Life Science Compliance Update

October 21, 2016

Life Science CEOs “Upbeat” About Industry Prospects


According to KPMG LLP’s U.S. CEO Outlook 2016, CEOs of life science companies are confident about their prospects for growth in the pharmaceutical, biotech, and medical device sector over the next three years. These next three years are considered critical and according to the report, two-thirds of CEOs believe that the next three years will be more critical for their industry than the previous fifty years.

In general, it is projected that one of the biggest driving factors will be technological change, second only to economic factors. Specific to the life sciences industry, new customers were seen as the biggest driver of growth (according to 37% of CEOs surveyed), while new products were not far behind (29% of CEOs surveyed).

In part because of the high hopes and prospects (life sciences CEOs were more optimistic about their own sector than their peers in other industries and plan investments over the next three years), approximately 84% of life sciences CEOs plan to hire in the next twelve months. Only 16% of life sciences CEOs said they plan to keep their workforce unchanged during the next twelve months, compared with 31% across all industries.

During the next three years, over three-fourths of life sciences CEOs plan to expand headcount between six and ten percent. None of the life sciences CEOs surveyed anticipate having to cut jobs in the next three years, and 11% believe that they are likely to expand headcount by more than 10%.

The top three areas where life sciences CEOs plan to “devote significant investment/resources” over the course of the next three years are: expanding facilities (32%), advertising and marketing (32%) and measurement and analysis of the customer (26%).

According to Liam Walsh, National Advisory Leader, Healthcare and Life Sciences, KPMG LLP, “improved data and analytic tools are having a role in helping to build drug pipelines and target patient groups for medicines. Questions remain about the industry’s ability and willingness to transform to make the most of their product portfolios.”

Alison Little, advisory leader for life sciences at KPMG, noted that “Most of the opportunities appear to be aimed at the sales, technical and scientific positions. Many administrative and back office functions have been through wrenching changes to become more efficient, leaving fewer opportunities than those in research and development, manufacturing, IT and customer facing positions, such as sales.”

Little also stated, via a press statement, “CEOs by their very nature tend to be optimistic people and the industry is coming to terms with its challenges. Drug makers are much better positioned than they were five-to-eight years ago when sales of many blockbuster medications were evaporating from cheaper, generic versions entering the market. Product pipelines are much stronger now and many of the drug makers have merged or focused their product portfolios.”

However, it wasn’t all positive, with CEOs expressing concerns over competition, an inability to increase market share; and the inability to stay on top of new products/services and technologies.

With such an optimistic outlook for the industry, many life sciences organizations are expecting transforming businesses. Only 45% of CEOs estimated that their companies “will be largely the same firm we are today,” compared with 61% of the CEOs surveyed overall.

Post ICD-10 Changes to the ACA and its Implications


The coming year will bring along change for practices. The ending of the ICD-10 grace period will bring rising problems for practices if they are not prepared. Apart from nearly 2700 new codes that are coming out, there are also significant changes in old codes as well.

With the introduction of ICD-10 it was decided that there would be a year’s time where all unspecified codes would still be accepted and not sent into denials mostly because many practices were unprepared. With this changing, the denials rates of practices will be rising to a huge extent. To combat this, practices need to have a medical billing software which is well equipped with the recent changes and the updates.

It is predicted by many experts that the denial rates will be moderately higher for practices come October 1st, however, they will be significantly higher for practices that do not have medical billing software, and are not prepared. Of course, the full wrath of the changes will be felt differently, depending upon which family of codes a particular practice gets often. Hence it is important to see the relevant changes concerning your practice, and then deciding what is needed.

The problem is that a relatively small practice will need such software much more, because it is harder for a smaller practice to hire an entire billing department, and hence in some cases (learn more) the doctor himself/herself ends up doing the coding, which basically results in a couple of extra hours every day. Instead, this time can be utilized in taking care of more patients which can result in not only a higher profit for the practice but better care for the patient. This way it all comes down to specialization, the doctor should be doing what the doctor knows best, which is to practice, and the coder should do what the coder knows best, which is to code. Now when the doctor takes the time to start doing other tasks ultimately it is a waste of resources.

The changes and the new codes that are being introduced are very important, and one should be fully prepared not just for the updates of the ICD-10, but for other factors that will be affecting the medical industry in the long run. One of these things is the upcoming election, which will have major implications on healthcare. The healthcare industry was revolutionized with the “Affordable Healthcare Act,” (ACA) ever since it became part of the constitution. Similarly, with the front runners of the both the major parties decided it would be interesting to see what potential effects they will have on the healthcare industry in the foreseeable future.

Hillary Clinton has exclaimed that she would not be for repealing the affordable health care act and actively “defend” it and even build on its success, whereas Donald Trump wants to completely repeal the act, and instead bring in “something great.” Now basically what does this mean for the healthcare industry, will the upcoming elections bring about a paradigm shift, and change the way things are done entirely?

    Now changes to the ACA look likely whether Clinton or Trump take the white house; however, this could be harder to do especially since the Supreme Court upheld it in 2012 and it is firmly a law of the land. It is estimated by the Obama administration that it would add around $137 billion to the federal budget to repeal the ACA.

Below we will be discussing the federal health care plans of both major party candidates, although neither candidate has outlined a detailed comprehensive plan as far as health care is concerned, they have suggested certain policies which provide a generic outline on which we can make an analysis.

Recently at the DNC Hillary Clinton talked about how she wants to defend and further add changes to the ACA to make sure that affordable health care is provided to as many Americans as possible. She also talked about how she would protect Roe v. Wade which was a landmark decision as far as abortion is concerned. As far as Clinton is concerned it should be protected and the decision of abortion should clearly lie with the mother.

Mike Pence who is Donald Trump’s running mate, actually talked about putting Roe v. Wade to the ash heap of history where it belongs. The republicans are pro-life, and would repeal the aforementioned case which would mean a huge tassel in congress.

Now here is the direct impact that the industry will have as far as practicing doctors are concerned. A Hillary Clinton presidency brings more of the same thing in a bigger package, more regulations such as HIPPA and HITECH in the industry, which means that practicing doctors will be treating more patients, relatively be getting paid the same amount that they are being paid currently with adjustments to inflation of course.

A Donald Trump Presidency would bring with it free market conditions, that could considerably increase the pay of doctors, and bring with it fewer regulations in the long term. This could lead to fewer people have access to good healthcare who cannot afford it; such is the law of the market. 

However whichever candidate gets selected, it is important to keep track of what is important, and for a practice, the most important factor should be how to keep afloat and turn in profit while helping the most amounts of people. To do this the practice needs to update about the changes that are coming, especially with the ICD-10 grace period ending.

Author Bio: Aiden Spencer is a health IT researcher and writer at CureMD who focuses on various engaging and informative topics related to the health IT industry. He loves to research and write about topics such as Affordable Care Act, electronic health records, Medical Practice management and patient health data. You can get in touch with him on Twitter: @AidenSpencer15

October 20, 2016

CMS Releases MA and Part D Landscape Information for 2017


On September 22, 2016, the Centers for Medicare and Medicaid Services (CMS) announced information on premiums and costs for Medicare Advantage (MA) and stand-alone prescription drug plans (PDPs) for calendar year 2017.

CMS stated that 2017 Medicare Advantage premiums will “remain stable [and even decrease] and more enrollees will have access to higher quality plans while, for the seventh straight year, enrollment is projected to increase to a new all-time high.” For calendar year 2017, CMS has estimated that the average Medicare Advantage monthly premium will decrease by roughly $1.19 (about a 4% decrease), from $32.59 to $31.40. Approximately two-thirds of Medicare Advantage enrollees will experience no premium increase. 

CMS also reports that ninety-nine percent of Medicare beneficiaries will have access to a Medicare Advantage plan in 2017 and that more of those plans will offer additional supplemental benefits, such as dental, vision, and hearing benefits.

CMS is expecting an increase in enrollment, to 18.5 million enrollees next year, an increase of sixty percent since 2010. Enrollment in Medicare Advantage plans is projected to increase to thirty-two percent of all Medicare enrollees in 2017, an increase from just twenty-four percent in 2010.

It is estimated that average premiums for the Medicare Part D prescription drug program will also remain stable, saving beneficiaries billions on prescription drugs. In July 2016, CMS announced that the average premium for a basic Medicare prescription drug plan is projected to be $34 a month in 2017. Recent projections show that access to a prescription drug plan will remain strong in 2017, with 100% access to a plan in the individual market, and improved access to employer plans. The average number of Medicare Advantage plan choices per county is relatively unchanged from 2016, and access to supplemental benefits will continue to grow.

Andy Slavitt, CMS Acting Administrator, said “Medicare Advantage and the prescription drug benefit continue to be a great option for seniors and people living with disabilities. Medicare enrollees will continue to have access to predictable premiums and high quality care.”

It is estimated that due to the Affordable Care Act, Medicare beneficiaries are seeing reduced costs through: (1) savings on covered brand-name and generic prescription drugs and (2) access to certain preventive services with no co-pay or other cost sharing. More than 11 million seniors and people with disabilities have received savings and discounts in the coverage gap, since the enactment of the Affordable Care Act.

Open Enrollment for 2017 Medicare health and drug plans starts October 15, 2016, and ends on December 7, 2016.

Information on premiums and costs of 2017 Medicare health and drug plans can be found here.

A fact sheet on Medicare Advantage and Part D can be found here.

Information on Medicare Open Enrollment, including state-by-state fact sheets, can be found here.

State-by-state information on discounts in the “donut hole” can be found here.

State-by-state information on utilization of preventive services at no cost sharing to beneficiaries in Medicare can be found here.


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