Congress Passes “American Taxpayer Relief Act of 2012″

On New Year’s Day, Congress passed the American Taxpayer Relief Act of 2012.  While this was mainly a move to stop the automatic tax increases and federal budget cuts effective January 1, 2013, the following changes were also made to the Medicare and Medicaid programs:

Overpayments – In the past, the period of time during which Medicare contractors could attempt to collect overpayments from providers was three years.  The Office of Inspector General wrote last May that the three year limit had prevented the CMS from collecting as much as $332 million already identified overpayments due to the auditing process taking so long. Under the new legislation the period of time for collecting Medicare overpayments will now be extended to five years.

Physician Medicare Reimbursement Fix – The new legislation delays a planned cut in Medicare payments for physicians for one year.  The announced spending cut was 26.5% for 2013, but with the conversion factor set at zero physician Medicare payments will remain relatively unchanged for 2013.  Also, the 25% multiple procedure payment reduction is increased to 50% for physicians providing multiple therapy services on or after April 1, 2013 for which payment is made under the physician fee schedule.

Documentation & Coding Adjustment for IPPS – An amendment by the legislation of the TMA, Abstinence Education and QI Programs  Extension Act of 2007 allows for an adjustment to the standardized amounts used in determining payments made under the Inpatient Prospective Payment System (IPPS) based upon the HHS Secretary’s estimates for discharges occurring only during fiscal years 2014 – 2017 to fully offset the necessary $11,000,000,000.  Past overpayments related to documentation and coding changes from fiscal years 2008-2009 will be non-recoupable by the HHS Secretary.

Outpatient Therapy Services – The therapy cap on therapy furnished as part of outpatient critical access hospital services will be extended, as well as, the exceptions process relating to the cap on outpatient therapy services.

Radiology Services – Medicare payments for stereotactic radiosurgery, complete course of treatment of cranial lesions, will be limited under the new legislation.

Diabetic Supplies – New competitive prices for Medicare payment of diabetic supplies are established under the new legislation while overpayments are eliminated.

Ambulance Services – The previous “temporary” increase in the ambulance fee schedule amounts for ground ambulance services originating in a rural or a rural census tract are extended yet again until January 1, 2014.  HHS will be required to submit a study of analyzed data on existing cost reports for ambulance services furnished by hospitals and critical access hospitals and another study on the feasibility of obtaining cost data on a periodic basis from all ambulance providers of services and suppliers for potential use in examining the appropriateness of the Medicare add-on payments for ground ambulance services and in preparing for future reform of such payment system.

Advanced Imaging Services – The current reduction of Medicare payments for advanced diagnostic imaging services will increase from 75% to 90% under the new legislation.

Medicare Advantage – The coding adjustment applied to Medicare Advantage plan adjustments is changed from 1.3 to 1.5 percentage points for 2014 and from 5.7 to 5.9 percentage points for 2015 – 2018.  Also, the provision to the Specialized MA plans for special needs individuals is extended until January 1, 2015.  Lastly, the deadline for when CMS will no longer approve new cost plans under MA has been extended to January 1, 2014.

End Stage Renal Disease Bundled Payments – The new legislation requires CMS to adjust payment for services furnished on or after January 1, 2014 relating to the ESRD bundled payment rate to reflect changes in utilization of certain drugs and biological.

Medicare-Dependent Hospitals & Low-Volume Hospitals – The Medicare-dependent hospital program will be extended under the new legislation until October 1, 2013.  The Medicare adjustment for payments to low-volume hospitals will also be extended through the fiscal year 2014.

Medicare Improvement Fund – Established in 2008, this fund has been defunded completely.

Medicaid Changes – Several programs under Medicaid have been extended for one year including the Qualifying Individual program (through 2013), the Transitional Medical Assistance program (through 2013), and the “express lane” option for enrollment under both Medicaid and the Children’s Health Insurance Program (through 2014).  Under the new legislation calculations will be adjusted for amounts that states receive for disproportionate share hospitals under Medicaid for fiscal years 2021 and 2022.

The American Taxpayer Relief Act of 2012 can be read in full here:

DISCLAIMER:  This post contains only summary information and highlights; it should be read in conjunction with the full article or document provided as a link.  Any advice or recommendations given is general and specific questions should be directed to professional counsel.

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