The U.S. Centers for Medicare & Medicaid Services (CMS) published a proposed rule last week regarding the cancellation of three bundled payment models and an incentive payment model while also reducing the scope of a third type of payment model. These models were mandatory for hospitals in certain geographic areas. The current administration had delayed the implementation of these models until January 1, 2018.   Continue Reading CMS Proposes to Cancel Bundled Payment and Incentive Models

HealthLaw_stethoscope2The Trump administration is considering releasing a rule to ease the burden that small practices are facing in trying to comply with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), according to a recent report in The Hill.

By way of background, MACRA consolidates a number of existing reporting programs into a two-track system under which eligible clinicians will receive incentive reimbursement payments through either the Merit-Based Incentive Payment Systems (MIPS) or through certain alternative payment models (APMs). Under MIPS, eligible clinicians can receive incentive payment (or penalties) based on their reporting of various measures. (For a detailed discussion of MACRA and these reporting requirements, see our prior post.) Alternatively, clinicians can be reimbursed under the second track if they participate in an “Advanced APM,” which include certain accountable care organizations (ACOs) and patient-centered medical homes. Continue Reading Insiders Say New MACRA Rule Likely as Providers Look to Sec. Price to Ease Burden

shutterstock_282978377Although telehealth has the potential to improve or maintain quality of care for Medicare beneficiaries, payment and coverage restrictions create barriers that prevent providers from fully utilizing telehealth technologies. That is the core finding of a report issued by the Government Accountability Office (GAO) this month on telehealth and remote patient monitoring use for Medicare beneficiaries.

The GAO report was issued as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which included a provision for the GAO to study telehealth and remote patient monitoring. In compiling the report, the GAO interviewed representatives of nine provider, patient, and payor associations who provided feedback on, among other things, barriers to providing telehealth services to Medicare beneficiaries. Continue Reading GAO Report: Medicare Reimbursement Policies Impede Telehealth Adoption

Last week, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services released a report analyzing CMS’ readiness to implement major parts of the Medicare Access and CHIP Reauthorization Act  of 2015 (MACRA). The report provides an inside look at the steps CMS is taking to implement MACRA’s Quality Payment Program (QPP), which is an ambitious transformation of the way in which the federal government reimbursements health care providers. The report highlights two key vulnerabilities for the MACRA transition, a process that will hopefully be smoother than the troubled roll out of HealthCare.gov.

Continue Reading OIG Report Offers Glimpse into CMS Progress Towards MACRA Implementation

The Children’s Health Insurance Program (“CHIP”), created in 1997, helps states provide health care coverage to low-income children up to age 19 whose families fall above the Medicaid eligibility threshold but are unable to afford private insurance. Over the past ten years, federal funding for CHIP has steadily increased.  Congress reauthorized CHIP in 2015 through MACRA, but the program, which represents one of the last remaining annual (or semi-annual) vehicles for Congress to advance health policy initiatives, will lapse September 30, 2017.  CHIP has traditionally received bipartisan support but the question of whether to continue funding the program has recently been at issue.

For the past several years, some experts believed CHIP would slowly wind down as the uninsured rate for children dropped in light of other coverage options under the Affordable Care Act (“ACA”). According to the U.S. Census Bureau, the period of 2013-2015 saw the largest decline in uninsured children ever going from 7.1 to 4.8 percent uninsured.  While the ACA provides additional coverage options for low-income families, CHIP remains popular because in some cases it offers better benefits at lower costs than plans on the exchanges.  This was the subject of debate during the last reauthorization, and in the lead up to MACRA’s passage, the Medicaid and CHIP Payment and Access Commission (“MACPAC”) advised Congress “to extend federal CHIP funding for a transition period of two additional years, during which time policies can be developed to address concerns about affordability and adequacy, with the ultimate goal being integration of children in Medicaid, employer-sponsored, or exchange coverage depending upon their family circumstances.”

Currently, low-income children who are not eligible for Medicaid have three options for healthcare coverage: through their parents’ employer-based plan, through an exchange plan under the ACA, and through CHIP. These three coverage options differ in the benefits offered and cost-sharing requirements for families.  As Republicans determine the fate of CHIP in 2017 and beyond, they will need to consider if coverage variations for low-income children should continue.  In other words, when approaching the ACA, Republicans need to keep in mind the positive aspects of CHIP that may not be included in the current marketplace or employer-based plans.

CHIP has been a bipartisan program throughout its existence, but decisions about whether to extend the program are inextricably tied to decisions regarding the ACA.

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.

Today, our colleagues at ML Strategies released their first look at what the results of Tuesday’s election mean for health care.  The client alert addresses both the lame duck session and what to expect in 2017 and beyond.  Key issues areas include the future of the Affordable Care Act, MACRA, drug pricing, and FDA User Fee Act reauthorization.

In the coming days, ML Strategies will be sharing further insight into what the election means for health care and what to expect from the new administration and Congress.

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