# Presentation: 651239

## Center for Medicare ManagementOrganizational Overview

**Presented to New CMS Staff**
- August 4, 2005
**by Thomas A. Gustafson, Ph.D.**
- Deputy Director, CMM, CMS

## 
Facts & Figures

Payment Policy Development

Policy Implementation

On the Horizon

Helpful Websites

**Facts & Figures**
**Payment Policy Development**
**Policy Implementation**
**On the Horizon**
**Helpful Websites**

**Notes:**
Is this slide okay?  What else does it need?

## Facts and Figures

## With 430 employees, CMM is one of the largest components within CMS	
CMM is responsible for management of the Original fee-for-service Medicare program:
Part A and Part B Payment Policy 
Requirements for Provider Billing and Claims Processing Systems
Medicare Contractors 
Partner and Stakeholder Communications

- With 430 employees, CMM is one of the largest components within CMS
- CMM is responsible for management of the Original fee-for-service Medicare program:
- Part A and Part B Payment Policy
- Requirements for Provider Billing and Claims Processing Systems
- Medicare Contractors
- Partner and Stakeholder Communications

## 
Part A - Hospital Insurance Benefits
Inpatient hospital stays, including
Critical access hospitals
Mental health care
Skilled nursing facilities (not custodial or long-term care). 
Hospice care
Some home health care. 

Part B - Medical Insurance Benefits
Physician services
Hospital outpatient care
Other medical services and supplies not covered by Part A 
Physical and occupational therapists
Some home health care

**Part A - Hospital Insurance Benefits**
- Inpatient hospital stays, including
- Critical access hospitals
- Mental health care
- Skilled nursing facilities (not custodial or long-term care).
- Hospice care
- Some home health care.
**Part B - Medical Insurance Benefits**
- Physician services
- Hospital outpatient care
- Other medical services and supplies not covered by Part A
- Physical and occupational therapists
- Some home health care

**Also known as “Fee-for-Service” (FFS)**

**Original Medicare**

## Medicare Enrollment

**About 40 million beneficiaries are currently enrolled in Fee-for-Service**

***The number of people Medicare serves will nearly double by the year 2030***

## Medicare Enrollment

**About 85 percent of Medicare beneficiaries are enrolled in**
**Fee-for-Service**

## Medicare Spending

- Note: Overall spending includes benefit dollars, administrative costs, and program integrity costs. Represents Federal spending only.
*Source*:  CMS, Office of the Actuary.

**Overall Medicare spending grew from $3.3 billion in 1967 **
**to nearly $241 billion in 2001.**

**Dollars in Billions**

**Medicare Spending**

## Medicare SpendingWhere the Medicare Claims Dollar Went

**Inpatient Hospital**
**$93 billion**

**Hospital Outpatient and Other Outpatient Facilities****1**
**$20 billion**

**Physicians**
**$40 billion**

**Managed Care**
**$42 billion**

**Hospice**
**$3 billion**

**Home Health**
**$9 billion**

**Skilled Nursing**
**$13 billion**

- 1 Other outpatient facilities include ESRD freestanding dialysis facilities, RHCs, outpatient rehabilitation facilities, and federally qualified health centers.
- 2 Other services include ambulatory surgical center facility costs and ambulance services.
**Note: Spending includes benefit dollars only.** Data do not sum due to rounding.
*Source*:  CMS, Office of the Actuary

**Total FY 2001 = $236 billion**

**DME, Supplies, Independent Labs and Other Services ****2**
**$16 billion**

## Medicare Contractors

- Process about one billion claims annually
- 26 Fiscal Intermediaries (Part A)
- 18 Carriers (Part B)
- Maintain Call Center and Written Inquiries staff
- 57 call centers nationwide
- Respond annually to more than 40 million provider toll-free telephone inquires

**Notes:**
Our fiscal intermediaries (FI) and Carriers not only process Medicare claims, but they also staff our call centers around the country and educate providers about coverage, billing, and other Medicare issues. 
Contractors are the face of CMS and directly interact with providers, physicians, and suppliers on the Agency’s behalf. 
If you have a problem or question about Medicare, you should first contact your FI or Carrier. If the issue isn’t resolved to your satisfaction, you may contact the CMS Regional Office.

## Payment Policy Development

## Division of Acute Care

Division of Practitioner Services

Division of Outpatient Care

Division of Ambulatory Services

- Division of Acute Care
- Division of Practitioner Services
- Division of Outpatient Care
- Division of Ambulatory Services

## Inpatient and Outpatient Hospital 
Physicians 
Certain Drugs
Graduate Medical Education/Indirect Medical Education
Ambulatory Surgical Centers
Ambulances
Rural Health Centers/Federal Qualified Health Centers
Clinical Laboratories

- Inpatient and Outpatient Hospital
- Physicians
- Certain Drugs
- Graduate Medical Education/Indirect Medical Education
- Ambulatory Surgical Centers
- Ambulances
- Rural Health Centers/Federal Qualified Health Centers
- Clinical Laboratories

**Notes:**
Find a doctor picture

## Division of Chronic Care Management

Division of Cost Reporting

Division of Division of Community Post Acute Care

Division of Division of Institutional Post Acute Care

Division of Technical Payment Policy

- Division of Chronic Care Management
- Division of Cost Reporting
- Division of Division of Community Post Acute Care
- Division of Division of Institutional Post Acute Care
- Division of Technical Payment Policy

## Skilled Nursing Facilities (SNFs)
Home Health Agencies (HHAs)
Durable Medical Equipment/Prosthetics & Orthotics
End Stage Renal Disease
PACE
Transplant Centers/Organ Procurement Organizations
Medicare Secondary Payer Policy
Physician Ownership & Referral Arrangements

- Skilled Nursing Facilities (SNFs)
- Home Health Agencies (HHAs)
- Durable Medical Equipment/Prosthetics & Orthotics
- End Stage Renal Disease
- PACE
- Transplant Centers/Organ Procurement Organizations
- Medicare Secondary Payer Policy
- Physician Ownership & Referral Arrangements

## FFS Payment System

- Medicare payment is generally based on the average cost of furnishing an item or service
- In response to rising costs, in 1984 Congress developed a prospective payment system (PPS) for the operating costs of hospital inpatient stays
- PPS sets limits on increasing expenditures without limiting access to care
- Since 1984, Congress has legislated a PPS or fee schedule for most Medicare services with payment based on:
- Bundle of services provided in connection with a diagnosis/procedure
- Specific item or service

## FFS Payment System Methodology

- Classifies items/services according to resource needs to assign a “relative value”
- Assigns a price to each case:
- Multiply the relative value of the case by a dollar multiplier based on average resource consumption ( the “standardized amount” or “conversion factor”).
- Apply geographic adjuster (wage index or geographic practice cost index), if any.
- Apply any applicable adjustments.

## Two regulations published in the Federal Register a year for most payment systems
Proposed with public comment period
Final
Content
Update Rates
Address many policy issues
Schedule for regulation development, policy decisions, and clearance is extremely compressed

- Two regulations published in the Federal Register a year for most payment systems
- Proposed with public comment period
- Final
- Content
- Update Rates
- Address many policy issues
- Schedule for regulation development, policy decisions, and clearance is extremely compressed

## Medicare’s FFS payment systems allow for introduction of almost all new technology and services

Decisions to incorporate new drugs, technologies, and services have been, and continue to be, made by hospitals and physicians

Becomes an issue when new item/service cannot be covered or when payment is too low.

- Medicare’s FFS payment systems allow for introduction of almost all new technology and services
- Decisions to incorporate new drugs, technologies, and services have been, and continue to be, made by hospitals and physicians
- Becomes an issue when new item/service cannot be covered or when payment is too low.

## FFS Payment Systems

| Payment System | Number of Providers | Total Annual Payments |
| --- | --- | --- |
| Inpatient Hospital |   3,900 | $104 Billion |
| Outpatient Hospital |   4,300 | $  25 Billion |
| Skilled Nursing Facility | 14,943 | $  14 Billion |
| Home Health |   7,235 | $  10 Billion |
| End Stage Renal Disease  Facility |   4,464 | $    7 Billion |
| Hospice |   2,438 | $    6 Billion |
| Inpatient Rehabilitation |   1,200 | $    6 Billion |
| Inpatient Psychiatric |   1,900 | $    4 Billion |
| Long-Term Care Hospital |      350 | $    3 Billion |

## FFS Payment Systems 

| Payment Area | Number of Providers/Suppliers | Total Annual Payments |
| --- | --- | --- |
| Physician/
Non-Physician Practitioner Services | 
           900,000 | 
$ 68 Billion |
| Durable Medical Equipment |            106,000 | $12 Billion |
| Clinical Laboratory |            183,690 | $  5 Billion |
| Ambulance |              10,000 | $  4 Billion |
| Ambulatory Surgical Center |                3,890 | $   1 Billion |
| FQHCs
RHCs |               2,544 
              3,404  | $  1 Billion |

## Policy Implementation

## Division of Institutional Claims Processing

Division of Practitioner Claims Processing

Division of Supplier Claims Processing

Division of Data Systems

Division of Chronic Care Improvement Programs

- Division of Institutional Claims Processing
- Division of Practitioner Claims Processing
- Division of Supplier Claims Processing
- Division of Data Systems
- Division of Chronic Care Improvement Programs

## Develops and implements requirements for provider billing and claims processing.

Writes system requirements and programs some parts of claims processing systems.

Provides technical data analysis & develops software for payment rates.

Helps resolve problems in program operations.

Manages the Chronic Care Improvement Programs (CCIP).

**Develops and implements requirements for provider billing and claims processing.**
**Writes system requirements and programs some parts of claims processing systems.**
**Provides technical data analysis & develops software for payment rates.**
**Helps resolve problems in program operations.**
**Manages the Chronic Care Improvement Programs (CCIP).**

## Division of Operations

Division of Planning and Analysis

Division of Performance Evaluation Planning

Division of Performance Evaluation Operations

- Division of Operations
- Division of Planning and Analysis
- Division of Performance Evaluation Planning
- Division of Performance Evaluation Operations

## Day-to-day management of carriers and fiscal intermediaries

Change management process for FFS instructions

Contractor budget management

Contractor workload transitions

Contractor performance evaluations

Implementation of contracting reform

**Day-to-day management of carriers and fiscal intermediaries**
**Change management process for FFS instructions**
**Contractor budget management**
**Contractor workload transitions**
**Contractor performance evaluations**
**Implementation of contracting reform**

**Notes:**
Change this picture...Try finding something under Medicare, Medical, evaulation, instructions

## Division of Provider Information Planning and Development

Division of Provider Relations and Evaluations

Division of Contractor Provider Communications

Division of Provider Communications Technology

- Division of Provider Information Planning and Development
- Division of Provider Relations and Evaluations
- Division of Contractor Provider Communications
- Division of Provider Communications Technology

## Oversees contractor provider inquiry & provider communication activities

Manages contractor training for new payment initiatives

Manages toll free provider lines & call center technology

Develops National CMS provider education & training materials/programs

Manages Open Door Forums

Develops customized provider web pages and associated listservs

**Oversees contractor provider inquiry & provider communication activities**
**Manages contractor training for new payment initiatives**
**Manages toll free provider lines & call center technology**
**Develops National CMS provider education & training materials/programs**
**Manages Open Door Forums**
**Develops customized provider web pages and associated listservs**

## Competitive Bidding

Pay for Performance

Medicare Contracting Reform

- Competitive Bidding
- Pay for Performance
- Medicare Contracting Reform

## Durable Medical Equipment (DME)
Alternative way to price DME items
Starts in 10 cities in 2007, expanding nationwide 

Drugs
Alternative way for physicians to get “incident to” drugs
Starts nationwide next summer

- Durable Medical Equipment (DME)
- Alternative way to price DME items
- Starts in 10 cities in 2007, expanding nationwide
- Drugs
- Alternative way for physicians to get “incident to” drugs
- Starts nationwide next summer

## CMS is taking steps to link quality of care to Medicare payment by:
Selecting quality measures in consultation with experts and providers,
Collecting and reporting provider performance data,
Promoting the adoption and effective use of health information technology,
Providing technical assistance to providers seeking to improve performance,
Promoting coordinated care and disease management, and
Implementing payment initiatives and demonstrations. 

**CMS is taking steps to link quality of care to Medicare payment by:**
- Selecting quality measures in consultation with experts and providers,
- Collecting and reporting provider performance data,
- Promoting the adoption and effective use of health information technology,
- Providing technical assistance to providers seeking to improve performance,
- Promoting coordinated care and disease management, and
- Implementing payment initiatives and demonstrations.

## Integrates Medicare Part A and B administration into  new entities: 
		Medicare Administrative Contractors (MACs)

Beneficiaries and providers will have a single point-of-contact connecting them to a seamless operations network for meeting their information needs.

- Integrates Medicare Part A and B administration into  new entities:
- 		Medicare Administrative Contractors (MACs)
- Beneficiaries and providers will have a single point-of-contact connecting them to a seamless operations network for meeting their information needs.

## Current Contracting EnvironmentFiscal Intermediaries

## Current Operational Environment  Carriers

## Future Operational Environment15  Primary Part A/B MAC Jurisdictions

| Request for Proposal Issuance | Award Date | Jurisdiction(s) |
| --- | --- | --- |
| September 2005 | June 2006 | 3 |
| September 2006 | September 2007 | 1,2,4,5,7,12,13 |
| September 2007 | September 2008 | 6,8,9,10,11,14,15 |

## Helpful Websites

**CMS Expert List**
**	****  ****http://cmsnet.cms.hhs.gov/hpages/ocos/correspondence/**
**	****  ****e_default.asp**
**Open Door Forums**
**http://www.cms.hhs.gov/opendoor**
**Providers**
- 		**http://www.cms.hhs.gov/providers/**
**Regulations**
**	****   ****http://**_[www.cms.hhs.gov](http://www.cms.hhs.gov/regulations/)__[/regulations/](http://www.cms.hhs.gov/regulations/)_
**Statistics and Data**
**http://www.cms.hhs.gov/researchers/**
**	****	**

**Notes:**
You will find links to these provider and supplier pages on the CMS website.