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Category: News

OPPS Proposed Rule – CY 2019

CMS-1695-P drafted on 7/25/2018; Published in the Federal Register on 7/31/2018

On July 25, 2018, the Centers for Medicare & Medicaid Services (CMS) proposed changes to ensure that seniors can access the care they need at the site of care that they choose and to lower drug prices as outlined in the President’s Blueprint. The proposed policies in the CY 2019 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule would help lay the foundation for a patient-driven healthcare system.

To increase the sustainability of the Medicare program and improve quality of care for seniors, CMS is moving toward site neutral payments for clinic visits (which are essentially check-ups with a clinician). Clinic visits are the most common service billed under the OPPS. Currently, CMS often pays more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting.  If finalized, this proposal is projected to save patients about $150 million in lower copayments for clinic visits provided at an off-campus hospital outpatient department. CMS is also proposing to close a potential loophole through which providers are billing patients more for visits in hospital outpatient departments when they create new service lines.

As part of active efforts to reduce the cost of prescription drugs, CMS is issuing a Request for Information to solicit public comment on how best to leverage the authority provided under the Competitive Acquisition Program (CAP) to get a better deal for beneficiaries as part of a CMS Innovation Center model. CMS believes a CAP-based model would allow the program to introduce competition to Medicare Part B, the part of Medicare that pays for medicines that patients receive in a doctor’s office.

In 2018, CMS implemented a payment policy to help beneficiaries save on coinsurance on drugs that were administered at hospital outpatient departments and that were acquired through the 340B program-a program that allows hospitals to buy certain outpatient drugs at a lower cost. Due to CMS’s policy change, Medicare beneficiaries are now benefiting from the discounts that 340B hospitals enjoy when they receive 340B-acquired drugs. In 2018 alone, beneficiaries have saved an estimated $320 million on out-of-pocket payments for these drugs. For 2019, CMS is expanding this policy by proposing to extend the 340B payment change to non-excepted off-campus departments of hospitals that are paid under the Physician Fee Schedule.

CMS is also seeking comment through a Request for Information asking whether providers and suppliers can and should be required to inform patients about charge and payment information for healthcare services and out-of-pocket costs, what data elements would be most useful to promote price shopping, and what other changes are needed to empower healthcare consumers.

Overall, the proposed rule is projected to result in an estimated decrease of $610M (or -0.1%) in payments to providers, ranging from 3.4% decreases for hospitals in the New England region up to 2.1% increases for non-teaching, non-DSH urban hospitals.

For more information regarding this Proposed Rule, see below:

Fact Sheet Link

Federal Register Link

Medicare OPPS Base Rates

CMS is proposing a base rate increase of 1.25% for hospitals that submit OQR quality data and 2.0% for ASCs that submit ASCQR quality data.

APC Changes

As expected, CMS is proposing weighting changes to APC weights for CY2019, along with new APC codes and new HCPCS codes. Below is a listing of the largest changes in weighting between CY2018 and CY2019 APCs:
 
Click here for a table of the full APC weighting comparison between CY2018 and CY2019.
 
Click here for a table of the new HCPCS codes effective 7/1/2018.
Other APC Changes
CMS has proposed to create three new comprehensive APCs (C-APCs) for ears, nose, and throat (ENT) and vascular procedures. CMS also proposes to remove two procedures from the inpatient-only list and add one procedure to the list.
Click here for a table of the changes to the inpatient-only procedures.

Changes to Quality Reporting

CMS is proposing several changes to the Outpatient Quality Reporting (OQR) in an effort to reduce burdens on hospitals, including the removal of 10 measures from the OQR (1 from CY2020 and 9 from CY2021). CMS also proposes to remove the three recently revised pain communication questions, starting with services on Jan. 1, 2022, to address concerns that providers might feel pressure to offer opioids in order to raise survey scores.
Click here for a table of the 10 OQR measures proposed to be removed.
 
Click here for a table of the 26 OQR measures required for CY 2020 and here for a table of the 15 ASCQR measures required for CY2020.

Off-Campus Payment Policy Changes

CMS remains concerned with the shift of services from freestanding physician offices to hospital provider-based departments (PBDs). As a result, they are proposing several significant changes that will negatively impact OPPS reimbursement for these facilities:
Expansion of PFS Rate for All Clinic Visits: CMS will extend the reduced Physician Fee Schedule (PFS) rate for clinic visits (HCPCS code G0463) to all off-campus PBDs, even those excepted under Section 603. (Note: The PFS payment rate is approximately 40% less than the OPPS rate.)CMS estimates that the impact of this change is expected to reduce reimbursement to hospitals by $760M.
Restricting “Clinical Families of Services”: CMS is also proposing to require that if an excepted off-campus PBD furnishes services from any clinical family of services from which it did not furnish and bill during the period from 11/1/2014 to 11/1/2015, such items and services would be paid at the reduced PFS rate applied to non-excepted off-campus PBDs. New items or services within a clinical family of service would continue to be paid under OPPS, as this would be considered a “service expansion.” For mid-build providers, CMS proposes a 1-year baseline period beginning on the first date the off-campus PBD furnished the service under OPPS.
Click here for a table of the clinical families of services.
New “ER” Modifier: Finally, CMS also plans to require a new “ER” modifier to identify services in off-campus ER departments. This is meant to address the MedPAC recommendation for CMS to assess the extent to which OPPS services are shifting to off-campus ER departments. (Critical access hospitals would be exempt from this reporting requirement.)

Changes to Drug Payment Policy 

In response to the President’s Commission on Combating Drug Addiction and the Opioid Crisis, CMS proposes to change the packaging policy for certain drugs. CMS is also proposing to change the payment for separately payable drugs for non-excepted off-campus PBDs to the same lower ASP minus 22.5% (or 77.5% of ASP) that excepted off-campus PBDs receive. Currently these non-excepted departments receive 106% of ASP for these drugs. SCHs, Children’s, and Cancer hospitals would be exempt.
 
Click here for a table of the drugs and biologicals with pass-through status expiring on 12/31/2018.

CMS Request for Information

CMS is seeking feedback as to how providers may safely and effectively transition EHR among other providers and thereby improve interoperability.

CMS is also interested in continuing the discussion as to how hospitals might improve access to charge information across providers in order to help patients understand their financial liability, including out-of-pocket costs.

Finally, CMS is soliciting comments on key designs for developing a potential model that would test private market strategies and introduce competition to improve quality of care for beneficiaries, while reducing both Medicare expenditures and beneficiaries’ out-of-pocket spending.  They are seeking feedback that would accelerate the move to a value-based healthcare system building upon the Competitive Acquisition Program (CAP) for Part B drugs.

For additional information, please contact Ron Knapp at ron.knapp@toyonassociates.com.

Other Recently Published Proposed Rules  

CY 2019 HHA PPS Proposed Rule [CMS-1689-P]
(FR Publish Date 7/12/2018)
  • Expected 2.1% increase in payments to HHAs in CY 2019
  • Rural add-on payment extended for CYs 2019 through 2022 with new methodology
  • Cost of remote patient monitoring will be allowable costs on the Medicare cost report
CY 2019 ESRD PPS and DMEPOS Proposed Rule [CMS-1691-P]
[FR Publish Date 7/19/2018)
  • Proposed ESRD
  • Updates to ESRD QIP measures and codifying several previously finalized requirements
  • Changes to the DMEPOS Competitive Bidding Program (CBP)
Physician Fee Schedule, Quality Programs, and Medicaid Interoperability Proposed Rule [CMS-1693-P]
(FR Publish Date 7/27/2018)
  • Updates to PFS RVUs, including an increase in the conversion factor of 0.13% to $36.0463
  • Elimination of payment distinction and documentation requirements E&M visit levels 2
    through 5
  • 50% multiple procedure payment adjustment when E&M visits and procedures with global periods are furnished together
  • Moving forward with Appropriate Use Criteria (AUC) using a Clinical Decision Support Mechanism (CDSM)
    >Effective 1/1/2020, physicians and other practitioners who order advance diagnostic
    imaging must consult with AUC and report the consultation information on the claims.
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Covered California Insurance Hikes are starting to Pinch

From: SF Chronicle – 10/16/16

Next year’s health insurance rates for individual policyholders are starting to hit mailboxes, and that’s proving to be painful for some California consumers.

Covered California, the state’s health insurance marketplace created by the federal health law, warned in July that 2017 premiums would go up an average of 13.2 percent, or more than triple the average 4 percent rate increases that consumers have seen since the exchange started offering coverage in 2014.

Around 90 percent of Covered California’s

1.4 million Enrollees get some federal aid to help cover the cost of their premiums. The increases will be felt most acutely by those policyholders who make too much money to qualify for those subsidies. These are self-employed people or those who otherwise don’t get health insurance through their employers.

“I was in favor of Obamacare,” said Ted Weinstein, a self-employed literary agent in San Francisco, referring to the Affordable Care Act. “Now I’m taking it in the shorts with a 27 percent rate increase (next) year.”

Weinstein, who emphasizes he supports expanding coverage to the millions of Americans without health insurance, said he’s frustrated that his Anthem policy, which cost $773 a month in 2014 when the major elements of the health law kicked in, has now shot up to over $1,300.

About 10 million Americans who buy individual health insurance either through or outside the state and federal marketplaces don’t receive any federal subsidies to help lower their costs, according to the Congressional Budget Office. Weinstein, for example, does not qualify for a subsidy.

President Obama’s signature health legislation has come under fire in this election season, with major insurers like Aetna and UnitedHealth retreating from the marketplaces, as well as the rising premiums. Even the law’s supporters, like Minnesota Gov. Mark Dayton, a Democrat, are lobbing criticisms. Dayton last week declared the Affordable Care Act “no longer affordable,” with individual premiums in the state exchange increasing next year by an average of 50 to 67 percent.

California has been largely considered successful in rolling out its exchange and keeping premiums under control, but this year is proving to be challenging.

While rates are going up an average of 13.2 percent statewide, Covered California’s largest insurers — Anthem and Blue Shield of California — are increasing rates by 17.2 percent and 19.9 percent respectively. The state has no laws or regulations that cap premium increases.

“Things are working better in California than almost everywhere else, but it’s still not perfect,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a nonpartisan health research and communications organization. “If open enrollment goes poorly, it’s possible there could be further plan exits and bigger premium increases this next year.”

This year’s open enrollment period starts Nov. 1 and ends Jan. 31, 2017, but people can sign up outside that period under special circumstances such as if they lost their coverage due to a job loss, divorce or move.

Anthem and Blue Shield have blamed the increases on several reasons, including higher-than-expected use of medical services by members, increased cost of prescription drugs and high costs incurred by people who signed up for coverage outside the open enrollment period.

The burden of the higher rates isn’t being shared equally throughout the state. Northern California historically has had higher premiums than Southern California for a variety of reasons including hospital-network mergers, but some of the contrasts are stark.

In Santa Clara County, premiums are going up a weighted average of 9.2 percent, while people in San Francisco will see their rates increase by 14.8 percent, according to figures released by Covered California. Meanwhile, in Monterey, San Benito and Santa Cruz counties, where there is little competition among providers, average premiums are skyrocketing by 28.6 percent.

Covered California, which started sending out renewal notices on Oct. 5, has recommended that consumers shop around and compare plans.

The exchange offers 11 plans, but the number of choices varies by region. Covered California officials estimated 7.4 percent of enrollees can choose from only two plans. San Francisco, by contrast, offers six different carriers.

Weinstein, 54, said similar coverage from other insurers cost about the same, but he’s most disturbed by benefit changes in his plan that no longer provide coverage if he wishes to visit an out-of-network doctor or hospital.

Weinstein said Republican presidential candidate Donald Trump’s message about how the Affordable Care Act is not affordable resonates for many Americans. While he doesn’t support Trump’s solutions, he said Trump talks more directly about the law’s problems than does Hillary Clinton, the Democratic nominee.

“Real people who are paying out of pocket are getting ravaged with rate increases,” he said. “Until they address that, Obama and Hillary and everybody else are not going to get any public support.”

Covered California Insurance Hikes are starting to Pinch

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GAO report says Obama administration failed to follow health law

From: Modern Healthcare;  9/29/16

The Obama administration failed to follow the president’s health care law in a $5 billion dispute over compensating insurers for high costs from seriously ill patients, Congress’ investigative arm said Thursday.

The opinion from the Government Accountability Office is a setback for the White House and bolsters Republican complaints that administration officials bent the law as problems arose carrying out its complex provisions. The finding may complicate efforts to stabilize premiums in the law’s insurance marketplaces, where about 11 million people get coverage.

At issue is how the administration has handled a little-known, but important program called “transitional reinsurance.” Working in the background of the law’s coverage expansion, the three-year program collects fees from employer and other private health insurance plans and channels the money to health plans that face large claims for treating patients with catastrophic medical problems.

The law specified that the fee would collect $25 billion from 2014-2016, and $5 billion of that would go directly to the Treasury. But when fee collections fell short, the Health and Human Services Department failed to allocate a share of money to the Treasury, saying it would do so later as more money came in.

Republicans cried foul and asked the GAO to examine the issue. On Thursday, Republicans got the ruling they had hoped for.

“HHS lacks authority to ignore the statute’s directive to deposit amounts (collected under the program) in the Treasury,” the GAO’s general counsel, Susan A. Poling, wrote.

The administration’s interpretation of the law “is inconsistent with the plain language of the statute,” she said.

Republicans accuse the administration of shortchanging the Treasury to “bail out” the health care law.

“The administration should end this illegal scheme immediately, and focus on providing relief from the burdens of this law,” Sen. John Barrasso, R-Wyo., said in a statement. Barrasso is a leader on health care issues.

Previously, Republicans have complained that the administration was flouting the law when it delayed a requirement that larger employers must offer coverage to their workers.

It didn’t help the administration’s case with GAO that the original HHS plan for distributing the fee money called for paying the Treasury.

The administration had no immediate response to the GAO opinion. The GAO has no enforcement power over its ruling, but congressional opponents of the health law could use the finding to write legislation that forces HHS to pay the Treasury. Generally, lawmakers of both parties respect GAO’s rulings on federal budget issues.

The reinsurance program is one of three financial backstops created by President Barack Obama’s law to support insurers as they built their customer base in the new markets for subsidized private insurance. Reinsurance provides a safety net for insurers by helping to pay large claims, an important consideration for companies selling coverage to a customer pool they didn’t know.

The marketplaces have been tough for insurers, due in part to less-than-promised support from a different government stabilization program. Insurers also say they’ve been swamped by higher-than-expected claims and by customers who sign up for coverage, use it on expensive care and then stop paying premiums. Major carriers such as UnitedHealth Group and Aetna have scaled back their role after forecasting annual losses that will top $300 million.

GAO report says Obama administration failed to follow health law

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