CMS Adopts 2019 ACA Health Plan Policies

CMS has released its final rule updating policies applying to qualified health plans (QHPs) offered on Affordable Care Act (ACA) Exchanges for 2019.  In the final rule, CMS stresses its goal of providing states greater flexibility and control over their insurance markets, particularly in the areas of: selection of essential health benefits benchmark plans; the operation and establishment of Exchanges, including Small Business Health Options Program Exchanges; rate review requirements; the process for receiving adjustments to the individual market medical loss ratio standard; and certification of qualified health plans (QHPs). The rule also finalizes policies pertaining to, among other things:  risk adjustment and risk adjustment data validation programs; cost-sharing parameters; user fees; special enrollment periods; and program integrity safeguards.  The final rule is scheduled to be published on April 17, 2018. 

In related news, CMS also released:

  • The 2019 Letter to Issuers in the Federally-facilitated Exchanges (FFE), which provides operational and technical guidance to issuers seeking to offer QHPs in the FFE for plan years beginning in 2019.
  • Guidance expanding eligibility for the shared responsibility payment hardship exemption to individuals living in counties with no issuers or only one issuer, counties where all plans include abortion as a benefit contrary to one’s belief, or because of the need for specialty care.
  • A bulletin extending for an additional year a current transitional policy for non-grandfathered coverage in the small group and individual health insurance markets.

New CMS Guidance for ADLT Lab Tests and ADLT Application Released

CMS is still rolling out policies and procedures to fully implement the major clinical laboratory payment reforms mandated by the Protecting Access to Medicare Act of 2014 (PAMA). As previously reported, the June 23, 2016 final PAMA rule established the framework for basing Medicare clinical laboratory fee schedule (CLFS) payment on private insurance payment amounts, with associated data reporting requirements. The rule also defined a subcategory of clinical diagnostic laboratory tests — Advanced Diagnostic Laboratory Tests (ADLT) – with separate reporting and payment policies, including payment at actual list charge for three quarters.

On March 23, 2018, CMS released the ADLT application and detailed guidance for laboratories on the process for requesting ADLT status, including the quarterly schedule for review of ADLT applications. In addition, CMS has posted a new application for requesting a HCPCS code for an ADLT or clinical diagnostic laboratory tests (CDLT) that is not an ADLT. Finally, CMS has released a form that a laboratory or manufacturer must use to notify CMS of any CDLT (that is not an ADLT) that has been cleared or approved by the Food and Drug Administration — whether it has already been assigned a unique HCPCS code or has not yet been assigned a unique HCPCS code.

New HHS Advisors Appointed to Develop Strategy on Drug Pricing, Opioid Policy

HHS Secretary Alex Azar has appointed two advisors to help advance Department strategy to address prescription drug pricing and the opioid crisis. Daniel M. Best, the new Senior Advisor to the Secretary for Drug Pricing Reform, is charged with leading the HHS initiative to lower the cost of prescription drugs. He recently served as Corporate Vice President of Industry Relations for CVS Health’s Medicare Part D business. In addition, Brett Giroir, M.D. has been named Senior Advisor to the Secretary for Mental Health and Opioid Policy, a role he will fill while continuing to serve as Assistant Secretary for Health. Secretary Azar also intends to name special advisors for healthcare payment reform and value-based transformation of the healthcare system in the coming weeks.

Public Meetings to Address 2019 Medicare Clinical Lab Tests and Payment

On June 25, 2018, CMS is holding its annual public meeting to consider the appropriate basis (crosswalking or gapfilling) for establishing payment amounts for new or substantially revised HCPCS codes being considered for payment under the 2019 Medicare clinical laboratory fee schedule (CLFS). The meeting will also address reconsideration requests regarding final determinations made last year on new test codes. CMS has posted the proposed new and reconsidered codes to be considered at the annual public meeting. In addition, the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests has scheduled public meetings on July 16-17, 2018 to make recommendations regarding the test codes presented at the CLFS public meeting.

CMS Trims List of DMEPOS Subject to Prior Authorization Due to “Unnecessary Utilization”

CMS is removing the Medicare prior authorization (PA) requirement for several types of medical equipment because the items no longer meet the standard set forth in a 2015 final rule. Under these regulations, CMS requires PA for certain items of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that the agency characterizes as “frequently subject to unnecessary utilization” if the items meet a certain cost threshold. While the cost threshold was originally set at an average purchase fee of at least $1,000 or an average monthly rental fee of at least $100, this amount is adjusted annually for inflation. After applying inflation adjustments for 2017 and 2018, the new thresholds are $1,018/purchase and $102/monthly rental. Four items on the current “Master List of Items Frequently Subject to Unnecessary Utilization” no longer meet these cost thresholds:

  • E0260 Hospital bed semi-electric (head and foot adjustment) with any type side rails with mattress
  • E0601 Continuous Airway Pressure (CPAP) Device
  • E1390 Oxygen Concentrator
  • K0004 High strength, lightweight wheelchair

CMS therefore is removing these items from the Master List – and associated PA requirements — effective April 30, 2018.

CMS Gives Providers More Time to Consider Low Volume Appeals (LVA) Initiative Participation

CMS has extended until June 8, 2018 the deadline to submit an expression of interest (EOI) for the Low Volume Appeals Initiative. As previously reported, the LVA option is available for providers, physicians, and suppliers with fewer than 500 total Medicare Part A or Part B claim appeals pending at the Office of Medicare Hearings and Appeals and the Medicare Appeals Council as of November 3, 2017 with a total billed amount of $9,000 or less per appeal, subject to other conditions. Eligible appeals will be settled at 62% of the net allowed amount.  Interested appellants that meet the eligibility criteria are invited to submit an EOI between April 12, 2018 and June 8, 2018 (CMS previously established two different application periods based on whether the appellant has a National Provider Identifier ending in an odd or even number).

MedPAC Calls for Medicare Post-Acute Care and Physician Payment Reforms, Recommends Medicare Payment Updates

The Medicare Payment Advisory Commission (MedPAC) has issued its annual recommendations to Congress on updates to Medicare fee-for-service payment system rates, many of which overlap recommendations made in previous years. For instance, MedPAC continues to call for implementation of a unified prospective payment system (PPS) for post-acute care (PAC) providers, including skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs), to be implemented beginning in 2021.  In the latest report, MedPAC recommends that Congress direct the Secretary of Health and Human Services to begin blending the relative weights of the setting-specific payment systems and the unified PAC PPS in 2019.  At the same time, MedPAC recommends that Congress modify the updates for the individual PAC systems by:

  • Reducing home health payment rates by 5% in 2019, rebasing payments beginning in 2020, and eliminating the use of the number of HHA therapy visits as a factor in payment determinations.
  • Reducing Medicare IRF PPS rates by 5% for FY 2019.
  • Eliminating the LTCH PPS update for FY 2019.
  • Eliminating SNF PPS market basket increases for fiscal years (FYs) 2019 and 2020, and implementing previous recommendations to reform SNF PPS payments in a way that shifts payments to medically-complex stays. MedPAC notes that it has endorsed SNF PPS reforms since 2008, and it “has grown increasingly frustrated with the lack of statutory and regulatory actions to lower the level of payments and implement a revised payment system.”

MedPAC also includes detailed discussions of Medicare payment for physician and other health professional services. MedPAC recommends increasing physician fee schedule rates in 2019 by the amount specified in current law (0.25%). MedPAC also offers extensive recommendations for revising the framework for updating Medicare physician payments established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Most notably, MedPAC recommends eliminating the Merit-based Incentive Payment System (MIPS) and adopting a new voluntary value program under which: (1) clinicians can elect to be measured as part of a voluntary group; and (2) clinicians in voluntary groups can qualify for a value payment based on their group’s performance on a set of population-based measures. Additionally, MedPAC presents the findings of its Congressionally-mandated report on coverage of telehealth services.

With regard to other Medicare fee-for-service payment systems, MedPAC recommends: Continue Reading

Get Ready for the FY 2019 Medicare Payment Rules

CMS is gearing up for the fiscal year (FY) 2019 Medicare payment system rulemaking cycle. The agency has requested that the White House Office of Management and Budget (OMB) review the FY 2019 proposed rules for the following payment systems:

  • The Hospital Inpatient Prospective Payment System for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System
  • The Inpatient Rehabilitation Facility Prospective Payment System
  • The Hospice Wage Index and Payment Rate Update
  • The Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities
  • The Inpatient Psychiatric Facilities Prospective Payment System-

OMB review is the last step before a regulation is published in the Federal Register. The annual updates to Medicare payment systems that operate on a fiscal year basis are typically released in April (the calendar year updates usually are released in June/July).

Congressional Hearings Spotlight Opioid Crisis, 340B Program, Medicare Physician Payments & More

The opioid crisis continues to be a focus for Congressional committees. The House Energy and Commerce Committee held hearings on prevention and public health solutions to the opioid crisis, along with the Drug Enforcement Administration’s role in combating the opioid epidemic. The Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing focusing on leadership and innovation at the state level.  In other policy areas:

CMS to Host Feedback Session on Medicare Oncology Care Model – May 3

CMS is inviting stakeholders to provide feedback on its Innovation Center Oncology Care Model (OCM) at a May 3, 2018 public meeting. Under the OCM, 187 practices and 14 payers are testing performance-based Medicare payment for episodes of care surrounding chemotherapy administration to cancer patients.

CMS Proposes Easing Rules for State Medicaid FFS Access Monitoring

The Centers for Medicare & Medicaid Services (CMS) is proposing to exempt states with high rates of Medicaid managed care enrollment from current requirements to analyze and monitor access in fee-for-service (FFS) delivery systems. The proposed rule also would loosen current state access analysis requirements when states make what CMS contends are “nominal” reductions in Medicaid FFS payment rates.

By way of background, the Medicaid Act provides that state plans must “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” 42 U.S.C. § 1396a(a)(30)(A) (Section 30(A)). Under current regulations issued in November 2015, states must submit to CMS an access monitoring review plan (AMRP) for certain categories of Medicaid services provided through a FFS delivery system. States must update the AMRP at least every three years. If a state reduces rates for additional Medicaid services in a way that could result in diminished access, those services must be added to the AMRP and states must monitor the effects of the rate reductions for 3 years. Furthermore, states must provide a public process and submit specific information regarding access to care if they propose to reduce or restructure Medicaid provider payment rates.

In response to state complaints about the administrative burden associated with the AMRP regulations, CMS has proposed streamlining these requirements. First, the proposed rule would exempt from most AMRP requirements those states with overall Medicaid managed care enrollment rates of 85% or more of the total covered Medicaid population (currently 17 states). In addition, the proposed rule would exempt from access-analysis requirements any reductions to provider payments of less than 4% in overall service category spending during a state fiscal year (and 6% over two consecutive years). CMS also would allow states that reduce Medicaid payment rates to rely on baseline information regarding access under current rates, rather than be required to anticipate the effects of rate reductions on access to care. CMS will accept comments on the proposed rule until May 22, 2018.

The proposed rule comes at a time when CMS approvals of state plan amendments reducing FFS payments have been subjected to increasing judicial scrutiny under the Administrative Procedure Act (APA). See, e.g., Hoag Mem’l Hosp. Presbyterian v. Price, 866 F.3d 1072 (9th Cir. 2017) (finding CMS acted in an arbitrary and capricious manner in approving a state plan amendment reducing Medicaid payments for outpatient services). Such APA suits have become more common in the aftermath of the U.S. Supreme Court’s decision in Armstrong v. Exceptional Child Center, Inc., 135 S. Ct. 1378 (2015), which eliminated the ability of providers and suppliers to sue state officials for injunctive relief in federal court related to alleged violations of Section 30(A). It remains to be seen what, if any, impact the proposed rule changes may have on the ability of providers and suppliers to challenge FFS reductions under the APA.

MACPAC Recommends Changes to Medicaid Managed Care, Telehealth, and DSH Policy

The Medicaid and CHIP Payment and Access Commission’s (MACPAC) March 2018 Report to Congress examines three aspects of Medicaid policy:  managed care, telehealth, and disproportionate share hospital (DSH) payments.  First, MACPAC proposes statutory changes to allow states to require all beneficiaries to enroll in Medicaid managed care programs, along with changes to Section 1915(b) waiver authority to make it easier for states to select managed care as their delivery system.  Second, MACPAC discusses the current authority of states to cover telehealth services, with a focus on the application of telehealth to oral health, behavioral health, maternity care, and high-need populations.  Finally, MACPAC includes a statutorily-mandated analysis of DSH policy, noting that it observes “no meaningful relationship” between state DSH allotments and potential indicators of the need for DSH funds (e.g., changes in the number of uninsured individuals; the amounts and sources of hospitals’ uncompensated care costs; and the number of hospitals with high levels of uncompensated care that also provide essential community services for low-income, uninsured, and vulnerable populations).

OIG Evaluates Risks of Relying on Unverified Patient Lists in Home Health Surveys

The Department of Health and Human Services, Office of Inspector General, has issued a new Risk Alert focusing on the home health agency (HHA) survey process.  The alert specifically examined whether HHA-supplied patient lists during surveys may omit certain patients from review and thereby present opportunities to conceal fraudulent activity or health and safety violations.

Upon reviewing a small sampling of patient lists from previous surveys, the OIG found that nearly one-third of HHAs had incomplete lists of patients, although the OIG noted that its analysis “cannot speak to the intent of the selected HHAs.”  To reduce the potential vulnerabilities that use of HHA-supplied patient lists presents, the OIG suggested developing patient lists from OASIS-based reports, conducting retrospective reviews of patient lists based on claims data, monitoring HHA staff as they generate patient lists, and confirming through sample staff interviews that patient lists include a subset of active patients served by the sampled staff members.

CMS Appoints Ombudsman to Handle Pharmaceutical/Technology Industry Concerns

James Bailey is the new CMS Medicare Pharmaceutical and Technology Ombudsman, a role Congress established in the 21st Century Cures Act to help expedite resolution of industry Medicare reimbursement concerns. The Ombudsman’s office is charged with fielding questions from pharmaceutical, biotechnology, medical device, diagnostic product manufacturers, and other stakeholders regarding Medicare coverage, coding, and payment for new or existing products. While the new office cannot advocate for specific policies in this area, the office “can facilitate information exchange.” The Ombudsman also does not replace other formal appeals processes.

New “MyHealthEData” Initiative Focuses on Putting Patients in Charge of their Medical Records

The Trump Administration has launched a new MyHealthEData initiative intended to make it easier for Medicare beneficiaries and other health consumers to control their medical data and share it with their choice of providers. The government-wide initiative, led by the White House Office of American Innovation, seeks to “break down the barriers that prevent patients from having electronic access and true control of their own health records from the device or application of their choice.”

As part of this overall initiative, CMS is launching Medicare “Blue Button 2.0” to enable beneficiaries to access and share their health data in a universal and secure digital format. Blue Button 2.0 currently contains four years of Medicare Part A, B, and D data.  CMS states that it “will be re-examining its expectations for Medicare Advantage plans and qualified health plans (QHPs) offered through the federally facilitated exchanges, and calling on all health insurers to release their data.”  In addition, CMS intends to streamline its Electronic Health Record Incentive Program, prioritize quality measures and improvement activities that promote interoperability, and require certain providers to show they have not engaged in data blocking activities.

CMS to Educate Drug Manufacturers on Navigating New ASP Reporting System

CMS is requiring prescription drug manufacturers that report average sales price (ASP) data to use a new automated system, beginning with the second quarter 2018 ASP data submission (due April 30, 2018).  To help manufacturers navigate the new system, CMS is hosting a March 27, 2018 educational call, which will include a question and answer session.  Registration is required to participate in the call.

CMS Releases Proposed 2019 Medicare Advantage/Part D Reimbursement Methodologies and Policies

CMS is seeking comments on its proposed updates to the methodologies used to pay Medicare Advantage (MA) and Part D plan sponsors for 2019.  This year CMS released its 2019 Advance Notice and Draft Call Letter in two parts.  In late 2017, CMS released proposed changes to the Part C risk adjustment model (Part I of the Advance Notice) to comply with new 21st Century Cures Act requirements.  Part II of the Advance Notice and Call Letter, released earlier this month, includes proposed rate updates and various policy provisions.  According to a CMS fact sheet, the update would increase plan payments by 1.84% relative to 2018, without taking into account an adjustment for underlying coding trend, which CMS expects to increase risk scores by 3.1% on average.  Continue Reading

CMS Announces Schedule for Public Meetings on Pending HCPCS Applications

CMS has set the dates for its annual meetings to discuss applications for new and revised HCPCS codes:

May 14-17, 2018: Drugs, Biologicals, Radiopharmaceuticals, Radiologic Imaging Agents

June 5-6, 2018: Durable Medical Equipment and Accessories, Orthotics and Prosthetics, Supplies, Other [note that the Federal Register includes two sets of dates for this session; we have confirmed that the meetings are June 5 and 6]

Additional information, include preliminary coding determinations, will be posted at least four weeks before each meeting on the CMS HCPCS website.

CMS Wants Physicians to Speak Up on Reducing E/M Services Documentation Burden (March 21)

CMS is hosting a call on March 21, 2018 to get feedback from physicians and non-physician practitioners on Evaluation and Management (E/M) services. According to the CMS announcement, the agency is looking for information from stakeholders on how the E/M guidelines can be updated “to reduce burden and better align coding and documentation with the current practice of medicine.”

Trump Administration Proposes Rules to Expand Short-Term, Limited Duration Insurance Plans

The Trump Administration has issued a potentially highly-significant proposed rule intended to expand the availability of short-term, limited duration insurance policies that are exempt from Affordable Care Act (ACA) qualified health plan standards.  Under the proposed rule, issued by the Departments of Treasury, Labor, and Health and Human Services (the “Departments”), the maximum duration of this “short-term” coverage would be extended from less than three months to less than 12 months (taking into account any extensions that may be elected by the policyholder without the issuer’s consent).  The contract and application materials for these short-term, limited-duration plans would be required to include standard notices to inform the public that the plans are not required to comply with federal requirements for health insurance (principally those in the ACA), and additionally, for those policies having a coverage start date prior to January 1, 2019, that they do not provide minimum essential coverage and the beneficiary may have to make a payment as a consequence (i.e., the ACA individual responsibility payment).  The proposal states that the premiums for these ACA non-compliant plans are likely to be lower than those for ACA-compliant plans, citing one report showing a difference of $124 per month vs. $393 per month in average monthly premiums for such plans in the fourth quarter of 2016.  The ACA requirements with which issuers of these plans are not required to comply include prohibitions on denying coverage to persons with preexisting conditions and on varying premiums based upon health status, requirements to cover essential health benefits, restrictions on average and lifetime benefit caps, and guaranteed renewability, among others.  As such, issuers of such policies would be permitted to engage in “medical underwriting” (referred to in the proposal as pricing “in an actuarially-fair manner (by which the Departments mean that it is priced so that the premium paid by an individual reflects the risks associated with ensuring the particular individual or individuals covered by that policy).”  Moreover, the issuer could refuse to renew policies for beneficiaries who develop chronic health care conditions.  The Departments noted that these changes may impact individual market risk pools for ACA-compliant plans, but they estimate that in 2019 only 100,000 – 200,000 individuals will elect to enroll in short-term, limited duration plans after this change; the Departments seek comments on these estimates, as well as on various other aspects of the proposed rule.  Comments on the proposed rule will be accepted until April 23, 2018.