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Centers for Medicare &Medicaid Services: 2019 Estimated Improper Payment Rates for Centers for Medicare &Medicaid Services (CMS) Programs

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ABSTRACT (ENGLISH) NEWS BITES – PRIVATE COMPANIES The Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments Elimination and Recovery Act of 2010 and the Improper Payments Elimination and Recovery Improvement Act of 2012, requires CMS to periodically review programs it administers, identify programs that may be susceptible to significant improper payments, estimate the amount of improper payments, and report on the improper payment estimates and the Agency's actions to reduce improper payments in the Department of Health &Human Services (HHS) annual Agency Financial Report (AFR). The Office of Management and Budget (OMB) has identified Medicare Fee-For-Service (FFS), Medicare Part C, and Medicare Part D; Medicaid; and the Children's Health Insurance Program (CHIP) as at-risk for significant improper payments. Independent analysis by oversight agencies including the Government Accountability Office (GAO), the Office of Inspector General (OIG) and the Medicaid and CHIP Payment and Access Commission (MACPAC), has resulted in the observation that expenditures for hospital Upper Payment Limit (the maximum payment a state Medicaid program may pay a certain provider type in the aggregate) supplemental payments increased for Medicaid benefits between 2001 and 2016, resulting in a total of $16.4 billion in supplemental payments for 2016. […]a government bureau is the nearest thing to eternal life we'll ever see on this earth." FULL TEXT NEWS BITES – PRIVATE COMPANIES The Improper Payments Information Act of 2002 (IPIA), as amended by the Improper Payments Elimination and Recovery Act of 2010 and the Improper Payments Elimination and Recovery Improvement Act of 2012, requires CMS to periodically review programs it administers, identify programs that may be susceptible to significant improper payments, estimate the amount of improper payments, and report on the improper payment estimates and the Agency's actions to reduce improper payments in the Department of Health &Human Services (HHS) annual Agency Financial Report (AFR). The Office of Management and Budget (OMB) has identified Medicare Fee-For-Service (FFS), Medicare Part C, and Medicare Part D; Medicaid; and the Children's Health Insurance Program (CHIP) as at-risk for significant improper payments. CMS implemented improper payment measurement programs for these programs and continues to address the drivers of improper payment rates through aggressive corrective action plans. It is important to note that improper payment rates are not necessarily indicative of or are measures of fraud. Instead, improper payments are payments that did not meet statutory, regulatory, administrative, or other legally applicable requirements and may be overpayments or underpayments. Additionally, improper payments do not necessarily represent expenses that should not have occurred. For example, current OMB guidance states that when an agency's review is unable to discern whether a payment was proper as a result of insufficient or missing documentation, this payment should be considered an improper payment. A significant amount of improper payments is due to instances where a lack of documentation or errors in the documentation limits CMS's ability to verify the payment was paid correctly. However, if the documentation had been submitted or properly maintained, then the payments may have been determined to be proper. A smaller proportion of improper payments are payments that should not have been made or should have been made in different amounts and are considered a

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monetary loss to the government (e.g., medical necessity, incorrect coding, beneficiary ineligible for program or service, and other errors). INDEX SECTION 1 CENTERS FOR MEDICARE &MEDICAID SERVICES PROFILE SECTION 2 PRESS RELEASES: 2019 SECTION 1 CENTERS FOR MEDICARE &MEDICAID SERVICES PROFILE 1.1 ACTIVITIES Centers for Medicare &Medicaid Services provide direction and technical guidance to plan, develop, manage, and evaluate health care financing programs and policies. The company administers the Medicare and Medicaid program; determine quality standards in long-term-care facilities; and certification of processes. Centers for Medicare &Medicaid Services was formerly known as Health Care Financing Administration and changed its name to Centers for Medicare &Medicaid Services in July 2001. The company was founded in 1977 and is headquartered at Woodlawn, Maryland. Additionally, it has regional offices in Massachusetts, New York, Pennsylvania, Georgia, Illinois, Texas, Missouri, Colorado, California, and Washington. 1.2 SUMMARY PermID: 5040942455 Website: http://www.cms.gov Industry: Insurance SECTION 2 PRESS RELEASES: 2019 November 12: Centers for Medicare &Medicaid Services: Fact Sheet: 2019 Medicaid Fiscal Accountability Regulation (MFAR) Today, the Centers for Medicare &Medicaid Services (CMS) has issued the proposed Medicaid Fiscal Accountability Rule (CMS-2393-P) to strengthen the fiscal integrity of the Medicaid program and help ensure that state supplemental payments and financing arrangements are transparent and value-driven. The last several years have seen a rapid increase in Medicaid spending from $456 billion in 2013 to an estimated $576 billion in 2016. Much of this growth came from the federal share that grew from $263 billion to an estimated $363 billion during the same period. Supplemental payments, or additional payments to providers beyond the base Medicaid payment for particular services, have steadily increased from 9.4 percent of all other payments in FY 2010 to 17.5 percent in FY 2017. Independent analysis by oversight agencies including the Government Accountability Office (GAO), the Office of Inspector General (OIG) and the Medicaid and CHIP Payment and Access Commission (MACPAC), has resulted in the observation that expenditures for hospital Upper Payment Limit (the maximum payment a state Medicaid program may pay a certain provider type in the aggregate) supplemental payments increased for Medicaid benefits between 2001 and 2016, resulting in a total of $16.4 billion in supplemental payments for 2016. With this significant growth comes an urgent responsibility to ensure sound stewardship and oversight of the Medicaid program. CMS currently lacks available timely and adequate State Medicaid payment and financing data to enable the most effective oversight of the Medicaid program. While CMS does not believe that all states necessarily are participating in Medicaid financing schemes or making inappropriate payments, CMS has determined that the agency does not always have adequate information to always properly determine when a state is financing its state share of Medicaid expenditures from impermissible sources or otherwise making inappropriate payments. October 29: CMS Hospital Value-Based Purchasing Program Results for Fiscal Year 2020 The Hospital Value-Based Purchasing (VBP) Program is one of many quality programs Medicare has established to pay for the quality of care rather than just the quantity of services provided to patients. This program is part of our long-standing effort to improve care across the entire healthcare delivery system by tying Medicare payment to quality and cost measure performance, and as recently reinforced in Executive Order 13890, which emphasizes empowering patients and health providers with better quality care and cost data to improve their ability to make healthcare decisions and to hold providers accountable. The Hospital VBP Program works by adjusting what Medicare pays hospitals under the Inpatient Prospective Payment System (IPPS) based on the quality and cost of

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inpatient care the hospitals provide to patients. Findings: Fiscal Year 2020 Hospital VBP Program Results In FY 2020, more hospitals will receive positive payment adjustments than will receive negative payment adjustments. For fiscal year (FY) 2020, the law requires that 2 percent of the payments for all participating hospitals be withheld and redistributed to the hospitals based on their performance on a previously announced set of quality and cost measures. We estimate that the total amount available for value-based incentive payments in FY 2020 will be approximately $1.9 billion. The Total Performance Score (TPS) for each hospital is based upon hospital performance scores in each of four measurement domains. Each domain contributes 25 percent to the total score. The measurement domains for the FY 2020 Hospital VBP Program are: Clinical Outcomes Safety Person and Community Engagement Efficiency and Cost Reduction We have posted the Hospital VBP Program incentive payment adjustment factors for each participating hospital for FY 2020 in Table 16B at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2020-IPPS-Final-Rule- Home-Page-Items/FY2020-IPPS-Final-Rule- Tables.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending. This is the eighth year of the Hospital VBP Program, affecting payment for inpatient stays in approximately 2,700 hospitals across the country. October 27: Events Calendar: Centers for Medicare &Medicaid Services: Remarks by Administrator Seema Verma at the HLTH Conference Thank you for having me. It's an honor to be here at the HLTH conference standing between you and the slot machines. So we all know the public is growing more and more frustrated with the high costs of healthcare and hassles in the system, many are talking about drastically expanding government to fix our problems. As head of the major government healthcare programs, I've made my practical reservations on that front clear. But, as the public begs for solutions around affordability and accessibility, I think the conversation should return to a more fundamental question of principle: what is the role of government in healthcare? As I prepared to answer that question during this speech, I was reminded of something Ronald Reagan once said: "Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth." I can echo those sentiments about the programs I lead and for good reason. CMS provides indispensable benefits to vulnerable Americans. But to the spirit of President Reagan's point, we cannot allow government's role in healthcare to go unquestioned and undefined. Source: Company Website October 09: Centers for Medicare &Medicaid Services: Modernizing and Clarifying the Physician Self-Referral Regulations Proposed Rule On October 9, 2019, the Centers for Medicare &Medicaid Services (CMS) issued a proposed rule to modernize and clarify the regulations that interpret the Medicare physician self-referral law (often called the "Stark Law"), which has not been significantly updated since it was enacted in 1989. The proposed rule supports the CMS "Patients over Paperwork" initiative by reducing unnecessary regulatory burden on physicians and other healthcare providers while reinforcing the Stark Law's goal of protecting patients from unnecessary services and being steered to less convenient, lower quality, or more expensive services because of a physician's financial self-interest. Through the Patients over Paperwork initiative, the proposed rule opens additional avenues for physicians and other healthcare providers to coordinate the care of the patients they serve – allowing providers across different healthcare settings to work together to ensure patients receive the highest quality of care. In addition, as part of the Regulatory Sprint to Coordinated Care, CMS worked closely with the Department of Health and Human Services Office of Inspector General in developing proposals to advance the transition to a value-based healthcare delivery and payment system

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that improves the coordination of care among physicians and other healthcare providers in both the Federal and commercial sectors. Source: Company Website September 10: Centers for Medicare &Medicaid Services: Remarks by Administrator Seema Verma at the American Hospital Association Regional Policy Board Meeting Today, America is at an inflection point – a crossroads of two profoundly different paths for the future of our health care. Our choices are clear, we can choose Medicare for All or a public option, doubling down on government and a one-size-fits-all, socialist approach, with government price settingthreatening our world-class system of innovation and top-notch care, and replacing it with long lines and rationing. Or we can choose to put patients first by moving to a system of competition and value, giving patients the choice and control they want, the affordability they need, and the quality they deserve. Our administration is upending the status quo to empower patients to be informed consumers of healthcare, seeking out high value providersthose that deliver the highest quality care at the lowest price. That means transparency, value-based payments, and burden reduction. Under President Trump's leadership, we're getting it done. CMS is activating the entire agency to focus on 16 initiatives with more than 500 deliverables. Instead of throwing money at problems, we're solving them. We're giving patients unprecedented cost and quality transparency, so they, not the government, can make decisions about their care. We're lowering the cost of care by deregulating, reducing administrative burden, addressing high prescription drug costs, and moving to value-based payment. Taken together, our actions are creating a fair market, where providers compete for patients on the basis of price and quality. This isn't just rhetoric; our results are tangible; we have delivered for the American people. Medicare beneficiaries have more choices, with 600 new plan options this year. With more plan choices, there's more competition, and with more competition, prices have gone down. Medicare Advantage premiums have decreased by 6 percent on average and in some cases up to 40 percent to 70 percent in certain areas. August 28: Centers for Medicare &Medicaid Services: 2019 Federally-Facilitated Exchange Navigator Cooperative Agreement Awards Each year, the Centers for Medicare &Medicaid Services (CMS) makes Navigator Cooperative Agreement Awards to organizations who serve as Navigators in Federally-facilitated Exchange states. In 2019, CMS awarded a total of $10 million to 34 organizations, matching the annual level of funding awarded last year. These awards will support the work of organizations that offer assistance to consumers searching, shopping for, and enrolling in health coverage on the Federal Health Insurance Exchange. Navigators are a part of a wide array of options for consumers seeking assistance in shopping for healthcare, including the Exchange Call Center, Certified Application Counselors, and private sector entities that can help consumers. The Federally-Facilitated Health Insurance Exchange Navigator Program Navigators help consumers prepare applications to establish eligibility and enroll in coverage through the Exchanges and potentially qualify for insurance affordability programs. They also provide outreach and education to raise awareness about the Exchanges. Navigators are funded through federal grants and must complete comprehensive federal Navigator training, criminal background checks, and state training and registration (when applicable), prior to assisting consumers. Navigator grants are awarded to individuals and private and public organizations capable of carrying out the Navigator duties and other program requirements. Navigators are required to carry out, at a minimum, the following duties: Source: Company Website August 19: Events Calendar: Centers for Medicare &Medicaid Services: Remarks by Administrator Seema Verma at the SHIEC Annual Conference Thanks Dan for that kind introduction and to the SHIEC members, and to CRISP of Maryland and DC for hosting me today. All of your continued efforts help empower patients and doctors to access the data they need to make

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important and life-changing healthcare decisions. On this day, 55 years ago the satellite Syncom 3 was launched into orbit. This satellite enabled Americans in the United States, for the very first time, to watch the 1964 Summer Olympics in Tokyo in the comfort of their own homes. Since then, information technology has had amazing advancements and we can now send information across the globe in less than a few seconds, except of course if that information is a patient's healthcare record. For that important, and at times lifesaving information, we still use antiquated fax machines. But inefficiencies in health information sharing aren't the only issues facing our healthcare system. The growth in healthcare costs continue to be an issue. The Medicare Trustees have warned that the Medicare trust fund will run out by 2026, threatening the program for current and future generations of seniors. And this problem isn't limited to Medicare. Healthcare costs continue to spiral. By 2027, nearly one in every five dollars is projected to be spent on healthcare. That's just seven years from today. It's a looming cost crisis that will hurt our economy and reduce access to affordable high quality healthcare. Medicare for All and similar proposals don't solve these problems. They just upend the American healthcare system, while not doing anything to address the underlying costs of care. These proposals will just have the government pay for everything with a $32 trillion price tag, increasing taxes for all Americans, while stripping private health insurance from 180 million people, taking away choices and forcing people into a one-size fits-all government program. August 15: Centers for Medicare &Medicaid Services: CMS is Bringing Health Plan Quality Ratings to All Exchanges for the First Time CMS is Bringing Health Plan Quality Ratings to All Exchanges for the First Time Consumers will have improved access to health plan quality information for the 2020 Open Enrollment Period For the first time, the Centers for Medicare &Medicaid Services (CMS) will require the display of the five-star Quality Rating System (or star ratings) available nationwide for health plans offered on the Health Insurance Exchanges beginning with the 2020 Open Enrollment Period. This step builds on the Trump Administration's overall commitment to increasing transparency and empowering consumers to make informed healthcare decisions for themselves and their families. Beginning with this year's Open Enrollment Period, consumers will be able to compare health coverage choices using a five-star quality rating of each plan on Exchange websites, including HealthCare.gov, similar to other CMS star rating programs, such as the easy to understand Nursing Home Compare website and Medicare Advantage. "As part of the Trump Administration's broader quality initiative, I am pleased to announce that we are expanding display of star ratings to the Exchanges," said CMS Administrator Seema Verma. "Knowledge is power, and for the first time, consumers will have access to meaningful, simple-to-use information to compare the quality, along with the price, of health plans on Exchange websites, including HealthCare.gov. This addresses our strongly held commitment to equip consumers with the tools they need to find the best choice possible. Increasing transparency and competition drive better quality and cost, with consumers benefitting the most." Under the five-star Quality Rating System, Exchange health plans are given a rating on a 1 to 5 scale, with 5 stars representing highest quality. Star ratings are based on a number of important factors, including how other enrollees rate the doctors in the plan's network and the care they receive, how well the plan's network providers coordinate with enrollees and other doctors to give members healthcare that achieves the best results, and the overall administration of the plan including customer service and availability of information. August 15: Centers for Medicare &Medicaid Services: Health Insurance Exchange Quality Ratings System 101 Consistent with section 1311(c)(3) of the Affordable Care Act, the Centers for Medicare &Medicaid Services (CMS) established a rating system for plans offered through an Exchange on the basis of quality and price. The purpose of the Quality Rating System (or star ratings) is to: (1) help consumers make informed healthcare decisions, (2) facilitate oversight of health plans, and (3) provide actionable information to health plans to improve the quality of services they provide. Star ratings in the Exchange give consumers a snapshot of how each health plan's quality compares to that of other Exchange plans in each state and across the country. Under the Quality Rating System, Exchange health plans are

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given an overall rating on a 5-star scale, with 5 stars representing highest quality. This rating is based on 3 categories: Member Experience, Medical Care, and Plan Administration. Each of these categories also has its own rating that is based on a 5-star rating scale. This provides consumers with an objective way to quickly compare plans, based on quality, as they shop for a plan that best meets their needs. Quality Rating System Requirements Issuers that offer plans through the Exchange are required to submit quality data to CMS. This applies to all issuers that offered coverage during the previous consecutive plan years and the current year, and have more than 500 enrollees. Issuers are required to collect and submit data for each unique product type offered in a state, called a reporting unit (Issuer ID-State-Product Type). Product types subject to the Quality Ratings System requirements include Exclusive Provider Organization (EPO), Health Maintenance Organization (HMO), Point of Service (POS), and Preferred Provider Organization (PPO). The star ratings measure data submitted to CMS is used to calculate each health plans rating. August 02: Centers for Medicare &Medicaid Services: Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System (CMS-1716-F) On August 2, 2019, the Centers for Medicare &Medicaid Services (CMS) issued a final rule that reflects the agency's efforts to transform the healthcare delivery system through competition and innovation to provide patients with better value and results. The final rule will update Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) for fiscal year (FY) 2020. The policies in the final rule represent historic changes to the way many low wage index hospitals, which tend to be rural, are paid, and support the agency's priority of "Rethinking Rural Health." By improving the accuracy of the Medicare payments to these low wage hospitals, they will be able to increase what they pay their workers, and this will help ensure that patients, including those living in rural areas, continue to have access to high-quality, affordable healthcare. In addition, the new technology policies in this rule also help ensure that Medicare beneficiaries continue to have access to potentially life-saving diagnostics and therapies by unleashing innovation and removing barriers to competition. Source: Company Website July 30: Events Calendar: Centers for Medicare &Medicaid Services: Speech: Remarks by Administrator Seema Verma at the Blue Button Developer Conference ​​​​​​ Thanks Chris for that kind introduction, and to President Trump and the White House for hosting us today. I'm excited to welcome all of you to our second annual Blue Button 2.0 Developer Conference. The progress we've made is remarkable and we wanted to bring everyone together to celebrate our progress, and to discuss the path forward. Again, I want to thank President Trump for his leadership and his unwavering commitment to protecting and strengthening the Medicare program. Under his leadership premiums have gone down, and we've increased benefits in Part D and Medicare Advantage. We're also putting the needs of patients first and empowering them with the data they need to make decisions about their healthcare. I also appreciate that we have Medicare beneficiaries joining us today: Larry McFall, Joan Hyatt, and Judy Biggs. Thank you so much for coming. Last year, we promised to take action to give patients more control of their healthcare data, and we've delivered. Today, we're also celebrating Medicare's 54th Birthday, which reminds me of when my kids were little. Their grandparents would come over to celebrate their latest milestone-give them a big hug-and say "my how you've grown!" So, happy birthday to you Medicare, and my, how you've grown! When Medicare was signed into law 54 years ago today, there were only 19 million beneficiaries. Today, that number has tripled to almost 61 million and we are adding 10,000 people every day – my Medicare how you've grown! When they first started, Medicare and Medicaid accounted for only 2.3% of federal spending. These gov't programs now account for 23.5% of federal spending. And unfortunately, the Medicare Trustees have warned that

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the Medicare trust fund will run out by 2026, threatening the program for current and future generations of seniors. This problem isn't limited to Medicare. July 16: Centers for Medicare &Medicaid Services: CMS Rules Put Patients First Updating Requirements for Arbitration Agreements and New Regulations That Put Patients Over Paperwork Today, the Centers for Medicare &Medicaid Services (CMS) announced two rules – one proposed and one final – that emphasize the agency's commitment to ensuring safety and quality in nursing homes. These rules are components of the agency's five-part approach to ensuring a high-quality long term care (LTC) facility system, which Administrator Seema Verma announced in April. Administrator Verma's approach includes strengthening requirements for LTC facilities, also known as nursing homes, working with states to enforce statutory and regulatory requirements, increasing transparency of nursing home performance, improving quality, and putting patient safety first by removing unnecessary burdens on providers. In addition to protecting patients and reducing burdens, the rule helps nursing homes focus their resources on their residents by saving them $616 million in administrative costs annually that can be reinvested in patient care. The proposed rule (Medicare and Medicaid Programs; Requirements for Long-Term Care (LTC) Facilities: Regulatory Provisions to Promote Efficiency and Transparency) allows LTC facility providers to devote more of their time and resources to their residents – instead of unnecessary paperwork – by eliminating obsolete or excessively burdensome regulations. It is also part of CMS'agency-wide effort to reduce burden, the Patients Over Paperwork initiative, and would respond to President Trump's Executive Order that directs federal agencies to "cut the red tape." "The Trump administration is helping nursing homes provide high-quality care by allowing them to focus their time and resources on residents – not unnecessary process and outdated regulations," said CMS Administrator Seema Verma. "We know our regulations work best when they are smart, targeted, and patient-focused, so we have taken a close look at our rules with patients and burden in mind. July 11: Centers for Medicare &Medicaid Services: Trump Administration Announces Steps to Strengthen Medicare with New Home Infusion Therapy Benefit and New Regulations that Put Patients Over Paperwork Today, the Centers for Medicare &Medicaid Services (CMS) proposed significant changes to the Home Health Prospective Payment System (Home Health PPS) that keep the unique needs of patients first, with proposals to implement a new home infusion benefit for beneficiaries, increasing home-based care. This proposed rule also includes updates to payments for home health agencies that would increase Medicare payments to home health agencies (HHAs) by 1.3 percent ($250 million), as well as proposals to protect taxpayer dollars against fraud and abuse. "We are proud to announce the new permanent home infusion therapy benefit that will give patients the freedom to safely access critical treatments, such as chemotherapy, at home instead of traveling to the hospital or doctor's office, improving their quality of life," said CMS Administrator Seema Verma. "We are also proposing updates to payments for home health agencies under the new Patient-Driven Groupings Model, which focuses on patient characteristics to more accurately pay for home health services, rewarding value over volume." The rule includes proposals for the permanent home infusion therapy benefit to be implemented in CY 2021, as required by the 21st Century Cures Act. Home infusion therapy is the administration of certain types of medication utilizing a durable medical equipment pump in the beneficiary's home, and includes professional services, patient education and training and monitoring of patient care. This benefit will give beneficiaries the option to receive critical infusion drug therapies at home, like anti-infectives, chemotherapy or treatment for immune deficiencies, instead of in a hospital or doctor's office. In response to public feedback that we received under our Patients Over Paperwork Initiative, CMS is proposing to allow therapist assistants to perform maintenance therapy (rather than only therapists), which would allow them to practice at the top of their state licensure, give flexibility to home health providers and improve beneficiary access to these services. CMS is proposing to address potential Medicare fraud by phasing out pre-payments for home health services.

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July 11: Centers for Medicare &Medicaid Services: CMS Launches Comprehensive Effort to Strengthen Monitoring of Medic

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