New Postings on the Reed Smith Health Industry Washington Watch Blog

The Reed Smith Health Industry Washington Watch blog has been updated to report on recent health policy developments, including the following:

  • Regulatory Developments. HHS has published proposed Stage 3 EHR Incentive Program and health information technology certification rules, along with a final health insurance wraparound coverage rule. CMS has updated its list of DME items subject to face-to-face encounter/written order prior to delivery requirements and published corrections to the 2015 Medicare physician fee schedule (MFPS) final rule. A number of major CMS proposed rules are in the pipeline.
  • Other HHS Developments. The Obama Administration has announced its plan to combat antibiotic resistant bacteria, CMS has launched its Health Care Payment Learning and Action Network, and CMS proposes removing two National Coverage Determinations.
  • OIG & GAO Developments. The OIG has released the FY 2014 Health Care Fraud and Abuse Control Program Report and its Compendium of Unimplemented Recommendations.  The GAO reported on Medicare payments to certain cancer hospitals.
  • Legislative Developments. The House approved legislation to reform Medicare reimbursement policy for physician services, but the Senate has not yet acted to avert pending MPFS cuts. The House and Senate have approved budget resolutions with Medicare, Medicaid, and ACA provisions. The House approved DMEPOS competitive bidding, hospital observation, controlled substances, and trauma care bills. Congressional panels have held hearings on health policy issues. 
  • Health Industry Events. Upcoming CMS events will focus on HCPCS coding applications, home health clinical templates, Open Payments/Sunshine Act Data, the Next Generation ACO Model, and the Medicare Shared Savings Program. MedPAC is meeting to discuss various Medicare policies.

HHS Publishes Proposed Stage 3 EHR Incentive Program, Health IT Certification Rules

On March 30, 2015, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule on Stage 3 meaningful use criteria, which focus on the advanced use of Electronic Health Record (EHR) technology to promote improved outcomes for patients. The proposed rule would establish the requirements that eligible professionals (EPs), eligible hospitals, and critical access hospitals must achieve to demonstrate meaningful use, qualify for Medicare and Medicaid EHR Incentive Program incentive payments, and avoid downward Medicare payment adjustments. CMS generally intends for the proposed changes to respond to provider concerns regarding the burden associated with the number of program requirements, the multiple stages of program participation, and the timing of EHR reporting periods. 

Notably, while CMS had previously announced that Stage 3 would begin in 2017, CMS is making Stage 3 compliance optional for 2017. Instead, beginning in 2018 all providers would report on the same definition of meaningful use at the Stage 3 level regardless of their prior participation. The proposed rule also would reduce the overall number of meaningful objectives to eight to focus on advanced use of EHRs (Protect Patient Health Information, Electronic Prescribing (eRx), Clinical Decision Support (CDS), Computerized Provider Order Entry (CPOE), Patient Electronic Access to Health Information, Coordination of Care through Patient Engagement, Health Information Exchange (HIE), and Public Health and Clinical Data Registry Reporting). In addition, CMS would align clinical quality measure reporting with other CMS quality reporting programs that use certified EHR technology (e.g., the Hospital Inpatient Quality Reporting and Physician Quality Reporting System programs), enhance alignment across care settings, and remove measures that are redundant or topped out. 

CMS expects net incentive payment spending under the Medicare and Medicaid EHR Incentive Programs to total $3.7 billion between 2017 and 2020 (which reflects $0.8 billion in negative payment adjustments for Medicare providers who do not achieve meaningful use). The comment period ends on May 29, 2015.

In a related development, on March 30 the Office of the National Coordinator for Health Information Technology (ONC) published a proposed rule to establish the 2015 edition health information technology certification criteria, establish a new 2015 Edition Base EHR definition, and modify the ONC Health Information Technology (IT) Certification Program to make it more broadly applicable to other types of health IT health care settings and programs. Among other things, the rule would: (1) adopt new and updated vocabulary and content standards for the structured recording and exchange of health information; (2) include enhanced data portability, transitions of care, and application programming interface capabilities in the 2015 Edition Base EHR definition; (3) align certification criteria with proposals for Stage 3; (4) provide certification to standards for the collection of social, psychological, and behavioral data to address health disparities; (5) provide for the exchange of sensitive health information and for the accessibility of health IT; (6) ensure all health IT presented for certification possesses the relevant privacy and security capabilities; (7) take a series of steps to improve patient safety; and (8) establish surveillance and disclosure requirements. Comments are due May 29, 2015.

House and Senate Approve Budget Resolutions with Medicare, Medicaid, ACA Provisions

On March 25, 2015, the House of Representatives approved (with no Democratic votes) H.Con.Res. 27, a budget resolution providing instructions to Congressional committees on the federal spending framework for FY 2016. Among other things, the resolution calls for repealing the ACA “in its entirety,” transforming Medicare into a premium-support program, and replacing the ACA Medicaid expansion with “State Flexibility Funds” to support state Medicaid reforms. The Senate approved a separate budget resolution, S.Con.Res. 11, on March 26 (also with no Democratic support). The Senate version would also repeal the ACA, but would not make structural reforms to Medicare (Committees would be directed to achieve more than $400 billion in unspecified Medicare savings over 10 years, the same level included in the President’s proposed FY 2016 budget).  While the budget resolutions are intended to guide Congressional budget activities in the coming year, they do not actually effect policy changes; any subsequent legislation in conformance with the resolution would be subject to future Congressional debate (and potentially Presidential veto).

Health Care Fraud and Abuse Control (HCFAC) Program Reports $3.3 Billion in Recoveries

According to the FY 2014 HCFAC program report, more than $3.3 billion was recovered in FY 2014 as a result of the government’s health care fraud judgments and settlements, including $2.3 billion won or negotiated by the federal government in FY 2014. Since the HCFAC program began in 1997, it has returned more than $27.8 billion to the Medicare Trust Funds. In FY 2014, the Department of Justice (DOJ) opened 924 new criminal health care fraud investigations, with criminal charges filed in 496 cases and 734 defendants convicted of health care fraud-related crimes. The report also notes that the Federal Bureau of Investigation efforts led to “the dismantlement of the criminal hierarchy of more than 142 health care fraud criminal enterprises.” With regard to civil cases, DOJ opened 782 new civil health care fraud investigations and had 957 civil health care fraud cases pending at the end of the year.

In addition, HHS Office of Inspector General (OIG) investigations resulted in 867 criminal actions related to Medicare and Medicaid and 529 civil actions (e.g., false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties settlements, and administrative recoveries related to provider self-disclosure matters). The OIG also excluded more than 4,000 individuals and entities from participation in Medicare, Medicaid, and other federal health care programs for criminal convictions for crimes related to these programs, patient abuse or neglect, or as a result of licensure revocations.

Beyond enforcement activities, the annual report discusses CMS preventive measures to combat health program fraud and abuse, including enhanced screening provisions that have resulted in deactivation of 470,000 enrollments and revocation of 28,000 enrollments. CMS also has continued the temporary moratoria on the enrollment of new home health or ambulance service providers in specific geographic locations and applied advanced analytics to Medicare fee-for-service claims to identify and suspicious billing patterns, among other initiatives.

Obama Administration Announces Plan to Combat Antibiotic Resistant Bacteria

On March 27, 2015, the Obama Administration released its National Action Plan for Combating Antibiotic Resistant Bacteria (NAP), a five-year, government-wide plan to address the spread of resistant bacteria. The main components of the strategy, which identifies roles for the public and private sectors, are as follows:

  1. Slow the emergence of resistant bacteria and prevent the spread of resistant infections through the judicious use of antibiotics in health care and agriculture settings;
  2. Strengthen national “One-Health” surveillance efforts to track resistant bacteria in diverse settings in a timely fashion.
  3. Advance development and use of rapid and innovative diagnostic tests to allow health care providers to distinguish between viral and bacterial infections and recommend appropriate, targeted treatment.
  4. Accelerate basic and applied research and development, including through streamlining the drug development process and increasing the number of candidate drugs in development.
  5. Improve international collaboration and capacities to monitor antibiotic resistance, spur therapeutics and diagnostics development, and strengthen regional networks and global partnerships that help prevent and control the emergence and spread of resistance.

CMS Launches Health Care Payment Learning and Action Network

On March 25, 2015, CMS formally launched the Health Care Payment Learning and Action Network, a public-private partnership intended to support HHS’s goal of moving Medicare and the broader health industry from a fee-for-service model towards alternative payment models that emphasize value. According to CMS, more than 2,800 entities have registered to join the Network, with 44 state, payer, health system, corporate, association, and other stakeholder partners already adopting organization-specific goals for alternative payment models.

OIG Issues 2015 Compendium of Unimplemented Recommendations

The OIG has released its March 2015 “Compendium of Unimplemented Recommendations,” which highlights the OIG’s top 25 recommendations for cost savings and/or quality improvements in HHS programs, along with other significant unimplemented recommendations. High-priority recommendations address the following areas, among others:

  • Payment Policies and Practices: Expand the DRG window to include additional days prior to the inpatient admission and other hospital ownership arrangements; establish a hospital transfer payment policy for early discharges to hospice care; and reduce hospital outpatient department payment rates for ambulatory surgical center-approved procedures.
  • Billing and Payment: Develop oversight mechanisms for the home health face-to-face requirement; change the method for determining how much therapy is needed to ensure appropriate skilled nursing facility payments; detect and recoup improper Medicare payments made for services rendered to incarcerated beneficiaries; implement an automated system to recalculate outlier claims to facilitate reconciliations; and provide states with definitive guidance for calculating the federal upper payment limit (UPL), including using facility-specific UPLs that are based on actual cost report data.
  • Contractor Oversight: Utilize and report Zone Program Integrity Contractors’ (ZPICs') workload statistics in ZPIC evaluations.
  • Grants and Contracts: The National Institutes of Health (NIH) should promulgate regulations addressing institutional financial conflict of interest.
  • Program and Financial Management: Reduce significant variation in states’ personal care services laws and regulations; and standardize administrative law judge level case files and make them electronic.
  • Quality of Care and Safety: Broaden patient safety efforts to include all types of adverse events; require states to report on vision and hearing screening data; strengthen oversight of state access standards for Medicaid managed care; and expand regulatory authority and oversight of dietary supplements.
  • Emergency Preparedness: Establish effective hospital emergency preparedness and response policies.
  • Health Information Technology: Improve the Transformed Medicaid Statistical Information System; and address fraud vulnerabilities in EHRs.
  • Program Integrity: Increase reviews of clinicians associated with high cumulative payments; and restrict certain beneficiaries to a limited number of pharmacies or prescribers.
  • Affordable Care Act: Improve internal CMS controls related to determining applicants’ eligibility for enrollment in quality health plans and eligibility for insurance affordability programs.

While some of these recommendations could be achieved administratively, other policies would require legislative changes to implement. 

GAO Calls for Changes to Medicare Payments to PPS-Exempt Cancer Hospitals

A recent Government Accountability Office (GAO) report, “Medicare: Payment Methods for Certain Cancer Hospitals Should Be Revised to Promote Efficiency,” examines the Medicare reimbursement methodology for cancer hospitals exempt from the acute inpatient prospective payment systems (PPS). The GAO determined that Medicare payments were substantially higher at PPS-exempt cancer hospitals (PCHs) in 2012 than at PPS teaching hospitals in the same geographic area for beneficiaries with the same diagnoses or services. GAO estimated that PCHs were paid an average of about 42% more for inpatient services and 37% more for outpatient services than a local PPS teaching hospital would have received for a similar patient. According to the GAO, the PCH inpatient and outpatient reimbursement methodologies “provide little incentive for efficiency.” The GAO therefore recommends that Congress consider requiring Medicare to pay PCHs on the same basis as PPS teaching hospitals or otherwise authorize the HHS Secretary to modify how Medicare pays PCHs. 

MedPAC Meeting on Medicare Policy (April 2-3, 2015)

 On April 2-3, 2015, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss various Medicare policy issues, including: hospital short stay policy; polypharmacy/multiple drug use (focusing on Part D opioid use); Medicare Part D risk sharing; measuring low-value care; using episode bundles to improve care efficiency (including potential refinements to the Medicare spending per beneficiary measure); bundling oncology services; and synchronizing Medicare policy across payment models.

CMS Publishes Update to DME Items Subject to Face-to-Face Encounter, Written Order Prior to Delivery Requirements

Today CMS published a notice updating the Healthcare Common Procedure Coding System (HCPCS) codes on the Durable Medical Equipment (DME) List of “Specified Covered Items” that require a face-to-face encounter and a written order prior to delivery (although CMS still is delaying enforcement of the face-to-face examination – but not the detailed written order – requirement). 

By way of background, in the 2013 Medicare physician fee schedule final rule, CMS established a list of Specified Covered Items that require a written order prior to delivery and a face-to-face encounter with a physician or other specified health care professional during the 6 months prior to the written order, and the conditions for compliance.  The initial items subject to this provision included:  items that require a written order prior to delivery under the Medicare Program Integrity Manual; items that cost more than $1,000; and items identified as particularly susceptible to fraud, waste, and abuse.  CMS announced its intention to update the list through rulemaking as necessary.  Today’s notice removes two codes from the original list because they represent items that are no longer payable by Medicare:  E0457 (Chest shell) and E0459 (Chest wrap).  The updated list is available here.

Senate Recesses Without Taking up House-Approved SGR Fix Legislation

The Senate has adjourned until April 13, 2015 without taking action on the House-approved Medicare Access and CHIP Reauthorization Act, which would repeal the Sustainable Growth Rate (SGR) formula, reform Medicare physician payments, and make other policy changes.  In the interim, the 21.2% physician fee schedule cut mandated by the SGR will be triggered for services furnished on or after April 1, 2015.   In a recent update, CMS reminded providers that electronic claims are not paid earlier than 14 calendar days (29 days for paper claims) after the date of receipt, so applicable claims will be held at least until the Senate returns, but the timing of any Senate action is still unclear.  CMS intends to provide an update by April 11, 2015 on the status of Congressional action to avert the negative update and the agency’s next steps.  

House Approves Medicare Access and CHIP Reauthorization Act

Repeals SGR Formula, Adopts Medicare and Other Policy Changes

Today the U.S. House of Representatives approved a major Medicare package, the Medicare Access and CHIP Reauthorization Act (MACRA), which would reform Medicare reimbursement policy for physician fee schedule services and adopt a series of policy changes affecting a wide range of providers and suppliers.

Most notably, the bill would repeal the statutory Sustainable Growth Rate (SGR) formula, which has called for deep cuts in Medicare rates in recent years, but Congress has routinely stepped in to override the full application of the formula. Instead, after a period of stable payment updates, MACRA would link physician payment updates to quality and value measurements and participation in alternative payment models. MACRA also would extend certain expiring Medicare and other health policy provisions, including a two-year extension of the Children’s Health Insurance Program.

To finance these provisions, MACRA would reduce Medicare market basket updates for post-acute care providers, revise Medicare inpatient hospital payment rate updates, restructure Medicaid disproportionate share hospital (DSH) reductions, require additional income-related adjustments for Medicare Part B and Part D premiums, and bar first-dollar Medigap coverage policies.

Finally, the bill includes a number of other health policy provisions, including: new program integrity policies (including eliminating civil money penalties for inducements to physicians to limit services that are not medically necessary); a requirement that suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that bid in a competitive bidding program obtain a bid surety bond that would be forfeited if the supplier does not accept a contract under certain circumstances; a delay in enforcement of the “two midnight” inpatient status policy; and revisions to Medicare payment for global surgical packages (including blocking a CMS decision to eliminate 10- and 90-day global surgical packages).

President Obama has promised to sign the bill if approved by the Senate. Timing is critical given that the latest short-term SGR “fix” expires at the end of the month, and physicians face a 21% across-the-board cut on April 1, 2015 in the absence of Congressional action.

CMS Publishes Corrections to 2015 Medicare Physician Fee Schedule Final Rule

CMS has published corrections to its final 2015 Medicare physician fee schedule rule. Among other things, the rule reflects a previously-announced correction to the conversion factor for the first quarter of 2015 ($35.7547), revises the April 1 – December 31, 2015 conversion factor to $28.1872 (assuming that Congress does not take action to avert this pending cut), makes numerous code-specific relative value unit corrections, and revises quality measure details. CMS is also adding regulatory text that had been inadvertently omitted regarding general supervision of non-face-to-face aspects of transitional care management services. 

CMS Proposed Rules in the Pipeline

CMS recently sent several major proposed rules to the White House Office of Management and Budget for regulatory clearance – the last step before publication in the Federal Register. OMB is reviewing proposed rules to update the skilled nursing facility, inpatient rehabilitation facility, and inpatient psychiatric facility prospective payment systems (PPS) for fiscal year (FY) 2016, and the FY 2016 acute inpatient PPS proposed rule also should be joining them in the near future. Other CMS regulations pending at OMB include proposed rules updating the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program meaningful use requirements for 2015 through 2017 and Medicaid managed care regulations.

CMS Proposes Removing Two NCDs under Expedited Process

In 2013, CMS adopted an expedited administrative process to remove certain national coverage determinations (NCDs) older than 10 years since their most recent review. In December 2014, CMS removed seven NCDs under this process. On March 18, 2015, CMS proposed removing two more NCDs under this process, addressing coverage of Apheresis (therapeutic pheresis) and Smoking and Tobacco-Use Cessation Counseling (NCD Manual Section 201.4; Section 210.4.1 would remain). Public comments on this proposal will be accepted until April 17, 2015, and CMS expects to publish its determination by fall 2015. Local MACs are authorized to determine coverage for items and services that were previously governed by NCDs that were removed. 

Congressional Health Policy Hearings

Congressional committees have held several hearings this week on health policy issues. On March 24, the Energy and Commerce Health Subcommittee held a hearing on the 340B drug pricing program. Also on March 24, the House Ways and Means Subcommittee on Oversight examined CMS’s use of the Fraud Prevention System (FPS) to identify and stop Medicare fraud, and the Senate Health, Education, Labor and Pensions Committee held a hearing entitled “Continuing America's Leadership: Advancing Research and Development for Patients.” On March 25, the Senate Special Committee on Aging examined “The Fight Against Alzheimer's Disease: Are We on Track to a Treatment by 2025.” 

CMS Calls on Next Generation ACO Model

CMS is hosting a series of calls to discuss its new “Next Generation” ACO Model, which is intended to promote Medicare quality improvement and care coordination. The following upcoming calls are scheduled:

March 31, 2015 -- Focusing on financial methodology and related issues;
April 7, 2015 – Focusing on benefit enhancements and beneficiary care coordination reward; and
April 14, 2015 – Focusing on letter of intent and application.

Obama Administration Finalizes Health Insurance Wraparound Coverage Rule

The Departments of Labor, Health and Human Services, and Treasury published a final rule on March 18, 2015 that amends the definition of excepted benefits to allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to individuals who are purchasing individual health insurance in the private market, including through the Affordable Care Act (ACA) Health Insurance Marketplace. The rule establishes the following pilot programs for wraparound coverage: a pilot allowing wraparound benefits only for Multi-State Plans in the Marketplace, and a pilot allowing wraparound benefits for part-time workers or retirees who enroll in an individual market plan (or Basic Health Plan coverage). There are several significant conditions and limitations to this type of coverage. The wraparound coverage must provide meaningful benefits beyond coverage of cost sharing (e.g., coverage of services considered to be out-of-network by the primary plan, reimbursement for the full cost of primary care or non-formulary prescription drugs), and may not consist of an account-based reimbursement arrangement. This type of wraparound coverage could be offered as excepted benefits to coverage that is first offered no earlier than January 1, 2016 and no later than December 31, 2018 (a year later than initially proposed), and that ends on the later of: (1) the date that is three years after the date wraparound coverage is first offered; or (2) the date on which the last collective bargaining agreement relating to the plan terminates after the date wraparound coverage is first offered.

CMS Call on Reviewing Open Payments/Sunshine Act Data (April 15)

CMS is hosting a national provider call on April 15, 2015 to discuss the Open Payments program, including the process for physicians and teaching hospitals to review applicable data prior to publication.  Registration is required.

Ways & Means Committee Schedules March 24 Hearing on Use of Data Analysis to Stop Medicare Fraud

On March 24, the House Ways and Means Subcommittee on Oversight is holding a hearing on CMS’s use of the Fraud Prevention System (FPS) to identify and stop Medicare fraud. Government and non-governmental witnesses will discuss the progress that the FPS has made and how data analysis is being used to identify and stop Medicare fraud and waste.

House Approves Medicare DMEPOS Competitive Bidding, Hospital Observation, Controlled Substances, & Trauma Care Bills

Yesterday the House of Representatives approved the following health policy bills:

  • H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015 – which would require Medicare suppliers that bid under a DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to obtain a $50,000-$100,000 bid surety bond for each competitive bidding area (CBA).  If the bidder is offered a contract for any product category in the CBA, and the supplier’s bid for the product category was at or below the median composite bid rate that was used to calculate single payment amounts, the bid bond would be forfeited if the supplier does not accept the contract.   In all other cases, the bid bond would be returned to the bidder.  The bill is intended to prevent  suppliers from submitting not-binding, “low-ball” bids that artificially drive down prices and jeopardize beneficiary access to equipment.   The bill also would codify that competitive bidding contracts can only be awarded to suppliers that meet applicable state licensure requirements.
  • H.R. 876, the “NOTICE Act” – which would require hospitals and critical access hospitals to provide written and oral notification to Medicare beneficiaries classified as being under observation status for more than 24 hours, rather than admitted as inpatients.  Such notice would include an explanation of the implications of observation status for beneficiary cost-sharing obligations and subsequent skilled nursing facility eligibility.
  • H.R. 639, Improving Regulatory Transparency for New Medical Therapies Act – to amend the Controlled Substances Act 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 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.
  • H.R. 647, Access to Life-Saving Trauma Care for All Americans Act –  to reauthorize certain Public Health Service Act trauma care center grants.  
  • H.R. 648, Trauma Systems and Regionalization of Emergency Care Reauthorization Act – to reauthorize grants supporting state and rural development of trauma systems and authorize new regionalized emergency care model pilot projects.

The bills are now awaiting Senate consideration.

New Postings on the Reed Smith Health Industry Washington Watch Blog

The Reed Smith Health Industry Washington Watch blog has been updated to report on recent health policy developments, including the following:

  • MedPAC Report to Congress on Medicare Policy. The Medicare Payment Advisory Commission (MedPAC) has released its annual recommendations to Congress on Medicare policies, including Medicare fee-for-service (FFS) payment updates and a status report on the Medicare Advantage and Medicare Part D programs. 
  • Regulatory Developments. CMS has published a final rule on SMART Act Medicare Secondary Payer appeals provisions, and the FDA has issued draft guidance on the use of electronic informed consent in clinical investigations.
  • Other CMS Developments. CMS has announced a new “Next Generation” Accountable Care Organization model, and it is inviting stakeholders to join a “Health Care Payment Learning and Action Network” to promote alternative payment models. CMS also has released the April 2015 Medicare Part B drug average sales price files, a report on the impact of Medicare quality measures, and initial results for the Medicare Physician Value-based Modifier.
  • OIG & GAO Developments. The OIG has released FY 2014 State Medicaid Fraud Control Unit data, along with reports on Medicare reimbursement for critical access hospital (CAH) swing-bed services and Medicare Part B drug pricing. The GAO has addressed antipsychotic drug use in community settings and state Medicaid program integrity system effectiveness.
  • Legislative Developments. Today the House of Representatives is scheduled to vote on bills addressing DMEPOS competitive bidding, hospital observation status, Controlled Substances Act amendments, and trauma care. Congressional panels have scheduled hearings on health information technology and the Affordable Care Act.
  • Health Industry Events. Upcoming CMS events will focus on physician quality reporting programs, HCPCS coding applications, home health clinical templates, and the Medicare Shared Savings Program. The FDA is hosting a clinical outcome assessments public workshop.  

MedPAC Report to Congress on Medicare Policy

The Medicare Payment Advisory Commission (MedPAC) has released its annual recommendations to Congress on Medicare policies, including Medicare fee-for-service (FFS) payment updates and a status report on the Medicare Advantage and Medicare Part D programs. The following are highlights of the recommendations for 2016 (many of which were recommended previously):

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House to Vote Today on DMEPOS Competitive Bidding, Hospital Observation Policy, and Other Health Policy Bills

On March 16, 2015, the House of Representatives is scheduled to consider the following health policy legislation:

  • H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015 -- which would require Medicare suppliers that bid under a DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to submit binding bids or risk forfeiture of a surety bond;
  • H.R. 876, the “NOTICE Act” – which would require hospitals to provide certain notifications to individuals classified as being under observation status rather than admitted as inpatients;
  • H.R. 639, Improving Regulatory Transparency for New Medical Therapies Act -- to amend the Controlled Substances Act to improve the efficiency, transparency, and consistency of the Drug Enforcement Agency’s process for scheduling new drugs;
  • H.R. 647, Access to Life-Saving Trauma Care for All Americans Act -- to reauthorize language from the Public Health Service Act to fund trauma care centers; and
  • H.R. 648, Trauma Systems and Regionalization of Emergency Care Reauthorization Act -- to reauthorize grants supporting state and rural development of trauma systems and authorize new regionalized emergency care model pilot projects.

CMS Invites Stakeholders to Join "Health Care Payment Learning and Action Network" to Promote Alternative Payment Models

As previously reported, CMS has established a public-private partnership, the Health Care Payment Learning and Action Network, to support HHS’s goal of moving Medicare and the broader health industry from a FFS model towards alternative payment models that emphasize value. CMS is now inviting payers, providers, employers, purchasers, state partners, consumer groups, individual consumers, and other interested parties to join the Network and participate in a kickoff event scheduled for March 25, 2015.

Among other things, the Network will: facilitate joint implementation of new models of payment and care delivery; define how best to report on new payment models; collaborate to generate evidence, share approaches, and remove barriers; develop common approaches to issues such as beneficiary attribution, financial models, benchmarking, quality and performance measurement, and risk adjustment; create implementation guides for payers, purchasers, providers, and consumers; and disseminate findings. In order to participate in the Network, interested parties must:

  • Support national goals for use of alternative payment models (e.g., accountable care organizations, bundled payments, and advanced primary care medical homes) for the U.S. health system that match or exceed the Medicare FFS goals (30% alternative payment model penetration by 2016 and 50% by 2018);
  • Agree that progress towards national goals should be measured;
  • Work with Network participants to establish standard definitions for alternative payment models;
  • Set organization-specific goals for alternative payment models within the first six months; and
  • Participate in reporting of progress towards national alternative payment model goals.

The Network will operate independently of HHS and other government entities, and its activities will be supported by an independent contractor that will act as a convener and produce “best practice” white papers.

CMS Report Assesses Effectiveness/Impact of Medicare Quality Measures

CMS has released the “2015 National Impact Assessment of Quality Measures Report,” which examines the effectiveness of quality measures used in CMS hospital, ambulatory, and post-acute quality programs. The report found that 95% of 119 publicly reported measure rates across seven quality reporting programs showed improvement from 2006 to 2012, with process measures most likely to be high performing. There were also achievements in reducing disparities in measure rates based on race and ethnicity. According to the report, CMS programs and measures reach a wide range of patients with high-impact medical conditions, although measures are not evenly distributed across CMS reporting programs. The report also considers measure alignment with other programs, impact beyond Medicare, measure exclusions, and other performance metrics. Numerous action items are suggested to guide future measure design and development. 

CMS Posts Initial Results for Physician Value-based Payment Modifier

 Under the ACA, the Physician Value-Based Modifier (Value Modifier) policy rewards physicians and groups of physicians who provide high quality and cost effective care, while penalizing those who did not meet objectives. Physicians in group practices of 100 or more eligible professionals who submit claims to Medicare under a single tax identification number are subject to the value modifier in 2015, based on performance in 2013. CMS has provided details on Value Modifier payment adjustments for applicable physician groups in 2015, including how groups that elected quality-tiering performed.

OIG Posts FY 2014 State Medicaid Fraud Control Unit (MFCU) Data

The HHS Office of Inspector General (OIG) has released detailed statistical data on MFCU enforcement actions, recoveries, and expenditures for fiscal year 2014. Overall, state MFCUs reported more than $2 billion in criminal and civil recoveries (settlements, judgments, or prefiling settlements) in FY 2014, more than $1.7 billion of which were civil recoveries. The states also had a total of 16,464 open fraud or abuse/neglect investigations at the end of FY 2014, and they reported 1,318 convictions and 874 civil settlements and judgments during the year. State-specific data also is available in interactive map form.

OIG Reviews Medicare Reimbursement for Critical Access Hospital (CAH) Swing-Bed Services

A recent OIG report examines increasing use of CAH “swing-bed” services, which the OIG describes as being equivalent to services performed at a SNF, but which are reimbursed at 101% of a CAH’s reasonable cost rather than at the Medicare SNF PPS rate. The OIG estimates that Medicare could have saved $4.1 billion over six years if payments for swing-bed services at CAHs were made using SNF PPS rates, and OIG recommends that CMS seek legislation to tie CAH swing-bed reimbursement rates to SNF PPS rates. CMS disagreed with these recommendations, stating that the OIG’s methodology overestimated potential savings. Nevertheless, CMS concurs that changes should be made to CAH designation and payment policies to “balance beneficiary access to care while promoting payment efficiency.” CMS pointed to provisions of the President's fiscal year 2015 budget proposal that would reduce CAH payments from 101% to 100% of reasonable costs and modify eligibility rules. For more information, see the full report, “Medicare Could Have Saved Billions at Critical Access Hospitals If Swing-Bed Services Were Reimbursed Using the Skilled Nursing Facility Prospective Payment System Rates.” 

GAO Calls for Expanded HHS Efforts to Reduce Antipsychotic Drug Use in Community Settings

The Government Accountability Office (GAO) has issued a report examining the extent to which antipsychotic drugs are prescribed for older adults with dementia in nursing homes and other settings. The GAO found that, according to Medicare Part D data, about one-third of older adults with dementia who spent more than 100 days in a nursing home in 2012 were prescribed an antipsychotic, compared to about 14% of Medicare Part D enrollees with dementia living outside of a nursing home were prescribed an antipsychotic that year. While several agencies within HHS have taken steps to address antipsychotic drug use in nursing homes as part of the National Alzheimer's Plan, these efforts have not applied to older adults in other settings, such as assisted living facilities or individuals' homes. The GAO therefore recommends that HHS update its National Alzheimer's Plan to expand outreach and educational efforts to reduce antipsychotic drug use among older adults with dementia residing outside of nursing homes; HHS concurred.  For details, see the full report, “Antipsychotic Drug Use: HHS Has Initiatives to Reduce Use among Older Adults in Nursing Homes, but Should Expand Efforts to Other Settings.”