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It is no secret that the coronavirus pandemic has driven our daily lives digital—work, education, social gatherings, and, of course, health care. Congress and CMS responded to the public health emergency by waiving limitations on reimbursement for telehealth services rendered to Medicare patients. These waivers introduced new flexibility and vastly expanded Medicare patients’ access to…

As part of its “Regulatory Sprint to Coordinated Care,” the Centers for Medicare & Medicaid Services (CMS) is seeking input on how it can address “unnecessary obstacles to coordinated care, real or perceived, caused by the physician self-referral law.” CMS Administrator Seema Verma acknowledged in a recent blog post that “[i]n its current form, the…

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

  • On November 30, 2017, the House Energy & Commerce Committee is holding a hearing on implementation of the 21st Century Cures Act (Cures Act), featuring testimony by National Institutes of Health Director Francis Collins, M.D. and Food

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Signals Trump Administration’s About-Face on Obama-Era Mandatory Innovation Models

The Centers for Medicare & Medicaid Services (CMS) has just released a proposed rule to cancel a significant — but still-pending — Obama Administration program that would require certain hospitals to participate in Medicare episode payment models (EPMs) for acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) procedures furnished in designated areas of the country. Perhaps more surprisingly, CMS also would dramatically scale back mandatory participation in the ongoing Comprehensive Care for Joint Replacement (CJR) program, with an option for participating hospitals in about half of the current CJR locations to shift to voluntary participation.

As previously reported, the EPM and CJR programs were part of the Obama Administration’s high-profile efforts to move the Medicare system away from fee-for-service (FFS) payments and towards alternative payment models (APMs) that reward quality of care rather than volume of services. Although early APMs (e.g., the Bundled Payment for Care Initiative) were voluntary, CMS eventually shifted attention to mandatory models in order to broaden participation. President Trump’s Secretary of Health and Human Services, Tom Price, M.D., has long been critical of mandatory Medicare payment innovation models and has been contemplating changes to these programs.  It is now clear that the Trump Administration is reversing course and pulling back from mandatory models.  In fact, CMS stated in an announcement that it “expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts” in the future.

EPM/CR Models Slated for Cancellation

CMS published a final rule in early 2017 to establish a mandatory EPM program for AMI and CABG cases in 98 metropolitan statistical areas (MSA), along with a mandatory EPM program for SHFFT procedures in 67 MSAs covered by the CJR program. In short, CMS planned to provide a bundled payment to hospitals in selected geographic areas for individual episodes, covering all services provided during the inpatient admission through 90 days post-discharge.  In such cases, the hospital would be held accountable for spending during the episode of care.  The bundled payment to the hospital would be paid retrospectively through a reconciliation process (hospitals and other providers and suppliers would continue to submit claims and receive payment via the usual Medicare FFS payment systems).  A participant hospital would receive a “reconciliation payment” if its actual episode payments (combined Medicare Part A and B claims payments for services furnished to the beneficiary during the episode) were below the target price for the episode, and certain quality thresholds were met.  Beginning with the second performance year, affected hospitals would be required to repay Medicare for a portion of spending that exceeded the target price (with limits on upward and downward adjustment). The rule also included provisions intended to promote the use of cardiac rehabilitation services through a Cardiac Rehabilitation (CR) Incentive Payment Model.
Continue Reading CMS Proposes Cancellation of Medicare Cardiac/Hip Fracture Episode Payment Models, Scale-Back of Mandatory CJR Participation

In order to improve “clinician engagement” and minimize administrative burdens, CMS has announced an 18-month pilot program to reduce medical review audits for participants in selected Advanced Alternative Payment Models (Advanced APMs), beginning January 1, 2017. Under this program, CMS will direct Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs), and the Supplemental Medical Review…

Temporary Transition Policies Reduce Threat of Negative Adjustments in 2019, But Adds to Complexity

On November 4, 2016, the Centers for Medicare & Medicaid Services (CMS) is publishing a sweeping final rule reforming the Medicare physician fee schedule (MPFS) update framework, as mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). …

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to provide recommendations on arrangements that meet the criteria for a physician-focused payment model (PFPM) under the reformed system for updating the Medicare physician fee schedule. The PTAC has announced that it will begin accepting letters…

In a recent blog post, CMS Acting Administrator Andy Slavitt announced CMS’s plans to give physicians more options for complying with significant upcoming changes to Medicare physician fee schedule (MPFS) rules – which will help physicians avoid triggering a negative payment adjustment in the first year of the program.

As previously reported, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repealed the longstanding sustainable growth rate methodology for updating the MPFS.  Instead, MACRA established a period of stable MPFS annual updates, after which MPFS updates will be made pursuant to either a new Merit-based Incentive Payment System (MIPS) or based on participation in qualified Alternative Payment Models (APMs).  CMS published a proposed rule in May 2016 to implement the MIPS and APM reforms, which together CMS calls the “Quality Payment Program.”  The first reporting period for the Quality Payment Program begins on January 1, 2017, and it will impact physician payment in 2019.
Continue Reading CMS Announces Flexibility for Physician First-Year Participation in MACRA Quality Payment Program

The Physician-Focused Payment Model Technical Advisory Committee will meet on September 16, 2016.  The Committee will continue discussions about the process by which physician focused payment model proposals will be received and reviewed by the Committee in accordance with regulations implementing Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) physician payment reforms.

The Centers for Medicare & Medicaid Services (CMS) has announced proposals for three new “episode payment models” that, like the Comprehensive Care for Joint Replacement (CJR) model, would mandate provider participation in selected geographic areas. The episodes included in these payment models would address care for heart attacks, coronary artery bypass graft, and surgical hip/femur fracture treatment (excluding lower-extremity joint replacement). The performance period for these proposed episode payment models would begin July 1, 2017, giving hospitals and other providers a very short amount of time to prepare for these new payment methods. Comments are due October 3, 2016. Reed Smith is available to assist clients with preparation of comments or questions related to the proposed rule.
Continue Reading CMS Proposes Three New “Episode Payment Models” for Cardiac Care, Hip/Femur Fracture Cases, Plus Changes to CJR Model

On July 25, 2016, CMS announced ambitious, multi-pronged plans to expand mandatory Medicare coordinated care/bundled payment programs, promote the use of cardiac rehabilitation services, refine current Comprehensive Care for Joint Replacement Model (CJR) rules, and integrate bundled payment programs into the upcoming Medicare physician quality/payment framework. The proposed “Advancing Care Coordination through Episode Payment Model” rule is part of the Administration’s efforts to move the Medicare system away from fee-for-service (FFS) payments and towards alternative payment models that reward quality of care rather than volume of services.
Continue Reading CMS Unveils New Mandatory Medicare Bundled Payment Models for Cardiac & Hip Fracture Cases, Plus Proposed Refinements to CJR Program

MedPAC has released its June 2016 Report to the Congress on Medicare and the Health Care Delivery System. The report includes recommendations for a number of Medicare policy reforms and analyses of various health care market developments. Several chapters address Medicare drug policy, including a review of external factors that influence the prices Medicare pays for prescription drugs. With regard to Medicare Part B drug policy, MedPAC discusses potential modifications to Medicare Part B drug reimbursement, such as reducing dispensing and supplying fees, along with approaches to improving the quality and reducing the costs of oncology care (since more than half of Medicare Part B drug spending is associated with anticancer and related drugs). Likewise, MedPAC examines the Medicare Part D prescription drug program and offers recommendations for giving plan sponsors greater financial incentives and mechanisms to manage the benefits of high-cost enrollees; exclude manufacturer discounts on brand-name drugs from counting as enrollees’ true out-of-pocket spending; eliminate beneficiary cost sharing above the catastrophic cap; and increase financial incentives for low-income beneficiaries to use lower-cost drugs and biologicals.

MedPAC also discusses development of a unified Medicare payment system for post-acute care, including its unified prospective payment system (PPS) prototype that it believes accurately predicts resource needs for nearly all patient groups. MedPAC raises various implementation considerations, including the need to develop separate payment models for nontherapy ancillary services and the combination of routine and therapy services; adjustments to recognize lower costs in home health agencies compared to institutional settings; the need for outlier policies and labor cost adjustments; future adjustments to reward high-quality, efficient care; conforming regulatory reforms; and an appropriate transition period, among other policy provisions.

In addition, the report addresses:…
Continue Reading MedPAC Issues Recommendations on Medicare Drug, Post-Acute Care, and Other Payment Policies

The Centers for Medicare & Medicaid Services (CMS) has proposed regulations to implement major reforms of the Medicare physician fee schedule (MPFS) update framework that were mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).  As discussed in our client alert, MACRA repealed the longstanding sustainable growth rate (SGR) methodology for updating the MPFS. Instead, MACRA established a period of stable MPFS annual updates, after which MPFS updates will be made pursuant to either a new Merit-based Incentive Payment System (MIPS) or based on participation in qualified Alternative Payment Models (APMs). CMS’s proposed rule to implement the MIPS and APM reforms, which together CMS calls the “Quality Payment Program,” is lengthy (the advance version is almost 1000 pages) and very complex. The following is an overview of the major provisions of the rule. …
Continue Reading CMS Proposes Implementation of MACRA Physician Payment Reforms

On April 19, 2016, the House Energy and Commerce Subcommittee on Health is holding a hearing entitled “Medicare Access and CHIP Reauthorization Act of 2015: Examining Physician Efforts to Prepare for Medicare Payment Reforms.”  The hearing will focus on major physician organizations’ investments in the development of alternative payment models, quality measures, and practice improvements.

The White House Office of Management and Budget (OMB) is now reviewing a highly-anticipated Centers for Medicare & Medicaid Services’ (CMS) proposed rule to implement major Medicare physician payment reform provisions included in the Medicare Access and CHIP Reauthorization Act (MACRA).  As previously reported, MACRA repealed the Medicare sustainable growth rate (SGR) formula and…

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) includes payment incentives to encourage providers to participate in alternative payment models (APMs) that focus on coordinating care, improving quality, and reducing costs. MACRA established the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to provide recommendations to the Secretary of Health and Human Services on…

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires CMS to develop quality measures that will apply to Medicare payments to physicians when new Merit-based Incentive Payment System (MIPS) and Medicare alternative payment model (APM) provisions go into effect (MIPS and APM payment adjustments begin in 2019).  Pursuant to this mandate, CMS has…

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires CMS to establish care episode groups and patient condition groups, which will be used to measure resource use under the new Merit-Based Incentive Payment System (MIPS) and alternative payment models (APMs). Care episode groups describe the patient’s clinical problems at the time items and …