CMS rule to address suspect billing in Shared Savings Program

CMS has proposed a rule to address “significant, anomalous, and highly suspect” billing activity within the Medicare Shared Savings Program, including durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) billing.

Slated to be published to the Federal Register on July 3rd, the proposed rule aims to mitigate the impact of the billing activity in question as it relates to the reconciliation of accountable care organization (ACO) payments in calendar year (CY) 2023.

In CY 2023, CMS said it has observed what it calls SAHS (significant, anomalous, and highly suspect) billing for the Healthcare Common Procedure Coding System (HCPCS) codes A4352 (Intermittent urinary catheter; Coude (curved) tip, with or without coating (Teflon, silicone, silicone elastomeric, or hydrophilic, etc.), each) and A4353 (Intermittent urinary catheter, with insertion supplies).

The agency explained that an HCPCS — or any other billing code — is flagged for SAHS billing when there is a significant increase in claims, whether in volume or dollars, with a national or regional effect. The change in claims also shows a deviation from historical utilization that is not clearly attributable to policy or supply and demand changes for covered items and services.

CMS plans to exclude payment amounts for HCPCS codes A4352 and A4353 on DMEPOS claims submitted by suppliers from expenditure and revenue calculations, which are to be used for assessing financial performance for ACOs in the 2023 performance year and establishing benchmarks for ACO starting agreements in 2024, 2025 and 2026. The exclusions will also impact the calculation of factors used to determine an ACO’s revenue status and repayment mechanism amounts in 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 the 2025 performance year, respectively.

CMS expects the proposed changes to delay the issuance of initial determinations and disbursements of earned performance payments for 2023 ACO performance by up to six weeks. The changes to the Shared Savings Program would also postpone the calculation of final historical benchmarks and delivery of related reports for ACOs that started an agreement period beginning on January 1, 2024.

Exclusions such as the anomalous catheter spending in this proposed rule are part of a larger strategy from CMS to address SAHS billing activity within the Medicare Shared Savings Program, which the agency said it will detail in the forthcoming Physician Fee Schedule rule.

The American Hospital Association (AHA) said in response to the proposed rule that it applauds CMS for taking steps to exclude these expenditures from ACO financial calculations. However, this is just one instance of potential SAHS billing in the program.

 “While this is a significant step to mitigate the impact of anomalous spending for CY 2023, the 2023 catheter spending is not the first, and unfortunately likely not the last, instance of ACOs reporting suspected fraudulent billing,” Jennifer Holloman, AHA senior associate director of policy, said in a statement. “We hope that the upcoming CY 2025 Physician Fee Schedule will provide additional details to support longer term strategies to address anomalous spending. For example, we have recommended the establishment of an outlier policy to detect variation in anomalous spending and remove services from future calculations. We look forward to working with CMS on developing a longer-term strategy to detect and address anomalous billing.”

Stakeholders can comment on the proposed rule through July 29th.