CMS Proposes Rule to Address Suspected Fraud Impacting ACOs

July 1, 2024
CMS proposes to exclude codes related to urinary catheter billing in assessing financial performance of Shared Savings Program ACOs

Stakeholders are pleased with a Centers for Medicare & Medicaid Services (CMS) proposed rule to address the impact of widespread anomalous billing and suspected fraud involving urinary catheters that impacted Medicare accountable care organization (ACO) results. 

According to a Feb. 24 story in the New York Times, more than 450,000 Medicare beneficiaries accounts were billed for urinary catheters in 2023, up from about 50,000 in previous years. The data came from a report produced by the Institute for Accountable Care and NAACOS. “The massive uptick in billing for catheters included $2 billion charged by seven high-volume suppliers, according to that analysis, potentially accounting for nearly one-fifth of all Medicare spending on medical supplies in 2023,” the Times story noted. 

In this proposed rule, CMS proposes to exclude payment amounts for the two Healthcare Common Procedure Coding System (HCPCS) codes on Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) claims submitted by any supplier from expenditure and revenue calculations used for: assessing performance year (PY) 2023 financial performance of Shared Savings Program ACOs, establishing benchmarks for ACOs starting agreement periods in 2024, 2025, and 2026, and calculating factors used to determine revenue status and repayment mechanism amounts in the application and change request cycles for ACOs applying to enter a new agreement period beginning on January 1, 2025, or continue their participation in the program in PY 2025, respectively.

The modifications to the Shared Savings Program financial methodology in this proposed rule, with a 30-day comment period, are anticipated to delay by up to six weeks issuance of initial determinations and disbursements of earned performance payments for PY 2023.

They would allow CMS to maintain timely adjudication of certain determinations of applicant ACOs’ eligibility to participate under the advance investment payment option, or the ACO Primary Care Flex Model, for an agreement period beginning January 1, 2025, and timely finalization of repayment mechanism arrangements required for ACOs to enter or continue their participation in two-sided models for PY 2025. Furthermore, the modifications as proposed would delay the calculation of final historical benchmarks, and delivery of related reports, for ACOs that entered an agreement period beginning on January 1, 2024. 

ACO stakeholders expressed their approval of the proposed rule. “NAACOS applauds CMS for implementing  stakeholder recommendations to hold ACOs harmless for significant anomalous and highly suspect catheter expenditures in 2023,” said NAACOS in a statement. “This ensures that clinicians, hospitals, other healthcare providers, and ACOs can remain in the models and are not unfairly penalized. As part of their efforts to promote high quality and efficient care, ACOs quickly discovered higher spending and reported suspected fraud. It is through these efforts that ACOs serve as a steward of the Medicare program. We look forward to working with CMS to establish permanent policies that will address future instances of fraud, waste, and abuse, as well as streamline the process for identification and reporting.”

Premier commended CMS for its swift action in proposing to address the suspect suspect billing activity in Medicare to ensure that ACOs are held harmless. In a recent letter to CMS, Premier joined additional stakeholder groups in highlighting a staggering 20-fold increase in Medicare claims related to catheters over the past two years, which CMS is now actively investigating as suspected fraud. “Premier applauds CMS for adopting our recommendation to exclude payments for the two catheter HCPCS codes from the 2023 performance year, protecting MSSP ACOs from unjust repercussions due to SAHS billing.”
 
Premier added that it looks forward to continued collaboration with CMS to develop a long-term solution that streamlines the process for MSSP ACOs to report suspected fraud and safeguards them from being unfairly penalized for billing that is outside of their control.

 

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