May 23, 2016
Washington Healthcare Update
Zika funding debated…Labor Department releases final overtime rule…Part B demo still being discussed.
House of Representatives
4. State Activities
5. Regulations Open for Comment
Supreme Court Sends Birth Control Case to Lower Courts
The Supreme Court told the Obama administration and religious nonprofits challenging the Obamacare birth control coverage requirement to find a solution in
the lower courts. In an unsigned opinion issued May 16, the court sent cases back
to federal appeals courts with instructions for the parties to try harder to work things out. The opinion said the court expresses no view on the merits of
the cases. At issue is the extent to which religiously affiliated employers need to participate in the requirement for most employer health plans to
provide no-cost contraception for women. The Supreme Court asked the lower courts to find a solution that allows religious institutions to avoid providing
birth control while maintaining Obamacare coverage protections.
The White House is pleased with the decision, according to press secretary Josh Earnest. He also said the White House is still concerned with Republican
opposition to confirming Supreme Court nominee Merrick Garland, but that an additional justice probably wouldn’t have caused a different result.
Lawsuit Against Obamacare’s Grandmothered Plans Rejected Again
A lawsuit challenging the Obama administration’s decision to allow plans that do not meet the Affordable Care Act’s (ACA) requirements to stay in place has
been rejected by the courts once again. The U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court’s finding that the plaintiff
could not show it had been harmed by the administration’s policy on transitional health plans.
The American Freedom Law Center argued that the policy ignores federal law and was responsible for a 57 percent increase in its premiums at the end of
2014. However, the
court’s opinion notes that they have not demonstrated that they have standing because they failed to show that
the increase in their premiums results from HHS’s transitional policy.
HHS initially allowed these so-called “grandmothered” plans to stay in place for one year, but ultimately extended the policy through 2017.
ACEP Suing HHS Over Out-of-Network Payments
The American College of Emergency Physicians (ACEP) is suing the U.S. Department of Health and Human Services (HHS), arguing that a provision of the
Affordable Care Act (ACA) allows insurers to underpay for out-of-network emergency medical services. The suit — filed May 12 in the U.S District Court
for the District of Columbia — comes after ACEP spent years urging HHS and the Labor and Treasury Departments to change the regulations.
The ACA established that in these cases, insurers must pay the greatest of three costs: the insurers’ in-network amount, the Medicare amount or the
usual, customary and reasonable amount (UCR).
According to ACEP, the highest of the three amounts is almost always the UCR, but insurers have historically understated and prevented public
verification of these amounts.
ACEP said it met with CMS numerous times to establish a way to verify UCR amounts in the years following the proposed rule, but had no success. CMS
finalized the rule in November 2015. ACEP charges that the rule should be invalidated because the administration failed to follow the Administrative
Procedures Act by not listening to the group.
The group argues that the final rule leaves ACEP’s members who are out-of-network emergency physicians with no minimum payment protection in states
that prohibit balance billing.
House of Representatives
House Approves Zika Funding Bill, White House Threatens a Veto
On May 19, the House approved the $622 million Republican-backed Zika funding bill. The legislation offers less than one-third of the $1.9 billion request
in emergency funding that the administration has said is vital to respond to the virus. It does not include new money and instead draws on $352 million in
unspent Ebola funds and another $270 million in HHS’s administrative budget. USAID would receive $119 million, BARDA would get $103 million, NIH would get
$230 million and the CDC would receive $170 million for fiscal year 2016.
The measure next must be reconciled with a compromise Zika bill the Senate passed May 17, which would provide about $1.1 billion — roughly two-thirds what
the Obama administration wants.
The White House had previously threatened to veto the bill if it gained approval in the House. The Office of Management and Budget says the bill is
“woefully inadequate” to provide the support that public health experts say is necessary. OMB said advisers would urge President Obama to veto the bill.
To see the bill, click here.
CJS Subcommittee Approves House Bill Funding Opioid Programs
On May 18, the Appropriations subcommittee on Commerce, Justice, Science (CJS) and Related Agencies approved by voice vote the fiscal year 2017 CJS
Appropriations bill. The legislation includes $103 million in grant programs to support opioid abuse reduction.
To see the bill, click here.
For a related press release, click here.
Energy and Commerce Committee Reiterates Request for Reinsurance Documents
In a letter to HHS Secretary Sylvia Mathews Burwell and CMS Acting Administrator Andy Slavitt, Republican House legislators expressed their frustration at
the administration’s delay in complying with document requests.
On March 23, the Energy and Commerce Committee requested all documents and communications relating to the administration’s decision “to prioritize payments
to insurance companies under the Transitional Reinsurance Program.” At issue is whether CMS is improperly diverting $3.5 billion that should go to the
federal treasury to reinsurance payments for health plans competing in the Obamacare marketplaces. The committee threatened to subpoena the documents if
HHS and CMS fail to comply with the request by May 30.
To read the letter, click here.
House Energy and Commerce Committee Holds Hearing on Medicare Part B Demo
On May 17, the House Energy and Commerce Health Subcommittee held a hearing on the Medicare Part B demonstration. The hearing split along party lines, with
Republicans arguing that the initiative makes it harder for patients to access certain prescription drugs and Democrats supporting the initiative but
suggesting improvements. Patrick Conway, CMS’s chief medical officer, has said that CMS is open to making changes before the proposal is implemented.
However, officials have also maintained that patients’ access to treatments covered by Part B would not be affected by the proposal.
To view the hearing, click here.
House Leadership Names CARA Conference Representatives
In a House and Senate conference committee on the Comprehensive Addiction and Recovery Act (CARA), 21 Republicans and 14 Democrats have been named to
represent the House. Majority Leader Kevin McCarthy will lead the Republicans and Energy and Commerce Committee Ranking Member Frank Pallone will lead the
Democrats. The Senate has not named conferees yet. A final bill on the legislation to address the opioid epidemic is expected to go to the president’s desk
Reps. Tiberi, McDermott Introduce Bill to Help Hospitals and Improve Patient Care
On May 18, House Ways and Means health subcommittee chairman Pat Tiberi (R-OH) and ranking member Jim McDermott (D-WA) introduced the Helping Hospitals
Improve Patient Care Act, bipartisan legislation to advance reforms for hospitals and other Medicare providers. The legislation is intended to support
current efforts to develop outpatient facilities and allow hospitals to treat more low-income and cancer patients.
The bill would exempt hospitals that had a binding written agreement to construct an outpatient department on Nov. 2, 2015. To get the exemption, hospitals
would also have to attest to meeting outpatient department criteria. CMS does not require attestation for hospitals, but the HHS Inspector General is
expected to release a report that is critical of that voluntary policy. However, those “mid-build” facilities still would be paid the lower doctor-office
rates next year, and then rates would revert to outpatient department levels in 2018.
The bill also includes an exemption for facilities that had attested to meeting outpatient department criteria by Dec. 2, 2015. Unlike mid-build
facilities, those facilities would not have their rates temporarily cut by Medicare in 2017.
Hospital-based cancer centers also would be exempt from the site-neutral pay cuts, but they would have to pay their way with other pay cuts to their
The package also includes several other bills that the committee considered last year:
The Medicare Crosswalk Hospital Code Development Act
(H.R. 3291), by House Speaker Paul Ryan (R-WI), which aims to improve understanding of how Medicare allocates resources for 10 surgical services that
are provided in both inpatient and outpatient settings.
The Establishing Beneficiary Equity in the Hospital Readmission Program Act
(H.R.1343), which accounts for the poor health of low-income beneficiaries for whom hospitals care when determining how many readmissions hospitals are
allowed before Medicare penalizes them.
The Rural Community Hospital Demonstration Extension Act
(S. 607), which would extend that demo from 5 years to 10 years.
LTCH Technical Correction Act
Electronic Health Fairness Act of 2015
(H.R. 887), which calls for exempting ambulatory surgical centers from electronic health record meaningful use penalties.
Medicare Advantage Coverage Transparency Act
(H.R. 2505), which would make CMS submit data on Medicare Part A, B, C and D enrollment by ZIP Code.
Seniors’ Health Care Plan Protection Act
(H.R. 2506), which would require CMS to revise the Medicare Advantage risk adjustment system to account for beneficiaries’ chronic conditions. It also
would require CMS to evaluate other potential changes to the risk adjustment system.
For more information, click here.
Moderate Senate Democrats Request Changes to Medicare Part B Demo
In a May 13 letter to CMS Acting Administrator Andy Slavitt, a group of moderate Senate Democrats asked that CMS change the size and scope of the Medicare
Part B demonstration and make alterations to ensure that seniors’ care is protected. The Democrats also raised concerns about patient access and rural
doctors. To see the full letter,
Senate Approves Zika Funding
On May 17, the Senate approved a bipartisan deal to partially fund the Obama administration’s request for emergency funding to combat the Zika virus —
signing off on $1.1 billion, which is not as much as Obama requested, but almost twice as much as the House is proposing. The Senate approved the funds on
a procedural vote and turned down two related measures — one would fully fund the administration’s $1.9 billion request and another smaller package would
have been paid for by cutting Obamacare.
Sen. Marco Rubio (R-FL) — who cosponsored the bill to approve the full $1.9 billion — said he thinks the Senate will have to revisit the Zika funding issue
at some point, especially if an outbreak occurs. Rubio’s home state of Florida already has over 100 of the 500 confirmed travel-related cases in the United
Sen. Shaheen Asks WHO to Evaluate Zika Threat to Olympics in Brazil
Sen. Jeanne Shaheen (D-NH) wrote a letter to WHO director
Margaret Chan expressing her concerns about the potential for the Olympics to greatly accelerate the global outbreak of the Zika virus. There will be an
estimated 10,000 athletes from as many as 200 countries, and 500,000 spectators from around the world traveling to Brazil for the event. Shaheen said it is
“imperative” that WHO commission a comprehensive evaluation of the public health risks associated with the Olympics being held in Brazil this August.
Senate Appropriations Subcommittee Gives Funding Increase to FDA
The Senate Appropriations Agriculture-FDA subcommittee
a bill on May 17 that provides a small increase – $11.9 million - to the U.S. Food and Drug Administration’s (FDA) discretionary budget for medical product
safety activities. FDA received $2.759 billion total in discretionary funding. The full committee will markup the legislation on Thursday.
Valeant Announces Discounts for Price-Hiked Drugs
On May 16, Valeant Pharmaceuticals announced
discounts for the price-spiked drugs Nitropress and Isuprel. Hospitals will be eligible for a minimum 10 percent rebate and up to 40 percent discounts
based on volume purchased of the two heart drugs. Valeant also said there will be no future price increases of the drugs or reductions in the discounts.
Democratic Rep. Elijah Cummings was not pleased with Valeant’s move: “A year ago, Valeant increased prices on these same two drugs by 525 percent and 212
percent, so slightly trimming their massive price increases now still forces our nation’s hospitals to pay millions of dollars more each year,” he said in
a news release.
EEOC Lowers Wellness Program Financial Penalty for Employee Spouses
On May 16, the Equal Employment Opportunity Commission (EEOC) lowered the maximum financial penalty employers may use to pressure employee spouses into
participating in a workplace wellness program under the Genetic Information Nondiscrimination Act (GINA).
The final GINA rule, which applies only to employee spouses,
limits the penalty to “30 percent of the total cost of self-only coverage under the group health plan.” This is different than the proposed rule, which limited
the penalty to 30 percent of the cost of — more expensive — family coverage.
Under EEOC’s final ADA rule — the Americans with Disabilities
Act — an employer can similarly impose a penalty of up to 30 percent of self-only coverage, which in this case is unchanged from the
According to an EEOC spokesperson, the penalties under both rules apply regardless of whether participation in a certain health plan is required to
participate in a wellness program.
The ADA rule also clarifies that the law’s “safe harbor provision,” which allows insurers to use employee medical information to evaluate the cost of
insurance, does not apply to workplace wellness programs.
Labor Department Releases Final Overtime Rule
On May 18, the White House finalized the Labor Department’s rule extending overtime protections to more than 4 million
workers. The rule, which will take effect Dec. 1, will raise the salary threshold under which virtually all workers are guaranteed time-and-a-half pay to
$47,476 — this is more than twice the current threshold of $23,660.
The threshold is tied to the 40th wage percentile for full-time salaried workers in the lowest income region and will be updated every three years.
The Labor Department said that the new salary threshold would apply to post-doctoral fellows who do not primarily teach.
The Labor Department also issued a non-enforcement policy for
certain health care providers that are primarily Medicaid-funded, which will last until March 2019.
To see the White House fact sheet, click here.
CMS Releases Final Rule on Medicare Secondary Payer Web Portal
On May 13, the Centers for Medicare and Medicaid Services (CMS) released its
detailing processes and a timeline for expansion of the Medicare Secondary Payer Web portal.
The agency published an interim final rule in September 2013 with a comment period meant to create a timeline to expand the functionalities of the
Medicare Secondary Payer portal. It provided for the development of a multifactor authentication process to allow certain users other than
beneficiaries to access CMS’s Medicare Secondary Payer conditional payment amounts and claims details through the agency’s web portal. It also said
that CMS would allow users to notify the agency through the web portal that a case, like workers’ compensation, is approaching a settlement that could
affect what Medicare would owe for health care as a secondary payer. The interim rule would also allow certain users to get conditional payment summary
statements and amounts before reaching a settlement, and make sure that disputes over what medical costs are related to a settlement are addressed
within 11 business days of CMS’s receipt of dispute documentation.
Some stakeholders had complained that CMS used the interim final rule with a comment period to implement these provisions of the SMART Act, but the
agency says in the final rule that the short time frame specified in the law — nine months — left the agency with little choice.
In the final rule, CMS removes the definition of Medicare Secondary Payer conditional payment information — it says doing so will prevent redundancy
and confusion. CMS also clarifies that a claim may be disputed only once.
The rule also includes new language clarifying that information about a settlement must be submitted to CMS within 30 days of such a settlement’s being
reached for the agency to be bound to any final conditional payment amount provided through the web portal. CMS also clarifies that a final conditional
payment amount may be requested at any time after a recovery case has been posted on the web portal.
CMS Releases Monitoring Data Showing Adequacy of New Payment Amounts for DMEPOS in Non-Competitively Bid Areas
On May 17, the Centers for Medicare and Medicaid Services (CMS) released monitoring data showing that suppliers in all areas where the adjusted Durable
Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule rates have been implemented have continued to accept these adjusted rates as
payment in full, suggesting that the adjusted fee schedule rates continue to be more than adequate in covering the costs of furnishing the DMEPOS items in
A good indicator of whether payment amounts are sufficient is the percentage of claims that suppliers submit as accepting assignment, meaning that the
suppliers accept the Medicare fee schedule amount as payment in full. Suppliers in non-competitive bidding areas are not required to accept assignment of
Medicare claims for DMEPOS items in accordance with the Medicare statute. This means that if an adjusted fee schedule amount is not sufficient to cover the
costs of furnishing the item to a particular beneficiary in the supplier’s service area because of where the beneficiary lives or for other reasons, the
supplier can decide not to accept assignment of the claim and can collect the extra money to cover their costs directly from the beneficiary. This payment
from the beneficiary would be in addition to the coinsurance and deductible required by all beneficiaries for DMEPOS items.
This monitoring data compares the rate of assignment of claims for DMEPOS items for the first four months of 2015 that were paid at the unadjusted fee
schedule rates versus the rate of assignment of claims for the same items that were paid at the new partially adjusted rates for the first four months of
The data are broken out for eight geographic regions of the contiguous United States, as well as non-contiguous areas (i.e., Alaska, Hawaii, Puerto Rico,
Virgin Islands, etc., combined). The data are also broken out to compare the rate of assignment of claims for DMEPOS items furnished in rural areas versus
non-rural areas. The rate of assignment of claims in 2016 continues to be very high overall in both rural and non-rural areas. Finally, the data is broken
out for several different categories of DMEPOS items.
Overall, there was no change in the rate of assignment for the first four months in 2016 (99.88 percent) compared to the first four months in 2015 (99.87
percent). There was also no change in the rate of assignment in rural areas in 2016 (99.90 percent) compared to 2015 (99.90 percent), while the rate of
assignment in non-contiguous areas changed only slightly in 2016 (99.81 percent) compared to 2015 (99.90 percent).
CMS said it will post additional data on assignment rates, access to items and services, and health outcomes in the near future.
To see the monitoring data, click here.
CMS Considering Overlapping Demonstrations
CMS Deputy Administrator for Innovation and Quality Patrick Conway said
the agency is considering how certain Center for Medicare and Medicaid
Innovation models and demonstrations might work together.
The agency has historically set up demonstrations so that providers can participate in only one, and Conway said at a recent briefing that the agency
has set it up that way so providers aren’t paid double for savings. CMS recently said that providers that participate in the Comprehensive Primary Care
Plus (CPC+) demonstration cannot participate in both that and other Medicare shared savings programs or demonstrations “as the intent of the CPC+
performance-based incentive payment and shared savings is the same.” This includes both Accountable Care Organizations and the Independence at Home
However, the agency also says in a Frequently Asked Questions document that providers participating in CPC+ can participate in certain other
demonstrations like Model 2 and Model 3 of the bundled payments program, the oncology care model, the Million Hearts model and the Accountable Health
Communities Model at the same time. Some analysts say this is one of the first times CMS has been explicit about allowing certain demonstrations to
Conway said the agency is getting feedback from stakeholders that would like to see the demonstrations cross over, and is actively thinking about
allowing models to work together and how to adjust the parameters of certain demonstrations to incentivize players to work together.
Some analysts say it makes sense for CMS to allow providers to participate in complementary demonstrations as long as they aren’t paid twice for the
same actions, but others say that distortions created by overlapping models could be problematic.
4. State Activities
California: Covered California Moving Fast to Fix Unintentional Switches into Medi-Cal
Covered California is speeding up its response to a systemic problem that is transferring some pregnant women on private insurance plans into Medi-Cal
without notice or consent. Last month, at least 1,900 women in Covered California plans were automatically and wrongly transferred into Medi-Cal once they
told the agency they were pregnant. Some women reported losing their doctors or experiencing delays receiving care. Covered California said the issue was
due to a computer glitch and that it will be resolved by September.
Minnesota: Minnesota DHS Hired Psychiatrists with Disciplinary Histories
The Minnesota Department of Human Services (DHS) has come under fire for knowingly hiring at least three psychiatrists with histories of alleged
malpractice and patient abuse. An investigation of psychiatrists hired by the state revealed that at least one had previously been sued by a patient for
sexual harassment and another inappropriately prescribed psychiatric medication for patients. The Minnesota Board of Medical Practice declared one
psychiatrist’s treatment of several patients as “professionally incompetent.” The providers were disciplined, fined and had conditions placed on their
licenses before the state hired them to work in its mental health facilities.
Mississippi: Gov. Bryant Signs Bill Blocking Medicaid Reimbursements for Planned Parenthood
Mississippi Gov. Phil Bryant signed a measure into law that blocks the state’s Medicaid program from paying for “costs of care and services” to providers
who offer abortion services. The bill, aimed at Planned Parenthood in Mississippi, will also hit the state’s only abortion clinic — the Jackson Women’s
Health Organization. Mississippi’s Planned Parenthood, which does not offer abortion services, will not receive Medicaid reimbursements for family planning
services. The law is likely to face a court challenge.
New York: Lawmakers Create Omnibus Medical Aid in Dying
New York lawmakers combined two medical “aid in dying” bills in a potentially positive move for the legislation. The new omnibus bill would require two
physicians to confirm that an individual has a terminal illness and is within six months of dying. Patients would then need to be referred to a mental
health professional for an evaluation, and two witnesses would need to attest that the request is voluntary. It is unclear how Democratic Gov. Andrew Cuomo
feels about the legislation. In other states, similar legislation has run into significant opposition from religious organizations. Five states have
authorized similar policies: California, Montana, Oregon, Vermont and Washington.
Oregon: Movement from Federal Health Insurance Platform Would Cost Oregon
It would cost about 10 percent more per year to switch to a new, state-based platform for Oregon’s health exchange, rather than keeping the federal
technology. The Department of Consumer and Business Services estimated that switching to a new state website would cost $3
million more per year than staying on HealthCare.gov — a total of $34 million. In 2017, CMS will start charging certain states for their use of the federal
platform following the failure of their own state-based systems — though Oregon’s move off of HealthCare.gov would not happen until 2018.
Texas: Texas Finalizes Repeal of Medicaid Price Reporting Requirement
Texas is repealing its Medicaid price reporting requirement for drug manufacturers. The Texas Health and Human Services Commission finalized the proposed
rule that releases manufacturers from the requirement to calculate and submit any updated prices to the agency for drugs covered under Texas Medicaid, with
the exception of a specific update request.
To see a related FDA blog post, click here.
5. Regulations Open for Comment
HHS Posts Guidance for State Innovation Waivers
On Dec. 11, the Department of Health and Human Services (HHS) posted guidance for states interested in seeking a State Innovation Waiver under Section 1332
of the Affordable Care Act (ACA). State Innovation Waivers allow states to receive federal funding to implement alternative models of health care coverage
that provide affordable coverage to their residents. The notice clarifies that the minimum length of public notice and comment periods for waiver
applications is 30 days.
To see the guidance, click here.
CMS Issues Proposed Rules for Hospice, Nursing Homes and Inpatient Rehab Facilities
On April 21, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would update Medicare fiscal year 2017 payment rules for
nursing homes and
inpatient rehab facilities. CMS is proposing a 2
percent increase in hospice payments for 2017, which would cost $330 million. This includes a 2.8 percent hike to reflect increased costs, but is balanced
out by a productivity adjustment of 0.5 percent and a 0.3 percent cut required by the Affordable Care Act (ACA).
CMS is also proposing two new hospice quality measures for 2017. One will assess staff visits during the last week of life, and the other will look at
whether patients received treatment consistent with federal guidelines in areas such as pain assessment.
CMS estimates that nursing homes will see a 2.1 percent pay increase next year, a boost of $800 million, according to a
fact sheet. To comply with the IMPACT Act, CMS proposed one new assessment-based quality measure and three claims-based measures to be included in the nursing homes’
quality reporting program.
The proposal for inpatient rehabilitation facilities would create a 1.6 percent increase compared to 2016 payments, an increase of $125 million.
CMS Proposes Inpatient Prospective Payment System and Long-Term Care Hospital Rule
On April 18, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to update fiscal year (FY) 2017 Medicare payment policies and
rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The proposed rule
would affect discharges occurring on or after Oct. 1, 2016.
Most notably, the proposed rule would permanently remove the two midnight rule and its effects for the current as well as the past two fiscal years
by adjusting the FY 2017 payment rates. CMS is proposing as an alternative that hospitals provide Medicare beneficiaries with a special notice if the
patient has been receiving observation services as an outpatient for more than 24 hours.
Proposed Changes to Payment Rates under IPPS
The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital
Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is 0.9 percent.
Hospitals that do not successfully participate in the Hospital IQR Program and do not submit the required quality data will be subject to a one-fourth
reduction of the market basket update. Also, the law requires that any hospital that is not a meaningful EHR user will be subject to a three-fourths
reduction of the market basket update in FY 2017.
CMS projects that the rate increase, together with other proposed changes to IPPS payment policies, will increase IPPS operating payments by approximately
0.7 percent and that changes in uncompensated care payments will decrease IPPS operating payments by an additional 0.3 percent. Other additional payment
adjustments will include continued penalties for excess readmissions, a continued 1 percent penalty for hospitals in the worst-performing quartile under
the Hospital Acquired Condition Reduction Program, and continued bonuses and penalties for hospital value-based purchasing. In sum, CMS projects that total
Medicare spending on inpatient hospital services, including capital, will increase by about $539 million in FY 2017.
This projected increase in spending includes an estimated $350,000 increase in FY 2017 payments to hospitals located in Puerto Rico under the proposal to
make IPPS payments for capital-related costs based solely on the national capital Federal rate (rather than the current blend of the national capital
Federal rate and Puerto Rico-specific capital rate), consistent with the recent statutory change in the payment methodology for operating IPPS payments to
To see the CMS fact sheet, click here.
CMS is issuing an Interim Final Rule with Comment for the section that establishes a temporary exception for certain wound care discharges from the site
neutral payment rate for LTCH discharges that do not meet the statutory patient level criteria for certain LTCHs.
CMS will accept comments on the proposed rule until June 16, 2016, and will respond to comments in a final rule to be issued by Aug. 1, 2016.
The proposed rule can be downloaded from the Federal Register.
CMS Releases MACRA Proposed Rule for New Physician Pay System
On April 27, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to guide major changes in Medicare payment to physicians,
meaningful use policy, and quality and value measures. The focus of the rule is to introduce more flexibility for physicians, who say they are
over-regulated and over-measure, while also nudging them toward models designed to reimburse them for high-value care.
The proposed rule would implement changes through the Quality Payment Program, which includes two paths:
1. The Merit-based Incentive Payment System (MIPS):
Most Medicare clinicians will initially participate in the Quality Payment Program through MIPS. MIPS allows Medicare clinicians to be paid for providing
high-value care through success in four performance categories:
Quality (50 percent of total score in year 1)
Advancing Care Information (25 percent of total score in year 1)
Clinical Practice Improvement Activities (15 percent of total score in year 1)
Resource Use (10 percent of total score in year 1)
2. Advanced Alternative Payment Models (APMs):
Clinicians who take a further step toward care transformation would be exempt from MIPS reporting requirements and qualify for financial bonuses. These
Comprehensive ESRD Care Model (Large Dialysis Organization arrangement)
Comprehensive Primary Care Plus (CPC+)
Medicare Shared Savings Program – Track 2
Medicare Shared Savings Program – Track 3
Next Generation ACO Model
Oncology Care Model Two-Sided Risk Arrangement (available in 2018)
The nominal risk standard was included in the rule but how CMS would define it is still a question.
To see the proposed rule,
For a related press release,
Gallup Poll Finds Majority in U.S. Support Idea of Federally Funded Health Care System
According to a new Gallup poll, 58 percent of adults favor replacing the Affordable Care Act (ACA) with a federally funded health care system that provides
universal coverage. By comparison, 48 percent support maintaining the ACA as it is, and 51 percent favor repealing the law. Gallup said it included these
three questions — replacing, repealing or keeping the ACA — in its interviewing to provide insight into how Americans might react to the three remaining
presidential candidates’ proposals for dealing with the ACA. But when posing the questions, Gallup did not mention the names of Bernie Sanders, Hillary
Clinton or Donald Trump.
Analysis Finds Part B Demo Does Not Have Negative Effect on Medicare Enrollees, Providers
An analysis from Memorial Sloan Kettering Cancer Center finds CMS’s proposed Part B drug demonstration will not negatively affect Medicare enrollees and
providers, contrary to concerns raised in letters from members of Congress. The analysis, which focuses on oncology care, concludes that concerns about the
payment change’s increasing hospital consolidation of physician practices are unwarranted and there is little likelihood that patients would have to go to
hospital outpatient departments rather than doctors’ offices. The authors also argue there is no evidence rural providers face higher drug acquisition
costs than their urban counterparts, or that they would be particularly hurt by the payment change.
To see the analysis, click here.
Study Finds Mental Disorders Top the List of Most Costly Conditions
According to a new Health Affairs study, the cost of caring for patients with mental health disorders surpassed $201 billion in 2013, more than any other
medical condition, including cancer and heart disease. Almost 40 percent of the total cost of caring for mental health disorders is spent on
institutionalized populations, including patients in nursing homes, psychiatric hospitals and prisons, according to the study. This group was previously
excluded from similar studies. The next most expensive medical conditions were heart conditions ($147 billion), trauma ($143 billion) and cancer ($122
To see the study, click here.
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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