On September 15, 2023, FDA published an update to the guidance document – “Breakthrough Devices Program, Guidance for Industry and Food and Drug Administration Staff.” Notably, FDA states that it may consider a medical device’s ability to improve health and healthcare disparities when deciding whether to designate a medical device as a breakthrough device. The agency may use this information to determine whether a candidate device provides more effective treatment or diagnosis when compared to the current standard of care. Below, we provide additional information regarding the breakthrough device program and the updated guidance.Continue Reading FDA Updates Breakthrough Device Guidance
The Department of Health and Human Services’ Office of Inspector General (“OIG”) issued an unfavorable advisory opinion (the “Opinion”) last Friday in which it refused to bless a proposed arrangement involving an intraoperative neuromonitoring (“IONM”) company (the “Requestor”) and various surgeons who perform procedures for which IONM is used, desiring to form a physician-owned entity (“Newco”) that would arrange to provide both the technical and professional components of IONM services (the “Proposed Arrangement”).
The Proposed Arrangement would essentially create a “turn-key” entity owned by the surgeons (the “Surgeon Owners”) that would subcontract to the Requestor and its affiliated physician practice (the “Practice”) “virtually all of the day-to-day requirements of an IONM business.” The Surgeon Owners would be responsible for forming Newco, preparing Newco’s internal governance documents, and determining the methodology for distribution of Newco’s profits amongst themselves. However, the Surgeon Owners would be passive investors, with limited involvement in Newco’s day-to-day operations.Continue Reading OIG Issues Unfavorable Advisory Opinion, Upholding Longstanding Contractual Joint Venture Concerns
The No Surprises Act, effective as of January 1, 2022, aims to provide patients with accurate information regarding their expected health care spending. In many cases, the new law prevents health care providers from charging patients for costs not reimbursed by insurance. We previously covered the impact of these “balance billing” prohibitions on hospital contracting. However, for the 28 million people in the United States without health insurance coverage or for those seeking care that requires initial self-payment, such as most psychological counseling, these balance billing prohibitions lack relevance because the entire balance is payable by the patient or their representative. The No Surprises Act also includes a potential solution for this group–a mandate that “Good Faith Estimates” (GFEs) be provided to all uninsured or self-pay patients.
Unlike the balance billing restrictions addressed in our prior blog, GFE requirements apply to all health care providers in all settings. Providers must now generate cost estimates when treating uninsured (including those with insurance who do not want a claim filed) and self-pay patients. Many providers will generate estimates using the same billing systems that existed prior to the No Surprises Act, but some changes may be necessary to meet new regulatory requirements. This post will highlight key provisions relating to GFE, including how to ensure that provider billing practices comply with the new mandate.Continue Reading No Surprises Act Good Faith Estimates: What they are and when you need them
The Centers for Medicare and Medicaid Services (CMS) is proposing significant and important modifications to its National Coverage Determination (NCD): Screening for Lung Cancer with Low Dose Computed Tomography (LDCT). Medicare pays for lung cancer screening, counseling, and shared decision-making visits, and for an annual screening for lung cancer with low dose computed tomography as a preventive service benefit under the Medicare program. CMS issued its NCD in 2015 initiating this screening benefit, but stakeholders have observed that many of the features of the initial NCD served as a barrier to the effectiveness of this screening program. The proposed NCD makes numerous improvements to this program and eliminates many of the barriers to qualified patients’ ability to gain access to important LDCT lung cancer screenings.
Last year, a formal joint request to reconsider the NCD was submitted to CMS by the GO2 Foundation for Lung Cancer, The Society of Thoracic Surgeons, and American College of Radiology (ACR), and CMS received numerous comments from various stakeholders, including from the Association for Quality Imaging. This new proposed NCD is in response to that request and the comments from stakeholders.Continue Reading New and improved proposed national coverage determination on screening for lung cancer with low dose CT
Effective January 1, 2022, common prohibitions against “balance billing” under hospital professional service contracts will likely become moot due to certain superseding federal prohibitions under the federal No Surprises Act enacted December 27, 2020. As detailed below, certain hospital-based physicians, including radiologists, anesthesiologists, and pathologists, should keep these new federal billing prohibitions in mind when entering into new hospital professional services agreements (“PSAs”) and revisit their existing agreements to determine whether any changes are appropriate.
“No Surprises Act” Background.
The federal government’s growing focus on surprise medical bills reached a new high on July 1, 2021, when the Department of Health and Human Services (“HHS“), along with the Department of Labor and Department of the Treasury, released a consumer-focused interim final rule with comment period taking aim at surprise billing and excessive cost-sharing practices. The rule, which also cites an ineffective “patchwork” of consumer protections under existing state laws, represents the first implementing regulation under the No Surprises Act. Both the rule and the statute become effective on or after January 1, 2022.
Balance Billing Prohibition.
This article discusses two distinct but interwoven billing procedures that deserve clarification: “surprise billing” and “balance billing.”Continue Reading No Surprises Act: Time to revisit balance billing prohibitions in hospital-based physician professional services agreements with hospitals?
The Centers for Medicare & Medicaid Services (CMS) is inviting suggestions for how it can eliminate Medicare regulations that (1) impose more stringent supervision requirements than existing state scope of practice laws, or (2) restrict health professionals from practicing at the top of their license. This comment solicitation, which is part of the Administration’s “Patients…
The Centers for Medicare & Medicaid Services (CMS) has published its final Medicare physician fee schedule (PFS) rule for calendar year (CY) 2020. In addition to updating rates for physician services, the final rule revises numerous other Medicare Part B policies. Highlights of the final rule include the following:
- The final 2020 conversion factor is
The Centers for Medicare & Medicaid Services (CMS) has published its proposed Medicare physician fee schedule (PFS) rule for calendar year (CY) 2020. In addition to updating rates for physician services, CMS proposes changes to numerous other Medicare Part B policies. Highlights of the proposed rule include the following:
- The proposed 2020 conversion factor (CF)
The Centers for Medicare & Medicaid Services (CMS) has proposed a new Radiation Oncology (RO) innovation model (RO Model) to test whether prospective site neutral, episode-based payments for radiotherapy (RT) episodes of care would reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries. Importantly, the RO Model would be mandatory for providers and suppliers that furnish RT services within randomly selected Core Based Statistical Areas (CBSAs), with very limited exceptions. CMS estimates that the RO Model would cover about 40% of Medicare RO episodes and reduce Medicare spending by $250 million – $260 million during the five-year program.
Key features of the proposed RO Model are summarized below. CMS will accept comments on the model until September 16, 2019.
RO Provider/Supplier Participation
Medicare-participating physician group practices (PGPs), hospital outpatient departments (HOPD), and freestanding radiation therapy centers that furnish RT services in designated CBSAs generally would be required to participate in the RO Model. CMS proposes exempting a provider or supplier that:
(1) furnishes RT services only in Maryland, Vermont, or the U.S. territories;
(2) is classified as an ambulatory surgery center (ASC), critical access hospital (CAH), or prospective payment system-exempt cancer hospital; or
(3) is eligible to participate the Pennsylvania Rural Health Model.
In a proposed rule to be published on July 18, 2019; CMS expresses its view that mandatory participation “is necessary to obtain a diverse, representative sample of RT providers and RT suppliers and to help support a statistically robust test of the prospective episode payments made under the RO Model.” CMS notes that because hospital outpatient prospective payment system (OPPS) rates are projected to increase substantially more than physician fee schedule (PFS) rates during the period of 2019 through 2023, it “would result in few to no HOPDs electing to voluntarily participate in the Model.” CMS also expects that a voluntary program would attract only those freestanding radiation therapy centers with historically lower RT costs compared to the national average.
Providers and suppliers would participate in the RO Model as either a Professional participant, Technical participant, or Dual participant.
Continue Reading CMS Proposes New Mandatory Medicare Radiation Oncology Payment Innovation Model
In a rare display of unity, President Donald Trump and bipartisan Congressional leaders have highlighted their shared commitment to tackling “surprise” medical billing – when an insured patient is subject to unexpectedly high out-of-pocket costs for out-of-network care that is beyond their control. Such surprise billing can occur when a patient receives emergency care from…
The Centers for Medicare & Medicaid Services (CMS) released a draft guidance for state survey agencies on May 3, 2019, impacting hospitals that share space, staff, and/or services with another co-located hospital or health care entity. The draft builds on informally followed principles by CMS employees which emphasized that certain payment rules, like those for…
Representatives Jackie Speier (D-California) and Dina Titus (D-Nevada) have introduced HR 2143, the Promoting Integrity in Medicare Act of 2019 (PIMA), which – if enacted – would narrow the “Stark” law’s exceptions and have a direct impact on the services provided by physicians who self-refer for the performance of certain designated health services. The 2019…
The Centers for Medicare & Medicaid Services (CMS) has issued new guidance on what date of service (DOS) should be billed for various Medicare Part B services. For radiology services, CMS offers the option of reporting the DOS of either the date when the radiology study was performed on the patient or the date of…
In a transmittal issued last week, the Centers for Medicare & Medicaid Services (CMS) extended newly-revised supervision rules for certain diagnostic tests paid via the Medicare Physician Fee Schedule (MPFS) to services paid under the Outpatient Prospective Payment System (OPPS) for hospital outpatient departments. The transmittal relates to services performed by a registered radiologist assistant…
The Centers for Medicare & Medicaid Services (CMS) has issued its final Medicare physician fee schedule (PFS) rule for calendar year (CY) 2019. In addition to updating rates for physician services, the rule adopts changes to numerous other Medicare Part B policies. Highlights of the final rule include the following:
- The final 2019 conversion factor (CF) is $36.0391, up slightly from the 2018 CF of $35.9996. This rate is based on a statutory update of 0.25%, offset by a -0.14% relative value unit (RVU) budget neutrality adjustment.
- The rule reduces from 6% to 3% the “add-on” payment for new, separately-payable Part B drugs and biologicals that are paid based on wholesale acquisition cost when average sales price during first quarter of sales is unavailable.
- The rule makes a number of changes to the Appropriate Use Criteria (AUC) program, which requires that physicians who order outpatient advanced diagnostic imaging (ADI) services (diagnostic magnetic resonance imaging, computed tomography, and positron emission tomography/nuclear medicine) for a Medicare beneficiary consult with AUC developed by provider-led organizations approved by CMS via a qualified clinical decision support mechanism (CDSM). Specifically, the final rule:
- Extends the requirements to independent diagnostic testing facilities (joining physician offices, hospital outpatient departments, and ambulatory surgical centers).
- Clarifies that AUC consultation information must be reported on all applicable technical component and professional component claims (i.e., not just reported on claims by furnishing facilities).
- Provides that when delegated by the ordering professional, clinical staff under the direction of the ordering professional may perform the AUC consultation with a qualified CDSM (a modification to the proposed rule, which would have specified that AUC consultations may be performed by auxiliary personnel under the direction of the ordering professional and incident to the ordering professional’s services).
- Uses established coding methods (e.g., G-codes and modifiers) to report required information.
- Revises the significant hardship exception criteria to include (1) insufficient internet access; (2) electronic health record or CDSM vendor issues; (3) extreme and uncontrollable circumstances; and (4) self-attestation of hardship status for ordering professionals.
For information regarding the AUC implementation schedule, see our previous post.
Continue Reading CMS Publishes Final CY 2019 Medicare Physician Fee Schedule Rates and Policies
The Centers for Medicare & Medicaid Services (CMS) has issued its proposed Medicare physician fee schedule (PFS) rule for calendar year (CY) 2019. In addition to updating rates for physician services, the sweeping rule proposes changes to numerous other Medicare Part B policies. Highlights of the proposed rule include the following:
- CMS proposes a
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 Physician Fee Schedule Update for 2018
Rule Would Delay Appropriate Use Criteria Requirement until 2019, Cut Rates for Off-Campus Hospital Departments
The Centers for Medicare & Medicaid Services (CMS) has published its proposed rule to update the Medicare physician fee schedule (PFS) for calendar year (CY) 2018. The proposed rule addresses numerous Medicare policies, including: implementation of appropriate use criteria (AUC) for advanced diagnostic imaging services; a deep reduction in reimbursement for off-campus hospital outpatient departments; and consideration of potentially misvalued codes, among many others. Highlights of the proposed rule include the following:
- Under the proposed rule, the 2018 MPFS conversion factor (CF) would be $35.9903, up slightly from the 2017 CF of $35.8887. This update reflects a 0.5% update factor specified under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is partially offset by a -0.03% relative value unit (RVU) budget neutrality adjustment and a -0.19% “target recapture amount” (since savings from proposed revisions to the RVUs of misvalued codes would not meet a statutory-0.5% target).
- CMS proposes to revise a policy adopted in the final 2017 Medicare Hospital Outpatient Prospective Payment System (OPPS) rule to implement Section 603 of the Bipartisan Budget Act of 2015, which establishes a site-neutral payment policy for certain newly-acquired, provider-based, off-campus hospital outpatient departments (which CMS calls “off-campus provider-based departments” or “off-campus PBDs”). Effective for services provided on or after January 1, 2017, off-campus PBDs are paid under the PFS in most cases, rather than the generally higher-paying OPPS (with certain exceptions). In the 2017 rule, CMS established new PFS site-of-service payment rates to pay non-excepted off-campus PBDs for the technical component of non-excepted services; these rates generally are based on OPPS payments scaled downward by 50% (called the PFS Relativity Adjuster). For CY 2018, CMS is proposing to reduce the Relativity Adjuster by 50%; that is, the technical component rates for these services would be reduced from 50% of the OPPS rate to 25% of the OPPS rate. CMS invites comments on whether a different PFS Relatively Adjuster would be appropriate.
Observers are digesting what the Trump Administration will mean for the health care and life sciences industry. Forecasting is more challenging for this incoming Administration than most given the relatively sparse policy details released during the campaign and the lack of a government service record to examine for clues. Today President-elect Trump’s transition team released a one-page statement on health care policy, but many questions remain. Nevertheless, we offer below our initial observations and issues to watch in the months to come.
- Potential Sea Change. Uncertainty is, as some like to say, the “obvious comment” that characterizes the whole prospective Trump Administration. Other than an intended “repeal and replacement” of the Affordable Care Act (ACA), President-elect Trump has provided relatively few details on a proposed health care agenda. Until these policies are fleshed-out, expect an environment where some business decisions and investments may be delayed, with a resulting impact on merger and acquisition activity. That said, other transactions may become more likely, as the threat of new restrictions under a Clinton administration are removed, along with the prospect of potential regulatory relief under a Republican-controlled federal government.
- Affordable Care Act Repeal and Replacement. Trump has repeatedly indicated his desire to repeal and replace the ACA, including a vow to summon Congress into a special session for this task. If the law is repealed, however, what would take its place, and how would Congress address the roughly 20 million Americans currently covered in some way under the ACA (and the potential rise in uncompensated care costs that also would result)? Despite the call for repeal, certain parts of the law are popular. For instance, President-elect Trump noted on the campaign trail that he was in support of the ACA’s prohibition against the use of pre-existing health conditions to deny coverage (or as a basis for premium-setting). Other proposals offered by Trump as candidate include allowing for the sale of health insurance across state lines as long as plans comply with state requirements, various tax benefits, and more transparency in health care pricing. In today’s policy statement, President-elect Trump added support for high-risk pools, which he characterizes as “a proven approach to ensuring access to health insurance coverage for individuals who have significant medical expenses and who have not maintained continuous coverage.” Congressional Republicans have offered a number of alternatives that are likely to be a springboard for reform, most notably the “Better Way” plan proposed by House Speaker Paul Ryan. In fact, according to the Speaker’s office, “in the 114th Congress alone, House Republicans have introduced more than 400 individual bills that would improve our nation’s health care system” – demonstrating that Congress is not reticent about legislating on health care issues. The new Senate’s Republican majority will not have the 60 votes required to override a potential Democratic filibuster of legislation to fully repeal the law. While Congress could use budget reconciliation authority (which requires only 50 votes in the Senate) to make significant changes, the drawn-out pace of the budget process may not satisfy those who want quick action in this area. Regardless of the legislative vehicle, after years of calling for Obamacare repeal while President Obama was in office, the Republican Congress will be under tremendous pressure to act quickly – even if it is a “down-payment” on reform — now that Republicans will control the presidency and the Congress.
Today President Obama signed into law H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), which reforms Medicare payment policy for physician services and adopts a series of policy changes affecting a wide range of providers and suppliers. Most notably, MACRA permanently repeals the statutory Sustainable Growth Rate (SGR) formula, achieving a goal that has eluded Congress for years. Now, after a period of stable payment updates, MACRA will link physician payment updates to quality, value measurements, and participation in alternative payment models.
Continue Reading President Obama Signs MACRA: Permanently Reforms Medicare Physician Reimbursement Framework, Includes Other Health Policy Provisions