Accountable Care Organizations

Last week, the Congressional Budget Office (CBO) concluded that a key piece of telehealth legislation, the CHRONIC Care Act of 2017, would not, overall, increase or decrease Medicare spending. This score is significant as it marks the first time that CBO has concluded that providing enhanced Medicare coverage for telehealth services would be budget neutral and clears the path for Congress to pass the legislation in a tough political climate.  Continue Reading CBO Greenlights Telehealth Provisions in Senate’s CHRONIC Care Act

As the healthcare industry moves towards value-based purchasing, pay-for-performance, and other payment reform models, industry leaders have identified federal fraud and abuse laws as a barrier to full implementation of such models.  Last month, the Health Care Leadership Council released a White Paper entitled “Health System Transformation: Revisiting the Federal Anti-Kickback Statute and Physician Self-Referral (“Stark”) Law to Foster Integrated Care Delivery and Payment Models” (“HCL White Paper”), identifying current fraud and abuse laws as impeding transformation of the healthcare system.  Pharmaceutical and device manufacturers have also taken advantage of the OIG’s Solicitation of New Safe Harbors and Special Fraud Alerts (“OIG Solicitation”) to advocate for more flexible fraud and abuse laws with respect to value-based arrangements. Continue Reading Pharmaceutical Manufacturers and Healthcare Leaders cite Fraud and Abuse Laws as Obstacle to Value-Based Arrangements

The Massachusetts Department of Public Health (DPH) Determination of Need (DoN) Program has promulgated final DoN regulations (shown here compared against the draft revisions.)  Approved by the Massachusetts Public Health Council (PHC) on January 11, 2017, DPH anticipates that the DoN regulations (105 CMR 100.000, et seq.) will be published in the Massachusetts Register on January 27, 2017, which will be their effective date.

Commissioner Monica Bharel, M.D., MPH emphasized that the overarching goal of these revisions is to meaningfully infuse public health and population health principles within this longstanding health care regulation. The Commissioner noted that it is her belief that successful cost containment must occur in the context of tackling social determinants of health. Our previous blog post, published at the time the draft revisions were presented to the PHC, reviews in some detail the DoN Program’s public policy goals underpinning these revisions, and we refer you to that post for more information.

At the presentation of the draft revisions to the PHC on August 23, 2016, DPH announced its intent to solicit and encourage robust public comment, and the public did not disappoint. A January 11, 2017 memorandum from senior DPH staff to Commissioner Bharel and members of the PHC requesting approval of the final proposed DoN regulations stated that DPH received over 100 comments, submitted at two public hearings and in writing during the 45-day public comment period. The memorandum summarizes not only the comments received, but the stakeholders who submitted the comments and DPH’s public policy rationale for its reaction to many of the comments. Materials (available here and here) accompanying the presentation of the final proposed DoN regulations also summarize the draft revisions, comments received and final proposed DoN regulations.

Many comments addressed the requirements for DoN review of ambulatory surgery, transfer of ownership, Community Health Initiative (CHI) projects, as well as application requirements, review process and criteria, and standard conditions.  Two areas that generated many of the public comments, and which resulted in adjustments to the proposed DoN regulations, are discussed below.  Continue Reading Massachusetts Determination of Need Program – Final Regulations

Most of the post-election discussion of the ACA has focused on how promises to repeal the law could impact the newly insured. But one priority area of the ACA that has received very little discussion is the federal government’s strategy to try to reign in health care costs by reducing volume and promoting quality.  Complicating the push to fully repeal the ACA is the fact that key elements of the ACA’s cost control strategy have found their way into the Medicare and CHIP Reauthorization Act (MACRA) passed by Congress in 2015.

MACRA was passed on a bipartisan, bicameral basis, creating a two-track system for Medicare provider reimbursement incentive payments. On one track is the more traditional fee-for-service reimbursement structure that will be subject to payment adjustments under a consolidated quality reporting system called the Merit-Based Incentive Payment System (MIPS). The second track, which entails greater incentive payments, addresses reimbursement for providers participating in alternative payment models (APMs) like accountable care organizations (ACOs) and other demonstration programs that have been created under CMS’s Center for Medicare & Medicaid Innovation (CMMI). We discussed these changes at length in our post last month.

While the sweeping Republican election victory portends extensive changes in many areas of health care, MACRA is not likely to see extensive changes–at least not directly.  Moving payment policy away from volume and towards quality was a goal for all the Congressional offices participating in the construction of MACRA. However, the implementation of MACRA could still face challenges if Congressional Republicans decide to repeal or constrain the ACA sections that give CMS the authority to operate the CMMI. Such a move would not be outside the realm of possibility; as we previously discussed, the CMMI has been a frequent target of criticism by Congressional Republicans. A full repeal of the ACA, or even limitations to the CMMI’s authority or budget, could cripple the government’s ability to operate the demonstration projects that are the cornerstones of MACRA.

Stakeholders need to engage with CMS moving forward, albeit a CMS under new management, to ensure that changes to the ACA do not have unintended consequences on MACRA’s implementation.  CMS may seek to streamline the numerous payment policies that have been proposed under the current Administration. Alternatively, it is possible that CMS will be active in creating its own versions of alternative payment models. One area of potential focus for further reform might be the so-called ACO Track 2 and 3 under the Medicare Shared Savings Program (MSSP), participation in which will now make providers eligible to receive APM incentive payments. Yet CMMI to date has struggled to find the right mix of payment reform, such as requiring two-sided risk, with payment incentives to show significant MSSP savings. In either case, the provider community will be closely watching the developments related to this already complex and daunting transition.

Continuing our current coverage of health policy issues and trends, Mintz Levin’s Health Law Practice and ML Strategies have issued a joint Alert regarding the Massachusetts Health Policy Commission’s Annual Cost Trends Hearings.  The hearings, which took place on October 17 and 18, provided an opportunity for a wide-ranging discussion of the Commonwealth’s health care system and its rising costs.  The Alert highlights the topics covered over the course of the hearing, and summarizes the points made by the academic, industry, and political leaders who participated. Many of these topics, including pharmaceutical spending, behavioral health, and alternative payment models, are at the core of emerging health policy discussions across the country.  You can read the full alert here.

On October 14, 2016, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The final rule marks the most significant reform to our health care system since the enactment of the Affordable Care Act in 2010, providing Medicare incentives to reward quality and value—not volume—through the use of alternative payment models such as accountable care organizations.  The final rule includes changes that significantly soften certain requirements from the proposed rule, with CMS emphasizing that physicians will be allowed to “pick their pace” for satisfying MACRA requirements that begin on January 1, 2017.

A MACRA Refresher

CMS issued a proposed rule in late April of this year, much of which is unchanged in the final rule.  For our previous discussion of MACRA, see our prior blog posts on: an overview of the MACRA and MIPS, Advancing Care Information, APMs, and flexible reporting requirements.

Starting in 2019, CMS will replace a number of existing reporting programs with a two track system, known as the Quality Payment Program, under which eligible clinicians will receive incentive reimbursement payments through either:

  1. The Merit-Based Incentive Payment Systems (MIPS); or
  2. Alternative payment models (APMs).

MIPS consolidates three existing Medicare programs: (1) the Physician Quality Reporting System, (2) the Physician Value-based Payment Modifier, and the (3) Medicare Electronic Health Record (EHR) Incentive Program. Under MIPS, eligible clinicians can receive incentive payment (or penalty) based on four categories of measures: quality, cost, improvement activities, and the use of EHRs. (These categories are discussed in greater detail below.) CMS will take the results and create a composite score that it will then use to increase or decrease the clinician’s reimbursement under the Medicare Physician Fee Schedule (PFS). These adjustments will begin on January 1, 2019, and will be based on data collected in 2017.  Clinicians scoring below a certain threshold will incur a negative adjustment in their payments starting with a maximum penalty of 4% in 2019 and increasing to a maximum penalty of 9% in 2022 and beyond. Those scoring above the threshold can receive up to a 4% increase in 2019, with a maximum increase of 9% in 2022. High achievers will be eligible for an additional upward adjustment.

The second track is for clinicians participating in an “Advanced APM,” including certain accountable care organizations (ACOs) and patient-centered medical homes. Advanced APMs essentially operate as more generous incentive programs that are exempt from the MIPS requirements.  Those on the Advanced APM track can earn bonuses of up to 5% of their PFS payments in 2019. However, as discussed in further detail below, only ACOs accepting some amount of downside financial risk can qualify for the MIPS exemption.

Continue Reading CMS Releases MACRA Final Rule, Easing 2017 Reporting Requirements

In a blog post last week, CMS acting administrator Andy Slavitt said that physicians will have the ability to choose among several options to report data to Medicare under the new physician payment system ushered in by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

As we previously discussed, starting in 2019, physicians will be reimbursed on one of two tracks. The first track will continue to provide reimbursement on a fee-for-service basis, but with an upward or downward adjustment based on the physician’s performance under the new Merit-Based Incentive Payment Systems (MIPS). The MIPS system will replace the Physician Quality Reporting System (PQRS), the Meaningful Use Program, and the Value-based Modifier Program. On the other track, physicians participating in advanced alternative payment models (APMs), including certain accountable care organizations (ACOs), will receive their fee-for-service reimbursement without being subject to MIPS. Continue Reading CMS Proposes Flexible Reporting Under MACRA

On June 30, 2016, the Senate Finance Committee’s Republican staff issued a 20-page report discussing comments made by industry stakeholders after a December 2015 round-table on the future of the physician self-referral law, also known as the Stark law. Unless an exception is met, the Stark law prohibits physicians from referring patients to facilities in which they have an ownership interest or compensation arrangement. Originally targeting the overutilization of physician-owned clinical laboratories, the Stark law has expanded to prohibit the referral of a wide range of “designated health services.” The law’s complexity has created what one Fourth Circuit judge described as “a booby trap rigged with strict liability and potentially ruinous exposure.” This is compounded by the fact that, as noted in the staff report, the Stark Law has been enforced primarily through the False Claims Act (“FCA”), thus imposing treble damages and penalties on the amounts paid by Medicare from any prohibited referral.

But most would agree that the Stark law has been a booby trap for years. Two developments explain the Committee’s recent motivation.  Continue Reading Senate Committee Releases Report on Potential Stark Law Changes, Hearing Scheduled

CMS issued a final rule, published in the Federal Register on Friday, June 10, 2016, updating how the performance of ACOs participating in the Medicare Shared Savings Program (MSSP) is measured and compensated.  This rule is part of an ongoing effort to move Medicare away from a model that pays for each service provided towards a system that rewards physicians for coordinating with each other to improve quality of patient care and outcomes while reducing cost.  CMS views ACOs as a major part of this transition, and according to its press release, believes that the current updates should help more ACOs successfully participate in the MSSP by “improving the shared savings payment methodology and providing a new participation option for certain ACOs to move to the more advanced tracks of the program.”  The major changes relate to three areas:

Continue Reading New Rules for ACOs in the MSSP

Continuing our blog series on CMS’s massive proposed rule for the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), we dedicate this post to examining the Advance Payment Model (APM) provisions of the proposed rule.  As our colleagues discussed on May 3rd, the proposed rule contains two key initiatives: Merit-Based Incentive Payment Systems (MIPS) and Alternative Payment Models (APMs).

Continue Reading Alternative Payment Models (APMs) Under MACRA Proposed Rule