Life Science Compliance Update

69 posts categorized "Affordable Care Act"

April 20, 2015

Obama Signs SGR Repeal Legislation; Value-Based Payment Model Comes Into Full Force in 2019


On Thursday, April 16, President Obama signed into law the legislation ending and replacing the Sustainable Growth Rate (SGR) Formula, which would have reduced Medicare physician payments by 21 percent. Perhaps foreshadowing the dawn of a new age of physician reimbursement, Obama signed the bill outside on a beautiful spring day.  

Late Tuesday, the Senate voted 92-8 to approve the legislation. The American Medical Association (AMA) responded favorably to the news, stating that the bill, entitled the Medicare and CHIP Reauthorization Act (MACRA), “will ensure access to care for seniors, military personnel and their families, children and low income adults.” The Act “once and for all gets rid of the flawed [SGR] formula that has plagued the health care system for more than a decade, paving the way for physicians to implement new delivery and payment reforms that will improve quality of care and reduce costs.”

Under SGR, Medicare’s budget was calculated by linking Medicare spending to economic growth. However, once health care costs began rising faster than the growth of the economy, physicians were at continual risk for cuts to their reimbursements. For over a decade Congress passed temporary “doc fixes” to keep the reimbursements steady. The new legislation eliminates the need for repeated fixes by repealing the SGR law and replacing it with a new system that eventually ties payments to participation in value-based payment models. Most of the changes are not slated to take effect until 2019. Doctors will receive an annual update of 0.5 percent in each of the years 2015 through 2019.

In 2019, the payment models change significantly. The National Review summarizes the value-based goals:

The heart of the bill is a new, two-tiered indexing system for physician fees. Physicians who agree to participate in Medicare Accountable Care Organizations (ACOs)--or in similar alternative payment models--will receive a permanent 0.75 percent increase in their fees each year. Physicians that don’t join an ACO will be placed into the “Merit-Based Incentive Payment System,” or MIPS. On average, physicians in MIPS will receive a payment increase of 0.25 percent every year — far below the annual payment increase for physicians in ACOs.

Merit-Based Incentive Payment System (MIPS)

In addition to MACRA's payment incentives to encourage providers to participate in alternative payment models--like medical homes, accountable care organizations, and bundled care--the law introduces the concept of the Merit-Based Incentive Payment System for physicians not in these alternative models. MIPS “consolidates the three existing incentive programs, continuing the focus on quality, resource use, and meaningful electronic health record (EHR) use with which professionals are familiar, but in a cohesive program that avoids redundancies,” states the House Bill explainer.

Under MIPS Medicare’s current quality reporting programs will be streamlined and simplified into one merit-based incentive payment system, referred to as “MIPS.” This consolidation will reduce the aggregate level of financial penalties physicians otherwise could have faced. The three programs contemplated by the bill to be consolidated into the MIPS are:

  • The Physician Quality Reporting System (PQRS), which incentivizes professionals to report on quality of care measures through a combination of incentive payments and negative payment adjustments (View CMS's page on PQRS here);
  • The Value-Based Modifier (VBM) Program, which adjusts payment based on performance on PQRS quality measures (and Medicare cost data), though the value modifier (VM) is a separate adjustment from the PQRS payment adjustment (CMS's page here); and
  • "Meaningful Use" of EHRs, which stipulates certain requirements in the use of certified EHR systems (Health IT's page here).

Under MACRA, starting in 2019, payments will be adjusted based on provider performance in the MIPS, rather than the above individual programs. Each year, HHS will establish a list of MIPS quality measures through rulemaking. Eligible professionals will be assessed in four performance categories, namely:

  • Quality (using measures from existing quality programs and new ones developed by professional organizations);
  • Resource use, using measures developed by the current VBM program;
  • EHR ‘meaningful use’ (using requirements established under current regulation); and,
  • A new component, “clinical practice improvement activities,” which “gives credit to professionals working to improve their practices and facilitates future participation in APMs.”

Professionals will receive a “composite performance score” based on their performance in each of the above categories. 

As noted above, the MIPS quality measures will be fleshed out in rulemaking--and here is where the rubber will hit the road for the future of healthcare delivery. Matching up the proper incentives with the most cost-effective quality care is a topic for another day. 

Several interesting articles have been written about what quality metrics should dictate payments to physicians. The Wall Street Journal's "What Measures Should Be Used To Evaluate Health Care?" provides a variety of viewpoints about the best measures for patient care. 

March 13, 2015

OIG Issues 2015 Health Reform Oversight Plan


HHS-OIG recently released their 2015 Health Reform Oversight Plan. The agency plans to hone in on the Affordable Care Act during 2015, with “primary focus” on the health insurance marketplaces. 

Health Insurance Marketplaces

OIG’s Oversight Plan states that their marketplace work will aim to answer questions in four key areas:

Payments: Are taxpayer funds being expended correctly for their intended purposes?

OIG plans on continuing their oversight into the accuracy and appropriateness of Federal expenditures with reviews of Financial Assistance Payments; Consumer Operated and Oriented Plan (CO-OP) Loan Program; Establishment grants; Navigator grants, and payments to Federal contractors.

Eligibility: Are the right people getting the right benefits?

To ensure accuracy in eligibility determinations, OIG is conducting reviews of marketplace enrollment safeguards, eligibility verifications for premium tax credits, and resolution of inconsistencies in federally facilitated Marketplace (FFM) applicant data. Further, OIG states that they are considering new work on emerging issues, such as Marketplaces’ verification of employer information. “We may also review eligibility for hardship waivers if that emerges as a significant issue as this year’s tax season progresses,” they state. Additional areas for oversight might include reviews of the second open enrollment period.

Management and Administration: Is HHS managing and administering Marketplace programs effectively and efficiently?

To assess the management and administration of Marketplace programs, OIG is currently reviewing HHS’s management and implementation of the FFM from enactment of the ACA through the second open enrollment period and continued oversight of Federal contractors.

Security: Is consumers’ personal information safe?

OIG’s security focused reviews include assessing FFM security controls over consumer information, including personally identifiable information. OIG will also review information security controls at selected State-based Marketplaces. OIG states they are working closely with HHS and law enforcement partners in other agencies to monitor for reports of cybersecurity threats and consumer fraud incidents and take appropriate investigative actions

Health Reform in Other HHS Programs

“Although we are devoting substantial attention to the Marketplaces…OIG is also conducting and developing oversight work addressing reforms in other programs,” their report states. These include Medicaid expansion and services, Medicare payment and delivery reform, Medicare and Medicaid program integrity, and public health programs.

Under the Medicare and Medicaid Program Integrity work, OIG states that they “are examining the implementation and effectiveness of provisions of Title VI of the ACA designed to strengthen transparency and program integrity in Medicare and Medicaid,” including reviews of enhanced provider screening systems, provider payment suspensions, provider terminations, and managed care encounter data.

OIG also states: “We will consider oversight of CMS’ new Open Payments Database and other Title VI transparency initiatives.”


Target Timeframes for Issuing Reports on Ongoing Marketplace Work

Winter 2015: OIG looks to be focused on payments in the early part of 2015:

  • Accuracy of Aggregate Payments to Qualified Health Plan Issuers for Advanced Premium Tax Credits and Cost Sharing Reductions, and Effectiveness of Related Internal Controls (Payments)
  • Payments to Federally Facilitated Marketplace Contractors (Payments)
  • Information System Security Controls at State-Based Marketplaces – CA (Security)
  • Review of Affordable Care Act Establishment Grants for State Marketplace – MD (Payments)
  • Programmatic Justification for CMS’ Involvement in Premium Tax Credit Obligations Under the ACA (Payments)

Spring 2015:

  • CMS’ Internal Controls Over Advance Premium Tax Credit Obligations and Payments Under the ACA (Payments)
  • Oversight of Federally Facilitated Marketplace Contractors (Management and Administration)
  • Review of Affordable Care Act Establishment Grants for State Marketplaces (Payments)
  • CO-OP Loan Program-Eligibility Status and Use of Startup and Solvency Loans – 6-month period (Payments)
  • Enrollment Safeguards at Additional State Marketplaces (Eligibility)
  • Information System Security Controls at State-Based Marketplaces – CO (Security)
  • CMS Implementation of Security Controls Over Consumer Information Obtained in the Federally Facilitated Marketplace (Security)
  • Review of the Federally Facilitated Marketplace’s Eligibility Verifications for Premium Tax Credits (Eligibility)

Summer 2015:

  • Implementation of the Federally Facilitated Marketplace (Case Study) (Management and Administration)
  • CO-OP Loan Program-Eligibility Status and Use of Startup and Solvency Loans – 12-month period (Payments)

Fall 2015:

  • Review of Grant Awards to Navigators in Federally Facilitated or State Partnership Marketplaces (Payments)
  • Information System Security Controls at State-Based Marketplaces – NY (Security)

 View the entire report here



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