HHS Posts Fall 2015 Regulatory Agenda Listing Rules in Pipeline

The Obama Administration has released its latest regulatory agenda, which lists major pending or planned regulatory actions and the anticipated timing of rulemaking activity. The agenda includes numerous pending HHS proposed and final rules affecting a wide range of policy areas, including Medicare payment rules, fraud and abuse authorities, the 340B drug pricing program, and numerous Food and Drug Administration (FDA) policies.

OIG Examines Medicare Part B Payments for 340B Purchased Drugs

A new OIG report reviews Medicare Part B spending on drugs purchased by eligible health care providers through the 340B drug discount program.  The OIG describes the report as “an independent analysis to inform the ongoing discussion” among policymakers about the nature of 340B discounts and whether statutory changes should be made to enable Medicare and/or Medicaid to share in savings associated with 340B-purchased drugs.

According to the OIG, Medicare Part B spent $3.5 billion for 340B-purchased drugs in 2013.  Medicare Part B payments for these drugs, based on 106% of average sales prices (ASP), totaled 58% more than the statutorily based 340B ceiling prices that year, enabling covered entities to retain approximately $1.3 billion.  The OIG described three “shared-savings arrangement” options that would have resulted in Medicare Part B savings between $162 million to $1.1 billion in 2013 “while still providing covered entities with incentives to purchase those drugs through the 340B Program”: Continue Reading

Obama Administration Proposes 2017 ACA Marketplace Plan Benefit and Payment Parameters

On December 2, 2015, CMS is publishing its annual proposed Notice of Benefit and Payment Parameters, which would govern participation in the Affordable Care Act (ACA) Health Insurance Marketplaces for 2017. The wide-ranging rule includes a number of provisions intended to protect consumers enrolled in Marketplace plans, enhance transparency, improve marketplace premium stabilization programs, and make other refinements to Marketplace requirements. Of particular note, the proposed rule would: Continue Reading

CMS Hospital Outpatient Payment Advisory Panel to Meet March 14-15, 2016

CMS has announced that the Advisory Panel on Hospital Outpatient Payment (HOP Panel) will hold its next meeting on March 14-15, 2016. The purpose of the Panel is to advise CMS on the clinical integrity of the Ambulatory Payment Classification groups and their associated weights under the Medicare hospital outpatient prospective payment system. The HOP Panel also advises CMS on hospital outpatient therapeutic services supervision issues. Note that this meeting will be conducted only via teleconference and webcast; details on participating will be posted approximately one week prior to the meeting on the CMS website.   The deadline for submitting presentations and comments for the agenda is January 29, 2016.

CMS Schedules New Technology Add-On Payment Town Hall Meeting (Feb. 16, 2016)

 CMS is holding a town hall meeting on February 16, 2016 to discuss fiscal year (FY) 2017 applications for add-on payments for new medical services and technologies under the Medicare IPPS. Interested parties will have an opportunity to present comments and data regarding whether the FY 2017 new medical services and technologies applications meet the substantial clinical improvement criterion. The deadline to register to present at the Town Hall Meeting is February 1, and the deadline to register to attend is February 2.

GAO Examines Trends in Medicare Part B Expenditures for New Drugs and Biologicals

The Government Accountability Office (GAO) has issued a report describing trends in Medicare Part B spending and utilization for “new” drugs and biologicals (approved by the FDA from 2006 through 2013). The GAO’s analysis is based on 250 such drugs identified by the FDA, 83 of which had either an associated Medicare billing code or price listed in CMS’s pricing files. According to the GAO, expenditures for new Part B drugs were concentrated among a small number of drugs. The 20 highest expenditure drugs accounted for 92% of 2013 expenditures on new Part B drugs and 26% of total Part B drug expenditures, with three drugs accounting for 53% percent of Medicare spending on new Part B drugs. The GAO attributes much of the 4.4% average annual growth in total Part B drug expenditures from 2007 to 2013 on new Part B drugs. Specifically, while total expenditures for new Part B drugs increased from $0.1 billion in 2007 to $5.9 billion in 2013, expenditures for Part B drugs approved before 2006 decreased from $16.1 billion to $15 billion during this period. The GAO also observed that there was generally a rapid increase in expenditures for new Part B drugs in the years immediately following their approval. For details, see the full report, “Medicare Part B: Expenditures for New Drugs Concentrated among a Few Drugs, and Most Were Costly for Beneficiaries.”

Obama Administration Updates Rules for ACA Grandfathered Health Plans

On November 18, 2015, the Obama Administration published final regulations to update requirements for group health plans and health insurance issuers under the ACA, particularly with regard to the changes they can make to the terms of their plan/coverage while retaining their “grandfathered” status. The regulations also address preexisting condition exclusions, lifetime and annual dollar limits on benefits, rescissions, coverage of dependent children to age 26, internal claims and appeal and external review processes, and ACA patient protections. The regulations, issued by the Departments of Treasury, Labor, and Health and Human Services, modify previous interim final regulations published in 2010 and incorporate subsequent subregulatory guidance. The regulations are effective on January 19, 2016, and apply to group health plans and health insurance issuers beginning on the first day of the first plan year (or, in the individual market, the first day of the first policy year) beginning on or after January 1, 2017.

President Obama Signed Protecting Our Infants Act of 2015

President Obama has signed into law S 799, the Protecting Our Infants Act of 2015, which is intended to combat the rise of prenatal opioid abuse and neonatal abstinence syndrome (NAS).  S 799 directs the HHS Secretary to conduct a review of planning and coordination related to prenatal opioid use and NAS; develop a strategy and recommendations to address research, treatment, and education gap areas; and increase technical assistance to states to improve data collection and surveillance activities related to prenatal opioid abuse and NAS.

Energy and Commerce Committee Approves Medicaid, Public Health Bills

On November 18, 2015, the House Energy and Commerce Committee approved several public health policy bills. Two approved bills pertain to the Medicaid program:

  • HR 3716, the Ensuring Terminated Providers Are Removed from Medicaid and CHIP Act – to implement several HHS OIG recommendations to improve CMS oversight of terminated providers and state screening of providers.
  • HR 3821, the Medicaid Directory of Caregivers Act – to require state Medicaid websites to include a directory of physicians who served Medicaid patients in the prior year.

Other legislation approved by the Committee include: HR 3014, to allow registered physicians who enter into an agreement with the Drug Enforcement Administration to transport and administer controlled substances to patients at other practice settings and disaster areas; HR 1321, to prohibit the manufacture, sale, or distribution of rinse-off cosmetics containing intentionally-added plastic microbeads; and HR 2017, to revise menu nutritional labeling requirements.

CMS Releases 2016 Medicare DMEPOS Fee Schedule – Reflecting Steep Cuts Based on DMEPOS Competitive Bidding Rates

Today CMS released the Medicare durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) fee schedule for the first half of 2016 – reflecting the agency’s first adjustments to nationwide rates based on DMEPOS competitive bidding program (CBP) pricing.

As previously reported, the Affordable Care Act mandates that CMS use pricing information from competitive bidding to adjust DME fee schedule amounts for items furnished in areas where the CBP is not implemented.  On November 6, 2014, CMS published its methodology to make such adjustments, which included a phase in of adjusted payments over six months.  Specifically, effective January 1, 2016 through June 30, 2016, the adjusted fee schedule amounts are based on a blend of 50% of the fee schedule amount that would have gone into effect on January 1, 2016, if not adjusted based on information from the CBP, and 50% of the adjusted fee schedule amount.  Beginning July 1, 2016, the adjusted fee schedule amounts will reflect 100% of the adjusted fee schedule amounts.

Notwithstanding this transition period, DMEPOS suppliers nationwide still will be subject to steep cuts on January 1 for many items that have been subject to CBP.  For instance, CMS issued a fact sheet listing the following average 2015 fees and average 2016 blended fees for the contiguous United States (both for urban areas and rural areas) for select items, effective January 1, 2016 (rates will be subject to fully-adjusted rates effective July 1, 2016): Continue Reading

CMS Call: 2016 Medicare Physician Quality Reporting Programs (Dec. 8)

On December 8, 2015, CMS is hosting a call to discuss how the 2016 Medicare Physician Fee Schedule final rule impacts Medicare quality reporting programs.  Specifically, the call will address changes to the Physician Quality Reporting System, the Electronic Health Record Incentive Program, the Comprehensive Primary Care initiative, the Value-Based Payment Modifier, the Medicare Shared Savings Program, and Physician Compare. In addition, the call will address CMS plans for moving toward the Merit-based Incentive Payment System and Alternative Payment Models, as mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Congress Clears Controlled Substances Act Scheduling Legislation

On November 16, 2015, the House of Representatives approved HR 639, the Improving Regulatory Transparency for New Medical Therapies Act, clearing it for the President.  The legislation would amend the Controlled Substances Act (CSA) to make procedural changes intended to improve the efficiency, transparency, and consistency of the Drug Enforcement Agency’s (DEA) process for scheduling new drugs.  According to the bill sponsor, the current lack of predictability in the timing of DEA scheduling decisions results in uncertainty in the drug development process and delays patient access to new therapies.  HR 639 would require the DEA to issue an interim final rule to place a drug that has both not been marketed previously in the United States and has abuse potential in a CSA schedule within 90 days of when the drug was approved by the Food and Drug Administration (FDA) when the FDA sends a scheduling recommendation to the DEA, whichever comes later.  The interim final rule would constitute a “final scheduling decision” that allows a manufacturer to begin marketing the product.  For purposes of calculating a new drug’s exclusivity and patent term restoration periods under the Hatch-Waxman Act, HR 639 would clarify that for a new drug that has been recommended to be scheduled by the FDA, the effective date of approval would be the later of FDA approval of the drug product or the issuance of an interim final rule by DEA scheduling the new drug.  The legislation also would impose deadlines for scheduling drugs that will only be used in clinical trials.

11/30/2015 update:  President Obama has signed HR 639 into law.


CMS Sets 2016 Medicare Deductible and Coinsurance Amounts

On November 16, 2016, CMS published Medicare Part A and B beneficiary cost sharing amounts for 2016. With regard to Part A, the 2016 deductible for hospital inpatient admissions for the first 60 days of care will be $1,288, followed by $322 per day for days 61-90 and $644 per day for stays beyond the 90th day in a benefit period. The daily skilled nursing facility coinsurance for days 21 through 100 in a benefit period will be $161 in 2016.  CMS also published 2016 Medicare Part A premium amounts for the uninsured aged and disabled individuals who have exhausted other entitlement. Finally, CMS announced Medicare Part B premiums and deductibles for 2016, which reflect a provision of the Bipartisan Budget Act of 2015 that shields certain beneficiaries from a jump in premiums for 2016. Most beneficiaries will be “held harmless” from premium increases because there was no Social Security cost-of-living increase for 2016; their monthly premiums will remain $104.90. Beneficiaries not subject to the “hold harmless” provision will pay $121.80, although higher-income beneficiaries (income greater than $85,000 individual/$170,000 joint) pay an income-related premium ranging from $170.50 to a maximum of $389.80 per month. The Part B deductible is $166 for all Part B beneficiaries.

CMS Seeking Comments on Medicare IRF/LTCH Patient Experience Surveys

On November 20, 2015, CMS is publishing two notices requesting public comments on the development of surveys regarding patient and family member experiences with the care received in (1) inpatient rehabilitation facilities (IRFs), and (2) long-term care hospitals (LTCHs).   Continue Reading

CMS Releases Final Medicare Clinical Lab Fee Schedule Determinations for 2016

CMS has announced its final 2016 Medicare clinical laboratory fee schedule (CLFS) payment determinations for new and reconsidered test codes, including determinations regarding whether to use crosswalking or gapfilling to establish payment for specific tests.

CMS Finalizes “Comprehensive Care for Joint Replacement” Model

On November 16, 2015, CMS released its final rule to establish a Medicare Comprehensive Care for Joint Replacement (CJR) model that will test whether bundled payments to acute care hospitals for lower extremity joint replacement surgery (LEJR) episodes of care will reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries. CMS estimates that this initiative – which will be mandatory for most hospitals operating in selected geographical areas –will include about 23% of all LEJR episodes nationally and will result in approximately $343 million in net Medicare savings over five years.

The advance version of the final rule is lengthy (more than 1000 pages) and complex. The basic framework of the program aligns with the program specifications set forth in CMS’s July 14, 2015 proposed rule. CMS did, however, push back the start date for the initiative; the regulations, while effective on January 15, 2016, are applicable when the first model performance period begins on April 1, 2016. Our preliminary observations regarding key features of the final rule and notable changes from the proposed rule include the following: Continue Reading

CMS Finalizes Medicare Physician Fee Schedule Rates, Policies for 2016

Today the Centers for Medicare & Medicaid Services (CMS) published the final rule to update the Medicare physician fee schedule (MPFS) for calendar year (CY) 2016. Despite the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) establishing a 0.5% conversion factor (CF) update for 2016, the final 2016 CF of $35.8279 actually is a decrease compared to the 2015 CF of $35.9335. This is because CMS has more than offset the 0.5% MACRA update with a -0.02% budget neutrality adjustment in addition to a -0.77% “target recapture amount” to reach a statutory target for savings achieved from misvalued code adjustments (discussed below).

Final rates and policies are effective January 1, 2016, with certain exceptions. CMS is accepting comments until December 29, 2015 on a limited number of provisions of the rule (e.g., interim final work, practice expense, and malpractice RVUs; interim final new, revised, potentially misvalued HCPCS codes; and changes to the physician self-referral list of codes).

The sweeping rule includes numerous policy provisions, including the following: Continue Reading

CMS Publishes Final Rule on Medicaid Fee-For-Service Ratesetting for Assuring Access to Covered Medicaid Services

On November 2, 2015, CMS published a final rule with comment period that is intended to provide a transparent, data-driven process for states to follow when they set Medicaid provider payment rates, effective January 4, 2016. Under the Social Security Act, state plans must ensure that payment rates for Medicaid services “are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that services are available to Medicaid eligible individuals to the extent that they are available to the general population in the geographic area.” The final rule requires states to review data and trends to evaluate access to care for covered services and conduct public processes to obtain public input on the adequacy of access to covered services in the Medicaid program. Should access deficiencies be identified, the state must submit to CMS within 90 days after discovery a corrective action plan on how it will achieve measurable and sustainable improvements. Notably, the final rule only focuses on the “access” portion of the statute; there is no more than lip services to the “quality of care” aspect of the law. Further, the final rule only applies to Medicaid fee-for-service rates. The final rule is especially important for providers in light of the Supreme Court’s decision in Armstrong v. Exceptional Child Center, Inc. holding that Medicaid providers do not have a cause of action to challenge a state’s Medicaid reimbursement rates. This means that challenges to the adequacy of rates will now likely gravitate to the state level. Continue Reading

CMS Invites Comments on MACRA Episode Groups

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires CMS to establish care episode groups and patient condition groups, which will be used to measure resource use under the new Merit-Based Incentive Payment System (MIPS) and alternative payment models (APMs). Care episode groups describe the patient’s clinical problems at the time items and services are furnished during an episode of care, such as clinical conditions or diagnoses, whether hospitalization occurs, and the principal services furnished. Patient condition groups describe the patient’s clinical history at the time of an encounter, such as chronic conditions, health status, and recent significant medical history. CMS is inviting comments on options for episode groups, along with the specific clinical criteria and patient characteristics used to classify patients into care episode and patient condition groups, and classification codes to identify patient/physician relationship categories. The comment deadline is February 15, 2016. Supplemental materials are available here.