With All Eyes on Senate ACA-Repeal Debate, House Passes Bill to Tweak Stark Law and Other Medicare Part B Policies

While the Capitol Hill spotlight is focused on the Senate debate on legislation to repeal or revise the Affordable Care Act, the House of Representatives quietly approved by voice vote HR 3178, the Medicare Part B Improvement Act of 2017. The bipartisan bill would impact a number of Medicare policies, including the Stark physician self-referral law, home infusion therapy and dialysis service policies, and documentation requirements for orthotics and prosthetics. In particular, the bill would: Continue Reading

CMS Proposes Medicare OPPS, ASC Update for CY 2018

CMS has published its proposed rule to update 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 proposing rate updates for the two payment systems, CMS solicits comments on a wide range of topics, including, among others:  deep OPPS reimbursement cuts for drugs obtained through the 340B drug discount program; a new OPPS drug administration packaging proposal along with a broader query regarding the need for packaging policy reforms; a proposal to allow total knee replacement procedures to be performed on an outpatient basis; and potential changes to the way CMS calculates the ASC payment update.  CMS will accept comments on the proposed rule until September 11, 2017.

With regard to OPPS payments, CMS proposes a 1.75% update for 2018, reflecting a 2.9% market basket increase, which is partly offset by a 0.75 percentage point reduction and a 0.4% multi-factor productivity (MFP) reduction. CMS expects that overall OPPS payments would increase by 2% ($897 million) compared to 2017 levels (although this estimate does not include the effects its 340B drug proposal, discussed below).  The update for hospitals that fail to meet the Hospital Outpatient Quality Reporting (OQR) Program reporting requirements is reduced by 2.0 percentage points.  Rate updates for individual procedures vary based on changes in ambulatory payment classification (APC) assignments and other proposed policies.

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

No IPAB Medicare Cuts Triggered for 2019, CMS Actuary Rules

The CMS Chief Actuary has officially determined that the projected Medicare per capita growth rate will not exceed the target that would require the Independent Payment Advisory Board (IPAB) to submit plans to reduce 2019 Medicare per-capita spending. Under the Affordable Care Act, if the threshold is breached, IPAB must submit detailed Medicare spending cut proposals to Congress and the President; IPAB’s proposals would go into effect automatically unless Congress enacts alternative legislation to achieve the required savings (with certain exceptions).  The IPAB spending control mechanism is deeply unpopular, even though the Board has never been formally constituted nor has the savings target ever been triggered.  There have been numerous legislative attempts to repeal the IPAB authority, and President Trump has called for repeal of IPAB in his FY 2018 budget proposal.


CMS Issues Corrections to Medicare/Medicaid LTC Conditions of Participation

CMS has made numerous technical and typographical corrections to its October 4, 2016 final rule revising the requirements that long-term care facilities must meet to participate in the Medicare and Medicaid programs. CMS notes that the corrections are consistent with the policy discussion in the final rule and do not result in substantive policy changes.  The corrections are effective July 13, 2017.

CMS Summit on Potential Behavioral Health Innovative Payment Model (Sept. 8, 2017)

The CMS Center for Medicare and Medicaid Innovation is holding a public summit on September 8, 2017 to explore creating a behavioral health innovative payment model intended to improve health care quality and access, while lowering the cost of care for Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) beneficiaries with behavioral health conditions. The meeting will feature four panel sessions on the following topics:  substance use disorders; mental health in the presence of co-occurring conditions; Alzheimer’s disease and related dementias; and behavioral health workforce development.  Registration is required to participate in the meeting. CMS also will accept written statements or questions until August 25, 2017.

House Committees Examine Health Care Policy Issues

Recent House of Representatives committee hearings have focused on a variety of health care policy issues, including the following:

  • Energy and Commerce Committee hearings on: the growth and oversight of the 340B drug discount program; drug and device company communications, including clinical/economic data; state efforts to address the opioid crisis; and extension of safety net health programs (the Children’s Health Insurance Program, Federally Qualified Health Centers, and the Community Health Center Fund). The Committee also has scheduled a July 26 hearing to examine extending Medicare Advantage Special Needs Plans (SNPs).
  • A House Ways and Means Committee hearing on efforts to control Medicare waste, fraud, and abuse.
  • A House Small Business Committee hearing on how telehealth can help rural communities.


CMS Delays Deadline for HHA Conditions of Participation Compliance

CMS is delaying the effective date of its January 13, 2017 final home health agency (HHA) conditions of participation (CoP) rule for six months, until January 13, 2018. While CMS is not making any other substantive changes to the rule’s requirements., the agency is making two other conforming date changes:  (1) CMS is giving HHAs until July 13, 2018 to implement data-driven performance improvement projects; and (2) CMS is extending the “administrator personnel standard” grandfathering provision for an additional six months (to January 13, 2018).

CMS Proposes Changes to for Second Year of Medicare Physician Quality Payment Program

CMS has proposed new regulations to continue implementing the “Quality Payment Program” (QPP) — the new Medicare physician fee schedule (MPFS) update framework mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). As previously reported, starting in 2017, physicians will be paid under the Merit-based Incentive Payment System (MIPS) or the Advanced Alternative Payment Model (APM).

For the second year of the QPP, CMS is proposing to continue a number of transition policies established for 2017 while “ramping up to full implementation.” Notably, with regard to the MIPS track, CMS proposes to:

  • Establish a Virtual Groups participation option. Virtual groups would be comprised of solo practitioners and groups of 10 or fewer eligible clinicians who come together “virtually” with at least 1 other such solo practitioner/group to participate in MIPS for a one year performance period.
  • Increase the low-volume threshold to exempt more small practices and clinicians in rural and Health Professional Shortage Areas.
  • Add bonus points under the scoring methodology to account for (1) caring for complex patients, and (2) using 2015 Edition Certified Electronic Health Record Technology (CEHRT) exclusively.
  • Incorporate performance improvement in quality and cost performance scoring.
  • Implement an optional facility-based scoring mechanism for facility-based clinicians.
  • Create an Advancing Care Information performance category hardship exemption for small practices and add bonus points to the final score of clinicians in small practices.
  • Add a new improvement activity for clinicians who attest to using Appropriate Use Criteria through a qualified clinical decision support mechanism for all advanced diagnostic imaging services ordered.

CMS also proposes various policies applicable to APM participation.  For instance, CMS propose to:

  • Extend the current revenue-based nominal amount standard through performance year 2020 (which allows an APM to meet the Advanced APM financial risk criterion if participants are required to bear total risk of at least 8% of their Medicare Parts A and B revenue).
  • Modify policies regarding the timeframe for making qualifying APM participant determinations.
  • Modify All-Payer Combination Option policies, which will be available beginning in performance year 2019.
  • Revise the nominal amount standard for Medical Home Models.

CMS will accept comments on the proposed rule until August 21, 2017.

CMS Proposes Update to Medicare ESRD PPS Payments for 2018

The Centers for Medicare & Medicaid Services (CMS) has published a proposed rule to update the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2018. CMS anticipates that the proposed rule would increase total Medicare payments to ESRD facilities by 0.8% in 2018, with hospital-based ESRD facilities having an estimated 1.0% increase and freestanding facilities having an estimated 0.8% increase.  CMS proposes a 0.7% rate update, which reflects a projected 2.2% market basket increase that is offset by a 1% reduction under the Protecting Access to Medicare Act (PAMA) and a 0.5% multifactor productivity reduction.  Based on this update, the proposed CY 2018 ESRD PPS base rate would be $233.31, up slightly from the 2017 base rate of $231.55.

The proposed rule also would, among other things: update outlier fixed dollar loss amounts and Medicare Allowable Payments; allow the use of any pricing methodology under section 1847A of the Social Security Act to determine the cost of drugs and biologicals when average sales price (ASP) data is not available for outlier payment purposes; and set the acute kidney injury (AKI) dialysis rate to equal the proposed ESRD PPS base rate.  Furthermore, CMS proposes changes in ESRD Quality Incentive Program (QIP) quality measures and methodologies for payment years 2019 – 2021.  CMS also solicits comments on the treatment of AKI patients under the ESRD QIP and whether CMS should account for social risk factors under the ESRD QIP.

Finally, as in other recent proposed Medicare payment rules, CMS includes a “Request for Information on Medicare Flexibilities and Efficiencies” that invites suggestions for ways to “increase quality of care, lower costs, improve program integrity, and make the health care system more effective, simple and accessible.”

CMS will accept comments on the proposed rule until August 28, 2017.

CMS Finalizes Changes to Payment Error Rate Measurement (PERM) & Medicaid Eligibility Quality Control (MEQC) Programs

CMS has published a final rule that modifies PERM and MEQC regulations to align with changes to how states adjudicate Medicaid and CHIP eligibility under the Affordable Care Act (ACA). According to CMS, the policy revisions are intended to “reduce state burden, improve program integrity, and promote state accountability.” Among other things, the rule changes the eligibility measurement component of the PERM program with regard to review periods, payment sample sizes, and state corrective actions.  It also restructures the MEQC program to complement the PERM program and provide states with additional flexibility.  The rule is effective August 4, 2017.

OIG Targets Additional Medicare/Medicaid Policy Areas for Review

The OIG has added 18 reviews to its FY 2017 Work Plan – most of which target CMS programs, with a particular emphasis on prescription drug policies. For instance, the OIG now intends to examine the following Medicare and Medicaid topics (among others):

  • Excessive Use of Opioids in Medicare Part D
  • Including Non-Covered Versions When Setting Payment Amounts for Part B Drugs
  • FDA Approval Status of Drugs in the Medicaid Drug Rebate Program
  • Accuracy of Drug Classification Data Used to Collect Medicaid Rebates
  • Reasonable Assumptions in Manufacturer AMP Reporting
  • Review of Quality Measures Data Reported by Accountable Care Organizations in the Medicare Shared Savings Program
  • Trends in Hospice Deficiencies and Complaints

Additional information about each of the new reviews is available on the OIG website.

Congressional Hearings, Markups Focus on Chronic Care, Drug Pricing, HHS Budget, Other Health Programs

House and Senate committees have held a number of hearings recently to focus on health policy topics, including the following:

Continue Reading

First Look at OIG’s FY 2017 Fraud Recoveries/Enforcement Activities

The HHS Office of Inspector General (OIG) expects its investigative recoveries during the first half of fiscal year (FY) 2017 to top $2.04 billion – which is down from $2.77 billion for the first half of FY 2016. During this period, the OIG reports 468 criminal actions against individuals or entities that engaged in crimes against HHS programs, along with 461 civil actions and 1,422 exclusions from participation in federal health care programs. Enforcement priorities during the first half of FY 2017 included prescription drug diversion, fraud in non-institutional settings, and grant fraud. The report also highlights major OIG audits of HHS programs, including reports covering quality of care, Medicare Part D spending, the hospital two midnight rule policy, and other Medicare and Medicaid payment policies.

OIG Estimates CMS Made $730 Million in Improper EHR Incentive Payments, Based on Small Sample of Claims

The HHS Office of Inspector General (OIG) estimates that CMS made $729.4 million in Electronic Health Incentive (EHR) payments to providers who did not meet meaningful use requirements from May 2011 to June 2014 – representing about 12% of the $6 billion in total EHR payments made during this period. This dramatic finding is based on a random sample of only 100 providers who received one or more payments during this timeframe; 14 providers in this sample received payments of $291,222 that did not meet the meaningful use requirements (e.g., insufficient attestation support, inappropriate reported meaningful use periods, or insufficiently used certified EHR technology). The OIG criticizes CMS for conducting “minimal documentation reviews of self-attestations, leaving the EHR program vulnerable to abuse and misuse of Federal funds.” The OIG also identified additional inappropriate EHR incentive payments made when eligible professionals (EPs) switched between Medicare and Medicaid incentive programs. The OIG recommends that CMS identify and recover inappropriate incentive payments, educate EPs on proper documentation requirements, and take additional steps to prevent inappropriate payments.

House Energy & Commerce Committee Unanimously Approves FDA Reauthorization, Public Health Bills

On June 8, 2017, the Energy and Commerce Committee voted unanimously to approve an amended version of HR 2430, the FDA Reauthorization Act (FDARA) of 2017. The bill would extend the FDA prescription drug, medical device, generic drug, and biosimilar biological product user fee programs, which are scheduled to expire at the end of September.  The bill also includes a variety of policy revisions, including provisions intended to improve the medical device inspection process and to establish a voluntary medical device safety/surveillance pilot project, and a “sense of Congress” resolution that the HHS Secretary and Congress should take steps to lower the cost of prescription drugs.

The Committee also voted to approve HR 1222, the Congenital Heart Futures Reauthorization Act; HR 2410, the Sickle Cell Disease Research, Surveillance, Prevention and Treatment Act; and HR 1492, the Medical Controlled Substances Transportation Act (to update the Drug Enforcement Administration registration process for mobile medical practitioners).

CMS Announces Summer Meetings on 2018 Clinical Lab Fee Schedule Update

CMS has scheduled two days of meeting this summer on updates to the Medicare clinical laboratory fee schedule (CLFS) for 2018. First, the public meeting on payment amounts for new or substantially revised HCPCS codes being considered for Medicare payment under the 2018 CLFS will be held on July 31, 2017. This meeting also will cover reconsideration requests regarding final determinations made last year on new test codes. If needed, the meeting will resume on August 1, 2017. In addition, the Clinical Diagnostic Laboratory Test (CDLT) Advisory Panel will hold a public meeting on August 1, 2017 to make recommendations regarding the test codes presented at the CLFS public meeting.

CMS Call: The IMPACT Act and Improving Care Coordination (June 20)

On June 20, 2017, CMS is hosting a Special Open Door Forum conference call to discuss implementation of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). According to a CMS announcement, the call will cover the goals of the IMPACT Act, RAND contract activities (including upcoming national testing), and identify opportunities for stakeholders to become involved over the next year.

CMS Reverses Course in Pre-Dispute Arbitration Agreement Ban

In a clear turnabout from its previous position, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule on June 5, 2017 that would lift the agency’s ban on pre-dispute arbitration agreements in the long term care (LTC) setting. By contrast, less than nine months earlier, CMS prohibited LTC facilities from entering into pre-dispute arbitration agreements with residents, conditioning admission to a facility on the execution of such agreements, or making a resident’s continuing right to remain at a facility contingent upon a post-dispute arbitration agreement.

The industry’s response to the ban was swift and resolute—on October 17, 2016, the American Health Care Association and a group of nursing homes filed a lawsuit in federal court seeking a preliminary and permanent injunction to prevent CMS from enforcing the ban on pre-dispute arbitration agreements. The U.S. District Court for the District of Mississippi granted the request for preliminary injunction on November 7, 2016, stalling enforcement of the final rule’s arbitration provisions. Continue Reading

CMS Extends Comment Period on SNF Case Mix Methodology ANPRM

CMS is extending the comment period on its May 4, 2017 advance notice of proposed rulemaking (ANPRM) discussing plans to revise the basis for the Medicare skilled nursing facility (SNF) prospective payment system (PPS).  As previously reported, the ANPRM set forth the outline of CMS’s plan to replace the current RUG-IV case-mix classification methodology with the Resident Classification System, Version I (RCS-I), as early as FY 2019.  CMS is extending the comment period from June 26, 2017 to August 25, 2017 in response to requests from national industry organizations for additional time to analyze this potentially far-reaching proposal.

As ACA Repeal/Replace Debate Drags On, Trump Seeks Advice on How to Make Improvements to Health Care Markets

In a tacit acknowledgement of the hurdles ahead for enactment of Affordable Care Act (ACA) repeal/replace legislation, the Trump Administration is soliciting suggestion for changes that could be made within the current legal framework to improve health insurance markets and meet Administration reform goals. In particular, the Department of Health and Human Services (HHS) is interested in potential changes to existing HHS rules to promote a “more patient-centered health care system that adheres to the key principles of affordability, accessibility, quality, innovation, and empowerment.” HHS highlights four potential areas for comments:

  1. Empowering patients and promoting consumer choice. For instance, what activities would help consumers choose a plan that best meets their needs? Which regulations currently reduce consumer choices regarding health care and health insurance financing?
  2. Stabilizing the individual, small group, and non-traditional health insurance markets. How can HHS stabilize the risk pool, promote continuous coverage, encourage younger and healthier consumers and other uninsured individuals to purchase plans, and reduce uncertainty and volatility?
  3. Enhancing affordability. How can HHS enhance the affordability of coverage for individual consumers and small businesses?
  4. Affirming the states’ regulatory authority to regulate the business of health insurance. Which HHS policies have unnecessarily interfered with states’ primary role in regulating health insurance markets?

Comments will be accepted until July 12, 2017.