THE CHALLENGE:
In November 2023, the Centers for Medicare & Medicaid Services (CMS) released its 2024 Physician Fee Schedule Final Rule, setting Medicare fee-for-service prices for physician services.
Shortly afterward, a healthcare provider client of McDermott Will & Emery noticed a dramatic change in the Medicare payment for hyperbaric oxygen (HBO) treatment. Contrary to the client’s expectations, the final payment rate for HBO therapy was more than 40% lower than the payment rate CMS had proposed in July 2023. Although rates sometimes change between the publication of the proposed and final rules, those changes are typically minor.
OUR OBJECTIVE:
To investigate the decrease and confirm whether it was accurate, the client’s McDermott lawyer, Karen Sealander, connected with a McDermott+Consulting data modeling and analytics team, led by Deborah Godes and Devin Stone.
THE OUTCOME:
The McDermottPlus team pinpointed a technical error in CMS’s calculations that had led to the significant rate decrease. They drafted a detailed email to communicate their findings to CMS. Before the rule took effect on January 1, 2024 – and before there could be any negative business consequences for McDermott’s client or others in the industry – CMS revised the payment for HBO treatment, nearly doubling the rate with an increase from $73.64 to $132.21.
To bring about the result, Devin and Deborah worked with the data modeling and analytics team to replicate CMS’s methodology (as outlined in the final rule), then dug into the claims data. They quickly spotted the oversight that they believed accounted for the discrepancy: Although providers typically bill five or fewer units of HBO therapy, one provider had been billing more than 1,000 units per claim, likely a typographical error. This statistical outlier had not been removed from CMS’s rate calculation, and the sheer size of that outlier had substantially skewed the data.
After identifying this inaccuracy, the McDermottPlus team shared their comprehensive analysis with CMS, which agreed to review the situation. Within two weeks, CMS had adjusted the payment rate.
MOVE FASTER:
In this instance, CMS was able to move quickly because the issue was simply a question of whether data should or should not be excluded from the calculation of a payment rate. Drawing on their experience in communicating with CMS, McDermottPlus provided a granular but clear explanation backed by convincing data, along with a specific recommended remedy to help speed the process.
With a multifaceted team delivering legal knowledge, data analytics skill and relationships within CMS, McDermottPlus and McDermott were able to resolve the issue in a timely manner for the client, meaningfully impacting their business.
Learn more about our McDermottPlus data modeling and analytics and McDermott healthcare capabilities.