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August 22, 2013
CMS Adopts Final Rules for Inpatient Admissions and Inpatient Part B Billing
In its final IPPS rule for FY 2014 CMS adopts its earlier proposals regarding its two-midnight policy related to inpatient admissions and hospital billing under Part B following a denial of an inpatient stay. CMS discusses its position on pages 50906-50954 of the final rule [PDF].Click to continue...
IPPS Final Rule: CMS Addresses Allina Decision and Addresses New Medicare DSH Payment Calculations
By: Thomas W. Coons
In the fiscal year 2014 Inpatient Prospective Payment System (IPPS) rule published in the Federal Register on August 19, 2013, the CMS took two steps of note regarding the Medicare disproportionate share hospital (DSH) calculation. First, CMS addressed the decision by the United States District Court for the District of Columbia in Allina Health Services v. Sebelius ("Allina") which we discussed in our December 13, 2012 Payment Matters newsletter. Second, CMS explained the new DSH payment calculations and described the data on which the payment is to be calculated.Click to continue...
Final Rule on 340B Orphan Drug Exclusion Imposes New Compliance Requirements on Covered Entities and Contract Pharmacies
By: Alan J. Arville *
The 340B program permits eligible hospitals and other “safety-net” providers (Covered Entities) to purchase covered outpatient drugs from pharmaceutical manufacturers at significant discounts. The Affordable Care Act and the Medicare and Medicaid Extenders Act of 2010 expanded the categories of Covered Entities to include critical access hospitals, free-standing cancer hospitals, sole community hospitals and rural referral centers. For these categories of Covered Entities only, drugs designated by the Food and Drug Administration as drugs “for a rare disease or condition” (Orphan Drugs) are excluded from covered outpatient drugs subject to mandatory 340B pricing requirements (the Orphan Drug Exclusion). Other Covered Entities, such as disproportionate share hospitals, are not subject to the Orphan Drug Exclusion.
On July 23, 2013, the Health Services and Safety Administration (HRSA) issued a final rule on Exclusion of Orphan Drugs for Certain Covered Entities Under 340B Program [PDF]. The Final Rule is effective on October 1st, 2013, and clarifies that Covered Entities subject to the Orphan Drug Exclusion may purchase Orphan Drugs at 340B prices when they are “transferred, prescribed, sold, or otherwise used for any medically-accepted indication other than treating the rare disease or condition” for which the drug was designated orphan status.Click to continue...
CMS to Begin Implementing 25 Percent Threshold for LTCHs
By: Mark A. Stanley *
CMS, in its federal fiscal year (FFY) 2014 final rule, has allowed its five-year moratorium on the 25 percent threshold payment adjustment policy to expire. Following the lifting of this moratorium, LTCHs that admit more than 25 percent of their patients from a single acute care hospital will face payment adjustments. CMS explained that it was “allowing the moratoria to expire because we continue to be concerned that LTCHs that admitted more than the applicable percentage of patients from a particular referring hospital were, in effect, behaving like step-down units of the referring hospital, which results in two separate Medicare payments—one to the referring hospital and one to the LTCH -- for what we believe should be structured as one episode of care.” The 25 percent threshold rule will apply for cost reporting periods beginning on or after October 1, 2013. Refer to Section VIII.D of CMS’ final rules [PDF] for LTCH’s Prospective Payment System updates for Fiscal Year 2014.Click to continue...