Medicare Program: Mitigating the Impact of Significant, Anomalous, and Highly Suspect Billing Activity on Medicare Shared Savings Program Financial Calculations in Calendar Year 2023

<RULE> DEPARTMENT OF HEALTH AND HUMAN SERVICES <SUBAGY>Centers for Medicare & Medicaid Services</SUBAGY> <CFR>42 CFR Part 425</CFR> <DEPDOC>[CMS-1799-F]</DEPDOC> <RIN>RIN 0938-AV20</RIN> <SUBJECT>Medicare Program: Mitigating the Impact of Significant, Anomalous, and Highly Suspect Billing Activity on Medicare Shared Savings Program Financial Calculations in Calendar Year 2023</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final rule addresses policies for assessing performance year (PY) 2023 financial performance of Medicare Shared Savings Program (Shared Savings Program) Accountable Care Organizations (ACOs); establishing benchmarks for ACOs starting agreement periods in 2024, 2025, and 2026; and calculating factors used in the application cycle for ACOs applying to enter a new agreement period beginning on January 1, 2025, and the change request cycle for ACOs continuing their participation in the program for PY 2025, as a result of significant, anomalous, and highly suspect billing activity for selected intermittent urinary catheters on Medicare Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) claims. Under the Shared Savings Program, providers of services and suppliers that participate in ACOs continue to receive traditional Medicare fee-for-service (FFS) payments under Medicare Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. ACOs participating in two-sided models may also share in losses. In this final rule, we respond to public comments we received on the proposal to mitigate the impact of significant, anomalous, and highly suspect billing activity on Medicare Shared Savings Program financial calculations in calendar year (CY) 2023. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> These regulations are effective on October 15, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Richard (Chase) Kendall, (410) 786-1000, or <E T="03">SharedSavingsProgram@cms.hhs.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">CPT (Current Procedural Terminology) Copyright Notice</HD> Throughout this final rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2019 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply. <HD SOURCE="HD1">I. Background</HD> <HD SOURCE="HD2">A. Statutory Background on Shared Savings Program Financial Calculations</HD> Section 1899 of the Social Security Act (the Act) (42 U.S.C. 1395jjj), as added by section 3022 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted March 23, 2010), establishes the general requirements for payments to participating Accountable Care Organizations (ACOs) in the Shared Savings Program. Specifically, section 1899(d)(1)(A) of the Act provides that providers of services and suppliers participating in an ACO will continue to receive payment under the original Medicare fee-for-service program under Parts A and B in the same manner as they would otherwise be made. However, section 1899(d)(1)(A) of the Act also provides for an ACO to receive payment for shared savings provided that the ACO meets both the quality performance standards established by the Secretary and demonstrates that it has achieved savings against a benchmark of expected average per capita Medicare FFS expenditures. Additionally, section 1899(i) of the Act authorizes the Secretary to use other payment models in place of the one-sided model described in section 1899(d) of the Act. This provision authorizes the Secretary to select a partial capitation model or any other payment model that the Secretary determines will improve the quality and efficiency of items and services furnished to Medicare beneficiaries without additional program expenditures. We have used our authority under section 1899(i)(3) of the Act to establish the Shared Savings Program's two-sided payment models (see for example, 80 FR 32771 and 32772, and 83 FR 67834 through 67841) and to mitigate shared losses owed by ACOs affected by extreme and uncontrollable circumstances during performance year (PY) 2017 and subsequent performance years (82 FR 60916 and 60917, 83 FR 59974 through 59977), among other uses of this authority described elsewhere in this final rule. Section 1899(d)(1)(B)(i) of the Act specifies that, in each year of the agreement period, an ACO is eligible to receive payment for shared savings only if the estimated average per capita Medicare expenditures under the ACO for Medicare FFS beneficiaries for Parts A and B services, adjusted for beneficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark under section 1899(d)(1)(B)(ii) of the Act. Section 1899(d)(1)(B)(ii) of the Act addresses how ACO benchmarks are to be established and updated under the Shared Savings Program. This provision specifies that the Secretary shall estimate a benchmark for each agreement period for each ACO using the most recent available 3 years of per beneficiary expenditures for Parts A and B services for Medicare FFS beneficiaries assigned to the ACO. This benchmark shall be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate and updated by the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare FFS program, as estimated by the Secretary. In past rulemaking, we have used our authority under sections 1899(d)(1)(B)(ii) and 1899(i)(3) of the Act to establish adjustments to the benchmark and program expenditure calculations, respectively, to exclude certain Medicare Parts A and B payments. In the November 2011 final rule (76 FR 67920 through 67922), we adopted an alternate payment methodology that excluded Indirect Medical Education (IME) and Disproportionate Share Hospital (DSH) payments from ACO benchmark and performance year expenditures due to concerns that the inclusion of these amounts would incentivize ACOs to avoid referring patients to the types of providers that receive these payments. In the Calendar Year (CY) 2023 Physician Fee Schedule final rule (87 FR 69954 through 69956), we excluded new supplemental payments to Indian Health Service/Tribal hospitals and hospitals located in Puerto Rico consistent with our longstanding policy to exclude IME, DSH and uncompensated care payments from ACOs' assigned and assignable beneficiary expenditure calculations. In the interim final rule with comment period entitled “Medicare and Medicaid Programs; Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program” which was effective on May 8, 2020, and appeared in the May 8, 2020 <E T="04">Federal Register</E> (85 FR 27550) (hereinafter referred to as the “May 8, 2020 COVID-19 IFC”), we established a methodology to adjust Shared Savings Program financial calculations to account for the COVID-19 Public Health Emergency (85 FR 27577 through 27582). Specifically, we established a methodology that would exclude all Medicare Parts A and B FFS payment amounts for a beneficiary's episode of care for treatment of COVID-19 to prevent distortion to, among other calculations, an ACO's benchmark and program expenditure calculations. We published a proposed rule entitled “Significant, Anomalous, and Highly Suspect Billing Activity on Medicare Shared Savings Program Financial Calculations in Calendar Year 2023, which appeared in the July 3, 2024 <E T="04">Federal Register</E> (89 FR 55168) (hereinafter referred to as the “SAHS billing activity proposed rule”). In the SAHS billing activity proposed rule, we proposed to use our authority under sections 1899(d)(1)(B)(ii) and 1899(i)(3) of the Act to make adjustments to the Shared Savings Program's benchmark and program expenditure calculations, among other calculations, to remove payment amounts for codes displaying significant, anomalous, and highly suspect (SAHS) billing activity in CY 2023. We proposed this rule to mitigate the impact of SAHS billing activity for selected intermittent urinary catheter supplies on Shared Savings Program calculations. <HD SOURCE="HD2">B. Background on Significant, Anomalous, and Highly Suspect Billing Activity in Calendar Year 2023</HD> In the SAHS billing activity proposed rule (89 FR 55169), we explained that recently, ACOs and other interested parties have raised concerns about an increase in billing to Medicare for selected intermittent urinary catheter supplies on Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) claims in CY 2023, alleging that the increase in payments represents fraudulent activity (the “alleged conduct”). Numerous ACOs have alerted the Centers for Medicare & Medicaid Services (CMS) to potential impacts on their PY 2023 expenditures because of the increased catheter billings. In early 2023, CMS detected a suspicious increase in billing for urinary catheters. Using our authority to suspend payments, CMS quickly stopped payment on almost all of these claims and began investigating the suppliers who were billing. <E T="51">1 2</E> <FTREF/> Since then, the top 15 billers of suspicious catheter claims have had their Medicare enrollment revoked. <FTNT> <SU>1</SU>  In the preamble to the propo ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 140k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━