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December 2017

CMS Releases 2018 MPFS Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) issued the 2018 Medicare Physician Fee Schedule (MPFS) final rule November 2. The MPFS includes a conversion factor of $35.99 and a projected 0.0 percent update for general and orthopedic surgery in 2018.

According to the final rule, CMS received many public comments regarding the revision of evaluation and management (E/M) guidelines, and indicated that the agency’s efforts now are focused on updating current E/M guidelines to reduce unnecessary administrative burdens. CMS also finalized the valuation for a number of individual services, including those related to muscle flaps, strapping multi-layer compression, endovascular repair of abdominal aorta and/or iliac arteries, treatment of incompetent veins, tracheostomy, and esophagectomy procedures, to reflect the broad-based, multispecialty recommendations made by the American Medical Association/Specialty Society Relative Value Scale Update Committee.

In addition, the rule finalized several changes to policies for the 2018 Physician Value-Based Modifier to better align incentives and provide a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program. Specifically, CMS reduced the automatic downward payment adjustment for not meeting the criteria to avoid the Physician Quality Reporting System (PQRS) adjustment from 4 percent to 2 percent for groups of 10 or more providers, and from 2 percent to 1 percent for solo practitioners and groups of two to nine providers. In addition, CMS finalized a change to the current PQRS program policy that requires reporting of nine measures across three National Quality Strategy domains to only require reporting of six measures for PQRS with no domain requirement. The final rule is available for public review, along with a fact sheet on its payment and quality provisions.

CMS Releases 2018 OPPS and ASC Final Rule

The Centers for Medicare & Medicaid Services (CMS) released the 2018 Outpatient Prospective Payment System (OPPS)/Ambulatory Surgical Center (ASC) Payment final rule November 1. Payment rates increase by 1.35 percent for providers paid under the OPPS in 2018. In addition, CMS indicated that it is working to lower the cost of drugs for Medicare beneficiaries. The agency finalized a policy to reimburse hospitals that purchase certain discounted Medicare Part B drugs through the 340B drug program at the average sales price (ASP) minus 22.5 percent, rather than the ASP plus an added 6 percent that has been paid in previous years. The final rule also reinstates for 2018 and 2019 the non-enforcement of direct supervision requirements for outpatient therapeutic services furnished in critical access hospitals and small rural hospitals with 100 or fewer beds. CMS finalized additional provisions to remove six measures from the Hospital Outpatient Quality Reporting Program and to remove total knee arthroplasty procedures from the inpatient only list.

Under the rule, CMS finalized a series of payment updates that it projects will increase total ASC payments by 3 percent in 2018. The final rule also adds two measures of hospital visit events following orthopedic and urology procedures performed at an ASC to the ASC Quality Reporting (ASCQR) Program. In addition, CMS finalized its proposal to delay the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey under the ASCQR Program. The final rule is available for public review, along with a fact sheet on the OPPS and ASC provisions.

2018 QPP Final Rule Released

The Centers for Medicare & Medicaid Services (CMS) issued a Quality Payment Program (QPP) final rule with comment period November 2. The QPP, implemented this year, offers two pathways for providers to participate in Medicare: the Merit-based Incentive Payment System (MIPS), and Advanced Alternative Payment Models (APMs). The majority of providers initially are participating through MIPS. With the policies included in the 2018 QPP final rule, CMS hopes to gradually prepare clinicians for full implementation of the program in 2019.

Key policies for the MIPS program finalized in the QPP rule for 2018 include the following:

  • Placing a focus on reducing burdens for small practices and increasing flexibility (including increasing the low-volume threshold to less than or equal to $90,000 in Medicare Part B allowed charges, or less than or equal to 200 Medicare Part B patients)
  • Weighting the four MIPS categories used to achieve a final score as follows: Cost (10 percent); Quality (50 percent); Improvement Activities (15 percent); and Advancing Care Information (25 percent)
  • Implementing virtual groups as an option to participate in MIPS (a CMS 2018 Virtual Groups Toolkit provides more information, including the election process)

Key policies for APMs that were finalized in the QPP rule for 2018 include additional provisions intended to make it easier for providers to participate in Advanced APMs, policies focused on reducing burden and simplifying the program, and more details on the All-Payer Combination Option, which allows providers to participate in Advanced APMs through a combination of participation in Medicare and certain other payors.

For more information about the 2018 QPP final rule, see the CMS fact sheet. Questions regarding the QPP can directed to CMS at [email protected].

White House Commission on Opioid Report Released

The White House Commission on Opioids released its final report containing a series of more than 50 recommendations to combat the opioid epidemic. The report does not request any new spending but acknowledges the importance of increased funding to implement the recommendations. Among the recommendations contained in the report, the Commission urges:

  • Increased access to addiction therapy, recovery programs, and medication- assisted treatment (MAT);
  • Expansion of first responders’ ability to administer naloxone;
  • Increased oversight by the Department of Labor over health plan compliance with parity laws;
  • Upgrading of drug abuse programs taught in schools;
  • Removal of questions about pain from patient satisfaction surveys for physicians and hospitals;
  • Consideration by the Food and Drug Administration’s (FDA) of the dose and duration for specific indications, as well as the possibility of issues like misuse and diversion, during the drug approval process;
  • Passage of the bipartisan Prescription Drug Monitoring Program Act (S. 778), which would tied federal funding to the required use of prescription drug monitoring programs (PDMPs);
  • An increase in federal sentencing penalties for the trafficking of the synthetic opioid fentanyl;
  • Consideration by lawmakers of what information patients should receive before being prescribed an opioid for chronic pain;
  • Establishment of drug courts in every judicial district nationwide; those violating their probation through substance use be sent to a drug court and not prison;
  • Establishment of a coordinated system by the Office of National Drug Control Policy (ONDCP) to track funded initiatives
  • The development of national curriculum and standard of care by the U.S. Department of Health and Human Services (HHS) for the prescribing of prescription painkillers.


House Passes IPAB, EMS, and CHIP Legislation

The House of Representatives successfully passed H.R. 849, the “Protecting Seniors Access to Medicare Act,” legislation to repeal the Independent Payment Advisory Board (IPAB). House also passed H.R. 304, the “Protecting Patient Access to Emergency Medications Act” by unanimous consent. H.R. 304 would clarify that emergency medical services (EMS) professionals are allowed to administer controlled substances pursuant to standing or verbal orders under certain conditions.

The House passed H.R. 3922, the CHAMPIONING HEALTHY KIDS Act. The bill would fund the Children’s Health Insurance Program (CHIP) for an additional five years and reauthorize funding for community health centers for two years. Other public health programs, including the National Health Service Corps (NHSC), Teaching Health Center Graduate Medical Education, Family-to-Family Health Information Centers, the Youth Empowerment Program, and the Personal Responsibility Education Program, would be extended for two years. H.R. 3922 also includes a two-year delay of Medicaid disproportionate share hospital (DSH) payment cuts as well as $1 billion in support of Puerto Rico’s and the U.S. Virgin Islands’ Medicaid programs. While the policies contained in the bill were the result of bipartisan negotiations, the final vote fell largely along party lines due to a disagreement over offsets used to pay for the legislation.

Bicameral CSR Proposal Officially Introduced

House Ways and Means Committee Chairman Kevin Brady (R-Texas) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) have introduced their bicameral proposal to temporarily extend funding for cost sharing reduction (CSR) payments through 2019. The Healthcare Market Certainty and Mandate Relief Act (H.R. 4200/S. 2052) would require plan issuers to not tie premium levels to the assumption of CSR receipt. It would provide relief from the individual mandate between 2017 and 2021 and relief from the employer mandate between 2015 and 2017. The proposal would also increase the maximum contribution limit for health savings accounts (HSAs).

Legislation to Provide EHR Regulatory Relief Reintroduced

The “Electronic Health Record (EHR) Regulatory Relief Act” (S. 2059) has been reintroduced in the Senate. The legislation aims to reduce the burden of meaningful use requirements through the creation of a 90-day reporting period, removal of the all-or-nothing scoring approach, and expansion of hardship exceptions. It would also eliminate a statutory requirement for the Secretary of the U.S. Department of Health and Human Services (HHS) to create more stringent measures of meaningful use.

Lawmakers Urge Inclusion of UDI in Claims

Sens. Elizabeth Warren (D-Mass.) and Chuck Grassley (R-Iowa) have requested additional information about the Centers for Medicare and Medicaid Services’ (CMS) position on the inclusion of unique device identifiers (UDIs) on Medicare claim forms. In a letter to CMS Administrator Seema Verma, the lawmakers outline conflicting statements made by CMS on the issue. They argue that it is “essential that the Medicare system support the post-market surveillance of risky medical devices, both to improve patient care and to support program integrity.” The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has previously recommended that the UDI information be included on Medicare claims.

Lawmakers Request Report on ID Modeling

House Energy and Commerce Committee leadership have written to the Government Accountability Office (GAO) to request a review of how the federal government uses predictive models to inform decision-making. The GAO recently reported that models could accurately predict infectious disease outbreaks and allow for better planning and deployment of public health resources. The GAO was requested to conduct an additional study to assess the challenges in conducting emerging infectious disease modeling, which could include a lack of sufficient data and methods.

Ways and Means Reaches Deal on Medicare Extenders

The House Ways and Means Committee announced that they have reached a bipartisan agreement relating to Medicare “extenders.” The legislative package will extend or make permanent a group of Medicare policies known as extenders, most of which are scheduled to expire by the end of the year without action from Congress. The polices were last extended in 2015 through the Medicare Access and CHIP Reauthorization Act (MACRA). The Ways and Means package includes a two-year extension of the Medicare geographic practice cost index (GPCI) for physician payments, a two-year extension of the Medicare Dependent Hospital Program and the Low-Volume Adjustment Program, a five-year extension of the Home Health rural add-on, a two year extension of the State Health Insurance Assistance Programs (SHIP), and a two- year extension of funding for consensus based entity work on quality measures.

The Ways and Means Committee also offers a number of financial offsets for the extenders package, including extension of a policy to redistribute misvalued billing codes, a Medicare Improvement Fund rescission, and modifications to skilled nursing facility (SNF), home health agency, and critical access hospital payments. Last month, a bipartisan Medicare extenders discussion draft was released by the Senate Finance Committee. Unlike the House Ways and Means’ agreement, the draft released by Chairman Hatch (R-Utah) and Ranking Member Wyden (D-Ore.) does not include offset provisions.

Trump Nominates Former Eli Lilly President for HHS Secretary

President Trump has announced his plans to nominate former Eli Lilly & Co. president Alex Azar to be the next Secretary of the U.S. Department of Health and Human Services (HHS

Hospitals File Lawsuit to Block 340B Cuts

Three hospital groups have filed a lawsuit against the Administration to block steep cuts to the 340B drug discount program. The American Hospital Association, Association of American Medical Colleges, and America’s Essential Hospitals argue that the Centers for Medicare and Medicaid Services’ (CMS) plan to cut payments for physician- administered drugs by more than 28 percent beginning January 1 threatens patient access to care for uninsured and other vulnerable populations. Lawmakers have introduced bipartisan legislation in the House of Representatives to prevent the cuts from going into effect. The bill (H.R. 4392) was introduced by Reps. David B. McKinley (R-W.Va.) and Mike Thompson (D-Calif.).

Experts Estimate Economic Burden of the Opioid Crisis

The economic burden of the opioid crisis reached $95 billion in 2016, according to a new analysis released by Altarum. The loss of life – 53,054 deaths in 2016 alone – resulting from the opioid epidemic accounts for $43.2 billion in economic loss. The report estimates than an additional $12.4 billion results from the loss of productivity from non-fatal drug use. Health care services for those suffering opioid dependencies accounts for $24.6 billion.

These costs are largely borne by the criminal justice system, child and family assistance services, and the education system. The federal government assumes $29.2 billion of the total costs associated with opioid misuse and abuse, indicating bears most of the burden of this crisis. Furthermore, Altarum states that that costs associated with the epidemic in 2017 are likely to rise beyond 2016 levels, while only a small fraction of the total cost opioid prevention and treatment efforts.

The White House Council of Economic Advisers (CEA) released its own analysis placing the cost of the opioid crisis at $504 billion. The higher figure is a result of CEA’s inclusion of the “value of a statistical life,” which places a cost on the intangible value of life itself, beyond the concrete estimates of lost earnings included in Altarum’s report. The number of overdose deaths have doubled during the past decade; the total number of life-years lost in 2016 due to opioid overdoses reached 1.84 million years in 2016. The CEA calls for a better understanding of the economic causes contributing to the crisis. The White House also said that it plans to offer a follow-up analysis of recent actions aimed at solving the crisis.

Exchange Enrollment Exceeds Expectations

Sign-ups for the ObamaCare exchanges have been unexpectedly high since the opening of the enrollment period began on November 1. Nearly 2.3 million people have signed up for coverage according to the Centers for Medicare and Medicaid Services (CMS), despite the uncertainty caused by rising premiums, insurer exits, and efforts by the Administration and GOP Congress to repeal or roll back the Affordable Care Act (ACA). While enrollment has increased significantly on a daily basis compared to previous years, it is impossible to generalize what this will ultimately mean for the individual market come close of the enrollment period on December 15. While 12.2 million people signed up for coverage last year, the total length of the open enrollment period was cut in half this year. A significant surge around the December 15 deadline would be necessary to maintain a steady enrollment rate with previous years.

CDC to Undergo Reorganization

Director of the Centers for Disease Control and Prevention (CDC) Brenda Fitzgerald announced that the agency will undergo a reorganization to improve its attention to science, surveillance, and service. The CDC currently has an administrative review underway to ultimately refocus its work around communities of practice and to increase the agency’s synergy and effectiveness.