CMS Proposes Changes to Sunshine Act "Open Payments" Regulations in 2015 Medicare Physician Fee Schedule Rule

This post was written by Elizabeth Carder-Thompson, Katie C. Pawlitz, and Nancy E. Bonifant.

Today the Centers for Medicare & Medicaid Services (CMS) issued an advance copy of the CY 2015 Medicare Physician Fee Schedule (PFS) proposed rule, which includes certain changes to the regulations implementing the Physician Payment Sunshine Act, also known as the Open Payments program. These proposed changes come just three days after the inaugural deadline for applicable manufacturers and group purchasing organizations (GPOs) to report to CMS detailed information regarding payments and transfers of value made to physicians and teaching hospitals, as well as physician ownership information.

As previously reported, the Physician Payment Sunshine Act and related regulations require pharmaceutical and medical device manufacturers and GPOs to register with and submit to CMS data on their financial relationships with physicians and teaching hospitals. This financial data will be made publicly available on the CMS Open Payments website.

In the PFS proposed rule, CMS proposes the following changes to the Physician Payment Sunshine Act regulations:

  • Deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply”
  • Deleting the reporting exclusion for payments made to speakers at accredited continuing medical education events when certain requirements are met. Although CMS is deleting this express exclusion, it notes that such payments may still be excluded generally from reporting under the separate exclusion for indirect payments, which applies in those instances in which the applicable manufacturer is unaware of the identity of the covered recipient. In other words, the practical impact of this change may not be significant in the long run.
  • Requiring the reporting of the marketed name of the drug, device, biological, or medical supply related to the payment being reported. Previously, CMS finalized that for drugs and biologicals, manufacturers must report the market name of a related product, but that for devices and medial supplies, manufacturers could report either the name under which the product is marketed or the general therapeutic area or product category associated with the device or medical supply.
  • Requiring manufacturers to report stocks, stock options or any other ownership interest as distinct categories.

The proposed rule will be published in the Federal Register on July 11, 2014, and comments are due to CMS by September 2, 2014.

OIG Issues Special Fraud Alert on Lab Payments to Referring Physicians

Today the HHS OIG issued a Special Fraud Alert highlighting its concerns regarding two trends involving transfers of value from laboratories to physicians that the OIG believes “present a substantial risk of fraud and abuse under the anti-kickback statute.” Specifically, the OIG details risks involved with certain compensation paid by laboratories to referring physicians and physician group practices for (1) blood specimen collection, processing, and packaging, and (2) submitting patient data to a registry or database. The Special Fraud Alert reiterates the OIG’s “longstanding concerns” when payments from laboratories to physicians exceed the fair market value of the physicians’ services or reflect the volume or value of referrals of federal health care program business.  Reed Smith is preparing an analysis of the Alert.

GAO Assesses Trends in Medicare Physical Therapy Self-Referrals

The GAO recently examined “self-referral” for outpatient physical therapy (PT) services, which the GAO defines as a provider referring patients to entities in which the provider or the provider's family members have a financial interest. According to the GAO, non-self-referred PT services per 1,000 Medicare FFS beneficiaries increased by 41% from 2004 to 2010, while the number of self-referred PT was generally flat. Expenditures associated with non-self-referred PT services also grew at a higher rate than for self-referred services. The GAO observed that these findings differ from its prior reviews of self-referrals involving advanced imaging, anatomic pathology, and intensity-modulated radiation therapy, in which the GAO found that self-referred services and expenditures grew faster than non-self-referred services and expenditures. The GAO suggests that a potential reason for this difference is that non-self-referred PT services can be performed by providers who can directly influence the amount, duration, and frequency of PT services through the Medicare written plan of care, whereas radiologists, for example, generally do not have the discretion to order more imaging services or more intense imaging procedures.

In addition, the GAO found that the relationship between provider self-referral status and PT referral patterns was mixed, and varied on the basis of referring provider specialty, Medicare beneficiary practice size, and geography. Self-referring providers in the three specialties that GAO examined (family practice, internal medicine, and orthopedic surgery) generally referred more beneficiaries for PT services on average than non-self-referring providers, but ordered fewer PT services per beneficiary compared to non-self-referring providers. The GAO also found that PT service referrals in the year a provider began to self-refer increased at a higher rate relative to non-self-referring providers of the same specialty.

In the report, “Medicare Physical Therapy: Self-Referring Providers Generally Referred More Beneficiaries but Fewer Services per Beneficiary,” the GAO concluded that regardless of referral patterns, the substantial growth in PT services raises concerns about costs for Medicare and beneficiaries. The GAO suggests that CMS’s initiative to collect additional information on beneficiary functional status on all PT claims may help CMS better assess the appropriateness of PT treatment provided by both self-referring and non-self-referring providers.

House Panel to Consider Bundled Post-Acute Care, Cancer Care Payment Parity Bills

The House Energy and Commerce Committee has scheduled a May 21 hearing entitled “Keeping the Promise: Site of Service Medicare Payment Reforms,” which will focus on two bills that seek to equalize payments between different providers:

  • The Medicare Patient Access to Cancer Treatment Act of 2014, which would establish payment parity under the Medicare program for ambulatory cancer care services furnished in the hospital outpatient department and the physician office setting.
  • The Bundling and Coordinating Post-Acute Care (BACPAC) Act of 2014, which would provide bundled payments for post-acute care services under Medicare Parts A and B.

The Committee will examine whether such proposals can save money for beneficiaries and the Medicare program without compromising quality of care.

CMS to Implement Ordering/Referring Denial Edits for HHA Certifying Physicians, Effective July 1, 2014

CMS plans to apply “Phase 2” ordering and referring denial edits to certifying physicians of Part A home health agency (HHA) services effective July 1, 2014. These edits, which currently apply only to the attending physician of an HHA, will ensure that the physician that certifies the patient’s eligibility to receive services under the Medicare home health benefit has a valid individual National Provider Identifier (NPI) and are of a specialty type eligible to order and refer the HHA items and services on the claim. The edits will deny the claim when this information is missing or invalid.

CMS Invites Comments on Sunshine Act "Open Payments" Dispute Resolution/Corrections Process

CMS is inviting comments on the Physician Payment Sunshine Act “Open Payments Program” dispute resolution and corrections process. As previously reported, the Physician Payment Sunshine Act requires pharmaceutical and medical device manufacturers and group purchasing organizations (GPOs) to register with and submit to CMS data on their financial relationships with physicians and teaching hospitals. This financial data will be made publicly available on the CMS Open Payments website. On May 5, 2014, CMS published a notice soliciting additional feedback on the dispute resolution and corrections process, under which covered recipients and physician owners or investors have an opportunity to dispute certain information regarding a payment or other transfer of value. Comments will be accepted until June 2, 2014.

CMS Issues Call for PQRS Quality Measures

On May 1, 2014, CMS will begin accepting recommendations for potential Physician Quality Reporting System (PQRS) quality measures for 2016 and future rulemaking years. Quality measure proposals also will be considered for use in other physician quality programs, including the Value Based Modifier, Physician Compare, and the Medicare Shared Savings Program.

CMS to Host Calls on Electronic Clinical Template for Home Health Orders

CMS is hosting a series of Special Open Door Forum calls to solicit feedback on data elements for a new “Suggested Electronic Clinical Template for Home Health.” Specifically, CMS seeks input on a list of clinical elements within a Suggested Electronic Clinical Template that would assist physicians when documenting the home health face-to-face encounter for Medicare purposes. Upcoming calls are scheduled for May 20, June 19, and July 16, 2014.

Will Physician Payment Sunshine Act Data Usher in a New Era of False Claims Act Litigation?

This post was authored by Scot Hasselman, Elizabeth Carder-Thompson, Katie Pawlitz and Jillian Riley.

While attention has been focused on Medicare physician payment data released by CMS yesterday, upcoming Sunshine Act data will shine a new spotlight on financial relationships between physicians and pharmaceutical and medical device companies – with potential FCA implications.

Last week marked the deadline for pharmaceutical and medical device manufacturers and group purchasing organizations (GPOs) to register with and submit aggregate 2013 payment and investment interest data to the Centers for Medicare & Medicaid Services (CMS) on certain financial relationships between themselves and physicians and teaching hospitals, as required by the Physician Payment Sunshine Act.1 In May, manufacturers and GPOs will be required to submit to CMS detailed 2013 payment data. With some exceptions, CMS will be making these data public by September 1, 2014. While the publicly available data are intended to provide more transparency for patients – to allow them to have a better understanding of the financial relationships between physicians and pharmaceutical and medical device companies – patients will certainly not be the only group interested in this public information. The Department of Health and Human Services (HHS) Office of the Inspector General (OIG), Department of Justice (DOJ), and relators’ attorneys will likely utilize these data to initiate investigations and support complaints under the federal False Claims Act (FCA). As with the recent release of the 2012 Medicare Part B Physician Fee Schedule data, members of the media will likely make inferences about certain financial relationships.

The U.S. government recovered $3.8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013.2 Fiscal 2014 looks to be a record-breaking year, with ever-increasing civil settlements by major pharmaceutical companies.3

As the reporting deadlines approach, it is worth considering an interesting, and largely unknown, potential implication of the public availability of these data: How will it affect future FCA litigation? The publically available Sunshine Act data could become relevant to FCA litigation in a variety of ways; two in particular are discussed below.

Anti-Kickback Statute Violations

The data could give rise to suspicions of violations of the federal Anti-kickback Statute (AKS). The AKS makes it a criminal offense to knowingly and willfully offer or pay remuneration to induce the referral of, or arrange for the provisions of, federal health care program business.4 In other words, the law prohibits any person or entity from giving, receiving – or offering to give or receive – anything of value in return for or to induce referrals for businesses covered by Medicare, Medicaid, or any other federally funded health care program. Violators of the AKS face imprisonment, criminal, and civil fines, as well as exclusion from federal health care programs.5

It is easy to see how publishing information regarding payments from pharmaceutical and medical device manufacturers to physicians and teaching hospitals could implicate the AKS, and by extension, the FCA. The Patient Protection and Affordable Care Act (ACA) made explicit that violations of the AKS are also violations of the FCA.6 Any payment from a pharmaceutical or medical device manufacturer to a physician who prescribes a product manufactured by the company providing the payment could be viewed as potentially inappropriate remuneration intended to influence prescribing behavior.

Off-Label Promotion

Publically available information reported as a result of the Sunshine Act may also have off-label promotion implications. Notably, reports to CMS must include the name of the drug or the type of device that forms the basis of the payment.7 Tying the payment to a particular drug or type of device could raise suspicions of off-label promotion. A pharmaceutical or medical device manufacturer that promotes its products for uses for which the product has not yet been approved by the United States Food and Drug Administration (FDA), i.e., off-label uses, is at risk of FCA liability. A false claim can arise when a manufacturer promotes a product for off-label, non-covered uses (that is, for a use that both has not been approved by FDA and is not covered by the federal health care programs). Payments going to physicians who specialize in an area that is outside the scope of a pharmaceutical or medical device’s approved indication could necessarily raise suspicions that the manufacturer is promoting the product for unapproved uses.

Potential Limits

Besides the risk of government identifying potential issues for further investigation and prosecution as a result of reported Sunshine Act data, private parties may also mine the publically available data. One substantial impediment to relators’ attorneys using Physician Sunshine Payment data in FCA litigation is the limitation that publicly available data cannot form the basis of a whistleblower claim.8 This is known as the public disclosure bar, although the effectiveness of this defense has been diminished with recent FCA amendments.

That said, the Sunshine Act data, even if not the basis of a claim, could nonetheless impact the litigation in many ways. For example, it could provide additional evidence for the government to review in reaching its decision whether to intervene in a qui tam action. Both OIG and DOJ could review the data before it is publicly available to assist in the determination that a given matter warrants intervention. Additionally, the publicly available data – beyond providing flavor in support of an FCA claim and assisting with meeting the heightened pleading standard associated with fraud allegations9 – could be a potential mine for plaintiff attorneys to locate areas of focus. Relators’ attorneys will no doubt track the data to ascertain potential problem drugs or companies about which they can then dedicate efforts to uncovering fraud and abuse in the federal health care system.

Going Forward

It remains to be seen how all of these risks will play out going forward. Courts will have to decide how these new data will fit into FCA litigation. OIG and DOJ will have to determine how much to rely on the new information. And relators’ attorneys will need to make decisions about how many resources to dedicate to mining the Sunshine Act data.

One potential consequence that we are already starting to see occur is that pharmaceutical and medical device manufacturers may halt or limit payments to physicians, and/or that physicians themselves will be reluctant to accept such payments, e.g., for research, for expenses associated with training on a device, and the like. Companies may decide to do so for a variety of reasons, including avoiding the administrative burdens associated with tracking and reporting such payments for purposes of the Sunshine Act, fear of FCA litigation, or for public relations reasons. Many physicians simply do not want their names publicized. It remains to be seen how these trends will evolve.
 

1 42 C.F.R. § 403.908(a).
2 DOJ Press Release, available at: http://www.justice.gov/opa/pr/2013/December/13-civ-1352.html. 3 See, e.g., DOJ Press Release, available at: http://www.justice.gov/opa/pr/2013/November/13-ag-1170.html.
4 42 U.S.C. § 1320a-7.
5 Id.
6 42 U.S.C. § 1320a-7b(g). Note that manufacturers may submit “assumptions documents” as part of Sunshine reporting. Although CMS stated in the preamble to the Sunshine regulations its belief that the contents of such documents “should not be made public,” it acknowledged that it could provide access to the documents during an audit or investigation by other HHS divisions, the Office of Inspector General, or the Department of Justice.
7 42 C.F.R. 403.94(c)(8).
8 31 U.S.C. § 3730(e)(4).
9 Fed. R. Civ. P. Rule 9(b).

California Weighs Further Curtailment of Physician Self-Referrals

This post was written by Paul Pitts.

California State Senator Ed Hernandez, O.D., Chair of the Senate Health Committee, has introduced legislation that would close an exception in state law that currently permits physicians to provide advanced imaging, anatomic pathology, radiation therapy, and physical therapy within their office or the office of their group practice.  Under current law, the so-called “in-office exception” permits physicians to refer patients to their own practice for these services, which are typically ancillary to the primary service of the referring physician. If this legislation is adopted, California’s self-referral law would be more restrictive than the federal physician self-referral law, commonly referred to as the Stark law. Physicians in California residing outside of rural areas would be prohibited from referring any patients, regardless of source of payment, for advanced imaging, anatomic pathology, radiation therapy, and physical therapy performed by the referring physician’s own practice. The proposed legislation, Senate Bill 1215, is scheduled for an April 21, 2014 hearing before the Senate Business, Professions and Economic Development Committee. Comments on the legislation may be sent to the committee at State Capitol, Room 2053 Sacramento, California 95814.

OIG Report: Questionable Billing for Medicare Electrodiagnostic Tests

The OIG has issued a report examining questionable Medicare billing for electrodiagnostic tests, which are used to evaluate patients who may have nerve damage and which the OIG has identified as an area vulnerable to fraud, waste, and abuse. According to the OIG, 4,901 physicians had questionable billing for Medicare electrodiagnostic tests in 2011, based on seven measures of questionable billing developed by the OIG (e.g., physicians with an unusually high percentage of electrodiagnostic test claims using modifier 59 or 25, physicians with an unusually high average number of miles between the physicians’ and beneficiaries’ locations, and physicians with an unusually high average number of electrodiagnostic test claims for the same beneficiary on the same day). These questionable claims totaled $139 million in 2011, with physicians in the New York, Los Angeles, and Houston areas having the highest total questionable billing. In response to these findings, the OIG recommend that CMS: increase its monitoring of billing for electrodiagnostic tests; provide additional guidance and education to physicians regarding electrodiagnostic tests, and take appropriate action regarding physicians identified as having inappropriate or questionable billing. 

As End of 3-Month SGR Patch Approaches, Hope Fading for Permanent Fix This Month

The clock is winding down for Congress to pass Medicare sustainable growth rate (SGR) formula reform legislation before the latest temporary spending patch expires at the end of the month and doctors again face steep cut in Medicare physician fee schedule (MPFS) payments.  While there had been high hopes for a permanent reform once key committee leaders reached agreement on a bipartisan, bicameral SGR reform bill, financing the roughly $180 billion package (including funding for various expiring Medicare provisions) has been the sticking point. When the House of Representatives approved its version of the bill on March 14 (H.R. 4015), it relied on savings attributed to repeal of the ACA individual insurance mandate to finance the bill – a proposal which drew a veto threat from the Administration and which will not be considered by the Senate. On the other hand, Senate Finance Committee Chairman Wyden has suggested offsetting the costs by capturing savings from “overseas contingency operations” funds (future war spending that is not expected to be expended) or not offsetting the costs – neither of which would pass the House.  Given this impasse, lawmakers are exploring another temporary fix, potentially through the end of 2014, with offsets for the smaller package likely to come from reductions in other Medicare spending. If Congress does not reach an agreement, MPFS payments will be subject to an approximate 24% cut on April 1, 2014 (although CMS announced in the final MPFS rule the conversion factor would be reduced by 20.1%, the Congressional Budget Office estimates that given other adjustments in the rule, the effective update to physician payments for 2014 will be a reduction of 23.7% if the rule goes into effect).

DME MACs Warn Doctors About DMEPOS Supplier "Marketing Schemes"

The four Durable Medical Equipment (DME) Medicare Administrative Contractor (DME MAC) medical directors have issued a joint open letter to physicians warning about “various marketing schemes” perpetrated by DME suppliers. Such methods cited by the DME MACs in a March 5, 2014 “Dear Physician” letter include unsolicited orders for medical equipment or supplies; advertisements that Medicare will provide the doctor with payment for patient referrals; or pre-completed medical necessity forms with instructions to just “Sign and Date Here.” The DME MACs note that doctors “are under no obligation to support or justify these supplier solicitations,” or to sign orders for items not initiated by the doctor or that were provided by the supplier without prior consultation. The letter suggests that physicians review the patient’s medical record before signing orders, and view with skepticism unsolicited orders for patients no longer in their care or who have not been seen in a long period of time. Physicians should document in the patient’s medical record the medical justification for any DME ordered. The letter also asks doctors to report suspected abuse to the OIG, which we note has long-standing concerns about DMEPOS supplier marketing practices. Particularly in light of tightened CMS requirements related to physician documentation of DMEPOS orders, the DME MACs’ open letter provides another reminder for suppliers to review their policies and practices in this area.

CMS Considering Innovative Episode-Based Payment Models for Outpatient Specialty Practitioner Services

CMS is requesting public comments on ways to structure new models for delivering and paying for Medicare outpatient specialty practitioner services. The first broad model CMS is considering is a procedural episode-based payment model, where the episode of care would be defined around an outpatient surgical or interventional procedure such as colonoscopy or cardiac catheterization. Payment under this model would include all related services furnished during the episode, such as practitioners’ services (e.g., anesthesia, pathology, and/or radiology), diagnostic tests, Medicare-covered prescription drugs, and if applicable, ambulatory surgical center or hospital outpatient department facility payments.

A second model being considered is described as a complex and chronic disease management episode-based payment model. In this case, the episode would be defined as a prolonged period of time for management of the condition by a specialist practitioner, and the bundle could contain the same comprehensive services as contemplated under the procedural interventional model. In both models, CMS is concentrating on care by specialist practitioners other than medical oncologists, since a potential oncology model is being developed on a separate track.

CMS is exploring these options under its Affordable Care Act authority to test innovative payment and service delivery models that have the potential to reduce program expenditures while preserving or enhancing the quality of care for Medicare, Medicaid and Children’s Health Insurance Program beneficiaries. 

** Note that CMS has extended the comment period from March 13, 2014 until April 10, 2014.

Bipartisan/Bicameral SGR Reform Bill Released; Offsets Not Yet Identified

The bipartisan leadership of the House Energy and Commerce Committee, House Ways & Means Committee, and Senate Finance Committee have released a consensus Medicare physician fee schedule reform bill expected to be considered by Congress before the latest temporary payment patch expires at the end of March. Highlights of H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act, include the following:

  • The bill would repeal the statutory “Sustainable Growth Rate” (SGR) provision, which has called for deep cuts in Medicare rates in recent years. Congress has routinely stepped in to override the full application of the formula – most recently replacing a 20.1% cut scheduled to go into effect January 1, 2014 with a 0.5% update for the first three months of 2014 – but H.R. 4015 would offer a permanent fix.
  • For five years (2014-2018) the bill would provide annual Medicare physician fee schedule updates of 0.5% during a transition period to a new quality-based system (thus for 2014, the temporary 0.5% update in place through March would be extended for the full year). 
  • Three current physician quality programs would be consolidated into a single value-based program called the “Merit-Based Incentive Payment System,” which starting in 2018 would tie payment to performance in four categories: quality; resource use; electronic health record meaningful use; and clinical practice improvement activities. Quality measures will be developed and updated in consultation with physicians and other stakeholders.
  • The bill would provide bonus payments to providers who receive a significant portion of their revenue from an alternative payment model (APM) or patient centered medical home (PCMH); the threshold would begin at 25% in 2018 and increase over time. 
  •  The measure includes a number of other provisions designed to improve payment accuracy for individual provider services, promote appropriate use criteria for certain advanced diagnostic imaging services, expand care coordination for individuals with chronic care, and expand the use of Medicare data for transparency and quality improvement.

A formal budget estimate for the package has not yet been released, although earlier versions of the plans have had 10-year costs of more than $121 billion over 10 years. The Committees have not yet identified what “offsets” would be used to pay for the package, but cuts impacting a broad range of health care provider types, health plans, and drug manufacturers have all been unofficially floated as options.  

CMS to Host "Physician Compare Town Hall Meeting" (Feb. 24)

On February 24, 2014, CMS is hosting a town hall meeting to discuss the future of the Physician Compare website and how to improve the information presented to consumers. For instance, CMS is seeking feedback on additional measures that might help consumers identify quality care, and measures to accurately and completely represent the various Medicare specialties. CMS is also considering including additional information such as Board Certification and other medical qualifications.  Related resources are posted on the CMS website.  CMS is accepting written comments on this topic until March 3, 2014.

SGR Reform/IPAB Connection - Will Medicare Physician Fee Schedule Fix Trigger IPAB Provider Cuts?

The Congressional Budget Office (CBO) has raised the specter that pending legislation to reform the Medicare physician fee schedule statutory update formula could increase the likelihood that the Affordable Care Act’s (ACA) Independent Payment Advisory Board (IPAB) mechanism would be triggered – potentially resulting in as much as $0.6 billion in Medicare provider cuts during the 2015-2023 period. 

As previously reported, House and Senate panels are proceeding with plans to reform the unpopular “sustainable growth rate” (SGR) formula – the statutory provision that outlines how Medicare physician fee schedule rates are updated annually.  In recent years, the formula has called for deep cuts in Medicare rates – although Congress has routinely stepped in with temporary patches to avert the full application of the formula.  Most recently, the SGR contributed to a 20.1% cut in the Medicare physician fee schedule update for 2014 – but Congress approved the Bipartisan Budget Act of 2013 in December to replace that cut with a 0.5% increase for services provided only during the first three months of 2014.  The temporary patch is intended to give lawmakers time to finalize pending bipartisan proposals to permanently repeal the SGR policy and replace it with a period of stable payment followed by reimbursement linked to quality of care.

Congressional panels tasked with drafting the SGR legislation have not yet revealed how they intend to pay for the costs of their bills.  In the absence of such offsets, the CBO has estimated that the version of the legislation approved by the House Ways and Means Committee in December (H.R. 2810) would increase spending by about $121 billion over the 2014-2023 period, while the Senate Finance Committee package (S. 1871) would increase direct spending by $150.4 billion during that period.  According to the CBO, such spending increases would result in the IPAB mechanism being triggered.

By way of background, under the ACA, the IPAB is charged with submitting detailed proposals to Congress and the President to reduce Medicare per-capita spending if projected spending growth exceeds a specified target based on inflation and growth in the economy, beginning in 2015.  IPAB’s proposals will go into effect automatically unless Congress enacts alternative legislation to achieve the required savings (with certain exceptions).  The IPAB is barred from submitting proposals that reduce Medicare payments prior to 2020 for providers that had reimbursement cuts under the ACA beyond a productivity adjustment (such as acute care hospitals, long-term care hospitals, inpatient rehabilitation facilities, and outpatient hospital services, among others), thereby potentially increasing the impact of the IPAB cuts on physicians and Medicare Advantage and Part D plan sponsors.  Note that none of the 15 members of the IPAB have actually been nominated yet, so the panel currently exists in name only (but failure to appoint a panel would not forestall the cuts – if IPAB does not submit a plan, the responsibility falls to the HHS Secretary).  

Last May, the CBO had projected that Medicare per-beneficiary spending would be below the IPAB triggers for fiscal years 2015 through 2023.  In budget estimates released last week, however, the CBO estimates that under the House SGR reform bill, the IPAB mechanism would be required to produce a $0.5 billion reduction in Medicare spending over the 2015-2023 period.  The Senate Finance SGR package would require even higher IPAB savings -- $0.6 billion over the same period. 

Congressional negotiators finalizing the SGR package are expected to eventually identify their own spending offsets, which could impact spending on a potentially broader range of health care provider types, health plans, and drug manufacturers, but minimize the potential that the IPAB makes those decisions.  The question now – if SGR reform actually proceeds -- is whether it will be Congress or the IPAB panel that identifies the offsetting savings.  Either way, however, it appears that SGR reform could be a good news/bad news proposition, with long-overdue SGR reforms adopted, but at a currently-unknown price. 

FDA Provides Direction on "Dear Doctor" Letters

This post was written by Jillian W. Riley.

On January 16, 2014, the Food and Drug Administration (FDA) issued a final guidance document for industry providing specific recommendations on the content and format of Dear Health Care Provider (DHCP or “Dear Doctor”) letters. DHCP letters are an important means of communicating new information to the health care provider community about a product that is already on the market. The guidance provides insight into (1) when to send a DHCP letter, (2) what information should be included, (3) how to organize the letter, and (4) how to format the letter. The recent guidance finalizes a draft guidance FDA published in November of 2010. 

The guidance stresses the importance of collaborating with FDA when crafting DHCP letters to ensure that a DHCP letter is appropriate under the circumstances, that the target audience has been identified, and that the message is clearly conveyed. Additionally, the guidance provides template examples to aid industry in drafting a clear and effective DHCP letter.

CMS Loosens Restrictions on Disclosure of Physician-Specific Medicare Payment Data

As part of its ongoing efforts to make Medicare data more transparent and accessible, CMS has ended its blanket restriction on disclosure of information about Medicare payments to individual physicians when requested under the Freedom of Information Act (FOIA).   Instead, CMS will now consider on a case-by-case basis whether exemption 6 of FOIA, which requires CMS to balance the privacy interest of individual physicians against the public interest in disclosure of such information, applies to a given request for information pertaining to Medicare payments to individual physicians.  CMS notes that since “the outcome of the balancing test will depend on the circumstances, the outcomes of these analyses may vary depending on the facts of each case.”  In a blog post, CMS contends that potential benefits associated with release of such information could include:

  • Allowing providers to collaborate on improved health care management and delivery at lower costs;
  • Giving consumers broader, more reliable measures of provider quality and performance to drive innovation and competition while informing consumer choice; and
  • Enabling journalists and others to identify waste, fraud, abuse, and unsafe practices.

In addition to reiterating its commitment to protecting the privacy of Medicare beneficiaries, CMS states that it intends “to consider the importance of protecting physicians’ privacy and ensuring the accuracy of any data released as well as appropriate protections to limit potential misuse of the information.” The official version of the notice will be published on January 17. 

House Panel to Examine Medicare "Extenders" Policy

On January 9, 2014, the House Energy and Commerce Health Subcommittee is holding a hearing on “The Extenders Policies: What Are They and How Should They Continue Under a Permanent SGR (Sustainable Growth Rate) Repeal Landscape?” The so-called extenders are measures that secure the continuation of various temporary Medicare payment and policy revisions impacting hospitals, physicians, therapy providers, and certain other provider types that are routinely extended by Congress (most recently as part of the Pathway for SGR Reform Act).

Older Entries

November 25, 2013 — CMS Call Regarding the Medicare Physician Value-Based Payment Modifier (Dec. 3).

November 12, 2013 — CMS "Phase 2" Ordering/Referral Denial Edits to Go Live on Jan. 6, 2014

October 30, 2013 — Nominees Invited for PCORI Physician Representative

October 30, 2013 — GAO Reports Jump in Medicare EHR Payments

October 30, 2013 — CMS Warns of Delay in Final CY 2014 Medicare Rules

October 30, 2013 — OIG Highlights Volume of Spinal Surgeries Tied to Physician-Owned Distributors (PODs)

September 16, 2013 — GAO Examines Self-Referral of Anatomic Pathology, IMRT Services

September 12, 2013 — CMS Call on 2015 Value-Based Payment Modifier (Sept. 24)

September 10, 2013 — No CMS DME Face-to-Face Rule Enforcement Before 2014

August 27, 2013 — CMS Call on Draft Electronic Clinical Template for Lower Limb Prostheses (Sept. 11)

August 8, 2013 — CMS Invites Comments on Release of Physician-Specific Payment Data

August 6, 2013 — Bill Introduced to Narrow Stark Exception for In-Office Services

July 29, 2013 — In Advance of Sunshine Act Reporting, CMS Releases Physician & Industry Resources

June 28, 2013 — CMS Delays DME Face-to-Face Requirement until Oct. 1, 2013

June 25, 2013 — CMS Call on PQRS Reporting and the Value-based Payment Modifier (July 31)

June 5, 2013 — House SGR Reform Efforts Continue - Hearing Today

April 30, 2013 — CMS Delays Phase 2 Ordering and Referring Denial Edits

March 28, 2013 — MedPAC's March 2013 Report to Congress

March 13, 2013 — Implementation of Medicare Ordering/Referring Provider Edits (March 20 Call)

February 11, 2013 — House Panel Hearing to Focus on Physician Payment/SGR Reform (Feb. 14)

February 1, 2013 — CMS Releases Physician Payments Sunshine Act Final Rule

January 30, 2013 — Senate HELP Committee Hold Hearings on Mental Health, Primary Care

January 30, 2013 — GAO Offers Recommendations for Medicare Physician Value Modifier Program

January 29, 2013 — CMS Issues Revised CMS-855S, 855O Medicare Enrollment Applications

January 14, 2013 — OIG Finds DMEPOS Competitive Bidding Not Spurring Suppliers to Solicit Specific Brands/Modes of Delivery

November 16, 2012 — CMS Issues Final 2013 Medicare Physician Fee Schedule Rule, Including Other Part B Policy Updates

November 16, 2012 — CMS Final Rule Boosts Medicaid Primary Care Payments, Vaccine Administration Fees

November 14, 2012 — CMS Adopts Face-to-Face Encounter Requirement for Medicare DME Orders

November 13, 2012 — GAO Report Examines Medicare Costs From Self-Referrals of Advanced Imaging Services

September 25, 2012 — CMS Call: Manual Medical Review of Therapy Claims (Sept. 26)

September 24, 2012 — CMS Call: Preparing Physicians for ICD-10 Implementation (Oct. 25)

July 31, 2012 — Congressional Health Policy Hearings

July 25, 2012 — CMS Call on Medicare Physician Value-Based Payment Modifier (Aug. 1)

July 19, 2012 — CMS Proposes Update to 2013 Medicare Physician Rates, Other Part B Policies

July 19, 2012 — CMS Answers Questions on 3-Day Payment Window Impact on Physician Offices

July 19, 2012 — July Congressional Hearings

July 6, 2012 — Congressional Panels Schedule Hearings on ACA Issues (Tax Policy, Physician/Economic Impact)

June 27, 2012 — OIG Assesses Extent of Physician EHR Use

June 18, 2012 — CMS Announces Comprehensive Primary Care (CPC) Initiative Participants

May 14, 2012 — Three OIG Reports Review Medicare E/M Services

May 14, 2012 — CMS Publishes Two Home & Community-Based Services (HCBS) Rules

April 18, 2012 — New Hampshire Quietly Considers Prohibition Of Physician Relationships With Medical Device Companies

February 13, 2012 — OIG Cautions Physicians on Reassigning Medicare Billing Rights

February 13, 2012 — OIG Highlights Lack of Data Regarding Physicians Opting Out of Medicare

February 10, 2012 — February Congressional Health Policy Hearings

January 4, 2012 — CMS Delays Application of Imaging MPPR Policy to Physicians in Same Group Practice

December 1, 2011 — Reed Smith Analysis and Overview of the Medicare Shared Savings Program for Accountable Care Organizations

October 20, 2011 — CMS Releases Final Medicare Shared Savings Program/ACO Rule

October 14, 2011 — Mandatory Use of Revised ABN Set for January 1, 2012

October 14, 2011 — GAO Examines Part D "Doctor Shopping"

October 11, 2011 — CMS Call on ACA Comprehensive Primary Care Initiative (Oct. 13)

September 30, 2011 — MedPAC Offers Medicare SGR Proposal, With Offsetting Medicare Cuts

September 29, 2011 — CMS Invites Applications for New Comprehensive Primary Care Initiative

September 27, 2011 — OIG Reviews Place-of-Service Coding for Physician Services

August 31, 2011 — CMS Seeks Applicants for ACA Bundled Payment Initiative

August 16, 2011 — GAO Assesses Challenges with CMS Physician Feedback Program

August 9, 2011 — CMS "Provider Compliance Group Outreach Calls" to Focus on Medicare Vulnerabilities (Aug. 23-25, 2011)

August 9, 2011 — CMS Call on Medicare and Medicaid EHR Incentive Programs: Understanding Meaningful Use (Aug 18, 2011)

July 16, 2011 — CMS Hosts Webinar on Physician Culture Change for Improving ACO Cost and Quality Outcomes (July 19)

July 13, 2011 — CMS Call "The ABCs of the Initial Preventive Physical Examination and Annual Wellness Visit" (July 21)

July 13, 2011 — CMS Call: ICD-10 Implementation Strategies for Physicians (Aug. 3)

June 14, 2011 — Lawmakers Seek Investigation of Physician Owned Distributors (PODs) for Medical Devices

May 31, 2011 — Federal Agencies Outline Regulatory Review Plans

May 31, 2011 — OIG Report on Physician Therapy Services Provided Under the Home Health PPS

May 18, 2011 — CMS Seeks Comments on Advance Payments to ACOs, Announces "Pioneer" ACO Model and ACO Training Sessions

April 21, 2011 — Summary and Analysis of Medicare's Shared Savings Program for Accountable Care Organizations

April 13, 2011 — Official Version of CMS Accountable Care Organization (ACO) Rule Now Available

April 12, 2011 — Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations

April 12, 2011 — CMS Indefinitely Postpones Signature Requirement for Clinical Diagnostic Laboratory Test Orders; Will Seek Rule Change

April 6, 2011 — CMS Call on Accountable Care Organization Rule (April 7)

April 1, 2011 — CMS Proposes Long-Awaited Accountable Care Organization (ACO) Regulations

March 29, 2011 — CMS Establishes $505 Provider/Supplier Application Fee for 2011

March 29, 2011 — CMS Hosts Forum on Advanced Diagnostic Imaging (ADI) Accreditation

March 19, 2011 — CMS Calls: Provider Compliance Group National Outreach/OIG Reports (March 22-24)

March 7, 2011 — GAO Reports on Duplications in HHS and Other Federal Programs

February 18, 2011 — CMS Final Rule Expands Medicare/Medicaid/CHIP Provider and Supplier Screening Requirements Under Affordable Care Act Authority

January 13, 2011 — CMS Withdraws Advance Care Planning Rule

January 10, 2011 — MedPAC to Examine Medicare Provider Payment Adequacy (Jan. 13-14)

November 15, 2010 — Senators Seek Accelerated HHS Action on Physician Payment "Sunshine Act" Provisions

September 30, 2010 — Questionable Billing for Hospice Physician Services

September 17, 2010 — MedPAC Policy Meeting

August 31, 2010 — CMS Finalizes New DMEPOS Supplier Standards

August 31, 2010 — Place-of-Service Coding for Physician Services

July 29, 2010 — Enrollment Guidance for Physicians with Infrequent Medicare Reimbursement

July 29, 2010 — CMS Calls on Medicare/Medicaid EHR Incentive Programs (Aug. 10 - 12, 2010)

July 28, 2010 — Analysis of Improper FY 2009 Medicare Payments

July 10, 2010 — CMS Delays PECOS Enrollment Requirement for Ordering Physicians

June 15, 2010 — CMS Call on the Medicare Shared Savings Program/Accountable Care Organizations (June 24)

June 8, 2010 — CMS Transmittal on Physician Supervision Requirements

June 8, 2010 — Advance Primary Care (Medical Home) Demonstration

June 4, 2010 — CMS Calls on Medicare Provider/Supplier Vulnerabilities (June 7, 8, & 9)

May 27, 2010 — Rural Physician Training Grant Program

May 27, 2010 — Credentialing and Privileging of Telemedicine Physicians and Practitioners

May 13, 2010 — Medicare/Medicaid Provider and Supplier Enrollment, Ordering and Referring, and Documentation Requirements, and Changes in Provider Agreements

April 16, 2010 — CMS Announces Series of "RAC 101" Calls

February 17, 2010 — PECOS Enrollment Requirement for Ordering Physicians Delayed Until January 3, 2011

February 11, 2010 — CMS Releases NPI Files for Referring Physicians

February 4, 2010 — Medicare Provider & Supplier Enrollment Open Door Forum (Feb. 17)

January 28, 2010 — National Practitioner Data Bank Adverse Action Reporting Final Rule

December 4, 2009 — CMS Delays Certain Requirements for Ordering Provider on DMEPOS and Other Part B Claims