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The CMS Center for Medicare & Medicaid Innovation (CMMI) continues to launch initiatives to test ways to improve the quality of health care while controlling cost, despite an uncertain fate under the future Trump Administration and Republican-controlled Congress.

Specifically, two new CMMI Beneficiary Engagement and Incentives (BEI) Models seek to promote “shared decision making,” which…

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…

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  If the law is repealed, however, what would take its place, and how would Congress address the roughly 20 million Americans currently covered in some way under the ACA (and the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.

Continue Reading Looking Ahead to a Trump Administration: Health Care and Life Sciences Industry Perspectives

CMS is soliciting public input on the “evolution” of its State Innovation Models (SIM) Initiative, which was launched in 2013 to accelerate state design and testing of multi-payer payment and delivery models to generate savings and improve care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries. In a September 8, 2016 press…

Congress has returned from recess, and health care policy continues to be on the agenda. The following health-related hearings and markups were held this week:

  • The House Ways and Means Committee approved H.R. 5942, a bill to establish a demonstration program to provide integrated care for Medicare beneficiaries with end-stage renal disease, and H.R. 954, the “CO-OP Consumer Protection Act of 2016,” which would provide an exemption from the requirement to maintain minimum essential coverage if an individual’s Consumer Operated and Oriented Plan (CO-OP) coverage is terminated.
  • The Ways and Means Health Subcommittee held a hearing on “the Evolution of Quality in Medicare Part A.”
  • The House Budget Committee examined the CMS Center for Medicare & Medicaid Innovation: Scoring Assumptions, and Real World Implications.
  • The House Energy and Commerce Health Subcommittee held a legislative hearing on bipartisan bills intended to improve public health, including: H.R. 1192, the National Diabetes Clinical Care Commission Act; H.R. 1807, the Sickle Cell Disease Research Surveillance, Prevention and Treatment Act; H.R. 3119, the Palliative Care and Hospice Education and Training Act; and H.R. 3952, the Congenital Heart Futures Reauthorization Act.

Continue Reading Congressional Health Policy Hearings, Markups Resume After Summer Break

CMS is announcing changes to the Medicare Advantage Value-Based Insurance Design (MA-VBID) model, which is testing how MA plans can use health plan design elements (e.g., supplemental benefits, disease management, or reduced cost sharing) to encourage enrollees with specified chronic conditions to use high-value clinical services or high-value providers that improve quality of care while…

CMS has opened the application period for physician practices interested in participating in its new primary care model, Comprehensive Primary Care Plus (CPC+), which is intended to improve how primary care is delivered and reimbursed. CMS also announced that the following 14 regions have been selected to participate in CPC+ (statewide unless otherwise noted): Arkansas;…

CMS has launched a new “Comprehensive Primary Care Plus” (CPC+) model to improve how primary care is delivered and reimbursed. According to CMS, the CPC+ initiative (which builds on the ongoing Comprehensive Primary Care model) will provide “greater cash flow and flexibility for primary care practices to deliver high quality, whole-person, patient-centered care and lower the use of unnecessary services that drive total costs of care,” which in turn will result in a healthier patient population.

Through the five-year CPC+ model, Medicare and commercial and state payers will partner in up to 20 regions to support eligible practices as they change how they delivery care, focusing on (1) Access and Continuity; (2) Care Management; (3) Comprehensiveness and Coordination; (4) Patient and Caregiver Engagement; and (5) Planned Care and Population Health. CMS expects that the model will include up to 5,000 practices with more than 20,000 doctors and clinicians serving 25 million beneficiaries.

Practices can apply to participate in one of two tracks with different payment options and clinical capability requirements, as summarized in the following CMS chart:Continue Reading CMS Announces Major Multi-Payer Comprehensive Primary Care Plus (CPC+) Model

CMS has released a complex and controversial plan – the Part B Drug Payment Model — to test new Medicare payment methods for certain Part B drugs to determine whether alternative payment designs will reduce Medicare expenditures while preserving or enhancing the quality of care provided to Medicare beneficiaries. CMS suggests that the current Medicare Part B drug reimbursement framework — based on the drug’s average sales price (ASP) plus 6 percent — provides a financial incentive to prescribe more expensive drugs without encouraging high-value care. To remove this incentive and promote value-based pricing, CMS is proposing to test a laundry list of reforms in selected geographic areas, such as basing payment on ASP plus a flat fee or incorporating a variety of value-based strategies used in many commercial plans.

The Part B Drug Payment Model (Model) would apply to the majority of drugs paid under Part B, including: drugs and biologicals with HCPCS codes that are nationally priced under section 1847A of the Social Security Act, including ASP, Wholesale Acquisition Cost (WAC), and Average Manufacturer Price (AMP) -based payment amounts; drugs and biologicals paid separately under the hospital outpatient prospective payment system (including pass-through drugs); non-infused drugs furnished by durable medical equipment (DME) suppliers; and intravenously- and subcutaneously-administered immunoglobulin G.  CMS proposes to exclude some categories of drugs, however, such as:  contractor-priced drugs; influenza, pneumococcal pneumonia and hepatitis B vaccines; drugs infused with a covered item of DME (excluded during phase 1 only “so that DME policy can focus on issues related to DME and so that the model does not interfere with decisions related to the inclusion or exclusion of these drugs in DME competitive bidding”); separately billable End-Stage Renal Disease drugs; blood and blood products; and certain drugs in short supply.  All providers and suppliers furnishing Part B drugs that are included in the Model will be required to participate (although in some cases the provider/supplier will continue to receive payment of ASP + 6 percent as part of a control group).
Continue Reading CMS Proposes Testing Medicare Part B Drug Payment Reforms to Promote Value

CMS’s latest innovation model, the Accountable Health Communities model, will test whether screening for health-related social needs, providing community service referral and navigation, and encouraging partner alignment impacts total cost of care, emergency department visits, inpatient hospital admissions, and quality of care for high-risk Medicare and Medicaid beneficiaries. The five-year program will provide up…

The latest CMS “innovation model” will test whether providing Medicare Part D prescription drug plan (PDP) sponsors with financial incentives and flexibility with regard to medication therapy management (MTM) program requirements can improve quality and reduce costs by “right-sizing” investment in MTM services.  Specifically, CMS will allow stand-alone PDP sponsors in 11 states to apply…

The latest CMS “innovation model” focuses on options for redesigning Medicare Advantage (MA) to improve health outcomes while reducing expenditures. Specifically, the Medicare Advantage Value-Based Insurance Design (VBID) Model will allow MA plans in seven states to apply to offer supplemental benefits or reduced cost sharing to enrollees with specified chronic conditions. The five-year initiative…

As promised in our July 21st post, our team has compiled a comprehensive analysis of the Centers for Medicare and Medicaid Services’ (CMS) proposed rule to establish a Medicare Comprehensive Care for Joint Replacement (CCJR) model, under which CMS would provide a bundled payment to hospitals for an episode of lower extremity joint…

On July 14, 2015, CMS published a proposed rule to establish a Medicare Comprehensive Care for Joint Replacement (CCJR) model.  Under the proposed rule, CMS would provide a bundled payment to hospitals in selected geographic areas for an episode of care for lower extremity joint replacement (LEJR) surgery, covering all services provided during the inpatient admission through 90 days post-discharge.
Continue Reading CMS Proposes “Comprehensive Care for Joint Replacement” Model

The CMS Independence at Home Demonstration saved more than $25 million during its first performance year while delivering high-quality patient care, according to a June 18, 2015 CMS announcement. The Independence at Home Demonstration is an ACA innovation model testing the effectiveness of delivering comprehensive primary care services at home to Medicare beneficiaries with multiple…

CMS is inviting physician practices to apply to participate in its new “Million Hearts® Cardiovascular Risk Reduction Model," which will test whether encouraging physician practices to calculate risk for eligible Medicare beneficiaries will prevent the occurrence of first-time heart attacks and strokes. CMS intends to operate the model for five years, and seeks…

As previously reported, CMS has established a public-private partnership, the Health Care Payment Learning and Action Network, to support HHS’s goal of moving Medicare and the broader health industry from a FFS model towards alternative payment models that emphasize value. CMS is now inviting payers, providers, employers, purchasers, state partners, consumer groups, individual…

CMS is soliciting applications for organizations to participate in a new Oncology Care Model (OCM), which will test performance-based Medicare payment for episodes of care surrounding chemotherapy administration to cancer patients beginning in 2016. The model features a two-part payment system for participating practices: (1) a $160 monthly per-beneficiary-per-month payment for the duration of the…