The Centers for Medicare & Medicaid Services (CMS) has finalized its Affordable Care Act (ACA) Marketplace health plan payment parameters and essential benefit standards for 2016. The rule addresses numerous policies, including: allocation of risk corridors collections for 2016; recalibration of risk adjustment factors; revisions to reinsurance and cost sharing parameters; user fees for federally-facilitated exchanges; standards for qualified health plans, including quality improvement strategy and provider directory requirements; Small Business Health Options Program requirements; conditions that trigger rate review; clarification that coverage satisfying the minimum value requirement must include substantial coverage of inpatient hospital and physician services; medical loss ratio program revisions; new policies and procedures for enrollee requests for prescription drugs not included on a plan’s formulary; and establishment of the 2016 annual open enrollment period as November 1, 2015 through January 31, 2016. The final rule will be published on February 27, 2015. A related CMS fact sheet is available here.
On February 24, 2015, CMS published a notice correcting its November 10, 2014 final rule updating the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year 2015. In addition to fixing various technical errors (e.g., status indicator and addenda corrections for specific codes), the notice increases the OPPS conversion factor from $74.144 to $74.173, which will slightly increase payment rates for most ambulatory payment classifications (APCs). On the other hand, CMS is reducing the 2015 ASC conversion factor slightly, from $44.071 to $44.058.
CMS has published a final rule revising Medicare Advantage (MA) and Part D prescription drug benefit regulations for CY 2016. Among other things, the final rule:
- Implements a statutory provision requiring MA and Part D contracts to provide the right to “timely”’ inspection and audit and allowing CMS to require MA organizations or Part D prescription drug plan (PDP) sponsors to hire an independent auditor to validate correction of CMS audit findings.
- Establishes U.S. citizenship and lawful presence as an eligibility requirement for enrollment in MA and Part D plans (effective June 1, 2015).
- Makes several policy changes intended to promote efficient dispensing of drugs in long-term care (LTC) facilities, including prohibiting payment arrangements that penalize the adoption of more efficient LTC dispensing techniques by prorating dispensing fees based on days’ supply or quantity dispensed, and requiring that any difference in payment methodology among LTC pharmacies incentivizes more efficient dispensing techniques.
- Requires MA Prescription Drug (MA-PD) plans to establish and maintain a process with network pharmacies to ensure timely and accurate point-of-sale transactions and coordinate Part A, Part B, and Part D drug benefits administered by the MA PD plan.
- Requires a sponsor’s Pharmacy & Therapeutics committee to document its process for an objective party to determine whether disclosed financial interests are conflicts of interest and management of any recusals due to conflicts.
Other provisions of the rule address, among other things, business continuity for MA organizations and PDP sponsors; codification of recent quality improvement program policies; and notification requirements related to changes to Part D plans. CMS is not finalizing a number of proposals included in the January 2014 proposed rule, including provisions that would have: lifted the protected class designation on three drug classes; required Medicare Part D sponsors to include in preferred networks any pharmacy willing to accept the sponsor’s terms and conditions; reduced the number of Part D plans a sponsor may offer; and codified CMS interpretation of the Part D non-interference clause.
On February 24, 2015, CMS published its final methodology and data sources for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS is using the same methodology in 2016 as was established in the final 2015 payment notice, with updated values for several factors.
Today CMS published a notice correcting its November 10, 2014 final rule updating the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year 2015. In addition to fixing various technical errors (e.g., status indicator and addenda corrections for specific codes), the notice increases the OPPS conversion factor from $74.144 to $74.173, which will slightly increase payment rates for most ambulatory payment classifications. On the other hand, CMS is reducing the 2015 ASC conversion factor slightly, from $44.071 to $44.058.
CMS warns requirement to report/return overpayments is in effect even without regulations
The Centers for Medicare & Medicaid Services (CMS) needs more time to finalize its February 16, 2012 proposed rule on reporting and returning of Medicare overpayments, according to a CMS notice to be published on February 17, 2015. The 2012 rule would provide details on implementation of an Affordable Care Act (ACA) provision requiring enrolled providers and suppliers (and certain other enrollees) receiving Medicare funds to report and return Medicare overpayments by the later of 60 days after the date on which the overpayment was identified or, if applicable, the date any corresponding cost report is due. Although the requirement to refund an overpayment already exists in federal law, the proposed rule would clarify what constitutes “identification” of an overpayment, the mechanics of when and how an overpayment must be returned, and the period of time subject to repayment. CMS had received a large number of comments from providers and suppliers and their industry associations that the proposed rule’s refund reporting policies and procedures would impose significant administrative burdens.
The Social Security Act requires public notice if an agency will take more than three years to finalize a proposed rule. CMS states that “the complexity of the rule and scope of comments warrants the extension of the timeline for publication” for an additional year (until February 16, 2016). Specifically, CMS has “determined that there are significant policy and operational issues that need to be resolved in order to address all of the issues raised by comments to the proposed rule and to ensure appropriate coordination with other government agencies.” The agency warns stakeholders, however, that “even without a final regulation they are subject to the statutory requirements found in section 1128J(d) of the Act and could face potential False Claims Act liability, Civil Monetary Penalties Law liability, and exclusion from Federal health care programs for failure to report and return an overpayment.”
On February 2, 2015, the Obama Administration released its proposed federal budget for fiscal year (FY) 2016. The budget would impact all types of health care providers, health plans, and drug manufacturers if adopted as proposed – which is unlikely given Republican control of the House and Senate. Nevertheless, Congress can be expected to consider the Medicare and Medicaid savings proposals (many of which are carry-overs from prior budgets) during expected debate in the coming months on Medicare physician fee schedule (MPFS) reform legislation or during future budget negotiations.
The following is a summary of the major Medicare, Medicaid, and related policy proposals contained in the FY 2016 budget proposal.Continue Reading...
CMS has announced that it plans to issue regulations this spring to address provider concerns about the burden associated with compliance with Medicare and Medicaid Electronic Health Record (EHR) Incentive Program meaningful use requirements. Specifically, in a January 29, 2015 blog post by Patrick Conway, MD, Deputy Administrator for Innovation and Quality and CMS Chief Medical Officer, CMS announced that upcoming regulations would:
- Realign hospital EHR reporting periods to the calendar year facilitate hospitals incorporation of 2014 Edition software into their workflows and better align with other CMS quality programs;
- Modify other aspects of the program to reduce complexity and lessen providers’ reporting burdens; and
- Reduce the EHR reporting period in 2015 to 90 days to accommodate these changes.
These changes are separate from another rulemaking expected to be released next month that would address the Stage 3 meaningful use criteria for 2017 and subsequent years.
CMS Announces New 6-Month Extension of Moratoria on Enrollment of HHAs, Ambulance Suppliers in Designated Areas
CMS is extending -- for another 6 months -- its current enrollment moratoria for new ground ambulance suppliers and home health agencies (HHAs) in designated metropolitan areas. The moratoria, which affect enrollment in Medicare, Medicaid, and the Children’s Health Insurance Program, apply to new ground ambulances in the Houston and Philadelphia metropolitan areas and new HHAs in the metropolitan areas of Fort Lauderdale, Miami, Chicago, Detroit, Dallas, and Houston. CMS discusses its rationale for extending the enrollment moratoria, including the factors suggesting a high risk of fraud, waste, or abuse, in a notice to be published on February 2, 2015. The extension is effective January 29, 2015. CMS may lift the moratoria before the end of the 6-month period or announce additional extensions.
HHS has sent to the White House Office of Management and Budget (OMB) for final regulatory clearance a proposed rule on Stage 3 meaningful use criteria for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. The Stage 3 rule will focus on advanced use of EHR technology to promote improved outcomes for patients, and it propose changes to the reporting period, timelines, and structure of the program, including providing a single definition of meaningful use. Likewise, HHS is seeking review of proposed rule that would, among other things, 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. The rules are not available yet, but could be approved for publication in the Federal Register at any time.
The FDA published a proposed rule on December 18, 2014 that would require electronic distribution of the prescribing information intended for health care professionals, which is currently distributed in paper form on or within the prescription drug or biological product packaging. FDA also is proposing that prescribing information intended for health care professionals will no longer be permitted to be distributed in paper form with the package from which a prescription drug or biological product is dispensed, except as provided by this regulation. According to the FDA, its proposal is intended to facilitate the distribution of updated prescribing information as new information becomes available or prescribing information changes are made, and to ensure that “the most current prescribing information for distributed prescription drugs will be available and readily accessible to health care professionals at the time of clinical decisionmaking and dispensing.” Comments on the proposed rule will be accepted until March 18, 2015.
On December 31, 2014, the IRS published final regulations providing guidance on the community health needs assessment and financial assistance policy requirements for charitable hospitals under the ACA. The regulations address the entities that must meet these requirements, related reporting obligations, and the consequences for failing to satisfy these ACA requirements. The regulations apply to taxable years beginning one year after December 29, 2014.
This post was written by Jennifer Pike.
Last February, the Food and Drug Administration (FDA) asked for public feedback on a proposed research study related to prescription drug television advertisements. In a notice published in the Federal Register on January 13, 2015, FDA announced its intention to continue to move forward with the proposed study. Specifically, the notice announced that the Agency had submitted a proposed collection of information to the Office of Management and Budget (OMB) for review and approval. The notice describes the general framework for the study, entitled “Disclosure Regarding Additional Risks in Direct-to-Consumer (DTC) Prescription Drug Television (TV) Advertisements (Ads),” and it provides FDA’s response to the 55 comments it received regarding its February 2014 notice.
Current FDA regulations (21 CFR § 202.1) require that TV and radio ads present a product’s major risks in audio, or audio and visual parts of the ads (“major statements”). FDA is concerned that these major statements are too long, resulting in reduced consumer comprehension, minimization of important risk information, and, potentially, therapeutic noncompliance due to fear of side effects. At the same time, and in conflict with the above, FDA is concerned that DTC TV ads do not include adequate risk information. FDA believes that providing limited risk information in ads will promote improved consumer perception and understanding of serious and actionable drug risks.
OMB is accepting comments on the collection of information until February 12, 2015.
Administration Issues Proposed Rules on ACA Summary of Benefits and Coverage, Excepted Benefits/Wraparound Coverage
On December 30, 2014, the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA), and the Centers for Medicare & Medicaid Services (CMS) published a proposed rule that would revise Affordable Care Act (ACA) summary of benefits and coverage (SBC) and uniform glossary requirements for group health plans and health insurance coverage. The changes, which would modify a February 14, 2012 rulemaking, are intended to help plans and individuals better understand their health coverage options and compare plans. For instance, the proposed rule would add another coverage example to the SBC to illustrate costs for consumers, streamline the SBC, and revise the uniform glossary that helps consumers understand insurance terms. If finalized, the new requirements would be implemented for plan years beginning on or after September 1, 2015. Comments on the proposed changes are due by March 2, 2015. The Departments also issued revised draft SBC template, instructions, and supplemental materials.
Separately, the agencies published a proposed rule on December 23, 2014 that would amend 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 ACA Health Insurance Marketplace. The rule proposes 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. There are several significant conditions and limitations to this type of coverage. This type of wraparound coverage could be offered as excepted benefits to coverage that is first offered no later than December 31, 2017 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. Comments will be accepted until January 22, 2015.
Today the HHS Officeof Inspector General (OIG) published its annual solicitation of recommendations for new or modified safe harbor provisions under the federal anti-kickback statute, as well as potential topics for new OIG Special Fraud Alerts. Comments will be accepted until March 2, 2015.
In a separate report, the OIG discusses three safe harbor proposals received in response to its 2013 solicitation:
- A new safe harbor protecting free continuing medical education programs offered by hospitals to physicians – The OIG is not adopting this suggestion, stating that the concept of free programs could vary greatly and should be addressed on a case-by-case basis, such as under the advisory opinion process.
- A new safe harbor that would permit health care providers and suppliers in certain circumstances to compensate individuals in clinical trials and to provide services related to the clinical trials at no cost, including the waiver of cost-sharing obligations – The OIG is considering the adoption of a safe harbor that would protect the waiver of cost-sharing obligations and possibly other incentives to participants in clinical trials sponsored by certain federal government entities.
- A new safe harbor protecting clinically integrated networks’ entry into contracts with commercial third party payors for value-based payments, including pay-for-performance bonuses and shared savings awards for high quality and cost-effective health care – The OIG believes the issues raised in the proposal require further study.
This post was written by Kevin M. Madagan.
Time to pop the bubbly a little early! FDA announced today that the Drug Supply Chain Security Act (DSCSA) deadline of January 1, 2015 for product tracing (i.e., the new federal pedigree standards) will not be enforced until May 1, 2015. This means manufacturers, wholesale distributors, and repackagers have an additional four months to work with trading partners to determine how best to comply with the DSCSA pedigree standards. Although we are not surprised by this development, it is still cause to celebrate, given the potential adverse impact of enforcing the requirements before industry is prepared for compliance.
The new DSCSA Compliance Policy – DSCSA Implementation: Product Tracing Requirements – Compliance Policy Guidance for Industry – announces that FDA “recognizes” that some manufacturers, wholesale distributors, and repackagers “may need additional time to work with trading partners” to ensure that all of the product tracing information required under the DSCSA is provided to and captured by the recipient trading partner. It also acknowledges the very real concern that enforcing the January 1, 2015 deadline could disrupt the supply chain and impact patients’ access to needed prescription drugs.
The DSCSA Compliance Policy is clear: FDA “does not intend to take action against trading partners (manufacturers, wholesale distributors, and repackagers) who do not, prior to May 1, 2015, provide or capture the transaction information, transaction history, and transaction statement required by section 582 of the FD&C Act (product tracing information) associated with each transaction of certain human, finished prescription drugs, as defined in section 581 of the FD&C Act (21 U.S.C. 360eee).” The policy is limited only to the DSCSA requirements that trading partners provide and capture product tracing information; it does not extend to other DSCSA requirements, such as verification related to suspect and illegitimate product (including quarantine, investigation, notification and recordkeeping) and requirements related to engaging in transactions only with authorized trading partners.
On December 8, 2014, CMS published a proposed rule that would revise the regulations governing the Medicare Shared Savings Program, which is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form Accountable Care Organizations (ACOs) to provide cost-effective, coordinated care to Medicare beneficiaries. The Shared Savings Program now includes more than 330 ACOs in 47 states and serves more than 4.9 million Medicare fee for service (FFS) beneficiaries.Continue Reading...
On December 12, 2014, CMS published a proposed rule to revise selected conditions of participation (CoPs) for providers, conditions for coverage (CfCs) for suppliers, and requirements for long-term care (LTC) facilities to conform with the Supreme Court decision in United States v. Windsor, and ensure that same-sex spouses in legally-valid marriages are recognized and afforded equal rights in Medicare and Medicaid participating facilities. The proposed rule addresses nine specific provisions located in the CoPs and CfCs for ambulatory surgical centers, hospices, hospitals, LTC facilities, and community and mental health centers that CMS believes could be interpreted to support the denial of federal rights and privileges to a same-sex spouse if the state of residence does not recognize same-sex marriages. CMS states that its “goal is to provide equal treatment to spouses, regardless of their sex, whenever the marriage was valid in the jurisdiction in which it was entered into, without regard to whether the marriage is also recognized in the state of residence or the jurisdiction in which the health care provider or supplier is located, and where the Medicare program explicitly or impliedly provides for specific treatment of spouses.” Comments on the proposed rule will be accepted until February 10, 2015.
CMS has issued a proposed rule that would establish ACA Marketplace health plan payment parameters and essential benefit standards for 2016. Specifically, the wide-ranging proposed rule addresses, among other things: the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters; user fees for federally-facilitated exchanges; standards for qualified health plans, including network adequacy and quality improvement; the Small Business Health Options Program; guaranteed availability and renewability, rate review; the medical loss ratio program; and minimum essential health benefits (including new policies and procedures for enrollee requests for prescription drugs not included on a plan’s formulary). CMS will accept comments on the proposed rule until December 22, 2014.