Close this search box.

March 2016

CMS Hip-Knee Pilot Program Starts in April:

Medicare will start in April a test program that will make about 800 hospitals financially responsible for how well people fare after knee and hip replacements. The will require that hospitals within 67 selected regions participate in the hip-and-knee program, despite complaints from providers. The 67 areas of the country sweep in hospitals in places such as New York, San Francisco and Los Angeles and greater Orlando, Florida, with limited exceptions. Under the program, the hospitals could get higher pay if their patients do well in the 90 days following hip and knee replacements, or have to repay Medicare if their patients are judged to have fared poorly. With the program, CMS is taking on a fairly common medical procedure for people on Medicare, with more than 400,000 procedures performed on those enrolled in the program in 2014 at a cost of $7 billion. Medicare officials long have been concerned about poor results in some regions, with rates of complications and infections three times higher at some hospitals than others. Expenses for surgery and recovery vary as well, ranging from $16,500 to $33,000, according to CMS. The hip-and-knee replacement project is one of the major initiatives led by the Center for Medicare and Medical Innovation, which was created by the 2010 health law. The goal of CMMI is to improve the medical care provided to senior citizens and the disabled by moving away from Medicare’s longstanding fee-for-service approach. Under the fee-for-service model, Medicare has given the same reimbursement regardless of whether the care was poor or exemplary.

Nearly 5 Million Enrollees in Exchanges Are New Customers:

Nearly 5 million new customers signed up for insurance under the exchanges established by the 2010 health care law, the Health and Human Services Department. A final report on the third open enrollment period shows that a total of 12.7 million people either signed up or automatically renewed their health care plans for 2016, with 4.9 million of those individuals being new customers. About 76 percent of enrollees got covered in the 38 states that use the website, while 24 percent are signed up through the state-based marketplaces. The vast majority of consumers signed up for coverage with tax credits, which is similar to past years. In the states, the average value of a tax credit is $290 per person per month. The administration touted figures that illustrate 3.5 million people who are signed up for coverage are between the ages of 18 and 34 – a key demographic to help sustain the health law. Among new enrollees, 33 percent are in that age range, up slightly from 31 percent the previous year. Health insurers would prefer a higher percentage of customers to be young adults, but HHS maintained in a press release that the “overall percentage of plan selections for those ages remains stable.” The report also highlighted statistics that show existing consumers who switched plans in 2016 saved an average of $40 per month, and that new customers signed up earlier this year compared to previous years.

House Committees Look to Adjust Medicaid Payments, Recover Subsidies:

The House Energy and Commerce Committee offered its approval on two spending reduction measures, including a bill (HR 4725) culling a range of Medicaid payment polices. The measure limits an expansion of Medicaid funding applied to prisoners and reduces the allowed level of state Medicaid provider taxes. The bill also eliminates a special fund for preventive health care services and adjusts Medicaid eligibility calculations to account for lottery winnings. Separately, the House Ways and Means Committee drafted a group of bills including a measure (HR 4723) seeking to recover health insurance subsidy overpayments due to underreported income estimates in health insurance exchange plan applications. House committee action on the bills signals possible committee action this week on a House budget resolution. The dual-track House compromise effort on the mandatory spending measures and a budget resolution is separate from possible Senate action on a budget plan, which could seek reconciliation process instructions to allow action next year on mandatory health care spending.

Senate Processes Research and Opioid Bill Amendments:

Senators performed some legislative maintenance on health policy measures. The Senate Health, Education, Labor and Pensions Committee approved updated versions of a batch of bills adjusting elements of the drug and medical device approval process. The bills are poised as components of a broader biomedical research promotion package. The committee quickly approved adjustments to measures reauthorizing the addition of rare pediatric diseases to a priority review process (S 1878) and adding Zika vaccine eligibility (S 2512), plus expedited reviews of medical devices (S 1077). The committee also approved updates to bills addressing regulations on combination products (S 1767), urging the FDA to assess patient engagement on new drugs (S 1597) and a measure encouraging the development of medical countermeasures in case of biological attack emergencies (S 2055). Meanwhile, the Senate has spent the week plodding through procedural steps to close debate on a bill (S 524) revamping prescription painkiller and heroin abuse programs. On Wednesday, amid procedural actions, senators approved a late amendment addressing follow-up services to people who have received opioid overdose reversal drugs. The late amendment goes along with earlier additions to the primary substitute amendment, covering transnational drug trafficking, Medicare opioid protection programs and consumer education. The Senate passed the opioid response bill. Separately, a House panel waits for action on a similar bill (HR 953) and the Senate HELP committee plans to markup a different set of opioid response and prescription bills (including S 1455, S 2256, S 480).

No Delay Likely for MACRA Deadlines:

Congress is unlikely to step in to ease the challenges facing doctors in the years ahead due to the implementation of last year’s overhaul of Medicare’s payments to physicians, a consultant said at a conference for insurers. MACRA is intended to spur doctors to embrace new payment systems such as accountable care organizations, which are pegged to judgments about the quality of the care they provide. Those who don’t agree to participate in these newer payment models will see the current Medicare fee-for-service system of payments replaced by one that will place more of an emphasis on meeting quality judgments. Congress in the past has changed many laws and delayed the implementation of regulations at the behest of doctors, such as holding off for several years on a switch to the new ICD-10 billing codes and staving off slated Medicare payment cuts through a series of what were known as “doc fix” bills. Lawmakers in both parties agree that Medicare needs to readjust its standards for paying doctors. The Centers for Medicare and Medicaid Services likely will ease the transition in some cases, seeking to make it easier for doctors to meet the standards, but is not expected to delay or undercut the requirements. CMS is in the process of implementing the first stage of the overhaul, working out the details of the so-called merit-based incentive payment system. Under the law, doctors who after 2019 fare well on quality measures set in initial rules will face rising expectations as new metrics are added as conditions of Medicare payment. The forces demanding a reshaping of Medicare’s payments, though, mean that they will have to adjust to the new reality of this law. The aging of the baby boomers added urgency to steps expected to rein in Medicare’s rising costs, whether through immediate pay reductions or through efforts to prevent disease and preserve health such as the quality measures.

Medicare Makes Ambitious Bid to Overhaul Its Drug Purchasing

The Obama administration has plunged into a contest with the pharmaceutical industry, putting forward a wide-ranging proposal for overhauling Medicare payments for chemotherapy, glaucoma treatments and other often costly drugs administered in doctors’ offices. The pharmaceutical tab doubled to $22 billion between 2015 and 2007 for Medicare’s Part B program, which covers services provided in private medical practices and hospital outpatient departments. The Centers for Medicare and Medicaid Services proposal not only seeks savings in Medicare’s Part B program but also opens discussion on a path for tying future drug payments to judgments about how much benefit a treatment provided patients, with rebates possible for poor outcomes. The new proposal builds on research that raised questions about how well patients may fare under Medicare’s current Part B reimbursement approach, which adds a premium to the reported average sales price of a drug. The fee, intended to be 6 percent of the average sales price, was reduced by the budget sequester to about 4.3 percent of the reported price. These financial incentives put a doctor or medical organization at a disadvantage for using a less costly drug when a similar, more expensive one is available or reducing the use of medicines. The Part B model goes a step further and is designed to sweep in much of the nation. CMS is seeking to create four comparison groups, including a control arm, for the model in selected geographic areas. Maryland will be excluded due to a large-scale test program already underway between the state and CMS regarding payments. That leaves about 7,000 separate areas in different parts of the country to participate. In the control arm, the current average sale price plus 6 percent model would persist. In the three other groups, the add-on payment would fall to 2.5 percent of reported prices with a flat fee added. CMS has proposed $16.80 as the flat fee, although the agency appears flexible to other suggestions. In some of these arms of the model, tools to spur a shift toward value-based purchasing could be added in later stages, CMS said, including procedures already used by insurers and pharmacy benefit managers to control costs. CMS said it intends to use a number of factors to judge the success of the alternative payment systems. It will examine whether the program has reduced costs, changed prescribing patterns or had unintentional consequences, the agency said.

A Push for Expansion of Telehealth Services:

Advisers to Medicare urged greater acceptance of telehealth services in the federal program for the elderly and disabled, although they are not yet at the point of issuing formal recommendations to spur greater use of computers and phones in delivering medical services. Advisers to Medicare urged greater acceptance of telehealth services in the federal program for the elderly and disabled, although they are not yet at the point of issuing formal recommendations to spur greater use of computers and phones in delivering medical services. Medicare Payment Advisory Commission commissioners on Thursday said they are concerned that current reimbursement policies are limiting access to more convenient access to their doctors. Medicare now largely limits telehealth payments through its traditional fee-for-service program to cases where people live some distance from providers, thus largely restricting this service to rural areas. Medicare Advantage programs and demonstration programs such as accountable care organizations also can provide medical consultations via computer or phone. Congress has responded with legislation, “Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act.” This would establish a bridge program to help physicians meet the goals of MACRA and the MIPS through the use of telehealth and remote patient monitoring. The Act would allow telehealth and RPM to be used by qualifying participants in APMs. Also, the Act will increase access to telehealth in remote communities and rural health clinics. The Act will still preserve state-based licensure for physicians. The Act will not address liability issues for physicians who are practicing telehealth across state lines.

House Prepares to Pass Medicaid Fraud Bill:

The House passed a measure that supporters say would protect state Medicaid programs from fraud. The bill (HR 3716) would require states and Medicaid managed care plans to identify and submit to the Health and Human Services secretary the name, type and specialty of providers terminated from Medicare, a state’s Medicaid or Children’s Health Insurance Program. Rep. Larry Bucshon, R-Ind., the bill’s sponsor, said the Health and Human Services Department’s inspector general found that 12 percent of providers terminated for cause from a state Medicaid program had continued participation in another state’s program for as long as two years after the initial termination. The administration said it supports passage because the bill would improve program integrity for Medicaid and the Children’s Health Insurance Program. The bill would improve “the ability of States to identify health care providers who have been terminated from participating in Medicare or in another State’s Medicaid or CHIP program,” the White House said in a statement of administration policy. The House approved a modified manager’s amendment by Rep. Larry Bucshon, R-Ind., that would give states until July 1, 2018, to comply with many of the bill’s provisions. It also would require the Health and Human Services Department’s inspector general to report to Congress by March 31, 2020, with an assessment of the extent to which providers terminated for fraud are terminated from participation in all state plans. Under the rule, the House was considering a version of the bill that includes provisions of a measure (HR 3821) by Rep. Chris Collins, R-N.Y., to require state Medicaid programs that operate fee-for-service or primary care case management programs to publish and periodically update an electronic directory of participating providers.

Governors’ Plan for Opioid Addiction

Governors from across the country from states battling the prescription drug abuse epidemic have come to Washington with a message for Congress and the federal government: We need more action to combat addiction. The governors are offering a broad set of recommendations, including calling on the Centers for Disease Control and Prevention to release updated opioid prescribing guidelines for primary care physicians and for the Department of Veterans Affairs to require its health care providers to report information about opioids to state prescription drug monitoring programs. The Department of Health and Human Services should also consider how Medicare surveys on patient satisfaction could pressure doctors to prescribe opioids, and assess whether or not the surveys need to be changed, the governors said. Congress should also amend the Drug Addiction Treatment Act of 2000 (PL 106-310), the governors said, so that nurse practitioners and physician assistants can prescribe buprenorphine, a treatment for opioid addiction. Prescribers also are limited in how many patients they can treat with buprenorphine, a limit that the governors want HHS to raise. Other regulatory tweaks the governors urge include granting doctors access to patients substance use disorder treatment information.

Officials Propose Increased Medicare Advantage Rates

Medicare officials proposed increases of 1.35 percent that would translate into an average 3.55 percent revenue increase for most plans. Medicare adjusts payments to take into account the way that insurers code patients’ conditions. In recent years, Medicare officials often have adjusted the payments to be more generous when they finalize the rates in April. Under the proposal, patients would be categorized into six groups of beneficiaries who live in the community or have been in an institution for less than 90 days. Three of the groups are: people who are older than 65 and are poor enough to be dually eligible for Medicaid; those over 65 who receive some help because they are partially eligible for Medicaid; and those over 65 who are not eligible for any Medicaid assistance. The other three groups are those younger than 65 who are fully, partially or not eligible for Medicaid. These changes could increase funding for plans with a large percentage of patients who also receive full Medicaid assistance in addition to Medicare benefits.

Medicare and Insurance Industry Merge Quality Metrics

Public and private health insurance providers announced a new set of quality measurements meant to make reporting requirements for doctors and care providers more consistent and efficient. By easing the reporting complexity for clinicians, insurers are also hoping to bring down costs for themselves and consumers. While individual payers currently utilize their own measurements, insurers have come together to agree on core measures in seven areas. The new measurements will be adopted by CMS as well as many private insurers, ultimately covering around 70 percent of all health care payers. CMS, which already uses some of the new measurements, will begin implementing the rest of the changes, including eliminating redundant measures, through its rulemaking process later this year. Private insurers are expected to phase in the changes starting in 2017. The core measures are in seven areas, including: primary care; cardiology; gastroenterology; HIV and Hepatitis C; medical oncology; obstetrics and gynecology; and orthopedics.