Medicare |

Nursing Homes Will Get A 4% Medicare Pay Bump Next Year Under CMS Final Rule

August 2, 2023 By Jay Baldauf

In what the Centers for Medicare & Medicaid Services (CMS) today described as a “parity adjustment recalibration,” the agency said it will increase payments to skilled nursing facilities by 4%, or $1.4 billion, starting in fiscal year 2024.

The payment bump will, in part, make up for a $2.2 billion underpayment to the facilities as a result of the Patient Driven Payment Model (PDPM) for SNFs that replaced the former payment system in 2020, CMS said in a fact sheet. In its final rule, the agency says that it overestimated overpayments to nursing homes, and that resulted in a 2.23% reduction in fiscal year 2023.

The final payment policy reflects a 3% SNF market basket increase plus a 3.6% market basket forecast error adjustment and less a 0.2% productivity adjustment, as well as a negative 2.3% reduction, or approximately $789 million, from the clawback related to the PDPM parity adjustment recalibration, CMS said.

The final rule updates payment policies and rates for SNFs under the new measures that aim to address staff turnover under an executive order by President Joe Biden. The implementation of the PDPM in 2020 led CMS to estimate an unintended increase to SNFs of about 5%, or $1.7 billion.

One of the reasons nursing homes were underpaid is CMS didn’t account for the Consolidated Appropriations Act’s requirement to exclude marriage and family therapist (MFT) services and mental health counselor services (MHC) from SNF billing. “Exclusion from consolidated billing allows these services to be billed separately by the performing clinician rather than being included in the Medicare Part A SNF payment,” the final rule states. “We are finalizing regulatory text changes required to codify this new legislative requirement to exclude MFT and MHC services from SNF consolidated billing for services furnished on or after January 1, 2024.”

CMS notes that the PDPM utilizes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10), to use an individual’s primary diagnosis to assign patients to clinical categories. “In response to stakeholder feedback and to improve consistency between the ICD-10 code mappings and current ICD-10 coding guidelines, CMS is finalizing several changes to the PDPM ICD-10 code mappings,” the final rule states.

Beginning in fiscal year 2025, CMS will adopt a discharge function score when considering payments to SNFs. “This measure assesses functional status by assessing the percentage of SNF residents who meet or exceed an expected discharge function score and uses mobility and self-care items already collected on the Minimum Data Set (MDS),” the final rule states.

LeadingAge, the association of nonprofit, mission-driven providers of aging services, including nursing homes, issued a statement saying the final payment rule “does not address the reality of providers’ operating environments, and will, ultimately, limit older adults’ access to much-needed care and services.”

“Of course, our nonprofit and mission-driven members welcome any increase in payment rates, the 4% provided in this rule will surely be offset by the increasing costs of care, which will most certainly continue to rise in the coming year—on top of the expected staffing standards,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement .”We encourage Congress and HHS to ensure any proposed standards meet the provisions outlined in LeadingAge’s Get Real on Ratios proposal.”

In addition, COVID-19 continues to cast a shadow over nursing home operations, seeing as how the facilities had been the main nexuses for the disease. Beginning in fiscal year 2025, CMS will track the percentage of healthcare personnel in nursing homes who are considered up to date on their COVID vaccinations.

“The prior version of this measure reported only on whether HCP had received the primary vaccination series for COVID-19, while the modified measure requires SNFs to report the cumulative number of healthcare providers who are up to date with recommended COVID-19 vaccinations in accordance with the CDC’s most recent guidance,” the final rule states.

CMS will also begin to monitor nursing staff turnover beginning in fiscal year 2026 as part of the Biden administration’s focus to ensure adequate staffing at nursing homes.

Filed Under: ACA, Doctors, Drugs, Employer Benefits, General Health, Medi-Cal, Medicare, Reform, Senior Health Tagged With: CMS, Covid19, final rule, HCP, ICD-10, Medicare, MFT, MHC, next year, nursing homes, pay bump, PDPM, SNF

Senate Finance Committee Advances PBM Reform Bill

August 2, 2023 By Jay Baldauf

A key Senate committee on Wednesday advanced bipartisan legislation aimed at regulating pharmacy benefit managers, the intermediaries in the prescription drug supply chain who negotiate discounts with drug companies on behalf of insurance plans.

The Senate Finance Committee approved the measure by a vote of 25-1, showing the broad bipartisan interest in PBM reform. Only Sen. Ron Johnson (R-Wis.) voted no, arguing the bill would add more layers of government interference.

While other committees have also passed PBM reform bills, the Finance Committee has jurisdiction over Medicare and Medicaid, which make up a large portion of U.S. health spending. Still, all the separate bills in the House and Senate will need to be combined into one floor-friendly package.

Committee Chairman Ron Wyden (D-Ore.) said he has been talking with Majority Leader Charles Schumer (D-N.Y.) about the bill, but did not give any more details.

Among other provisions, the legislation would delink PBM compensation from the price of the drug, which would remove an incentive for PBMs to favor higher priced drugs.

The legislation would also ban spread pricing, which is when a PBM charges Medicaid more for prescription drugs than they pay.

Wyden and ranking member Sen. Mike Crapo (R-Idaho) noted that additional proposals on PBMs that didn’t make it into the bill on Wednesday could be added over the August recess.

PBMs decide which drugs will be on a covered list of drugs, called a “formulary,” and how much a patient will have to pay for them. Three PBMs dominate the U.S. market: CVS Health’s Caremark, UnitedHealth’s OptumRx and Cigna’s Express Scripts.

The U.S. spends more than $4 trillion annually on health care, and Wyden said too much of that is being “frittered away on outdated middlemen practices.”

“The incentives of PBMs are just wrong. They win when prices are higher, not lower. Today’s proposals will flip that on its head,” Wyden said.

Drugmakers blame PBMs for the high costs of prescription drugs, though the PBM industry says their role is misunderstood and executives point fingers at the manufacturers.

PBMs collect rebates from drug manufacturers in exchange for coverage by a health plan.

The PBMs argue they can negotiate with insurers and manufacturers for lower drug costs and larger discounts for medications. They pass savings on to insurance plans, resulting in lower premiums for consumers.

Lawmakers have long been critical of PBMs, though the industry is not solely responsible for the high drug prices.

Sen. Sheldon Whitehouse (D-R.I) cautioned that members shouldn’t lose sight of the larger issue of drug manufacturers being responsible for setting their own prices.

“I for one want to make darn sure this committee is not turned into the tool of the pharmaceutical industry” and only focuses on PBMs, Whitehouse said.

Filed Under: ACA, Doctors, Drugs, Employer Benefits, Federal Government, General Health, Medi-Cal, Medicare, Reform Tagged With: advances, bipartisan, finance committee, Legislation, Medicaid, Medicare, PBM, reformbill, Senate

Medicare Advantage Report Shows Enrollees Capitalize On Supplemental Benefits

August 2, 2023 By Jay Baldauf

Most Medicare Advantage (MA) enrollees use one or more supplemental benefits, with most health plan members using multiple benefits, according to a newly released report from the Elevance Health Public Policy Institute.

The report finds that 83% of dual-eligible and 75% of non-dual-eligible individuals used at least one supplemental benefit a year. Those figures only drop to 64% and 48%, respectively, for using at least two different supplemental benefits. It also concluded that dual-eligible enrollees were more likely to live in a food desert, so they are more likely to self-select plans with strong supplemental benefit offerings.

“Further, dual eligible utilizers have a higher average CMS-HCC risk score than non-utilizers, suggesting they could be using their supplemental benefits to help address more intensive healthcare needs,” the report said.

The analysis concludes that MA enrollees see value in plans with supplemental benefits to address personalized needs. Many enrollees use grocery cards that allow for more spending on nutritious food, particularly for people living in food deserts with limited access to quality food.

Other members sign up for transportation benefits that allow people to complete errands like shopping for groceries or going to the bank. Both dual-eligible and non-dual-eligible utilizers of transportation benefits were found to have higher risk scores—and likely greater healthcare needs.

In 2019, CMS permitted supplemental benefits beyond vision and dental to include certain nonmedical services and different cost-sharing or tailored benefits.

Private MA plans can offer supplemental benefits due to the plan’s lower costs when compared to traditional Medicare, therefore enrollees can pick a plan that best suits their other individual needs. Congress has used MA to address food insecurity, as an enrollee could select a plan that offers meal benefits.

More than half of MA beneficiaries have annual incomes less than $25,000, and more than one-third identify as racial or ethnic minorities, the report says.

MA enrollment skyrocketed by 337% from 2006 to 2022, leaving the program on a path to insolvency, experts warn. Approximately half of all Medicare beneficiaries are enrolled in MA plans.

Filed Under: ACA, Doctors, Drugs, Employer Benefits, General Health, Medi-Cal, Medicare, Reform Tagged With: capitalize, CMS-HCC, dental, Elevance, enrollees, Fitness, hearing, Medicare, Medicare adbvantage, report, supplemental benefits, Vision