model’s 5-year performance period to July 1, 2021, in response to stakeholder concerns about the COVID-19 pandemic. 
    • Currently, Medicare pays for radiation therapy on a fee-for-service basis, reimbursing providers and suppliers for each service they perform. More radiation therapy treatments therefore result in more payments.  Service site also impacts payment rates, depending on whether radiation therapy is furnished in a hospital outpatient department (“HOPD”) or freestanding radiation therapy center.  These factors have caused concern at CMS that that the fee-for-service model improperly incentivizes providers and suppliers to deliver radiation therapy over more treatment visits at more expensive treatment sites, resulting in additional, unnecessary and avoidable costs for Medicare beneficiaries and the Medicare program.
    • Under the RO Model, which will be mandatory (subject to a narrow low-volume opt out) for radiation therapy providers and suppliers in randomly selected Core-Based Statistical Areas, CMS will make bundled payments to cover radiation therapy services furnished in a 90-day period to Medicare beneficiaries under treatment for 16 types of cancer. Payments will be made prospectively, with half of the amount paid at the beginning of the episode of treatment and the remaining half paid at the end.  Payments also will be split into professional and technical components, and importantly will be site neutral, regardless of the setting (i.e., HOPD vs. freestanding) where the radiation therapy is furnished. 
    • Participant-specific payment amounts under the RO Model will be based on proposed national base rates, trend factors and adjustments for case mix, historical experience and geographic location, with CMS applying a discount factor of 3.75% to the professional component and 4.75% to the technical component. Certain withholds for incorrect payments, quality and patient experience also will apply, which RO Model participants will have the opportunity to earn back.
    • Key Takeaway: It remains to be seen whether CMS will make any changes to the RO Model prior to its new effective date.  In addition to expressing
  • concerns about the original 3-month implementation timeline, stakeholders have been particularly vocal in their opposition to payment cuts effected by the RO Model. To mitigate some of the financial impact — CMS estimates Medicare fee-for-service payments will be reduced by 6% for physician group practices and 4.7% for HOPDs — and the associated risks to quality, stakeholders have requested that the amount of the discount factors be reduced to no more than 3%. But so far, CMS has yet to act.
  • Innovations in health care delivery continue during COVID-19 pandemic as Lyft announces new electronic health record (“EHR”) integration.
    • On October 8, 2020, Lyft announced a plan to integrate its ridesharing app into Epic Systems Corp.’s EHR, signaling Lyft’s continued commitment to expanding into the health care arena. The new “Lyft for Epic” will allow staff at participating hospitals to schedule Lyft rides on behalf of patients who need help traveling to or from non-emergency medical appointments directly from the patients’ EHR.  Participating hospitals would bear the cost of these rides.
    • Lyft views this new integration as a simple way to improve patient appointment adherence, stating that “data shows... that Lyft can help providers reduce no-show rates by up to 27 percent.” In addition, through this integration, Lyft hopes to increase operational efficiency through “shorter waiting times, less crowded waiting rooms, and improved patient throughput.”
    • Lyft and Epic are also working to develop a capability for health systems to collect data and “generate reports that make it easier to measure the impact of rideshare on health system spend[ing] and population health outcomes — potentially even tracking patient segments to proactively identify patients that would benefit from a Lyft ride.”
    • As such collaborations between ridesharing apps and EHR vendors are relatively new, it has yet to be seen whether integrations like Lyft for Epic are able to reduce no-show rates, improve health outcomes and increase operational efficiency on a large scale.
    • Lyft and other ridesharing apps seeking to provide free transportation to patients must ensure that they abide by all relevant provisions of the federal Anti-Kickback Statute (“AKS”) and the beneficiary inducement provisions of the Civil Monetary Penalties law (“CMP”).
      • The Department of Health and Human Services, Office of Inspector General (“OIG”) has addressed the provision of free transportation to patients in the context of AKS and CMP in certain of its advisory opinions, including OIG Advisory Opinion No. 15-13, OIG Advisory Opinion No. 16-02, and OIG Advisory Opinion No. 16-10. Although OIG advisory opinions are each based on a specific set of facts, Lyft and other ridesharing apps would be wise to familiarize themselves with the content of these opinions and apply the advice contained therein to their new collaborations.
    • Key Takeaway: Lack of access to safe, reliable transportation is a significant barrier to care for vulnerable patients.  Although the effects of collaborations between ridesharing apps and EHR vendors are still being observed and reported, this area of innovation is certainly one to watch as it has the potential to both improve quality outcomes and provide greater access to care.