Medicare Hospice Payments to Increase by $340 Million under Final FY 2019 Rule

The Centers for Medicare & Medicaid Services (CMS) has finalized its FY 2019 update to Medicare hospice rates and policies.  As forecast in the May 8, 2018 proposed rule, CMS is increasing FY 2019 hospice rates by 1.8% ($340 million), based on a 2.9% inpatient hospital market basket update that is reduced by both a 0.8 percentage point multifactor productivity adjustment and a 0.3 percentage point statutory adjustment.  The annual update is reduced by 2 percentage points for hospices that fail to report required quality data.  The final FY 2019 hospice cap is $29,205.44, an increase of 1.8% over the 2018 level.

The final rule codifies a Bipartisan Budget Act of 2018 provision that expands the definition of attending physician to include physician assistants.  CMS also updates Hospice Quality Reporting Program (HQRP) procedural policies, changes how hospice quality results are displayed on Hospice Compare, and adds a new HQRP measure “removal factor” that considers whether the costs associated with a measure outweigh the benefit of its continued use, among other HQRP provisions.

CMS Educational Call on Proposed CY 2019 Physician Fee Schedule Rule (Aug. 22)

CMS is inviting stakeholders to participate an August 22, 2019 listening session on the CY 2019 proposed Medicare physician fee schedule rule.  The call will focus on three aspects of the proposed rule:

  • Streamlining Evaluation and Management (E/M) payment policies
  • Advancing virtual care
  • Changes to the Quality Payment Program intended to reduce clinician burden, focus on outcomes, and promote interoperability

During the call, CMS experts will answer “clarifying questions” regarding these provisions to help stakeholders develop their formal comments.

Medicare Inpatient Psychiatric Facility Rates for FY 2019 Finalized

CMS has published its final rule to update fiscal year (FY) 2019 rates and policies for Medicare inpatient psychiatric facility (IPF) services.  CMS estimates that the final rule will increase payments by a total of $50 million (1.1%) compared to FY 2018 levels.  The final rule provides for a 1.35% payment update for FY 2019, based on a 2.9% market basket update that is reduced by both a 0.8 percentage point productivity adjustment and a statutorily-mandated 0.75 percentage point reduction.  CMS estimates that payments will be further reduced by 0.24 percentage points as a result of an outlier fixed-dollar loss threshold adjustment.  Under the final rule, the IPF prospective payment system federal per diem base rate is increased from $771.35 to $782.78; the per diem base rate is $767.33 for providers who failed to report quality data.  The final rule also updates the IPF labor-related share, the IPF wage index, and quality measures and reporting requirements under the IPF Quality Reporting Program (IFPQR).  Note that while CMS proposed to remove eight IPFQR measures, as a result of public comments CMS is retaining three of the measures (pertaining to Physical Restraint Use, Seclusion Use, and Tobacco Use Treatment at Discharge).

CMS Hosts Forum for Opioid Prescribers to Address the Opioid Epidemic (Aug. 15)

On August 15, 2018, CMS is convening a Special Open Door Forum on “Sharing Federal Strategies to Address the Opioid Epidemic.”  The conference call, which will feature representatives from several Department of Health and Human Services agencies, is intended to educate opioid prescribers on federal resources and strategies for safe prescribing as well as other opioid-related topics.

Citing “Significant Potential for Fraud, Waste, and Abuse,” CMS Extends HHA/Ambulance Enrollment Moratoria in Selected States

The Centers for Medicare & Medicaid Services (CMS) has determined that it should extend for an additional six months its current moratoria on the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollment of new home health agencies (HHAs) and Part B nonemergency ground ambulance suppliers in selected states.  Under the latest notice, the moratoria on new HHAs and branch locations applies to Florida, Illinois, Michigan, and Texas, and the non-emergency ambulance enrollment moratorium applies to New Jersey and Pennsylvania (the previous ambulance supplier enrollment moratorium in Texas was lifted last year as a result of Hurricane Harvey), applicable beginning July 20, 2018.  In extending the moratoria, CMS states that the Office of Inspector General concurs that “a significant potential for fraud, waste, and abuse continues to exist regarding those provider and supplier types in these geographic areas.”  Furthermore, CMS believes that the moratoria are needed to enable the agency to “continue with administrative actions to combat fraud and abuse, such as payment suspensions and revocations of provider/supplier numbers.”  Since the initial moratoria were imposed in 2013, denied applications from more than 1204 HHAs and 26 ambulance companies in the affected geographic areas.


House Approves Permanent Medical Device Tax Repeal Bill

The House of Representatives has voted 283 – 132 to approve legislation (HR 184) that would permanently repeal the Affordable Care Act’s 2.3% excise tax on the sale of certain medical devices.  While a government funding bill approved by Congress in February 2018 blocked imposition of the tax in 2018 and 2019, permanent repeal has been a top priority of the medical technology industry.  It is uncertain, however, whether the Senate will take up the bill this year.

CMS Proposes CY 2019 Medicare OPPS, ASC Update, with Emphasis on Promoting Site-Neutrality

CMS has issued 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) 2019.  In addition to providing routine annual updates, the proposed rule includes several provisions intended to encourage “site-neutral payments” for different types of providers.  CMS also proposes a change to the basis for updating ASC rates that has long been sought by stakeholders.  CMS will accept comments on the proposed rule until September 24, 2018.

Hospital Outpatient Provisions

CMS proposes a 1.25% update to Medicare OPPS rates for 2019, reflecting an expected 2.8% market basket increase that is partly offset by both a statutory 0.75 percentage point reduction and a 0.8% 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 vary.

In the proposed rule, CMS emphasizes its interest in addressing payment differentials that the agency believes drives site-of-service decisions, especially between the physician’s office and hospital outpatient department settings, and increases costs to the Medicare program and beneficiaries.  In particular, CMS targets certain off-campus hospital provider-based departments (PBD) that are “excepted” under section 603 of the Bipartisan Budget Act of 2015.  Section 603 provides that effective for services provided on or after January 1, 2017, certain off-campus PBDs are generally paid under the physician fee schedule (PFS), rather than the typically higher-paying OPPS, unless an exception applies.  For 2019, CMS proposes:

  • Paying a PFS equivalent rate for clinic visit services (G0463, Hospital outpatient clinic visit for assessment and management of a patient) when provided at an “excepted” PBD. CMS observes that clinic visits are the most common service billed under the OPPS, and this policy is expected to save approximately $760 million in FY 2019, including $150 million in reduced beneficiary copayments.
  • CMS proposes to apply to exempted PBDs a current policy that reduces OPPS payment for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B drug discount program from average sales price (ASP) plus 6% to ASP minus 22.5% (with certain exceptions).
  • Revising payment when an excepted PBD expands into new lines of service. Under the proposed rule, if an excepted off-campus PBD furnishes a service from one of 19 proposed clinical families of services that it did not furnish during a baseline period (November 1, 2014 through November 1, 2015), the service from the “new” family would be paid under the PFS rather than the OPPS.
  • CMS notes that it is “developing a method to systematically control for unnecessary increases in the volume of other hospital outpatient department services.” In the meantime, CMS requests comments on alternative approaches to controlling unnecessary volume increases, while “not impeding development or beneficiary access to new innovations.”

Other proposed provisions include the following:   Continue Reading

Congress Continues Focus on Health Policy; More Hearings on the Congressional Agenda

The House Energy and Commerce Committee has scheduled three hearings this week on health topics:

  • A July 24 hearing on advertising and marketing practices within the substance use treatment industry;
  • A July 25 hearing on FDA and NIH implementation of the 21st Century Cures Act; and
  • A July 26 hearing on the Medicare Merit-based Incentive Payment System for physicians.

These hearings follow several other recent health policy committee hearings and markups, including the following:

  • Energy & Commerce subcommittee hearings examined state efforts to improve transparency of health costs, mental health provisions of the 21stCentury Cures Act, and the 340B drug pricing program.
  • The Energy & Commerce Committee approved the following public health bills:  HR 6378, the Pandemic and All-Hazards Preparedness and Advancing Innovation Act; HR 959, the Title VIII Nursing Workforce Reauthorization Act; HR 1676, the Palliative Care and Hospice Education and Training Act; HR 3728, the Educating Medical Professionals and Optimizing Workforce Efficiency Readiness Act; and HR 5385, the Children’s Hospital GME Support Reauthorization Act.
  • The House Ways and Means Committee held hearings on combating Medicare fraud and modernizing the Stark Law to address value-based care.  The Committee also approved several bills to promote health savings accounts and make other health-related tax code changes.
  • The Senate Health, Education, Labor and Pensions Committee held a hearing on “Reducing Health Care Costs:  Eliminating Excess Health Care Spending and Improving Quality and Value for Patients.”

CMS Proposes CY 2019 Update to Medicare Physician Fee Schedule Rates, 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 2019 conversion factor (CF) of $36.0463, up slightly from the 2018 CF of $35.9996.  This proposed rate is based on a statutory update of 0.25%, offset by a -0.12% relative value unit (RVU) budget neutrality adjustment.  CMS also proposes numerous RVU changes for individual procedures, including potentially misvalued codes.  CMS also discusses its efforts to accurately value postoperative visits performed during the global period.
  • CMS proposes to reduce 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.
  • CMS proposes to maintain its current “site-neutral payment policy” whereby the agency reduces payments to certain provider-based, off-campus hospital outpatient departments that came into operation after the Bipartisan Budget Act of 2015 (which CMS calls “off-campus provider-based departments” or “off-campus PBDs”).  Under this policy, CMS reimburses nonexcepted items and services furnished by these off-campus PBDs at a rate that is 40% of the outpatient hospital prospective payment system (OPPS) rate.
  • CMS is maintaining its implementation schedule for Appropriate Use Criteria (AUC), which requires that physicians who order advance diagnostic imaging (ADI) services (diagnostic magnetic resonance imaging, computed tomography, and positron emission tomography/nuclear medicine) for a Medicare beneficiary consult with AUC via a clinical decision support mechanism (CDSM).  In the final 2018 rule, CMS announced it will begin the AUC program on January 1, 2020 (three years after the statutory deadline) as an “educational and operations testing year.  As of January 1, 2020, ordering professionals will be required to consult specified applicable AUC using a qualified CDSM when ordering applicable ADI services, and furnishing professionals will be required to report consultation information on the Medicare claim.  However, CMS will pay claims for ADI services in 2020 regardless of whether the claims report the AUC consultation.  From July 2018 through December 2019, “early adopters” can voluntarily report limited consultation information on Medicare claims.  In the 2019 proposed rule, CMS proposes to:
    • Extend the AUC program requirements to independent diagnostic testing facilities (joining physician offices, hospital outpatient departments, and ambulatory surgical centers).
    • Allow the AUC consultation to be performed by auxiliary personnel under the direction of the ordering professional and incident to the ordering professional’s services. The proposed rule is currently silent on what, if any, steps are required if the auxiliary personnel learn that the ordered ADI test does not adhere to the specified AUC criteria.
    • Clarify that AUC consultation information must be reported on all applicable claims (i.e., not just reported on claims by furnishing professionals/practitioners).
    • Use established coding methods (e.g., G-codes and modifiers), not a unique consultation identifier, to report the required AUC information.
    • Revise the significant hardship exception criteria.
  • CMS proposes to allow diagnostic imaging tests to be furnished under a physician’s direct supervision (instead of personal/in-the-room supervision) when performed by a radiologist assistant in accordance with state law and state scope of practice rules.  Radiologist assistants would be required to personally perform the test and not supervise a technologist.
  • CMS proposes significant changes to evaluation and management (E/M) payment and documentation policies that are intended to reduce administrative burdens and improve payment accuracy.  Notably, CMS proposes to eliminate the payment distinction and documentation requirements between E/M visit levels 2 through 5.  CMS also proposes to impose a 50% multiple procedure payment adjustment when E/M visits and procedures with global periods are furnished together.
  • CMS proposes numerous changes to the Quality Payment Program (QPP) designed to reduce burdens on clinicians, focus on outcomes, and promote interoperability of electronic health records. These proposals are discussed in a detailed CMS fact sheet.  In conjunction with the proposed rule, CMS announced additional details related to its Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration, which will waive Merit-based Incentive Payment System (MIPS) requirements for clinicians sufficiently participating in Medicare Advantage arrangements that are similar to Advanced Alternative Payment Models.
  • The proposed rule includes numerous other policy provisions, including:  implementation of a Bipartisan Budget Act of 2018 (BBA of 2018) provision pertaining to writing and signature requirements in certain compensation arrangement exceptions to the Stark Act; implementation of a BBA of 2018 provision adding mobile stroke units, renal dialysis facilities, and the homes of ESRD beneficiaries as Medicare telehealth originating sites; payment for new communication technology-based service codes; discontinuation of certain functional reporting requirements for outpatient therapy services and creation of payment modifiers for services furnished by therapy assistants (which will be paid at 85% of the applicable Part B payment); and changes to the definition of “applicable laboratory” for clinical laboratory fee schedule purposes.  CMS also solicits comments on creation of a bundled episode of care for management and counseling treatment for substance use disorders.

CMS also includes a Request for Information (RFI) on the possibility of revising conditions of participation to advance electronic exchange of information that supports safe, effective transitions of care among providers.  A second RFI requests input on ways to improve the accessibility and usability charge information to help patients understand their potential financial liability and compare charges for similar services across providers and suppliers.

CMS will accept comments on the proposed rule and RFIs through September 10, 2018.

OIG Moving Ahead on Changes to Anti-Kickback Safe Harbor Protection for Drug Rebates to Plans, PBMs

On July 18, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) submitted to the Office of Management and Budget (OMB) for regulatory review a proposed rule entitled “Removal Of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection.” This proposed rule, if released, appears to follow through on various statements made by HHS Secretary Azar suggesting that safe harbor protection under the Federal Anti-Kickback Statute should be removed for prescription drug rebates—a potential action on which HHS requested comment in the Administration’s Drug Pricing Blueprint.

At this stage we have a few initial observations:

  • While a proposed rule could be at OMB for hours or for months before being released (or might never be released), we note that the period for submission of comments on the Drug Pricing Blueprint ended on July 16, 2018, only two days prior to the submission of this proposed rule to OMB.  As such, this rule must have been in the works for some time, and the Administration does not appear to have waited to review and consider comments before deciding to move forward with it.
  • We will of course need to see the text of the proposed rule to evaluate it from a substantive perspective.  It is noteworthy that the title refers not only to the removal of safe harbor protection but also to “creation of new safe harbor protection.”  Secretary Azar and the Drug Pricing Blueprint have referred to replacing rebates with “a fixed price for a drug over the contract term”; while we’re not aware of the Administration providing any explanation of what that means or how it would work, the idea may be that rebates would still be paid to payors, but in an amount equal to the difference between the contracted-for fixed (net) price and the drug’s list price.  That said, it is not clear whether the proposed new safe harbor will contain those or other requirements.
  • The title in the OMB submission does not refer to which safe harbor(s) would be modified to “remove” safe harbor protection—e.g., OIG may propose to modify the shared risk exception at 42 CFR 1001.952(t) and/or the discount safe harbor at 42 CFR 1001.952(h).
  • There are significant questions relative to OIG’s authority to effectively prohibit manufacturer rebates to payors through changes to the anti-kickback safe harbor regulations.  These include:
    • The Anti-Kickback Statute contains a statutory exception for “a discount or other reduction in price obtained by a provider of services or other entity under a Federal health care program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or other entity under a Federal health care program.”  Manufacturers and payors may seek to rely upon this statutory exception as permitting rebates, even if the regulatory safe harbor promulgated by OIG is more restrictive.
    • The “non-interference clause” included in the part of the statute establishing the Medicare Part D program provides that the Secretary of HHS, “[i]n order to promote competition under this part and in carrying out this part … may not interfere with the negotiations between drug manufacturers and pharmacies and [Part D plan] sponsors.”   OIG regulations which would mandate “fixed price” contracts of the sort described in the Blueprint, or which otherwise proscribe discounting structures, might be deemed to run afoul of this statutory restriction.
  • The rule would apparently be subject to a comment period before it is finalized, inasmuch as it is identified in the OMB notice as a proposed rule.  If and when the rule would be finalized is unclear, as is the effective date of any final rule.

Given the importance of payor rebates to the current drug pricing system, these types of regulatory changes could potentially have significant impacts on various parts of the health care industry, depending upon the specifics.  One thing that is certain is that industry and observers will be watching closely for the release of this proposed rule—as will we.

CMS Proposes Medicare DMEPOS Rate Changes and Competitive Bidding Reforms

Agency Anticipates Temporary Lapse in Competitive Bidding Program after 2018

CMS is proposing a number of changes to Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) reimbursement policies for 2019, including fee schedule adjustments to account for a “temporary lapse” in the competitive bidding program (CBP). Consistent with the Administration’s stated goal of reducing regulatory burdens on providers and suppliers, CMS also proposes changes to CBP bidding rules for future rounds of bidding and other policy changes that generally have been welcomed by industry.  CMS will accept comments on the proposed rule until September 10, 2018.

Provision of DMEPOS During Competitive Bidding Gap.  With regard to DMEPOS competitive bidding, CMS acknowledges that there will be a lapse in the competitive bidding program (including the national mail-order program for diabetic testing supplies) because the agency has not begun the recompete process for current contracts that end on December 31, 2018.  Therefore beginning January 1, 2019, beneficiaries may receive DMEPOS items from any Medicare-enrolled supplier until such time as new CBP contracts are awarded.  CMS anticipates that the next round of bidding “could potentially be delayed until January 1, 2021.”

Future Competitive Bidding Program Rules.  CMS proposes a number of “market-oriented reforms” and technical policy changes that would apply to future rounds of competitive bidding, including the following: Continue Reading

CMS Proposes Updates to Medicare Home Health Payment Policies for 2019 and 2020

The Centers for Medicare & Medicaid Services (CMS) has proposed its annual update to Medicare home health prospective payment system (HHS PPS) rates for calendar year 2019, along with a broader case-mix methodology reform proposal that would be implemented beginning in 2020.

With regard to the 2019 update, CMS proposes a 2.1% rate increase ($400 million) based on a home health agency (HHA) market basket update of 2.8%, minus a 0.7 percentage point multifactor productivity adjustment.  Payments would also reflect a 0.1% increase tied to outlier payment spending and a 0.1% decrease stemming from a new statutory rural add-on classification policy. The proposed 2019 national, standardized 60-day episode payment rate is $3,151.22, compared to the 2018 rate of $3,039.64; the rate for an HHA that does not submit required quality data would be $3,089.49.

The proposed rule includes numerous proposals that would impact home health benefit and payment policies.  For instance, the proposed rule would define remote patient monitoring in the Medicare home health benefit and add the cost of remote patient monitoring as an allowable HHA administrative cost.  It also would provide a temporary transitional payment for home infusion therapy services in 2019 in advance of full implementation of a new home infusion therapy benefit in 2020.  CMS proposes new safety and accreditation standards for home infusion therapy suppliers, and seeks comments regarding payment for home infusion therapy services beginning in 2021.  CMS also proposes changes to Home Health Quality Reporting Program policies, including removal of seven quality measures under a new measure removal factor, in addition to proposed refinements to Home Health Value-Based Purchasing Model measures and performance scoring.  A number of provisions of the rule are designed to reduce regulatory burdens, including changes to the physician certification/recertification process to eliminate the requirement that certifying physicians estimate how much longer skilled services will be needed when recertifying patient eligibility for home health care. Continue Reading

Ways and Means Committee to Examine Ways to Modernize Stark Law to Promote Value-Based Reforms

The House Ways and Means Health Subcommittee has scheduled a July 17, 2018 hearing on “Modernizing Stark Law to Ensure the Successful Transition from Volume to Value in the Medicare Program.”  In announcing the hearing, Subcommittee Chairman Peter Roskam stated that “the lack of Stark modernization is a clear barrier to reforms that reward better outcomes and higher value care.”  This echoes CMS Administrator Seema Verma’s recent blog post acknowledging that “[i]n its current form, the physician self-referral law may prohibit some relationships that are designed to enhance care coordination, improve quality, and reduce waste.”  As previously reported, CMS is accepting comments through August 24, 2018 on the Stark Act’s impact on participation in integrated delivery models, alternative payment models, and other coordinated care arrangements.  The Ways and Means hearing will review the Administration’s efforts in this area and examine stakeholder recommendations for Congressional action.

CMS Proposes $220 Million Boost in Medicare ESRD PPS Payments in 2019

The Centers for Medicare & Medicaid Services (CMS) has released its proposed rule to update the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2019.  CMS proposes to increase the ESRD PPS base rate from $232.37 in 2018 to $235.82 in 2019 as a result of a proposed 1.5% market basket increase and a proposed wage index budget-neutrality adjustment factor of 0.999833.  CMS also expects to increase payments by $30 million as a result of updates to the outlier threshold amounts.  Overall, CMS estimates that its proposed ESRD PPS policies would increase payments to ESRD facilities by approximately $220 million in CY 2019.

The proposed rule also would, among other things: update the drug designation process for new renal dialysis drugs and biologicals and change the basis for determining transitional drug add-on payment adjustments; update the wage index; revise the low-volume payment adjustment regulations; update the acute kidney injury dialysis rate (which would be the same as the ESRD PPS base rate); and modify ESRD Quality Incentive Program (QIP) reporting requirements and measures.  CMS also includes requests for information on (1) promoting interoperability and electronic healthcare information exchange through possible revisions to patient health and safety requirements; and (2) price transparency/improving beneficiary access to provider and supplier charge information.  Furthermore, as part of this rulemaking, CMS is proposing a number of changes to Medicare policies related to rate setting for durable medical equipment, prosthetics, orthotics and supplies, which we will address in a separate post. CMS will accept comments on the proposed rule until September 10, 2018.

CMS Proposes Tightening Medicaid Provider Reassignment Rules

The Centers for Medicare & Medicaid Services (CMS) is proposing to rescind the authority of states to make Medicaid payments to a third party on behalf of an individual provider, rather than directly to the provider, “for benefits such as health insurance, skills training, and other benefits customary for employees,” under certain circumstances.  This authority, which was adopted in a 2014 rule, was originally intended to “enhance state options to provide practitioners with benefits that improve their ability to function as health care professionals.”

CMS now explains that after further review, it believes “the new exception created by the 2014 rule is not consistent with the statute, may have resulted in provider payments being diverted in ways that do not comport with the law, and, in some cases, may have occurred without the express knowledge of the provider.”  While the agency does not have details on the amount of reimbursement currently being reassigned to third parties by states, CMS believe it is likely in excess of $100 million.  For instance, CMS estimates that unions may currently collect as much as $71 million under arrangements in which states reassign homecare workers’ dues to unions – an arrangement that would not be permitted under the proposed rule scheduled to be published on July 12, 2018.

CMS seeks comments on how it could provide further clarification on the types of payment arrangements that would be permissible assignments of Medicaid payments, and whether additional flexibilities are needed to support self-directed service models.  CMS will accept comments for 30 days after publication.

CMS Considering New Medicare Advantage Payment Arrangement Incentive (MAQI) Demonstration

CMS is planning a new “Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration” that would allow clinicians who participate in certain Medicare Advantage (MA) plans that involve taking on risk to be treated as Advanced Alternative Payment Model (Advanced APM) participants under the Medicare physician fee schedule. By way of background, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established two tracks for Medicare physician fee schedule/Quality Payment Program updates:

  1. The Merit-based Incentive Payment System (MIPS), which adjusts Medicare payments based on performance on quality, cost, improvement activities, and advancing care information measures, or
  2. Advanced APMs, under which eligible clinicians may earn incentive payments for sufficient participation in certain payment arrangements that coordinate care, improve quality, and reduce costs.

Continue Reading

MedPAC Issues Annual Report to Congress on Medicare and the Health Delivery System

The Medicare Payment Advisory Commission (MedPAC) has released its annual report to Congress on “Medicare and the Health Care Delivery System.” This year’s report includes recommendations for changes to emergency department services policies, along with analyses of potential changes that would impact physicians, medical equipment suppliers, post-acute care providers, and others.  Highlights include the following: 

  • The only formal recommendations in this year’s report involve the appropriate access to and use of hospital emergency department (ED) services. MedPAC calls on Congress to:  (1) allow isolated rural stand-alone EDs to bill standard outpatient prospective payment system facility fees; and (2) provide such EDs with annual payments to assist with fixed costs.  Furthermore, MedPAC recommends reducing by 30% Type A ED payment rates (for EDs open 24 hours a day, 7 days a week) for off-campus stand-alone EDs that are within six miles of an on-campus hospital ED.
  • MedPAC describes a budget-neutral approach to rebalancing the Medicare physician fee schedule to increase ambulatory evaluation and management (E&M) services rates while reducing rates for other services (e.g., procedures, imaging, and tests). For instance, MedPAC modeled the impact of a 10% payment rate increase for E&M services, which would cut rates for all other services by 3.8%. 
  • MedPAC examines Medicare payment policies for medical devices. First, MedPAC considers potential expansion of competitive bidding for durable medical equipment, prosthetic devices, prosthetics, orthotics, and supplies.  Second, MedPAC examines physician-owned distributors (PODs) of devices and medical equipment and suggests “ways in which Medicare and policymakers can constrain the risks posed by PODs” (e.g., through revisions to the Stark physician self-referral law and by requiring all PODs to report under the Open Payments program).
  • MedPAC discusses ways Medicare could revise coverage policies to reduce the use of “low-value care,” which MedPAC defines as the provision of a service with little or no clinical benefit or for which the risk of harm outweighs its potential benefit. MedPAC focuses on six tools that Medicare could use:  expanding prior authorization; implementing clinician decision support and provider education; increasing cost sharing for low-value services; establishing new payment models that hold providers accountable for the cost and quality of care; revisiting coverage determinations on an ongoing basis; and linking clinical effectiveness and cost-effectiveness to Medicare coverage and payment policies.
  • The report also includes analyses regarding: the effects of the Hospital Readmissions Reduction Program on beneficiary care and Medicare spending; potential refinements to a unified post-acute care (PAC) prospective payment system to account for sequential stays; approaches to helping hospitals encourage Medicare beneficiaries to use higher-quality PAC providers; principles to measure hospital quality (and application of those principles to population-based outcomes measures and a potential new hospital quality incentives program); the impact of Medicare ACO models on cost and quality; and ways to encourage the development of managed care plans that integrate care dual-eligible individuals.

CMS Schedules July 13 Focus Group Meeting on Provider Compliance Issues

Citing an interest in improving its processes and eliminating unnecessary requirements, CMS is hosting July 13, 2018 “Provider Compliance Focus Group” meeting regarding Medicare fee-for-service compliance topics, including medical review, targeted probe and educate, and Recovery Audit Contractors.  CMS states that it wants “to ensure claims are paid appropriately and preserve the Medicare Trust Fund for future generations,” while making it easier for providers “to submit claims accurately and manage the audit process if you’re audited.”  The target audience for the session is physicians, non-physician practitioners, billing specialists, suppliers, and associations.  Registration is required.

Roundup of Recent Congressional Hearings, Markups on Health Policy Issues

Congressional committees have held numerous hearings and markups in recent weeks on health policy topics, including several hearings focused on health care costs.  Highlights include the following:   Continue Reading

House Approves Sweeping Opioid Prevention/Treatment Legislation

The House of Representatives has overwhelmingly approved bipartisan legislation, HR 6, the SUPPORT for Patients and Communities Act, intended to bolster opioid prevention and treatment programs and strengthen law enforcement efforts.  Among many other things, the wide-ranging legislation would: Continue Reading