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October 2014

President Obama Signs Bill Allowing Veterans to Access Non-VA Providers

President Obama signed the “Veterans Access, Choice, and Accountability Act of 2014” into law in August 2014. The law requires hospital care and medical services to be furnished to veterans through contracts with Medicare providers outside of the VA system when veterans have been unable to schedule appointments or face unreasonable wait times at Veterans facilities. The law also directs the Secretary of the Veterans Administration to work with the Secretary of Health and Human Services to develop, update, and make publicly available a comprehensive database containing all applicable patient safety, quality of care, and outcome measures for VA health care that are tracked by the Secretary.

Congress Recesses Until After Elections, SGR Hangs in Balance

After returning from its August congressional recess for two weeks, the House and Senate recessed again until after the elections, setting up a showdown over the Medicare physician fee schedule during what is expected to be a short, lame-duck session after the elections or early in 2015. For over a decade, Congress has relieved the cuts called for by the Sustainable Growth Rate (SGR), the element of the Medicare physician payment formula that would otherwise have resulted in significant cuts in these payments. In each case, Congress has implemented a fix to avoid the drastic effects of applying the SGR formula to the fee schedule. The current “patch” for the SGR expires on April 1, 2015. Leaders of the 5 largest medical societies – American Osteopathic Association (AOA), American Medical Association (AMA), American College of Surgeons (ACS), family physicians (AAFP), and ACP (internists) – banded together to meet with congressional leaders the last week before Congress recessed to advocate for SGR repeal during the lame duck session. 2014 presents the most plausible time to repeal the SGR given that the committees responsible for the Medicare physician fee schedule are in bipartisan, bicameral agreement on the means for doing so. However, SGR repeal remains a daunting proposition for members of Congress, mainly due to its cost. While agreement on the substance has been reached, there is significant disagreement among Republicans and Democrats about how to pay for the repeal. With the Senate majority in question, decisions about the fate of the SGR are on hold until after the elections.

Physician Groups Respond to IOM GME Report, Primary Versus Specialty Issues Arise

Following the July 2014 release of a report from the Institute of Medicine recommending sweeping changes to government financing of Graduate Medical Education (GME), several medical societies weighed in with their vision of GME reform. A number of Members of Congress also quickly weighed in on the issue, introducing legislation on the topic. The American Academy of Family Physicians (AAFP) held a briefing on Capitol Hill on September 15 to release its recommendations for the future of GME. AAFP calls for “limit(ing) payments for direct graduate medical education and indirect medical education (IME) to training for first-certificate residency programs,” setting up what is likely to be a pitched battle between primary and specialty medicine for scarce federal dollars. The American Association of Medical Colleges (AAMC) has been perhaps most vocal in its rebuke of the IOM report, saying that the “proposal’s major cuts to patient care will slash funding for vital care and services available almost exclusively at teaching hospitals.” The American Osteopathic Association (AOA) held a Congressional Hill briefing on September 17 to outline the issues facing the profession and Congress as it seeks to redesign and modernize the program. The AOA is “supportive of the IOM Committee’s recommendations to modernize the GME system in service of national health care objectives, and encourages members of Congress to pass legislation that aligns continued federal funding with these goals, while promoting accountability, transparency and innovation within the GME system.” Several members of Congress introduced legislation shortly after the IOM study’s release, led by Senator Mur’s proposal of S. 2728, “The Community-Based Medical Education Act of 2014.” While action is not expected in Congress on GME this year, the issue is likely to be the subject of congressional consideration and action in 2015.

CMS Issues Final Rule Granting Providers, Hospitals Relief From Meaningful Use Stage 2

The Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) have issued a final rule on meaningful use that closely follows what the agencies included in their May 20, 2014, proposed rule. The final rule gives providers some flexibility to meet the meaningful use timeline for 2014 by allowing the use of 2011 Edition certified electronic health record technology (CEHRT), 2014 Edition CEHRT, or a combination of 2011 Edition and 2014 Edition CEHRT for their 2014 reporting year. Under the old rules, all physicians attesting to meaningful use in 2014 were required to use a 2014 edition CEHRT regardless of the stage of meaningful use to which they were attesting. Additionally, the final rule delays the January 1, 2016 deadline for implementation of Stage 3 meaningful use requirements for the first cohort of adopters to January 1, 2017. The delay is intended to give CMS and ONC the opportunity to analyze the data obtained during Stage 2 before setting Stage 3 requirements. Finally, the agencies have modified clinical quality measure reporting requirements to conform to the new CEHRT flexibility provisions. Many providers, and late EHR adopters, should benefit from the extension of the original stringent deadlines set by CMS.

RAC Contracting Turmoil: New Contracts on Hold; CMS authorizes re-start of automated audits

New RAC contracts designed to fix certain problems in the RAC audit program will be on hold while the a federal district court considers an appeal filed by one of the RAC Contractors – CGI, Inc. CMS had temporarily suspended RAC audits in June of this year to allow for transitioning to the anticipated new contracts. However, the court order prevents CMS from moving forward with new contracts until the appeal has been decided. As a result, CMS will re-start automated audits under the old contracts until the new RAC contracts can be awarded. CGI’s appeal could delay the new RAC contracts for up to a year.

Rural Hospitals May Get Reprieve on Physician Supervision Requirement

Both chambers of Congress have passed legislation that would allow small rural hospitals to provide outpatient services without having a physician on-site. The legislation is intended to reverse CMS’ January 1, 2014 lifting of its enforcement moratorium on the physician supervision rule. Under CMS policy now in effect, small rural hospitals must have a physician on-site to directly supervise outpatient services, such as drawing blood or providing activity therapy. The legislation would extend the enforcement moratorium through 2014 and prevent retroactive enforcement while Congress considers a more comprehensive solution. Both the AHA and the National Rural Health Association support the legislation.

HHS Issues Final Rule on 2014 Edition Release Electronic Health Record Certification Criteria and Program

On September 11, the ONC issued the 2014 Edition Release 2 EHR Certification Criteria final rule adopting ten optional certification criteria and two revised criteria that provide increased flexibility and clarity and enhance health information exchange. The final rule also made a few improvements to the ONC Health IT (HIT) Certification Program and removed outdated regulation text from the Code of Federal Regulations. The ONC Fact Sheet on the rule summarizes the new criteria and improvements.

Medical Community United in Opposition to Elimination of CME Exemption under Physician Sunshine Act

CMS has received thousands of letters from physicians and others urging it not to eliminate the reporting exemption for CME under the Physician Sunshine Act. That exemption allows manufacturers to avoid reporting funds that support CME programs if the programs are accredited by one of five named accrediting organizations. CME proposed to eliminate the exemption because of complaints that it unfairly excluded funding for CME programs that were accredited by entities other than the five accrediting organizations named in the regulation. CMS takes the position that the exemption is not needed because another exemption for “indirect” payments is sufficient for programs that do not allow industry sponsors to influence the choice of speakers or content. The CME Coalition, whose members include many physician and industry organizations, have recommended that instead of axing the exemption, CMS expand it to include CME accredited by any organization that meets certain recommended criteria. The CME Coalition asserts that if CMS does not reverse its position, CME providers would lose close to $200,000,000 in CME funding over three years – approximately 10.6 percent of their sponsorship funds.

MedPAC Questions CMS Efforts to Measure Quality at Individual Doctor Level

MedPAC, Congress’ adviser on the Medicare program, is questioning CMS efforts to measure quality at the individual physician level due to the complexity of the PQRS and Value-Based Modifier programs. In an August 28th, 2014 letter to CMS, MedPAC stated that if clinicians do not know how to improve their value-based modifier score, they will be unlikely to devote resources to improving quality and increasing efficiency. MedPAC also noted that some specialties lack clinically meaningful measures and stated that a better approach to improving quality of individual physicians is to encourage them to join groups such as ACOs or Medicare Advantage plans that are financially and clinically accountable for patients.

New ACO Data Shows Mixed Results

Performance results for ACOs in the Medicare Shared Savings Program were recently released by CMS and show mixed results. About one fourth of the 220 participating ACOs earned bonuses; another fourth saved money for the Medicare program but not by enough to share in savings. The remaining ACOs did not generate any savings for the program. Savings distributed to those ACOs earning bonuses totaled $445 million; savings retained by the Medicare program were $372 million. However, the ACO industry states that ACO participation will decline unless CMS changes the rules and does not require ACOs to be subject to downside risk during the second year of the contract. It also urges an increase in the shared savings percentage and criticizes CMS for the way it attributes beneficiaries to ACOs.

U.S. Court of Appeals for the District of Columbia Circuit to rehear ACA case AMITA

The full D.C. Circuit Court of Appeals has agreed to re-hear the case of Halbig v. Burwell. In July, a three-judge panel from the D.C. Circuit Court ruled that individuals in the 36 states that sign up for insurance through the federal health insurance exchange as part of the Affordable Care Act are ineligible for subsidized insurance. On the same day of this ruling, a Virginia federal appeals panel unanimously ruled the opposite way on the identical issue. The full D.C. Circuit Court of Appeals comprises of 13 judges. Eight of the 13 are Democratic appointees. The outcome of the case could affect more than half of the 8 million Americans who have purchased taxpayer-subsidized private insurance under the Affordable Care Act.