The Centers for Medicare & Medicaid Services (CMS) finalized a rule (PDF) Tuesday to limit the impact of fraudulent billing activity on the finances of accountable care organizations.
Mirroring its proposed rule from July and complementing the proposed 2025 Medicare Physician Fee Schedule from earlier this summer, the rule tackles significant, anomalous and highly suspect billing activity and its impact on Medicare Shared Savings Program (MSSP) financial calculations for calendar year 2023.
Without intervention, the urinary catheter scandal would “jeopardize the integrity of MSSP,” CMS explained.
It details that two codes, both for different types of intermittent urinary catheters, can be deemed as highly suspect billing. The rule excludes payment amounts for these catheters.
HCPCS or CPT codes are considered suspect when there is an unusual spike in claims at a regional or national level. This spike is not easily explainable due to market factors or regulatory changes and can be seen through a jump in volume or an increase in dollar amounts.
CMS claimed in the news release that it identified a “concerning rise in urinary catheter billings, which was attributed to a small group of of durable medical equipment supply companies.” The agency found beneficiaries had not received catheters and weren’t billed directly. Other physicians did not order supplies, and they often weren’t needed.
The National Association of ACOs (NAACOS) previously told Fierce Healthcare and other news publications that NAACOS alerted CMS to suspect activity in December but eventually shared the story with the media to spark action.
“NAACOS applauds CMS for finalizing policies to hold ACOs harmless for significant, anomalous and highly suspect catheter billings in 2023,” said Clif Gaus, president and CEO of NAACOS, in a statement shared with Fierce Healthcare. “This ensures that clinicians, hospitals, other healthcare providers and ACOs are not unfairly held responsible for this spending.
“While this rule holds ACOs harmless for a broad national instance of suspected fraud, anomalous billing is typically identified at the local level,” he added.
The final rule was similarly applauded by purchasing network Premier, which also urged CMS to lock in the Medicare Physician Fee Schedule's complementary measures later this year.
Medicare Part A and B claims are used in financial calculations to determine ACO revenue status, the assignable population in a regional service area and expenditures for people in ACO and fee-for-service populations, the agency said.
If CMS took no action, performance year expenditures would increase, resulting in reduced ACO shared savings—or, worse, shared losses. Inaction would also have affected ACOs differently.
"For most ACOs, the inclusion of the specified catheter codes did not substantially change their estimated financial outcome in PY 2023," the final rule states. "At the other extreme, leaving in the specified codes was estimated to reduce earnings to another ACO by an amount equivalent to 2.4% of benchmark."
The rule changes how performance year 2023 is calculated and establishes benchmarks for ACOs in 2024, 2025 and 2026. It also factors in ACOs that are applying to a new agreement period beginning in January.
CMS gave further details about the new calculation during the physician fee schedule proposed rule.
“In general, we anticipate that billing activity that meets the high bar to be considered an SAHS [significant, anomalous, and highly suspect] billing activity will be a rare occurrence,” a fact sheet released in July said.
Other products, like diabetic and skin grafting supplies, have caught the attention of NAACOS and others in the industry, but so far not on the same scale as urinary catheters for ACOs.
The feds are continuing to work with the Department of Health and Human Services' Office of Inspector General, the Department of Justice and Unified Program Integrity contractors to detect fraud.
There are 480 ACOs in MSSP, with more than 609,000 providers caring for 10.8 million fee-for-service beneficiaries. ACOs saved $4.3 billion in performance year 2022, with ACOs receiving payments totaling $2.5 billion and Medicare keeping $1.8 billion.