Congressional Hearings Focus on Health Policy Issues

A number of Congressional panels have scheduled or held recent hearings on health policy issues, including the following:

  • On November 30, 2017, the House Energy & Commerce Committee is holding a hearing on implementation of the 21st Century Cures Act (Cures Act), featuring testimony by National Institutes of Health Director Francis Collins, M.D. and Food and Drug Administration Commissioner Scott Gottlieb, M.D. The panel previously held a hearing on “MACRA and Alternative Payment Models: Developing Options for Value-based Care.”
  • The Senate Health, Education, Labor, and Pensions (HELP) Committee held hearings on gene editing technology, the Surgeon General’s perspective on encouraging healthy communities, and health information technology. On November 29, the HELP Committee is considering President Trump’s nomination of Alex Azar to be Secretary of Health and Human Services. The panel has also scheduled a November 30 hearing on “The Front Lines of the Opioid Crisis: Perspectives from States, Communities, and Providers,” along with a December 7 hearing on implementation of the Cures Act.
  • The House Oversight and Government Reform Committee held a hearing on combatting the opioid crisis.

House Approves IPAB Repeal Legislation

The House of Representatives has voted 307 – 111 to approve HR 849, Protecting Seniors’ Access to Medicare Act, to repeal the Independent Payment Advisory Board (IPAB).  Under the ACA, the IPAB must submit Medicare spending plans to Congress if projected spending growth exceeds specified targets.  IPAB proposals go into effect automatically unless Congress enacts alternative legislation achieving required savings.  While IPAB members have not been appointed and the spending trigger has not been met to date, the Congressional Budget Office currently projects that the IPAB authority will be invoked in 2023, 2025, and 2027.  The bill now moves to the Senate Finance Committee.


President Signs Metabolic Syndrome Support Legislation, Emergency Medication Act

President Trump has signed into law S 920, the National Clinical Care Commission Act, which establishes a national clinical care commission to improve coordination of federal programs that support care for people with complex metabolic syndromes and related autoimmune disorders.

In addition, President Trump signed HR 304, Protecting Patient Access to Emergency Medications Act of 2017.  The measure clarifies that emergency medical services professionals may administer controlled substances pursuant to standing or verbal orders in certain circumstances.

HHS Announces New Appeals Settlement Initiatives

The HHS Departmental Appeals Board (DAB) is inviting the public to submit recommendations for precedential Medicare Appeals Council (Council) decisions that will be binding on all CMS, HHS, and Social Security Administration components that adjudicate matters under CMS jurisdiction. The designation of precedential decisions was authorized by regulations adopted earlier this year; the DAB will publish notice of any precedential designations in the Federal Register.

CMS also announced that it will provide a low-volume appeals (LVA) settlement option for certain providers and suppliers with appeals pending at the Office of Medicare Hearings and Appeals (OMHA) and the Council. This option will be available for appellants with fewer than 500 total Medicare Part A or Part B claim appeals pending at OMHA and the Council as of November 3, 2017 with a total billed amount of $9,000 or less per appeal, subject to certain other conditions.  Eligible appeals will be settled at 62% of the net allowed amount.  In addition, OMHA intends to expand its Settlement Conference Facilitation (SCF) alternative dispute resolution process for certain appellants that are not eligible for the LVA option.

OIG: Medicare Program Integrity at the Top of HHS Management Challenges

The OIG’s latest compilation of top HHS management and performance challenges flags vulnerabilities in key HHS health and social services programs, including includes the following:

  1. Ensuring Program Integrity in Medicare (addressing improper payments, fraud, payment policies, health care reforms, and health information technology).
  2. Ensuring Program Integrity in Medicaid (including compliance with fiscal controls, fraud prevention, and quality of Medicaid data).
  3. Curbing the Opioid Epidemic (addressing inappropriate prescribing of opioids, fraud and diversion, access to treatment, and misuse of grant funds).
  4. Improving Care for Vulnerable Populations (addressing substandard nursing home care, hospice care and community-based services problems, and safe services for children).
  5. Ensuring Integrity in Managed Care and Other Programs Delivered through Private Insurers (including combating fraud, waste, and abuse by health care providers; ensuring compliance by managed care and Part D sponsors; and overseeing the health insurance marketplace).
  6. Improving Financial and Administrative Management and Reducing Improper Payments (addressing weaknesses in financial management systems, Medicare trust fund issues, improper payments, contracts management, and Digital Accountability and Transparency Act implementation).
  7. Protecting the Integrity of Public Health and Human Services Grants (ensuring effective Department grants management and grantee program integrity).
  8. Ensuring the Safety of Food, Drugs, and Medical Devices (including overseeing the drug and medical device supply chain).
  9. Ensuring Program Integrity and Quality in Programs Serving American Indian and Alaska Native Populations (improving Indian Health Service quality of care, management, and infrastructure; combating fraud; and ensuring adequate internal controls for grant programs).
  10. Protecting HHS Data, Systems, and Beneficiaries from Cybersecurity Threats (guarding HHS’s data and systems and fostering a culture of cybersecurity beyond HHS).

OIG urges HHS to “be mindful of these challenges and opportunities to address them as it undertakes its efforts to reimagine HHS as part of the Federal Government’s comprehensive plan to reform Government.”

CMS Proposes Changes to Medicare Advantage, Part D Programs for 2019

CMS has issued a proposed rule to update the Medicare Advantage (MA) program and Part D prescription drug benefit rules for contract year 2019.  The proposed rule would, among many other things:

  • Implement a Comprehensive Addiction and Recovery Act (CARA) provision that allows Part D plan sponsors to establish drug management programs that limit at-risk beneficiaries’ access to coverage of opioids to selected prescribers and/or network pharmacies (subject to various limitations);
  • Eliminate the “meaningful difference” requirement that limits the variety of plans an MA organization can offer in the same county;
  • Modify Part C and Part D Star Ratings rules;
  • Clarify the any willing pharmacy standard, including the definitions of mail-order and retail pharmacies;
  • Provide for a one month Part D drug transition supply in both the long term care and outpatient settings;
  • Update the electronic prescribing standards used by Part D drug plans;
  • Authorize CMS to change the data and methodology used to establish maximum out-of-pocket limits;
  • Modify Part D tiering exception policy;
  • Expedite generic substitutions in certain situations;
  • Encourage the use of follow-on biological products for certain beneficiaries;
  • Revise requirements related to the review of marketing materials;
  • Modify appeals policies;
  • Eliminate the prescriber and provider enrollment requirement and establish a “preclusion list” for program integrity risk screening; and
  • Streamline various reporting requirements.

CMS also solicits comments on how it could most effectively require Part D drug plan sponsors to pass through at the point of sale a share of the manufacturer rebates they receive — and do so without increasing government costs and without reducing manufacturer payments under the coverage gap discount program. In addition, CMS requests comments on how it could update requirements governing the determination of negotiated prices to ensure that the reported price at the point of sale includes all pharmacy price concessions.  CMS discusses in detail the options it is considering, and requests public input on a variety of operational and policy considerations.

CMS will accept comments on the proposed rule until January 16, 2018.

CMS Modifies Medicare Physician Quality Payment Program Rules for 2018

CMS has issued a final rule with comment period making changes to the Quality Payment Program (QPP) for 2018, the second performance year for the reformed physician payment framework mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS is continuing its “slow ramp-up” of the QPP by building on the transition policies established for 2017. In the 2018 rule, CMS intends to encourage successful QPP participation under either the Merit-based Incentive Payment System (MIPS) or the Advanced Alternative Payment Model (APM) track while reducing burdens on clinicians.

With regard to MIPS participation, the final rule:

  • Reweighted the performance category scoring for 2018 as follows: Quality 50%, Cost 10%, Improvement Activities 15%, and Advancing Care Information 25%.
  • Increased the performance threshold to 15 points in year two (up from 3 points in 2017).
  • Established a Virtual Groups participation option under which solo practitioners and groups of 10 or fewer eligible clinicians that exceed the low-volume threshold may come together “virtually” to participate in MIPS for a one-year performance period.
  • Increased the low-volume threshold to less than or equal to $90,000 in Part B allowed charges or less than or equal to 200 Part B beneficiaries (up from $30,000 charges/200 beneficiaries) in order to exclude more practices.
  • Provided bonus points for: the treatment of complex patients; use of only the 2015 Edition Certified Electronic Health Record Technology; and clinicians and small practices that submit data on at least one performance category in an applicable performance period.
  • Implemented an optional facility-based scoring mechanism for facility-based clinicians, beginning with the 2019 performance year.
  • Created hardship exemptions in the Advancing Care Information performance category.
  • Added a new improvement activity for clinicians who attest to consulting specified applicable appropriate use criteria (AUC) through a qualified clinical decision support mechanism for outpatient advanced diagnostic imaging services ordered (applicable to clinicians who are early adopters of the Medicare AUC program in the 2018 performance year and for clinicians who begin the Medicare AUC program in future years as specified in separate regulations).
  • Promulgated an interim final rule with comment period to address extreme and uncontrollable circumstances MIPS eligible clinicians may face as a result of widespread catastrophic events affecting a region or locale in CY 2017, such as Hurricanes Irma, Harvey and Maria.

CMS also adopted a number of policies affecting APM participants.  For instance, the final rule: Continue Reading

Medicare Home Health Payments to Drop by $80 Million under Final 2018 Rule

The final CMS calendar year (CY) 2018 Medicare home health prospective payment system (HH PPS) rule cuts Medicare payments by 0.4% ($80 million) in 2018 compared to 2017 levels, but CMS did not adopt a more sweeping case mix methodology reform proposal that would have reduced 2019 payments by almost $1 billion.

Under the final rule, CMS applied a 1% update percentage as mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) for those home health agencies (HHAs) that report required quality data (otherwise the update is decreased by 2 percentage points). This positive update was more than offset by other rate adjustments, however, including a 0.5% reduction due to the sunset of the rural add-on provision and a 0.9% reduction for nominal case-mix coding intensity growth (the last year of a three-year phase in period).  The final CY 2018 national, standardized 60-day episode payment rate is $3,039.64, compared to $2,989.97 for 2017; the rate for an HHA that does not submit required quality data is $2,979.45.

As part of the Administration’s recent “Patients Over Paperwork” Initiative, the final rule removed 235 data elements from 33 Outcome and Assessment Information Set (OASIS) assessment instrument items, effective January 1, 2019.  CMS also finalized various Home Health Quality Reporting Program refinements involving reconsideration and exception requests and extensions of reporting timeframes.  CMS estimates that these provisions will decrease costs for all HHAs by more than $145 million annually.  The final rule also, among other things:  recalibrated HH PPS case-mix weights; updated the CY 2018 home health wage index using FY 2014 hospital cost report data; and refined requirements under the Home Health Value-Based Purchasing Model.

As previously reported, CMS had considered adopting a new Home Health Groupings Model to focus on clinical characteristics and other patient information rather than the number of therapy visits provided to determine payment, beginning in 2019.  CMS did not finalize this proposal, however, in order to take into further consideration public comments regarding the proposal.  CMS intends “to further engage with stakeholders to move towards a system that shifts the focus from volume of services to a more patient-centered model.”

CMS Finalizes Medicare Clinical Lab Fee Schedule for 2018

CMS has issued final 2018 Medicare clinical laboratory fee schedule (CLFS) rates, which are based on private payer data as mandated by the Protecting Access to Medicare Act of 2014 (PAMA).  A companion document explains changes the agency made in response to public comments on the September 2017 preliminary rates and clarifying its methodology.  In addition, CMS posted its final determinations regarding the payment basis (crosswalk or gapfill) for new and existing laboratory HCPCS codes for which CMS received no applicable payment information to calculate a private payor rate-based CLFS payment amount.

CMS Releases 2018 HCPCS Update

The 2018 update to the alphanumeric Healthcare Common Procedure Coding System (HCPCS) files is now available on the CMS website.  The files include the Level II alphanumeric HCPCS procedure and modifier codes, their long and short descriptions, and information on Medicare coverage and pricing.  CMS also has begun posting application summaries for HCPCS applications discussed at the 2017 public meetings, including the rationale for final coding decisions.  The deadline for applications for the 2019 HCPCS cycle is January 4, 2018.

HHS Secretary Nominee Azar to Face Senate HELP Committee after Thanksgiving

President Trump has nominated Alex Azar to be Secretary of Health and Human Services, which would fill the vacancy created when Tom Price, MD resigned the post in September.  Mr. Azar, an attorney who previously served in senior HHS positions and as a pharmaceutical industry executive, is scheduled to appear before the Senate Health, Education, Labor and Pensions (HELP) Committee on November 29, 2017.  The Senate Finance Committee, which will actually vote on the nomination, has not yet announced a date for its hearing. 

CMS Finalizes Medicare Physician Fee Schedule Update for 2018

Delays AUC Requirement until 2020, Cuts Off-Campus Hospital Department Payments

The Centers for Medicare & Medicaid Services (CMS) has published its final Medicare physician fee schedule (PFS) rule for CY 2018. In addition to updating rates for 2018, the rule includes important policy changes, including an additional delay in implementation of appropriate use criteria (AUC) for advanced diagnostic imaging services and another reimbursement cut for off-campus hospital outpatient departments (although not as deep as proposed).  Highlights of the final rule include the following: Continue Reading

CMS Finalizes Medicare OPPS, ASC Rates and Policies for CY 2018

CMS has published a final rule updating Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year (CY) 2018. In addition to rate updates, notable policy changes in the rule include a deep ($1.6 billion) OPPS reimbursement cut for drugs obtained through the 340B drug discount program, expanded OPPS drug administration packaging, and removal of total knee replacement procedures from the “inpatient only” list.

With regard to OPPS payments, the final rule provides a 1.35% update for 2018, reflecting a 2.7% market basket increase that is partly offset by both a 0.75 percentage point reduction and a 0.6% multi-factor productivity (MFP) reduction. The update for hospitals that fail to meet quality reporting requirements is reduced by 2.0% points.  Payment changes for individual procedures and ambulatory payment classifications (APCs) vary.  Under the new 340B discount drug policy CMS will reduce OPPS payment for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B drug discount program from ASP plus 6% to ASP minus 22.5% (rural sole community hospitals, children’s hospitals, and certain cancer hospitals are excluded from this policy). CMS is redistributing the $1.6 billion in savings from this change by increasing by 3.2% conversion factor for non-drug items and services for 2018.  CMS may revisit how the 340B drug savings should be applied in the future.  Note that various hospitals and hospital associations have filed a lawsuit seeking to block this policy.

Other major provisions of the final rule include the following:   Continue Reading

DOJ Settles Second 60-Day Overpayment Case, Highlights Broader Reach of the FCA’s Reverse False Claims Provision

A recent False Claims Act (“FCA”) settlement involving an allegedly overpaid Florida medical practice reaffirms the interplay between the 60-Day Overpayment Statute and the FCA, but also highlights the importance for all providers and suppliers to report and return overpayments, regardless of the source of federal funds.

According to the Department of Justice (“DOJ”), First Coast Cardiovascular Institute (“FCCI”) allowed credit balances from various federal health care programs to accrue despite multiple internal warnings that the balances should be paid back. DOJ alleged that FCCI’s failure to return those credit balances within 60 days violated the FCA. DOJ’s comments are notable, however, because the credit balances not only involved Medicare and Medicaid, but also TRICARE and the Department of Veterans Affairs, both of which are outside the scope of the 60-Day Overpayment Statute. DOJ and FCCI resolved the alleged $175,000 in unreturned overpayments for a $448,821.58 price. Continue Reading

CMS Boosting Medicare ESRD Facility Payments by 0.5% for 2018

The Centers for Medicare & Medicaid Services (CMS) has issued its final Medicare end-stage renal disease (ESRD) prospective payment system (PPS) rates and policies for calendar year 2018. CMS projects that the final rule will increase total Medicare payments to all ESRD facilities by 0.5% in 2018 (lower than the 0.8% increase forecast in the proposed rule); payments to hospital-based ESRD facilities are expected to rise by 0.7% in 2018, while payments will increase by 0.5% for freestanding facilities.

The final update to the ESRD base rate is 0.3%, resulting from a 1.9% market basket increase that is partially offset by a 1% reduction under the Protecting Access to Medicare Act (PAMA) and a 0.6% multifactor productivity reduction. After the application of the wage index budget-neutrality adjustment, the final base rate is $232.37, compared to the 2017 base rate of $231.55.

The final rule also:

  • Updates outlier fixed dollar loss amounts and Medicare Allowable Payments;
  • Allows the use of any pricing methodology under section 1847A of the Social Security Act when average sales price (ASP) data is not available to determine the cost of drugs and biologicals for outlier payment purposes;
  • Sets the acute kidney injury (AKI) dialysis rate to equal the proposed ESRD PPS base rate ($232.37); and
  • Updates ESRD Quality Incentive Program (QIP) measures for payment year (PY) 2021, revises the ESRD QIP Extraordinary Circumstances Exception policy, and simplifies the Performance Score Certificate (beginning in PY 2019).

Final Medicare Provider Payment Rules in the Pipeline

The White House Office of Management and Budget (OMB) is reviewing several CMS rules that would finalize CY 2018 Medicare payment policies for various types of providers and suppliers. Specifically, OMB is reviewing final rules to update the hospital outpatient and ambulatory surgical center PPS; the Medicare physician fee schedule and physician Quality Payment Program; the home health PPS; and the end stage renal disease PPS.  These rules should be released late October or early November.

OIG Wants CMS to Track Medicare Costs from Device Failures

A recent Office of Inspector General (OIG) report suggests that the lack of medical device-specific information on Medicare claim forms complicates CMS efforts to identify and track Medicare costs related to the replacement of recalled or prematurely failed medical devices. The OIG also believes the lack of device information on claims data “impedes the ability of FDA and CMS to identify poorly performing devices as early as possible” and interferes with the provision of timely follow-up care. The OIG recommends that CMS: Continue Reading

CMS to Help SNFs Prepare for Value-Based Purchasing Program Rules (Nov. 16)

A November 16, 2017 CMS call will focus on how the Medicare SNF Value-Based Purchasing Program will affect Medicare’s payments to SNFs beginning October 1, 2018. Among other things, the call will cover how CMS will translate SNF performance scores into value-based incentive payments and policies included in the FY 2018 SNF PPS final rule.

Learn What is New Regarding the Medicare Hospital “Primarily Engaged” Requirement (Nov. 2)

CMS is hosting an educational call November 2, 2017 on new State Operations Manual guidance that discusses the Medicare definition of a hospital, including the requirement for hospitals to be primarily engaged in providing care to inpatients. Registration is required to participate.

New Laws Extend IVIG Demonstration and Expiring Public Health Programs, Promote Early Hearing Detection and Intervention

President Trump has signed into law a bill (P.L. 115-63) that extends the Medicare Intravenous Immune Globulin (IVIG) Demonstration through December 31, 2020. The law also extends through the first quarter of FY2018 (1) the Teaching Health Center Graduate Medical Education Program, and (2) the Special Diabetes Program for Indians.

The President also signed S 652, the Early Hearing Detection and Intervention Act of 2017. The new law reauthorizes and modifies HHS programs for early detection, diagnosis, and treatment regarding deaf and hard-of-hearing newborns, infants, and young children.