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20 posts from December 2017

December 28, 2017

In Depth Review of CMS MACRA QPP Regulations


As we continue our coverage of the MACRA Quality Payment Program (QPP) rule, the following article provides a more in-depth look at the regulations promulgated by CMS. We drafted an initial summary when the rule was released in early November.

Biggest surprise: cost category of MIPS

In its proposed rule in July 2017, CMS proposed completely removing the cost domain from MIPS for 2018, despite the underlying statute requiring that cost account for 30% of the overall MIPS score by 2019. However, in the final rule, CMS shocked many when it reversed its position and finalized a cost domain weight of 10 percent for the 2018 performance year.

As described in Health Affairs, by incorporating cost measures for 2018, CMS has created several new “facts on the ground” for health care providers:

  • The cost domain will be the major differentiating factor among clinicians in MIPS over time, and CMS’s inclusion of cost in the 2018 performance period signals that the administration supports using cost as a measure of value and to determine MIPS payment adjustments.
  • Clinicians have little power to influence the total cost of care for their patients when acting alone. Only teams including support staff like care coordinators, dietitians, pharmacists, social workers, and others working together across care settings—with appropriate financial incentives—will reduce costs and improve quality. The cost domain confuses clinicians and provides a wildcard for most practices with less than 200 doctors who have no experience managing cost metrics (see visualization below).
  • Despite significant confusion and hope that a new administration would delay or undercut payment reform and MACRA, it is moving ahead quickly, and payments to physicians will be adjusted based on MIPS performance.

Virtual groups

Any individual MIPS eligible clinician or a group of 10 or fewer clinicians can form a Virtual Group with at least one other such individual eligible clinician or group. Each participating individual clinician must meet the low volume threshold definition of MIPS Eligible clinician. That is, have greater than $90,000 in Medicare Part B allowed charges and care for more than 200 Medicare Part B patients. Each participating group also has to meet the low volume threshold requirements at the group level. A group may have clinicians that do not meet the low volume threshold requirements at individual level. However, there must be at least one MIPS eligible clinician in the group.

A Virtual Group election process requires a formal written agreements among individual clinicians and groups electing to form a Virtual Group and will select a representative. This person would make the election on behalf of the members of a Virtual Group regarding the formation of a Virtual Group for the applicable performance period, by the election deadline. Virtual Groups have until December 31, 2017 to make the election for 2018 performance year.

Some other important aspects to Virtual Groups:

  • A Virtual Group is created for at least one performance period. Participants are NOT allowed to change the selection during the performance period.
  • An individual or a group may only participate in one Virtual Group during a performance period. This is determined at the TIN level.
  • There is no limit to number of participants in a Virtual Group
  • Virtual Group is recognized as an official collective entity for reporting purposes but is not a distinct legal entity for billing purposes. As a result, Virtual Group will not need to establish a new TIN nor reassign their billing rights to a new or a different TIN.

Furthermore, most of the reporting requirements applicable to groups would also generally be applicable to Virtual Groups, unless otherwise specified. Virtual groups will aggregate data for each NPI under each TIN within the virtual group by adding together the numerators and denominators to report the measure ratio for a measure at the Virtual Group level. Most of the quality measures reporting requirements such as requiring 6 measures including one outcome measure or high priority would apply to Virtual Group. All Cause Hospital Readmission Measure would be included if the Virtual Group has more than 15 clinicians and meets the case volume of 200 cases.

Data completeness requirements for Virtual Groups would apply cumulatively across all TINs in a Virtual Group. If the Virtual Group has one TIN that falls below the 60 percent data completeness threshold for measure, they may still report on that measure as long as the Virtual Group cumulatively exceeds such threshold. Virtual Groups submitting quality measures data using the CMS Web Interface or a CMS approved survey vendor to report the CAHPS for MIPS survey must meet the data submission requirements on the sample of the Medicare Part B patients CMS provides.

ACI data for Virtual Groups will be aggregated by combining data from Certified EHR Technology from all participants. If the groups (not including solo practitioners) that are part of a Virtual Group have CEHRT that is capable of supporting group level reporting, the Virtual Group would submit the aggregated data across the TINs produced by the CEHRT. If a group (TIN) that is part of a Virtual Group does not have CEHRT that is capable of supporting group level reporting, such group would aggregate the data by adding together the numerators and denominators for each MIPS eligible clinician within the group for whom the group has data captured in CEHRT. If an individual MIPS eligible clinician meets the criteria to exclude a measure, their data can be excluded from the calculation of that particular measure only.

The Virtual Group MIPS Score will be calculated by combining the scores of all the performance categories using the score calculation rules applicable for MIPS groups. Each eligible clinician in a Virtual Group will receive this Virtual Group score that will be reflective of the combined performance of the Virtual Group.

Also, the Virtual Group MIPS Score would be applied to all TIN/NPIs billing under a TIN included in the Virtual Group during the performance period. The payment adjustments would be applied at the TIN/NPI level based on the Virtual Group Score. The clinicians who are a part of a Virtual Group, but are also Qualified Participants (QP status) in an Advanced APM, will have their performance counted as a part of the Virtual Group, but will not receive payment adjustment based on the Virtual Group MIPS score. These clinicians’ payment adjustment will be covered under the Advanced APM entity. 

Part B drugs

In the final rule, CMS determined that Eligible Clinician’s MIPS score would impact not only their professional services reimbursement but also billed Medicare Part B drugs. These are often very expensive drugs and include those used in the treatment of such diseases as cancer and renal failure. Injected and infused drugs are included as well as those related to transplantation, osteoporosis, and numerous other conditions. The Proposed Rule indicated these Part B drug costs in most circumstances would be included in the MIPS reimbursement and eligibility calculations.

According to the CMS:

“MACRA legislation now requires that MIPS payment adjustments be made to payments for both items and services under Medicare Part B, including Part B drugs. For each MIPS payment year, the MIPS payment adjustment factor, and, if applicable, the additional MIPS payment adjustment factor for exceptional performance are applied to Medicare Part B payments for items and services furnished by MIPS eligible clinicians during the year. These adjustments apply to all of the Medicare Part B items and services furnished by, and billed under, the combined Taxpayer Identification Number (TIN)/National Provider Identifier (NPI) of a MIPS eligible clinician and not only to services paid under the Medicare PFS.”

Complex patients

There has been a lot of discussion since the Quality Payment Program was unveiled regarding how complex patients could drag down quality metric reporting as physicians struggle for adherence and/or care improvement. In 2018, CMS will award five bonus points in the MIPS program for treatment of such patients. This is seen as a move to appease critics who urged CMS not to water down standards and maintain their uniformity, while acknowledging adherence struggles for some patient

QPP’s unintended consequences

Politico recently reported that physicians are avoiding some of the nation's sickest patients out of concern that deaths or other poor outcomes following treatment could cause Medicare or insurers to cut their payments or shame them with poor marks on their health care quality measures.

"It breaks my heart because it's undermining engagement of physicians with their patients," said David Barbe, president of the American Medical Association said to Politico, who added he often hears a colleague say he or she is avoiding a complex patient because it will "kill my scores."

In fact, a recent study found that physicians who served higher-risk patients under the Value-Based Payment Modifier (the precursor to QPP) ultimately had lower quality scores, giving them more penalities and fewer bonuses.

"If people see that pattern happening, they will have a lot of incentive to stop caring for sick patients," said Karen Joynt, the study's author and physician at the Washington University School of Medicine.

Reactions to final rule

Becker’s Hospital Review rounded up quotes from across the health care industry. Two in particular that stood out:

Tim Gronniger, former CMS deputy chief of staff and senior vice president of strategy and development at Caravan Health, a consultant, presented a mixed reaction. "The final rule for 2018 makes clear that for the vast majority of clinicians MACRA is here to stay, so it's time to start planning for how to succeed rather than hoping CMS makes it all go away," Mr. Gronniger said. "While we would have preferred CMS not increase the low-volume threshold, clinicians who see any significant number of Medicare patients are still in the program, and clinicians who are excluded will see their compensation frozen for the coming five years."

Tom Nickels, executive vice president of government relations and public policy at the American Hospital Association, felt the final rule "continues a flexible approach to the MACRA's physician quality payment program urged by hospitals, health systems, and the more than 500,000 employed and contracted physicians with whom they partner to deliver care."

"While we believe it could be adopted in 2018, we understand CMS' decision to eventually adopt a facility-based clinician measurement option that will allow many hospitals and clinicians to spend less time collecting data, and more time collaborating to improve care," Mr. Nickels said. "While we applaud CMS for providing much-needed relief from unrealistic and unfunded mandates for EHR capabilities for clinicians, we are disappointed the agency has yet to provide similar relief for hospitals. We also urge CMS to provide additional avenues for clinicians to earn incentives for partnering with hospitals to provide better quality, more efficient care through advanced alternative payment models.”

December 27, 2017

OPDP Letters Remain on Decline


The Office of Prescription Drug Promotion (OPDP) is known for monitoring company communications about medical products and when it considers those communications to be outside of regulatory parameters, issuing a letter warning the company of such promotion. For relatively minor violations, OPDP issues an Untitled Letter; for more serious violations, OPDP will issue a Warning Letter. 

As can be seen in the below graph, in the late 1990s, OPDP was issuing over 100 Warning and/or Untitled Letters annually. Since that time, there have been peaks and valleys when it comes to the number of Letters issued. Nothing compares to the recent years of 2014 through present, though. In 2014, OPDP issued ten Letters; in 2015, nine Letters; and in 2016, eleven Letters.


For 2017, though, there have only been three letters issued: two Warning Letters and one Untitled Letter. Interestingly, last year followed a similar path up to this point. Very few Letters were issued through October 2016, and then during the last two months of the year, issued more Letters than it had all year. Therefore, it is hard to predict that we will see another year of single-digit Letters issued by OPDP, but it may be possible.

This seeming lack of enforcement from OPDP is important to industry because the letters provide insight into the way the Food and Drug Administration (FDA) is currently thinking about developments in communication. This helps to fill in the gaps between guidances and can help when today’s communications environment is fast pace and quickly-changing.

The trickle of visible enforcement raises questions as to why there has there been a drop in enforcement activity and whether the drop represents a shift in emphasis or new policy? 

This year, Amherst Pharmaceuticals, LLC and Magna Pharmaceuticals, Inc., received a Warning Letter on November 14, 2017, regarding Zolpimist and the way it was advertised online and at an exhibit booth. OPDP took issue with false or misleading claims about the risks associated with, and the efficacy of, the drug. OPDP also noted that the materials were not submitted at either the time of initial dissemination or publication as is required under the Code of Federal Regulations.

Cipher Pharmaceuticals, Inc., received a Warning Letter for CONZIP in August 2017 for its professional detail aid being “false or misleading because it omits important risk information associated with the use of ConZip” within the FD&C Act.

Orexigen Therapeutics, Inc., received 2017s only Untitled Letter for CONTRAVE in May 2017 for a television ad that made false or misleading representations about the risks and side effects associated with Contrave.

It is possible that this drop in Letters shows that the FDA is shifting its focus in enforcement to areas where there is greater risk, as there have been several Letters issued about violations that leave some wondering what the element of risk involved is.

December 22, 2017

OIG Asks CMS to Track Medicare Costs from Device Failures


A recent Office of Inspector General (OIG) report suggests that the lack of medical device-specific information on Medicare claim forms complicates CMS efforts to identify and track Medicare costs related to the replacement of recalled or prematurely failed medical devices.

The OIG determined that Medicare costs related to the replacement of recalled or prematurely failed medical devices could not be identified and tracked using only claim data. However, using claim and other data in combination with complex and labor-intensive auditing procedures, OIG estimated that services related to the replacement of seven recalled and prematurely failed medical devices cost Medicare $1.5 billion during calendar years 2005 through 2014. It was also estimated that $140 million in beneficiary copayment and deductible liabilities were related to these recalled and prematurely failed medical devices and their related services and procedures.

Medicare claim forms include the medical procedures performed but do not contain a field for reporting medical device-specific information. By including medical device-specific information on the claim forms, CMS could more effectively identify and track Medicare’s aggregate costs related to recalled or prematurely failed devices. This could help reduce Medicare costs by identifying poorly performing devices more quickly, which could also protect beneficiaries from unnecessary costs and improve their chances of receiving appropriate follow-up care more quickly.

To do the review, OIG identified Medicare claims for calendar years 2005 through 2014 for all services provided to Medicare beneficiaries who had replacements of seven selected recalled cardiac medical devices. Then, a random sample of 526 claims and requested medical records for each sample item to determine whether the claim was associated with a replacement of a recalled or prematurely failed medical device were requested.

The OIG recommends: (1) that CMS continue to work with the Accredited Standards Committee and (2) that CMS require hospitals to use condition codes 49 or 50 on claims for reporting a device replacement procedure.

The OIG recommends CMS continue to work with the Accredited Standards Committee to ensure that the Device Identifier (DI) is included on the next version of claim forms. From there, CMS would use this data to identify and track the additional health care costs incurred by Medicare for recalled or prematurely failed medical device. CMS did note that it was considering adding the DI to the claim form, but that it will “carefully evaluate the potential that this policy would impose burden on physicians unnecessarily.”

OIG also recommended that CMS require hospitals to use condition codes 49 or 50 (indicating specific product replacements) on claims for reporting a device replacement procedure for all procedures that resulted from a recall or premature failure, regardless of whether the device was provided at no cost or with a credit. CMS concurs with this recommendation in cases where payment is impacted.


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