Combating fraud and abuse in the Medicare Prescription Drug Program

By Jonathan Blum, CMS Principal Deputy Administrator

The Centers for Medicare & Medicaid Services (CMS) takes prescription drug abuse very seriously and actively works to detect and prevent fraud and abuse in order to protect the Medicare program, its beneficiaries, and taxpayers.

The Medicare Part D prescription drug benefit provides prescription drug coverage to more than 39 million seniors. CMS strives to ensure that beneficiaries have the medications they need while at the same time is being vigilant to safeguard the program from inappropriate use. 

A centerpiece of our strategy to combat fraud and abuse in Medicare Part D is the identification of Part D enrollees who have potential opioid or acetaminophen overutilization issues that may present a threat to patient safety. Overutilization of opioids or acetaminophen products can result in serious adverse events or death. The Medicare Part D Overutilization Monitoring System was implemented in 2013 to help CMS ensure that Part D plan sponsors are meeting CMS requirements to establish reasonable and appropriate drug utilization management programs to prevent overutilization of these medications.  Comparing recent data with 2011 Part D data that pre-dates the implementation of the monitoring system shows that there has been a substantial reduction in the number of opioid and acetaminophen overutilizers in Medicare Part D.  In 2011, more than 172,000 Part D enrollees were identified as meeting CMS criteria for potential opioid or acetaminophen overutilization.  Between January and June 2013, the number of Part D enrollees with potential opioid or acetaminophen issues dropped to approximately 35,600 – a rate that would represent a reduction of nearly 60 percent if maintained throughout 2013.  

CMS also released a proposed rule today that seeks to employ new tools when problematic prescribers and pharmacies are identified. Some of the proposed key fraud and abuse provisions include:

  • ·       Requiring prescribers of Part D drugs to enroll in Medicare and revocation such enrollment in cases of abusive prescribing practices and patterns;
  • ·       Allowing CMS to request and collect information directly from pharmacy benefit managers, pharmacies and other entities that contract with Part D sponsors to better detect fraud; and
  • ·       Improving CMS’ ability to collect identified Medicare overpayments from MA plans and Part D sponsors.

Combined with our ongoing efforts, the fraud and abuse provisions in the proposed rule will ensure that Medicare beneficiaries have access to affordable prescription drugs while making certain that plans provide value to Medicare and taxpayers.

For more information about our efforts to combat fraud, waste and abuse in Medicare Part D, please visit: http://www.cms.gov/Newsroom/Newsroom-Center.html.

To read the proposed rule, please see: http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1. The proposed rule will be published in the Federal Register on January 10, 2014.  CMS will accept comments on the proposed rule until March 7, 2014. 

New Data Shows Affordable Care Act Reforms Are Leading to Lower Hospital Readmission Rates for Medicare Beneficiaries

Being re-hospitalized shortly after being discharged is an unpleasant experience for patients. It’s also costly for patients, insurance companies and other payers, and—if the patient is a Medicare beneficiary—taxpayers, too. High readmission rates – the percentage of inpatient discharges where a re-hospitalization occurred – can also be a sign of low-quality care. It often means there may have been unclear instructions to patients or lack of follow-up care.

While many people only understand the Affordable Care Act as a plan to expand health insurance, it includes many provisions to slow the growth in health costs. Why does this matter? The consistent increase in health care costs over the past several decades puts a strain on the national pocketbook and that of millions of families who faced rapidly increasing premiums.

And we’re seeing results. Health care price inflation is now at its lowest level in 50 years, and, according to the most recent projections, health care spending grew at the slowest rate on record over the last three years. Real per person spending grew at just a 1.3 percent rate, and this slow growth was seen in Medicare, Medicaid and private insurance. Inflation for health care goods and services is currently running at just 1 percent on a year-over-year basis.

As just one of the many reforms to slow health care costs and improve patient quality, over the past several years the Centers for Medicare & Medicaid Services (CMS) and others have focused on reducing avoidable readmissions, including hospital-level improvement initiatives, community-based care transitions programs, and broad-based payment incentives like the Hospital Readmissions Reduction Program.

The all-cause 30-day hospital readmission rate among Medicare fee-for-service beneficiaries held constant from 2007 to 2011. Earlier this year, a group of researchers at CMS published a study revealing good news about hospital readmissions: In 2012, when the Affordable Care Act’s reforms focused on reducing avoidable readmissions kicked in, this rate began to fall. After holding steady at 19 percent from 2007 to 2011 the all-cause 30-day hospital readmission rate among Medicare fee-for-service beneficiaries fell to 18.5 percent in 2012.

We are pleased to report that the decline in readmission rates is continuing into 2013. Preliminary claims data shows the Medicare readmission rate averaged less than 18 percent over the first eight months of 2013. This translates into an estimated 130,000 fewer hospital readmissions between January 2012 and August 2013.

Line chart. Shows annual readmission rates holding steady at 19 percent from 2007-2011, then declining to 18.5 percent in 2012 and 18 percent for the first 8 months of 2013.

Source: Office of Information Products and Data Analytics, CMS

In addition, this trend is widespread across the country. To see how rates are changing at the local level, we compared readmission rates over the first eight months of 2013 to the average rates for 2007-2011 in local health care markets. We found that this year’s readmission rates were at least a half a percentage point lower in 76 percent of local markets (232 of the 306). Fewer than 10 percent of local markets had higher rates. Using the same comparison, readmission rates also went down in 49 states and the District of Columbia. The only state that did not see a decrease – Utah – already had one of the lowest readmission rates in the country.

Percentage Point Change in Medicare Readmission Rates by HRR,
January-August 2013 to 2007-2011 Average

Map of the United States.  Shows readmission rates declined in the vast majority of HRRs and improvement was widespread throughout the country.  Rates increased in a small number of HRRs with increases not focused in particular areas of the country.

Source: Office of Information Products and Data Analytics, CMS

We can see that the decline in all-cause readmission rates that began in 2012 is continuing this year on a widespread basis. While we continue to monitor and study these encouraging reductions, what is clear is that intense focus on reducing hospital re-admissions through improved processes of care and new tools in the Affordable Care Act are having a demonstrably positive impact.

CMS Releases Latest Value-Based Purchasing Program Scorecard

By Dr. Patrick Conway, CMS Chief Medical Officer and Director of the Centers for Clinical Standards and Quality

On November 14, for the second year in a row, the Centers for Medicare & Medicaid Services (CMS) posted Hospital Value-Based Purchasing payment incentive adjustment factors for fiscal year 2014. We think this second anniversary deserves recognition—it’s a sign that value-based purchasing in Medicare is becoming routine.

The Affordable Care Act gave CMS many new tools to convert Medicare from a program that paid for decades on automatic pilot into one that deliberately pays to promote better health. Now, thanks to one of these tools, the Hospital Value-Based Purchasing program, Medicare is no longer a program that just pays the bills. Acute-care hospitals across the country not only are paid more for higher quality care, they also have skin in the game.

In FY 2014, 1.25 percent of a hospital’s Medicare base-operating DRG payments go into a value-based purchasing pool. Depending on how well hospitals measured up to their peers on important health-care quality indicators during a prior performance period, they will either break even, get a bonus, or—if their performance is lower than average—get back less than what they contributed to the FY 2014 pool.

FY 2014 payments began October 1. About half of the hospitals participating in the program —over 1300 hospitals—will essentially break even over the course of the year, that is, their payment change is between -0.2 percent and +0.2 percent. Across the country, 630 hospitals—just under a quarter—will receive a bonus, that is, an increase in Medicare payment above +0.2 percent. Just over a quarter of hospitals (778) will receive an overall decrease in Medicare payment, which means that it is less than -0.2 percent.

But even though we’d like to see every hospital across the country offer the highest quality care possible, we’re pleased with this round of results. Hospital Value-Based Purchasing provides a useful snapshot of how hospitals are performing on important indicators for patient safety, care, quality, and well-being. The Hospital Value-Based Purchasing program refines the measures it uses to evaluate performance annually.
In FY 2014, there were fewer higher performers—that is, their incentive payment is greater than the amount they contributed—than lower performers—their incentive payment is lower than the amount they contributed, that higher performers’ bonuses on average will be larger than the lower performers’ losses over the course of the year.

Finally, a little over two-thirds of the higher performers were higher performers last year, and about three-quarters of the lower performers also had an incentive adjustment factor of less than one in FY 2013. That’s good news too. The fact that not every higher performing hospital last year made the grade this year, and not every lower performing hospital last year will see payment decline this year,, means that hospitals are adjusting to the new world of value-based payment. It also may mean that the important addition of 30-day mortality measures for heart attack, heart failure and pneumonia had an impact on hospitals’ scores.

As the Hospital Value-Based Purchasing program continues to evolve with a richer set of measures including an efficiency measure in FY 2015, we may see the mix of value-based payment adjustment factors change again. Meanwhile, value-based purchasing in Medicare continues to move ahead, improving the way that health care is delivered to people with Medicare now and helping create a health care system that will ensure quality care for generations to come.

To see the November 14, 2013 value-based incentive payment adjustment factors, please go to: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/

Virtual Research Data Center Offers Secure Timely Access to Data at Lower Cost

By Niall Brennan, Acting Director, Offices of Enterprise Management

One of the Obama administration’s top priorities is to make healthcare affordable through better quality and more efficient delivery.  But a thoughtful approach to health system transformation requires the country’s best minds working on it, using the most comprehensive, up-to-date evidence available.

On November 12, the Obama administration took an important step forward on this path.  At the White House’s Data to Knowledge to Action event, Building New Partnerships, the Centers for Medicare & Medicaid Services (CMS) announced the new Virtual Research Data Center (VRDC), which can provide the nation’s researchers with access to the most comprehensive, up-to-date data sets available through CMS.

CMS covers 100 million Americans through Medicare, Medicaid, the Children’s Health Insurance Program, and soon through the Health Insurance Marketplace. The Medicare program is the nation’s largest health insurer, handling more than 1 billion claims per year.  We have made our data sets available to researchers for many years.  Studies that help us better understand the healthcare ecosystem are published almost weekly in major medical journals based on CMS data.

Demand for CMS data has grown exponentially in recent years.  Historically, the scale of CMS data and a lack of technological alternatives meant most researchers were physically shipped data, with yearly updates as permitted. Medicare data for 2012 is only just now being physically shipped to researchers. Through the VRDC, we are changing that. The VRDC will help investigators access data in a much timelier manner and will provide them with a variety of tools to analyze the data.  It will also help approved researchers doing approved surveillance and other studies that require current data, which needs to be refreshed on a regular basis, something that has traditionally been unavailable.

We also want CMS data to be affordable, and the VRDC helps with this, too. The lowest price of a complete set of Medicare Parts A, B, and D data was more than $100,000 for a single year, and many researchers need multiple years of data.  Now, with the VRDC, a single researcher conducting one project over the course of the year can have access to as much data as his or her research requires for $40,000.  User fees reflect the cost of making the data available and are used to fund CMS data dissemination to researchers.  Additional users can be added to a project for $15,000. We believe this helps lower any price-based barriers to obtaining Medicare data.

Finally, the VRDC will make data sharing more secure.  In the VRDC, sensitive, individually-identifiable information about beneficiaries never leaves the CMS data environment.  This can help prevent breaches or unauthorized data use.  In addition, since researchers will be accessing CMS data through a secure virtual desktop, they no longer need to maintain expensive data infrastructures of their own or prove to CMS through data security assessments that their data infrastructure meets the security requirements in the CMS Data Use Agreement.   However, I also want to assure established CMS data users who have invested significant sums in an existing data storage infrastructure:  you can still get your data physically as you always have. CMS data has the potential to help create a more efficient, higher-quality healthcare system. Our goal is to break down barriers to information and encourage innovation in health care delivery.  Even under the old system, CMS data has provided the basis for breakthroughs in healthcare reform.  We look forward to using the VRDC to stimulate innovations that are equally groundbreaking in years to come.

For more information or to submit a VRDC research request, visit the ResDAC VRDC webpage: http://www.resdac.org/cms-data/request/cms-virtual-research-data-center.

Fighting Medicaid Fraud, Waste, and Abuse Through Education

By Ted Doolittle, CMS Deputy Director, Center for Program Integrity

The Centers for Medicare & Medicaid Services (CMS) wants everyone to join in the fight against fraud, waste, and abuse as part of our comprehensive strategy to protect federal health care programs and taxpayer dollars.  We are now making it easier than ever before for health care providers, managed care plans, and individuals and families with Medicaid benefits to use the education and training materials on the new Medicaid Program Integrity website.

Resources available on the website include videos, fact sheets, and checklists, made specifically for providers and beneficiaries.  These tools are national in scope, but some information can be personalized by your State of residence (or where you live) upon request.  One of the key resources is a brochure on how people with Medicaid can protect themselves and the Medicaid program from fraud. You can also email MedicaidProviderEducation@cms.hhs.gov for the state contact number for reporting fraud.

State program integrity professionals and counselors will also find valuable education and training materials on the site – all available at no cost.  We have developed toolkits to address hot issues and frequently asked questions about Medicaid program integrity, including beneficiary protections and compliance resources for dental professionals and managed care organizations.  Take a moment to learn more about the CMS Medicaid Program Integrity education and training materials available by clicking on this link, that will take you to the CMS.gov website.

Click here to join our listserv to receive timely notices of new material as it becomes available. Listserv members are also notified when new training, education, or speaking events are scheduled.

We value your feedback, recommendations, questions, and requests and encourage you to e-mail the Education Medicaid Integrity Contractor at medicaidprovidereducation@cms.hhs.gov for further information.

Thank you for being a partner in Medicaid program integrity!

And for more information on CMS’s efforts to protect consumers in the Health Insurance Marketplace, please visit: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-Sheets/2013-Fact-Sheets-Items/2013-09-18.html

Premium and Prescription Savings are Good News for People with Medicare

By Jonathan Blum, CMS Principal Deputy Administrator

The Centers for Medicare & Medicaid Services (CMS) has announced the 2014 Part B premiums in original Medicare and most seniors and people with disabilities will not increase next year, staying at $104.90 a month for Part B premiums.

For the third year in a row Medicare premium costs are meeting or beating expectations.  Monthly Medicare premiums in 2013 are lower than the $109.10 they were projected to be.   The year before, premium costs came in six dollars lower than the experts predicted.  The last five years have been among the slowest periods of average Part B premium growth in the program’s history.

Lower original Medicare costs are just one of the positive changes we’ve seen in Medicare since the Affordable Care Act was signed into law.

Since 2010, more than 7.1 million seniors and people with disabilities who reached the donut hole have saved $8.3 billion on their prescription drugs, an average of $1,167 per person.     In 2014, people with Medicare who have entered the donut hole will receive discounts and coverage of about 53 percent on the cost of brand name drugs and 28 percent coverage for the cost of generic drugs. Prescription drug savings and Medicare coverage will gradually increase until 2020, when the donut hole will be closed.

Medicare Advantage plan benefits and prices continue to improve thanks to a new Affordable Care Act star-rating system that pays plans based on quality.  Since passage of the Affordable Care Act, average Medicare Advantage premiums are down by 9.8 percent.  More beneficiaries are able to access and choose high quality plans – more than half are in four or five-star plans for 2014, up from 37 percent this year.

Other Affordable Care Act changes that pay hospitals and doctors based on the quality of care they deliver for patients—like reducing hospital readmissions, which have started to drop after being stuck for the past five years—are beginning to have an effect.  Programs like Hospital Value-Based Purchasing and Accountable Care Organizations are making sure that improved quality of care for patients is at the center of efforts to reduce cost growth.  Over the last four years, the stronger anti-fraud measures instituted by the Affordable Care Act has enabled the Obama administration to recover over $14.9 billion for taxpayers.

And health care spending has grown more slowly in the past few years than it has since the 1960s.  We’re working hard to make sure these gains continue.  Meanwhile, lower costs and better care is great news for the Trust Funds, great news for taxpayers, and really great news for people with Medicare.

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Moving Forward on Arkansas’ Innovative Plan to Provide Health Coverage to 200,000 Arkansans

By Cindy Mann CMS Deputy Administrator and Director, Center for Medicaid and CHIP Services

Today, the Centers for Medicare & Medicaid Services announced the approval of the Arkansas Medicaid 1115 Demonstration to expand Medicaid coverage to over 200,000 people that do not have access to health coverage.  This demonstration is part of the state’s larger initiative to create affordable, quality coverage options for all its residents. This coverage is possible thanks to the Affordable Care Act.

Over the last few months, CMS has worked closely with Arkansas on the Arkansas Health Care Independence Program, or as they call it in Arkansas, the Private Option and has benefited from public comments from a diverse group of stakeholders. Under the Private Option demonstration, the state will use premium assistance to provide adults who make $15,280 or less with coverage provided by Qualified Health Plans operating in the Health Insurance Marketplace. As a result, most of the newly eligible adults in Medicaid will receive almost all of their Medicaid benefits and cost-sharing coverage through the same plans that are serving Arkansans who enroll through the federally facilitated Marketplace. Under this and all premium assistance approaches, individuals in the demonstration retain all the rights, responsibilities, and protections as other Medicaid beneficiaries, including cost-sharing protections.

Outreach, the application process, and plan choice will be the same regardless of whether an Arkansas resident is enrolled in Medicaid or has a premium tax credit through the Marketplace. Arkansas is leading the state’s outreach effort for the Marketplace.  It is training “Health Insurance Guides” to help individuals in all 75 counties understand their options.  It has been running advertising on 28 television stations, 24 regional radio stations, 118 community radio stations, and in 120 community newspapers.  In addition, ads have been placed on 227 billboards, 100 gas pumps, two Central Arkansas Transit buses, and direct mail will be sent to 254,000 households and 172,000 small businesses.  The marketing tag line of “Get In” has switched to “Get Informed” and will be shift to “Get Enrolled” beginning October 1, 2013. Open enrollment for the new Medicaid demonstration as well as the Marketplace will begin on October 1, 2013 with eligibility effective January 1, 2014.

The Administration remains committed to working with states on the flexibility and resources they need to build new systems for health coverage.  Premium assistance is one option, and we will continue to work with states on solutions that work best to meet shared goals.  We encourage states to come to us with their delivery system ideas, and look forward to continuing to work with states on these and other innovative approaches to provide affordable coverage to all Americans.

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