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CMS Releases Medicare Physician Fee Schedule and Quality Payment Program Final Rule

November 9, 2018—The Centers for Medicare and Medicaid Services (CMS) Nov. 1 released a final rule on the Physician Fee Schedule and Quality Payment Program, delaying changes to payment for evaluation and management (E&M) codes until 2021 and finalizing some documentation changes. AAMC President and CEO Darrell G. Kirch, MD, issued a statement applauding CMS for the documentation changes. He said, “These will significantly reduce burden for physicians and other health care professionals, allowing them more time to focus on patients.”

Under the final rule, clinicians will be able to use the current 1995 or 1997 E&M documentation guidelines, medical decision making, or time to document E&M visits beginning in 2021. Also beginning in 2021, clinicians will have a single, blended payment rate for E&M outpatient office visits levels 2-4 for new and established patients, as well as the use of previously proposed add-on codes that describe additional resources inherent to primary and specialty care and for extended visits. CMS previously had proposed a single, blended payment rate for levels 2-5, beginning in 2019. The agency did not finalize the associated multiple procedure payment reduction policy.

In addition, CMS finalized the following: 

  • Changes to documentation requirements, allowing clinicians to focus their documentation on what has changed since the last visits, rather than re-documenting the history and exam;

  • Allowing clinicians to review and verify certain information in the medical record that is entered by ancillary staff or the beneficiary, rather than re-documenting it;

  • Changes to teaching physician documentation, allowing the medical record to document only that the teaching physician was present and clarifying that the student, nurse, or physician could document this information;

  • Paying for interprofessional internet consultations through two new codes (99452 and 99451), finalizing an increase in RVU to 0.70;

  • Maintaining the 40% relativity adjuster for payments of items and services provided in certain off-campus hospital outpatient provider-based departments;

  • A 15% weight for the cost performance category, an increase from 10% in 2018, under the quality payment program;

  • Change the definition of Merit-based Incentive Payment System (MIPS)-eligible providers to include additional provider types and the addition of a third element (number of covered professional services) to the low-volume threshold determination;

  • An opt-in policy that offers eligible clinicians who meet or exceed at least one element of the low-volume threshold the ability to participate in MIPS; and

  • Updating the advanced alternative payment models (APM) certified EHR technology (CEHRT) threshold so that an advanced APM must require at least 75% of eligible clinicians in each APM entity to use CEHRT and extended the 8% revenue-based nominal standard for advanced APMs through performance year 2024.

The AAMC will be reviewing the final rule in detail in the coming weeks and will be providing comments by the Dec. 31 deadline. The AAMC will also be hosting webinars on the final rule with dates to be announced shortly.

Contact:

Gayle Lee
Director, Physician Payment & Quality
Telephone: 202-741-6429
Email: galee@aamc.org

Kate Ogden
Physician Payment & Quality Specialist
Telephone: 202-540-5413
Email: kogden@aamc.org

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CMS Releases CY 2019 OPPS Final Rule

November 9, 2018—The Centers for Medicare and Medicaid Services (CMS) Nov. 2 released the calendar year (CY) 2019 Medicare Outpatient Prospective Payment System (OPPS) final rule. Among other policy issues, the final rule addresses site-neutral payment reductions for off-campus outpatient clinics, expands payment reductions for certain drugs acquired under the 340B program, and makes changes to the Medicare hospital quality reporting program. The AAMC previously submitted comments on the proposed rule [see Washington Highlights, Sept. 28]. 

CMS is finalizing its site neutral payment policy that will decrease reimbursement for clinic visits (HCPCS code G0463) furnished at off-campus provider-based departments (PBDs) paid under the OPPS. As part of a two-year phase-in, beginning Jan. 1, 2019, clinic visits provided at these sites will be paid at 70% of the OPPS full payment rate. Beginning Jan. 1, 2020, reimbursements will be reduced further to 40% of the OPPS full payment rate. CMS estimates that the payment cuts’ implementation will save $380 million in CY 2019. The proposal will not be implemented in a budget neutral manner.

CMS also finalized its proposal to expand payment reductions for drugs acquired under the 340B Drug Pricing Program and furnished in nonexcepted off-campus PBDs. CMS will pay the average sales price minus 22.5% for 340B-acquired drugs that are furnished by nonexcepted off-campus PBDs beginning Jan. 1, 2019.Additionally, drugs acquired under the 340B program and reimbursed at the wholesale acquisition cost (WAC) will be paid at WAC minus 22.5%.

The final rule included a 1.35% increase to the OPPS payment for CY 2019. Reimbursements for drugs with WAC pricing will be reduced from WAC plus 6% to WAC plus 3%. As recommended in the AAMC’s comment letter, CMS did not finalize its proposal to define clinical families of services.

Additionally, the final rule included changes to the hospital quality reporting program. CMS updated and refined the requirements for quality reporting and removed quality measures that are duplicative, “topped out,” or the costs to report are greater than the benefits of reporting. The agency also removed eight of the 10 quality measures that had been proposed for removal from the hospital outpatient quality reporting program. CMS did not finalize the removal of the Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients (OP-29) and the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (OP-31) measures.

The rule modified the Hospital Consumer Assessment of Healthcare Providers and Systems survey measure under the hospital inpatient quality reporting program by removing the “communication about pain” questions effective with fiscal year 2022 payment determination. CMS will not report publicly the three revised “communication about pain” questions in the interim when they remain included in the survey.

A fact sheet on the final rule is available on the CMS website.

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

Phoebe Ramsey, J.D.
Sr. Regulatory Analyst - Quality & Payment Policy
Telephone: 202-448-6636
Email: pramsey@aamc.org

Andrew Amari
Hospital Policy and Regulatory Specialist
Telephone: 202-828-0554
Email: aamari@aamc.org

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AAMC Responds to Report on Administration of Extramural Funding for VA Researchers

November 9, 2018—The AAMC Nov. 1 sent a letter to Department of Veterans Affairs (VA) Chief Research and Development Officer Rachel Ramoni, DMD, ScD, in response to a September 2018 report titled “Study on Veterans Affairs (VA) Extramural Funding.” The VA’s Office of Research and Development (ORD) commissioned the independent research organization Westat to collect information about the administration of extramural research funding to VA researchers.

U.S. medical schools and teaching hospitals have shared a more than 70 year-long relationship with the VA to provide clinical care, support physician education, and conduct research in partnership to improve care for veterans. The letter notes that “VA-academic medicine research collaborations are critical to fostering veteran-centric research and improving current and future healthcare for veterans and all Americans in all health care settings.”

In its response, the AAMC noted its support for ORD’s interest in better understanding how extramural grants are administered and added that the report “provides VA with an opportunity to determine whether improvements to the current process are necessary to further advance VA research and its overall benefit to veterans.” The AAMC highlighted nine issues and recommendations for the VA ORD to consider in completing its analysis of Westat’s report, including:

  • The review should be broadened to include perspectives of the academic affiliates;
  • Each individual VA medical center (VAMC) should develop formal written policies;
  • ORD should enhance education of VA researchers regarding the roles of Facilities and Administrative reimbursements from National Institutes of Health (NIH) grants and the Veterans Equitable Resource Allocation in supporting research;
  • When appropriate, academic affiliates administering NIH awards that utilize VA resources should subcontract with the nonprofit corporation (NPC) for VA services, and vice versa;
  • VA ORD and NPCs should educate VA researchers about resources and services offered by NPCs;
  • Potential conflicts of commitments should be reconciled at a local level;
  • VA should increase the priority of the VA research enterprise and improve incentives for VAMC leadership to invest in research;
  • VA and NPCs allocate additional resources and staff to pre/post award grant administration; and
  • Increased funding for the VA intramural program, including research infrastructure.

The AAMC looks forward to future discussions regarding extramural research at the VA, and a continuation of the strong partnership to improve care for veterans.

Contact:

Christa Wagner
Legislative Analyst
Telephone: 202-828-0595
Email: chwagner@aamc.org

Anne Berry, MPP
Lead Specialist, Implementation Research & Policy
Telephone: 202-739-2987
Email: aberry@aamc.org

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CMS Releases Medicaid and CHIP Managed Care Proposed Rule

November 9, 2018—The Centers for Medicare and Medicaid Services (CMS) Nov. 8 released a proposed rule aimed at streamlining the Medicaid and Children’s Health Insurance Plan (CHIP) managed care regulatory requirements through reduced state administrative burden and enhanced flexibility for states to manage their Medicaid and CHIP programs. According to the administration, the proposed rule strives to decrease regulatory burden, promote transparency, and allow for flexibility and innovation in care delivery.

Highlights of the proposed rule include:

  • Allowing states to require managed care plans to make pass-through payments, including graduate medical education payments, to hospitals or physicians for a three-year period when Medicaid populations or services are initially transitioned from a Medicaid fee-for-service to Medicaid managed care;

  • Continuing current regulatory requirements related to actuarial soundness of rate setting, provider screening and enrollment standards, and medical loss ratio standards;

  • Allowing for the use of telehealth in certain areas for meaningful access; and

  • Enabling the use of electronic communication with beneficiaries when appropriate.

The AAMC is continuing to review the proposed rule. Comments are due mid-January.

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

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HRSA Proposes Earlier Implementation Date for Ceiling Price and Civil Monetary Penalty Final Rule

November 2, 2018—The Health Resources and Services Administration Oct. 31 released a notice of proposed rulemaking (NPRM) that changes the implementation and compliance date for the 340B Drug Pricing Program Ceiling Price and Civil Monetary Penalties (CMP) final rule to Jan. 1, 2019. The current implementation date is July 1, 2019 [see Washington Highlights, June 8].  

The AAMC, along with the American Hospital Association, America’s Essential Hospitals, and 340B Health, filed a Sept. 2018 lawsuit in U.S. District Court challenging the years-long delay to implement the final rule [see Washington Highlights, Sept. 14]. 

The final rule, initially published in on Jan. 2, 2017 (82 Fed. Reg. 1210), establishes the process for calculating the ceiling price for drugs acquired under the 340B Program and the application of CMPs for manufacturers not in compliance with program requirements. This process will allow 340B covered entities to verify the ceiling price of 340B drugs to ensure they have been charged the correct prices. 

The AAMC will submit comments to the NPRM, which are due Nov. 24.

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

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HHS OIG Issues Report on CMS’s Policies and Procedures on Medicare GME Reimbursement Compliance

November 9, 2018—The Department of Health and Human Services (HHS) Office of Inspector General (OIG) Nov. 1 issued a report on whether the Centers for Medicare and Medicaid Services (CMS) adequately ensures that hospitals comply with Medicare graduate medical education (GME) requirements.

Although the OIG found that CMS generally ensured hospitals’ compliance with federal GME requirements, audits identified some instances in which teaching hospitals did not comply with federal requirements when claiming Medicare GME reimbursement for residents. Hospitals in six Medicare Administrative Contractor (MAC) jurisdictions claimed GME reimbursement for residents who were claimed by at least one other hospital during the same period. These claims totaled roughly $4 million in excess Medicare GME payments.

The report claimed that overstated resident full-time equivalent (FTE) counts were due to CMS’s inadequate procedures to ensure that hospitals do not count residents as more than one FTE. Specifically, the OIG noted that CMS neither reviewed resident data to detect overlapping rotational assignments nor directed the MACs to do so. As a result, the OIG recommended that CMS implement policies and procedures to analyze resident data or require MACs to ensure residents are not claimed as more than one FTE.

In its written response to the report, CMS agreed with the OIG’s recommendation and stated it has begun the development of a new Intern and Resident Information System (IRIS) database that hospitals will use to collect and report information on residents. 

In the fiscal year 2019 Inpatient Prospective Payment System (IPPS) final rule, CMS agreed with the AAMC’s concerns that IRIS data alone does not ensure residents will not be double counted by teaching hospitals. CMS added that it is in the process of establishing a new XML-based IRIS file format that will capture FTE resident count data consistent with the way FTEs are reported on the Medicare cost report.

Contact:

Andrew Amari
Hospital Policy and Regulatory Specialist
Telephone: 202-828-0554
Email: aamari@aamc.org

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Final Rules Released on Religious and Moral Exemptions and Accommodation for Coverage of Contraceptive Services Under ACA

November 9, 2018—The Departments of Health and Human Services, Treasury, and Labor Nov. 7 issued two final rules to provide broader conscience protections for entities and individuals who have religious or nonreligious moral objections to health insurance that covers contraceptive methods and/or sterilization procedures, and whose health plans are subject to the mandate of contraceptive coverage as preventative health services through guidance issued under the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).

These finalize the interim final rules issued on Oct. 13, 2017, with changes based on public comments. Those interim final rules prompted three lawsuits, two of which resulted in federal judges granting nationwide injunctions against the proposals. All three cases are currently on appeal.

Exemptions for Religious Beliefs

The final rule exempts employers, including institutions of higher education, that have sincerely held religious beliefs against contraceptive services from the ACA mandate and would no longer be required to provide such coverage. Under the rule, an exempt employer could opt for an accommodation whereby its insurer or third-party administrator would be responsible for providing contraceptive services to employees and their dependents covered under the plan.

Exemptions for Moral Convictions

Similar to the exemptions for religious beliefs, this rule would exempt nonprofit organizations, closely held businesses, institutions of education, and individuals that have nonreligious convictions opposing services covered by the contraceptive mandate. Moral convictions protected must meet the standards of the so-called “Church Amendments” enacted in the 1970s to protect conscience rights.

Publicly traded companies and governments cannot claim the exemptions finalized by these rules.

HHS also released a fact sheet about these final rules. The rules will become applicable 60 days after publication in the Federal Register, which is scheduled for Nov. 15.

Contact:

Phoebe Ramsey, J.D.
Sr. Regulatory Analyst - Quality & Payment Policy
Telephone: 202-448-6636
Email: pramsey@aamc.org

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MedPAC Discusses Modernizing the Medicare-Dependent Hospital Program and Integrating Dual-Eligible Special Needs Plans

November 9, 2018—The Medicare Payment Advisory Commission (MedPAC) met Nov. 12 to discuss several issues, including potential policies for modernizing the Medicare-Dependent Hospital (MDH) program and integrating Medicare and Medicaid for dual-eligible special needs plans (D-SNPs).

Congress enacted the MDH program to help rural hospitals that provide a comparatively large proportion of their patient care to Medicare patients, measured by the percentage of a hospital’s Medicare inpatient days and discharges. Currently, the program includes 155 hospitals that receive an average of $1.2 million more in payments per year above their inpatient prospective payment system (IPPS) rates.

MedPAC staff said that the MDH program does not measure Medicare dependence adequately, relies too heavily on Medicare costs rather than need, and lacks geographic equity. To address these issues, staff suggested the program focus on hospital revenues, open participation to urban hospitals, and eliminate the current bed-size requirement.

In response, commissioners discussed several issues. The suggestion of opening the program to urban hospitals sparked significant debate. Commissioners expressed concern about whether the newly introduced urban hospitals would be receiving reimbursement support otherwise meant for rural hospitals the program was intended to assist. Instead, commissioners decided to split the issue. They plan to look at rural hospital policy issues separately from the issues for “Medicare-dependent” hospitals, both rural and urban. Commissioners noted they are likely to resume discussion at their December meeting, rather than make recommendations now.

The meeting continued with a staff presentation about how Medicare and Medicaid could be integrated in D-SNP plans more effectively. Specifically, the dual-eligible population tends to receive fragmented care, and data suggests that integration offers better and more coordinated care. Staff noted that there are several barriers to integration, including the fact that partial-benefit duals have less integration opportunity but account for nearly 27% of enrollment. Additionally, many plans do not have managed long-term services and supports (MLTSS) contracts. There is misaligned enrollment where beneficiaries are only enrolled in a D-SNP but not the companion MLTSS plans.

Staff presented three policy options to address these issues: limit the ability of partial-benefit dual-eligible beneficiaries to enroll in D-SNPs, require D-SNPs to have MLTSS contracts, and ban “look-alike” plans that might try to circumvent limits placed on D-SNPs.

Commissioners noted that although they plan on making some recommendations, they may be limited due to the complexity of the issue. The commissioners generally agreed that look-alike plans have stand-alone value and should not be limited, although others felt these plans were fundamentally a barrier to integration. Commissioners had limited discussion and were split on the merits of the other policy options.

The commission also discussed modifying the advanced alternative payment models (APM) incentive payment for Medicare physician reimbursement, established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). In MedPAC’s June 2017 Report to Congress, staff offered a policy option for changing the payment, which is currently set at 5% of the clinician’s Medicare fee-for-service (FFS) revenue. Staff expressed concern about the current incentive payment structure, citing administrative complexity. They said there is no incentive to increase advanced APM participation once thresholds are met. Staff commented that the incentive is sized to the total fee for service (FFS) revenue, not advanced APM participation.  They described a policy option to eliminate the threshold and provide a 5% incentive payment on the clinician’s revenue coming through the advanced APM, making it proportional to advanced APM revenue instead of total FFS revenue.

During the discussion, commissioners expressed some concerns about unintended consequences. Some observed that keeping the “cliff” of threshold participation encourages increased participation in these value-based models. They also expressed concern that decreasing the payment incentive may further discourage participation. Ultimately, the commission agreed to move forward with this policy option, acknowledging that some minor adjustments will be made before it will come to a vote.

Contact:

Andrew Amari
Hospital Policy and Regulatory Specialist
Telephone: 202-828-0554
Email: aamari@aamc.org

Phoebe Ramsey, J.D.
Sr. Regulatory Analyst - Quality & Payment Policy
Telephone: 202-448-6636
Email: pramsey@aamc.org

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On the Hill

Following the midterm elections, the Democrats will regain control of the House of Representatives while the Republicans maintain the majority in the Senate. As of Nov. 9, the Democrats lead in the House 225-200 with 10 races still outstanding. In the Senate, the current count is 51-46, with three races still under review.


On the Agenda

The House and Senate will reconvene from recess beginning Nov. 13.

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org