Health Law Scan

The old adage—March comes in like a lion and goes out like a lamb—didn’t quite hold true for the hospice sector, which experienced a late-month flurry of activity. The government gave the hospice sector a lot to consider, from MedPAC’s suggested freeze on hospice rates to CMS’s 2025 Proposed Hospice Rule (public comments due May 28, 2024) that, if finalized as is, would include a 2.6% payment bump. CMS’s Proposed Hospice Rule lays the groundwork for the long-anticipated Hospice Outcomes and Patient Evaluation (HOPE) quality measures data collection instrument, which will be used to collect data at various points during the hospice stay, not just at admission and discharge.

The Medicare program is broken down into four parts. Part A covers the cost of healthcare items and services provided during inpatient hospital stays as well as skilled nursing facility, hospice, and some home health care. Part B covers certain physician services, outpatient care, medical supplies, and preventive services. Together, Parts A and B are commonly referred to as traditional Medicare or fee-for-service (FFS) because claims for each item or service are submitted to the Centers for Medicare & Medicaid Services (CMS) for reimbursement through its Medicare Administrative Contractors.

If you have had a loved one suffer from dementia, you know the emotional, physical, and financial toll of this terrible disease. With advancements in dementia treatment, however, there is renewed hope on addressing this disease and increasing emphasis on fostering innovative care models.

Estimates show that Medicaid enrollment grew by more than 20 million (approximately 31%) during the public health emergency (PHE) and the top Medicaid managed care organizations (MCOs) experienced a 44.1% increase in managed care enrollment between March 2020 and March 2023. This increase has been largely attributed to the continuous enrollment condition, which conditioned certain federal funding on maintaining all Medicaid enrollments during the PHE. In spring of 2023, the continuous enrollment condition ended and states were given a year to redetermine the eligibility of 94 million Medicaid enrollees.

The Biden administration recently announced its much-anticipated proposed rule for implementing a minimum staffing “floor” for nursing homes in the United States and further launched a nursing home accountability initiative. These efforts are seismic for the long-term care nursing home community and will bring new challenges and scrutiny to a health industry sector battered with healthcare personnel shortages, pandemic recovery obstacles, changing reimbursement models, and regulatory scrutiny.

For over a year, the hospice industry, legislators, and state and federal regulators have expressed concerns about the fast growth and potentially unscrupulous activities of new hospices in several states in particular. Those concerns were covered in the press and congressional hearings, with the California legislature leading the way to clamp down on abusive hospice practices with a hospice license moratorium enacted in 2022. Hospice industry leaders had called for the Centers for Medicare and Medicaid Services (CMS) to take additional action to target abusive new hospice practices in certain states and on July 12, 2023, CMS announced targeted oversight of new hospices in Arizona, California, Nevada, and Texas in a “MLN fact sheet.”

The Centers for Medicare & Medicaid Services (CMS) proposed on April 23, 2023 two rules that would affect Medicaid managed care: Ensuring Access to Medicaid Services (CMS 2442-P) and Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality (CMS-2439-P). The proposed rules recognize the growth of managed care, which currently constitutes more than 70% of the Medicaid population.

Medicaid enrollment grew significantly during the public health emergency (PHE). States implemented expanded eligibility and enrollment as well as reduced cost sharing and premiums based on Medicaid program regulatory flexibilities available during the PHE, but many of those will expire on May 11, 2023 and December 11, 2023.

The US Department of Justice’s (DOJ’s) Civil Division released its annual fraud statistics on February 7, covering fiscal year 2022. Settlements and judgments under the False Claims Act (FCA) exceeded $2.2 billion in the fiscal year ending on September 30, 2022. Consistent with previous years, a significant portion of the recoveries related to the healthcare industry.

The Centers for Medicare & Medicaid Services (CMS) delayed the publication of the final rule on the use of extrapolation and the application of a fee-for-service adjuster (FFS Adjuster) in risk adjustment data validation (RADV) audits of Medicare Advantage organizations (MAOs). The proposed rule was published on November 1, 2018, more than four years ago. With this latest extension, the final rule deadline is now February 1, 2023.