General Reimbursement Market Insights
This section of ALLOS’ Reimbursement Resource is dedicated to select insights into the changing reimbursement environment as it affects oncology providers.
Medicare Administrative Contractor (MAC) Continuing Reform1
As a provision of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003, Congress required that CMS replace the current fiscal intermediary (FI) and carrier contracts with competitively procured contracts conforming to new Federal criteria. Under this provision directive, CMS began a process to complete the transition of Medicare Fee-for-Service (FFS) claims processing activities from the FIs and carriers to the MACs.
Although CMS continues with the initial MAC reform transitions, a new plan was published on July 22, 2010. CMS posted a notice on the federal government's procurement website regarding upcoming plans for CMS's continued implementation and strategy of MAC procurements. This was updated, with more formalized structure, on October 5, 2010. Full implementation for the second phase of the MAC reform consolidation is expected to be completed in 2016.
CMS' plan includes three objectives for this second phase A/B MAC reform process:
- Consolidation of the present 15 A/B MAC jurisdictions into ten (10) A/B MAC jurisdictions (in a phased process that will take several years to complete);
- Implementation of a contract limit for the A/B MAC contracts, and;
- Enhancement of the role of the contractor medical directors (CMDs).
The following map provides a graphic review of the second phase consolidation of contractors, so you can better understand how those changes might affect your practice.
When a MAC reform contract is finalized, there are specific steps to transition administration from one contractor to another. One such step is related to Local Coverage Determinations (LCD), such as those for oncology drugs, biologicals and services.
The outgoing contractor provides the new MAC with any LCDs. The MAC is required to consolidate the existing LCDs of the outgoing carriers/intermediaries within its jurisdiction so that they are the same throughout the jurisdiction. The MAC begins the analysis of all LCDs as soon as possible to determine their applicability jurisdiction-wide. Depending on the MAC’s Statement of Work, the incoming contractor must select the least restrictive or most clinically appropriate LCD from the existing LCDs on a single topic.
Although it is encouraged, the MAC is not required to utilize the formal notice and comment revision process until the consolidation process is final. The MAC shall notify the provider community within its jurisdiction which LCDs it has consolidated and adopted no less than 45 days prior to those policies being implemented. In order to provide adequate notice, the MAC may allow current LCDs and edits at existing contractors to remain in place until all carriers/intermediaries within the jurisdiction have cut over.
The MAC has the discretion to involve the provider community in the selection of the most clinically appropriate policies. However, due to the short timeframes involved with some transitions, it is important to know that the MAC is not required to go through a formal Carrier Advisory Committee (CAC). A CAC is required for a new or revised policy developed after the cutover of existing workload to an incoming MAC.
Maintaining awareness of these transitions will be key to ensure consistency in your understanding of LCD changes, and potential impact on patient access.
Recovery Audit Contractor (RAC) Roles and Resources2
Medicare Modernization Act, Section 306 required the Department of Health and Human Services (DHHS) to conduct a 3-year demonstration program using Recovery Audit Contractors (RACs) to detect and correct improper payments in the Medicare FFS program. The Recovery Audit Contractor (RAC) demonstration program was designed to determine whether the use of RACs will be a cost-effective means of adding resources to ensure correct payments are being made to providers and suppliers and, therefore, protect the Medicare Trust Fund. The demonstration operated in New York, Massachusetts, Florida, South Carolina and California and ended on March 27, 2008.
Through Section 302 of the Tax Relief and Health Care Act of 2006, the three year RAC demonstration project then became permanent, and the program had to be expanded to all 50 states by no later than 2010.
The goal of each RAC is to identify improper payments made on claims of health care services provided to Medicare beneficiaries. The improper payments may be overpayments that occur when health care providers submit claims that do not meet Medicare’s coding or medical necessity policies or underpayments whereby health care providers submit claims for a simple procedure but the medical record reveals that a more complex procedure was performed. Any health care provider that bills Medicare Part A and/or Part B can be reviewed by the RAC. This includes hospitals, physician practices, nursing homes, home health agencies, and durable medical equipment suppliers.
There are currently four RAC regions which are operated by different companies that were awarded the RAC contract through a bidding process. Diversified Collection Services is the RAC for Region A, CGI Technologies covers Region B, Region C is operated by Connolly Consulting, and Health Data Insights covers Region D. A geographical map of the RAC alignment is included at the end of this information.
Each RAC reviews claims on a post-payment basis, and they must use the same Medicare policies as the Medicare contractors – Part B Carriers, Fiscal Intermediaries, and the Medicare Administrative Contractors. This includes CMS Manuals, Local Coverage Determinations, and National Coverage Determinations. RACs will not be able to review claims paid prior to October 1, 2007, and the maximum look-back period is three years.
There are two types of review that a RAC can perform: 1) Automated review through a review of claims where no additional documentation is needed; and 2) Complex review where the RAC will request additional documentation from the health care provider. Each RAC must employ qualified personnel in order to carry out these reviews. The RAC staff will include nurses or therapists, certified coders and a physician medical director.
The issues that are reviewed by a RAC must be approved first by Centers for Medicare and Medicaid Services. Once approved, these issues will be posted on the website for each RAC.
The websites where the issues are posted are listed below for each RAC, along with a graphic map representation of the geographic jurisdictions for each contractor:
- Region A: Diversified Collection Services (DCS) www.dcsrac.com (Provider Portal/Issues under review)
- Region B: CGI Federal
racb.cgi.com (Issues) - Region C: Connolly Healthcare
www.connollyhealthcare.com (Approved Issues) - Region D: Health Data Insights (HDI)
racinfo.healthdatainsights.com (New Issues)
2011 Health Care Reform Provision Implementation3
With the passage of the Affordable Care Act in 2010, many of the provisions are being implemented over the course of several years. The provisions that are being implemented in 2011 include the following:
- Medicare Part D Prescription Drug Gap Coverage Discounts
Requires pharmaceutical manufacturers to provide a 50% discount on brand-name prescriptions filled in the Medicare Part D coverage gap beginning in 2011 and begins phasing-in federal subsidies for generic prescriptions filled in the Medicare Part D coverage gap.
Implementation: January 1, 2011 - Center for Medicare and Medicaid Innovation
Creates the Center for Medicare and Medicaid Innovation to test new payment and delivery system models that reduce costs while maintaining or improving quality.
Implementation: Center established by January 1, 2011 - Medicare Premiums for Higher Income Beneficiaries
Freezes the income threshold for income-related Medicare Part B premiums for 2011 through 2019 at 2010 levels resulting in more people paying income-related premiums, and reduces the Medicare Part D premium subsidy for those with incomes above $85,000/individual and $170,000/couple.
Implementation: January 1, 2011 - Medicare Advantage Payment Changes
Restructures payments to private Medicare Advantage plans by phasing-in payments set at increasingly smaller percentages of Medicare fee-for-service rates; freezes 2011 payments at 2010 levels; and prohibits Medicare Advantage plans from imposing higher cost-sharing requirements for some Medicare covered benefits than is required under the traditional fee-for-service program.
Implementation: January 1, 2011 - National Quality Strategy
Requires the Secretary of the federal Department of Health and Human Services to develop and update annually a national quality improvement strategy that includes priorities to improve the delivery of health care services, patient health outcomes, and population health.
Implementation: Initial strategy due to Congress by January 1, 2011 - Funding for Health Insurance Exchanges
Provides grants to states to begin planning for establishment of American Health Benefit Exchanges and Small Business Health Options Program Exchanges, which facilitate the purchase of insurance by individuals and small employers.
Implementation: Grants awarded starting March 23, 2011; enrollment in Exchanges begins January 1, 2014. - Medicare Independent Payment Advisory Board
Establishes an Independent Advisory Board, comprised of 15 members, to submit legislative proposals containing recommendations to reduce the per capita rate of growth in Medicare spending if spending exceeds targeted growth rates.
Implementation: Funding available October 1, 2011; first recommendations due January 15, 2014.
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1 Centers for Medicare and Medicaid Services. Medicare Contracting Reform: Overview and Implementation. Accessed on January 3, 2011 at:http://www.cms.gov/MedicareContractingReform/01_Overview.asp#TopOfPage
2 Centers for Medicare and Medicaid Services, Recovery Audit Contractors: Overview, Demonstration Project, and Recent Updates. Accessed on January 5, 2011 at: http://www.cms.gov/RAC/01_Overview.asp#TopOfPage
3 Henry J Kaiser Family Foundation. Health Reform Source, Implementation Timeline. Accessed on January 5, 2011 at http://healthreform.kff.org/timeline.aspx
IMPORTANT SAFETY INFORMATION
Warnings and Precautions
- FOLOTYN may suppress bone marrow function, manifested by thrombocytopenia, neutropenia, and anemia. Monitor blood counts and omit or modify dose for hematologic toxicities.
- Mucositis may occur. If ≥Grade 2 mucositis is observed, omit or modify dose. Patients should be instructed to take folic acid and receive vitamin B12 to potentially reduce treatment-related hematological toxicity and mucositis.
- Fatal dermatologic reactions may occur. Dermatologic reactions may be progressive and increase in severity with further treatment. Patients with dermatologic reactions should be monitored closely, and if severe, FOLOTYN should be withheld or discontinued.
- Tumor lysis syndrome may occur. Monitor patients and treat if needed
- FOLOTYN can cause fetal harm. Women should avoid becoming pregnant while being treated with FOLOTYN and pregnant women should be informed of the potential harm to the fetus.
- Use caution and monitor patients when administering FOLOTYN to patients with moderate to severe renal function impairment.
- Elevated liver function test abnormalities may occur and require monitoring. If liver function test abnormalities are ≥Grade 3, omit or modify dose.
Adverse Reactions
- The most common adverse reactions were mucositis (70%), thrombocytopenia (41%), nausea (40%), and fatigue (36%). The most common serious adverse events are pyrexia, mucositis, sepsis, febrile neutropenia, dehydration, dyspnea, and thrombocytopenia.
Use in Specific Patient Population
- Nursing mothers should be advised to discontinue nursing or the drug, taking into consideration the importance of the drug to the mother.
Drug Interactions
- Co-administration of drugs subject to renal clearance (e.g., probenecid, NSAIDs, and trimethoprim/sulfamethoxazole) may result in delayed renal clearance.
