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Author: Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.

CMS Announced Medicare Accelerated and Advance Payments in Response to Change Healthcare Cyberattack

Written by Brian Werfel on . Posted in News, Private Insurance.

On March 9, 2024, the Centers for Medicare and Medicaid Services (CMS) announced the creation of the Change Healthcare/Optum Payment Disruption (CHOPD) Program.  Under the CHOPD Program, CMS will make accelerated payments to Part A providers and advance payments to Part B suppliers that have experienced claims disruptions as a result of the Change Healthcare cyberattack.

Under the CHOPD Program, qualifying providers and suppliers will be eligible to apply for and receive Medicare advances of up to 30 days of their average Medicare payments.  Applications for payment advances must be made to the provider’s or supplier’s Medicare Administrative Contractor (MAC).  The 30-day payment advance will be based on the average Medicare payments to the provider or supplier between August 1, 2023 and October 31, 2023.  Specifically, CMS will compute the total amounts paid to the provider during this period, and then divide by 3 to arrive at the 30-day average amount.

Advance payments received through the CHOPD Program are considered a loan.  Therefore, these amounts must be repaid through offsets against future Medicare payments.  Recoupments will commence on the date the advance payments are received by the provider or supplier.  These recoupments will be equal to 100% of future payments, and will continue until the earlier to occur of: (1) the full repayment of the advance payment or (2) 90 days.  In the event a balance remains after 90 days, the MAC will generate a demand notice for the outstanding balance, which must be repaid within 30 days.  If the provider does not repay the outstanding balance within that period, interest will start to accrue on the outstanding balance.

Providers and suppliers with multiple National Provider Identifiers (NPIs) may be eligible for multiple advance payments.

Eligibility Requirements

To qualify for advance payments, a provider or supplier must meet the following requirements:

  1. Advance payments may be requested for individual providers or suppliers, i.e., a unique NPIs and Medicare ID (PTAN) combination.
  2. The provider or supplier must not currently be receiving Periodic Interim Payments.
  3. The provider or supplier must make the following certifications:
  4. The provider/supplier must certify that they have experienced a disruption in claims payment or submission due to a business relationship the provider/supplier has with Change Healthcare or another entity that uses Change Healthcare, or the provider’s/supplier’s third-party payers have with Change Healthcare or another entity that uses Change Healthcare.
  5. The provider/supplier must not be able to submit claims to receive claims payments from Medicare.
  6. The provider/supplier has been unable to obtain sufficient funding from other available sources to cover the disruption in claims payment, processing, or submission attributable to the cyberattack
  7. The provider/supplier does not intend to cease business operations and is presently not insolvent.
  8. The provider/supplier, if currently in bankruptcy, will alert CMS about this status and include case information.
  9. Based on its information, knowledge and belief, the provider/supplier is not aware that the provider/supplier or a parent, subsidiary, or related entity of the provider/supplier is under an active healthcare-related program integrity investigation in which the provider/supplier or a parent, subsidiary, or related entity of the provider/supplier: (1) is under investigation for potential False Claims Act violations related to a federal healthcare program; (2) is a defendant in state or federal civil or criminal action (including a qui tam False Claims Act action either filed by the Department of Justice or in which the Department of Justice has intervened; or (3) has been notified by a state or federal agency that it is a subject of a civil or criminal investigation or Medicare program integrity administrative action; or (3) has been notified that it is the subject of a program integrity investigation by a licensed health insurance issuer’s special investigative unit.
  10. The provider/supplier is enrolled in the Medicare program had has not been revoked, deactivated, precluded, or excluded by CMS or the HHS Office of the Inspector General.
  11. The provider/supplier does not have any delinquent Medicare debts.
  12. The provider/supplier is not on a Medicare payment hold or payment suspension.
  13. The provider/supplier will use the funds for the operations of the specific provider/supplier for which they were requested.

To the extent a provider or supplier is approved for an advance payment, they must then execute a Terms and Conditions document acknowledging the following:

  1. That the funds were advanced from the Medicare Trust Fund, and represent an advance on claims payments.
  2. The accelerated and advance payment is not a loan, and cannot be forgiven, indebtedness cannot be reduced, and there are no flexibilities regarding repayment timelines. CMSI will use its standard recoupment procedures to recover these amounts.
  3. Repayment will commence immediately via 100% recoupment of Medicare claims payment owed to the provider/supplier, as the provider/supplier submits claims and claims are processed, after the date on which the payment is granted. Recoupment will continue for a period of 90 days.
  4. A demand will be issued for any remaining balance on Day 91 following the issuance of the advance payment.
  5. Interest will start to accrue 30 days after a demand is issued consistent with the interest rate established under applicable interest authorities.
  6. CMS will proceed directly to demand the advance payments if any certifications or acknowledgements are found to be falsified.
  7. Grant of an advance payment is not guaranteed and payments will not be issued once the disruption to claims servicing is remediated, regardless of when a request is received. CMS may terminate the program at any time.
  8. CMS maintains the right to conduct post payment audits related to any advance payments issued under this program.

Summary of Change Healthcare Cyberattack and HHS Statement

Written by Brian Werfel on . Posted in News, Operations.

On February 21, 2024, UnitedHealth Group (UHG) disclosed that one of its subsidiaries was the victim of a ransomware attack.  According to UHG, the cyberattack was perpetrated against Change Healthcare, an operating unit within UHG’s Optum subsidiary.  Change Healthcare is a health care technology company that provides support and technical services to UHG and numerous other health care insurers.  In response to the cyberattack, UHG proactively isolated the affected systems while it works to assess the damage.  

Change Healthcare offers a range of services to the healthcare industry, including payment and billing, prescription processing, and data analytics.  According to its website, it processes more than 15 billing healthcare transactions annually.  According to the American Hospital Association, Change Healthcare touches 1 out of every 3 patient records.  

As of today, Change Healthcare’s systems remain down, and there is no definitive timetable for when the company anticipates restoring services.  

HHS Statement on Impact to Federal Health Care Programs

On March 5, 2024, the U.S. Department of Health and Human Services issued a statement detailing the steps HHS would be taking to avoid further disruptions to the health care system.  Specifically, HHS/CMS indicated that it would:

 

  • Work to expedite new electronic data interchange (EDI) enrollments for any provider that needs to change the clearinghouse through which it submits Medicare claims.  HHS is also encouraging other federal health care programs, including State Medicaid and CHIP agencies, to waive or expedite new EDI enrollments.
  • Issue guidance to Medicare Advantage organizations and Medicare Part D sponsors to encourage them to relax or remove prior authorization, utilization management, and timely filing requirements for the duration of the Change Healthcare system outage.  
  • Encourage MA plans to offer advance funding to providers most affected by the cyberattack.
  • Encourage State Medicaid and CHIP agencies to remove or relax their own prior authorization and utilization management requirements, and to consider offering advance funding to providers to the extent permitted by state law. 
  • Ensure that Medicare Administrative Contractors are prepared to accept paper claims from providers who need to file them.  

HHS also indicated that it would permit hospitals to submit requests for Medicare Accelerated Payments, similar to those issued during the early stages of the COVID-19 pandemic; however other providers/suppliers do not seem to have access to this workaround HHS indicated that its MACs would be issuing specific guidance on how to request accelerated payments later this week.

The Potential Impact on EMS Providers

According to various reports, there are approximately 800 payers whose claims routing processes utilize Change Healthcare’s network.  The day-to-day processing of electronic claims for these payers may be impacted in varying degrees.  This impact may be felt directly, in the case of claims submitted directly by the provider to the payer, or indirectly, in the case of claims submitted through a clearinghouse.  

The AAA encourages members to contact their clearinghouses to see which payers, if any, are being affected by the system interruption.  Payers that are not capable of processing electronic claims will likely have opened channels for claims to submitted on paper.  The clearinghouses should be able to provide additional information on the steps a provider needs to take to ensure the proper processing of these claims.

Optum has also established temporary alternative funding options.  Essentially, these are advances based on historical claims submissions, which will be repaid (likely through claim offsets) once Optum’s systems are fully back online.  At this point it is unclear whether ambulance providers will be eligible for this alternative funding.  Members are encouraged to check the Optum website for further updates.  



CMS Posts 2023 Public Use File

Written by Brian Werfel on . Posted in Medicare, Member Advisories, News.

On November 23, 2022, CMS posted the 2023 Ambulance Fee Schedule Public Use Files. These files contain the amounts that will be allowed by Medicare in the calendar year 2023 for the various levels of ambulance service and mileage. These allowable reflect an 8.7% inflation adjustment over the calendar 2022 rates. The 2023 Ambulance Fee Schedule Public Use File can be downloaded from the CMS website by clicking here.

Please note that these files reflect the Medicare allowable based on current federal law.  Accordingly, the 2023 Public Use Files do not include the current add-ons (i.e., 2% for urban, 3% for rural, and the super-rural bonus), as these add-ons are currently scheduled to expire on December 31, 2022.

The AAA is actively working with congressional offices to not only extend but hopefully increase, the Medicare ambulance add-ons by the end of the year. If you have not already written to your members of Congress about extending the add-ons at increased levels, please do so today by using the AAA online advocacy tool by clicking here.

Unfortunately, in recent years, CMS has elected to release its Public Use Files without state and payment locality headings. As a result, in order to look up the rates in your service area, you would need to know the CMS contract number assigned to your state. This is not something the typical ambulance service would necessarily have on hand. For this reason, the AAA will be publishing a reformatted version of the CMS Medicare Ambulance Fee Schedule that includes the state and payment locality headings. The reformatted fee schedule will be available on the AAA website in the coming days.

The AAA will also be publishing an updated version of its Medicare Rate Calculator, which we expect to have available on our website once we have a better sense of the timing of the extension of the add-ons.

CMS Announces 2023 Ambulance Inflation Factor

Written by Brian Werfel on . Posted in Government Affairs, Medicare, Member Advisories, News.

On October 14, 2022, CMS issued Transmittal 11642 (Change Request 12948), which announced the Medicare Ambulance Inflation Factor (AIF) for the calendar year 2023.

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year.  Starting in the calendar year 2011, the change in the CPI-U is now reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP).  The MFP reduction may result in a negative AIF for any calendar year.  The resulting AIF is then added to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

For the 12-month period ending in June 2022, the Federal Bureau of Labor Statistics (BLS) has calculated that the CPI-U increased by 9.1%.  CMS further indicated that the CY 2023 MFP would be 0.4%.  Accordingly, CMS indicated that the Ambulance Inflation Factor for the calendar year 2023 will be 8.7%. 

This is the largest inflation update since the implementation of the current Medicare Ambulance Fee Schedule in April 2002.  The increase from last year’s 5.1% increase is also the single largest year-over-year increase on record.

CMS Ambulance Open Door Forum Summary

Written by Brian Werfel on . Posted in Cost Data Collection, Medicaid, Medicare, Member Advisories.

On August 18, 2022, the Centers for Medicare and Medicaid Services (CMS) held its most recent Ambulance Open Door Forum (ODF). As is typically the case, CMS started the ODF with a series of announcements, before opening the call to questions from the ambulance industry.

 

The first announcement related to proposed changes to the regulations governing the medical necessity requirements for non-emergency, scheduled, repetitive ground ambulance services. Specifically, CMS is proposing to modify the so-called “special rule” for repetitive, scheduled non-emergency services (set forth in the regulations at 42 C.F.R. §410.40(e)(2)(ii)). CMS indicated that these proposed changes would provide necessary and ensure the consistent application of the documentation requirements by its contractors. The proposed change would add language indicating that both the Physician Certification Statement and “additional documentation from the beneficiary’s medical record” could be used to support medical necessity for the ambulance transport. The new language would further indicate that these documents must provide detailed explanations that are consistent with the beneficiary’s current medical condition. On the ODF, CMS encouraged the industry to submit comments on these proposed changes. However, CMS indicated that, because these changes were the subject of ongoing rulemaking, it would not be able to answer any questions on the ODF.

 

The second announcement related to the proposed changes to the Medicare Ground Ambulance Data Collection System (GADCS) included in the July 2022 Proposed Rule. CMS and its contractor, the Rand Corporation, went through a detailed PowerPoint presentation that summarized these proposed changes. That PowerPoint presentation can be accessed by clicking here.

 

As part of its discussion of the GADCS, CMS also announced the implementation of an automated process for requesting hardship exemptions and informal review of determinations that an ambulance provider is subject to a financial penalty for failing to properly submit its cost data.

 

The final announcement related to ambulance services furnished by Rural Emergency Hospitals (REHS). In the FY 2023 Outpatient Hospital Proposed Rule, CMS is proposing to codify in its regulations the statutory requirement that ambulance services furnished by entities that are owned and operated by REHS will be paid under the Medicare Ambulance Fee Schedule. CMS is also proposing to revise the origin and destination requirements to include REHS as both a covered origin and covered destination for ambulance services.

 

The ODF concluded with a brief Q&A period. All of the questions posed to CMS related to the GADCS.  One of the questions placed to CMS was whether it would permit ambulance suppliers to prospectively seek a hardship exemption, i.e., to permit an ambulance supplier to ask now that it be relieved of the financial penalties for failing to report its cost data. The person posing the question specifically referenced ambulance suppliers impacted by the severe flooding in the State of Kentucky. CMS confirmed that an ambulance supplier had to be notified that it was subject to a financial penalty before it was eligible to seek a hardship exemption.

PRF Late Reporting Extended

Written by Brian Werfel on . Posted in Member Advisories.

HRSA announces potential relief for health care providers that missed the deadline to report on their use of Provider Relief Funds

On April 7, 2022, the Health Resources and Services Administration (HRSA) posted a notice that offers providers that missed the deadline to report on their use of HHS Provider Relief Funds the opportunity to potentially be able to file that report and therefore avoid the potential recoupment of PRF funds.  The “Request to Report Late” is limited to situations where the failure to timely submit the required report was due to one or more extenuating circumstances.

 

If you were notified that you failed to submit your required PRF Report on a timely basis and are being asked to return PRF funds, you should read this member advisory carefully. 

 

Relevant Background

 

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  As part of that Act, Congress allocated $100 billion (increased to $178 billion by subsequent legislation) to the creation of the CARES Act Provider Relief Fund (PRF) which was used to support hospitals and other healthcare providers on the front lines of the nation’s coronavirus response.

 

Under the terms of the PRF program, health care providers that received more than $10,000 in any reporting period were required to submit a report that provides details on how those funds were expended.  The first report covered PRF payments received between April 10, 2020, and June 30, 2020, and was due on or before September 30, 2021.  HHS subsequently enacted a 60-day grace period, which ran from October 1, 2021, through November 30, 2021.  The second report covered PRF payments received July 1, 2020, and December 31, 2020, and was due on or before March 31, 2022.

 

Providers that failed to submit any required report by these deadlines are subject to the potential recoupment of those funds.

 

What HRSA Considers to be “Extenuating Circumstances”

 

According to the notice, health care providers will be permitted to request the opportunity to complete their report after the deadline to the extent the filing of their report was delayed due to one or more of the following:

 

  • Severe illness or death – a severe medical condition or death of a provider or key staff member responsible for the reporting hindered the organization’s ability to complete the report during the relevant reporting period.
  • Nature Disaster – a natural disaster occurred during or in close proximity to the end of the reporting period that damaged the organization’s records or information technology.
  • Lack of receipt of reporting communications – an incorrect email or mailing address on file with HRSA prevented the organization from receiving instructions prior to the relevant reporting period deadline.
  • Failure to click “Submit” – the organization registered and prepared a report in the PRF Reporting Portal but failed to take the final step to click “Submit” prior to the reporting deadline.
  • Internal Miscommunication or error – internal miscommunication or error regarding the individual who was authorized and expected to submit the report on behalf of the organization and/or the registered point of contact in the PRF Reporting Portal.
  • Incomplete Targeted Distribution payments – the organization’s parent entity completed all General Distribution payments, but a Targeted Distribution(s) was not reported on by the subsidiary.

 

Process for Applying for Permission to Submit a “Late Report”

 

To the extent one or more of the extenuating circumstances described above applies, the provider will be given the opportunity to submit a Request to Report Late Due to Extenuating Circumstances.  The timeframe to submit these requests will run from April 11, 2022, to April 22, 2022. 

 

HRSA is indicating that any provider that plans to submit such a request but has yet to register in the PRF Reporting Portal, should register prior to submitting their request.

 

To submit a request to file late, the provider will need to submit a form indicating the extenuating circumstance(s) that prevented the required report from being submitted in a timely fashion.  That form will require the provider to provide a “clear and concise explanation” of the applicable extenuating circumstance.  However, providers will not be required to submit any supporting documentation.  The provider will be required to attest to the truthfulness and accuracy of their extenuating circumstance.

 

After submitting their request, the provider will be notified by HRSA whether their request is approved or denied.  If the request is approved, the provider will have 10 days from the date of the notification to submit the required report through the PRF Reporting Portal.

 

If the request is denied, HRSA will proceed with the recoupment of the PRF funds subject to the missed report.

 

HRSA Announces Distribution of Phase 4 General Distribution Funds

Written by Brian Werfel on . Posted in Executive, Government Affairs, Uncategorized.

The Health Resources & Services Administration (HRSA) has announced that it will begin distributing Phase 4 General Distribution Payments on Thursday, December 16, 2021.  According to HRSA, approximately 75% of all Phase 4 applications have now been processed.  HRSA indicated that the remaining 25% of applications require additional review under its risk mitigation and cost containment safeguards.

HRSA further indicated that it began distributing American Rescue Plan (ARP) Rural Payments on November 23, 2021.  As of December 14, 2021, HRSA has indicated that it has processed approximately 96% of ARP applications.  The ARP allocated a total of $8.5 billion to health care providers who serve rural Medicare, Medicaid and CHIP patients.  HRSA indicated that it will distribute $7.5 billion of these funds in its initial distribution.

To the extent a provider was determined to be eligible for either a Phase 4 payment or an ARP Rural Payment, the provider will receive both an email notification and a paper letter with additional details on these payments.  This will include the individual amounts attributed to any subsidiary TINs submitted as part of their application.  To the extent HRSA determined that you were not eligible for a Phase 4 payment, the email notice will provide an explanation for why you were determined to be ineligible.  These email notices will be sent to the email address provided in the Phase 4 application.  Providers selected for additional review will receive email notification as soon as HRSA completes its review process, which it indicated would be completed in “early 2022.”

AAA members are encouraged to look for this email.  If you have not received an email notification, we would suggest that you check your spam filter, as several of our members have indicated that the email was flagged as “spam” by their email system. 

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