Life Science Compliance Update

June 21, 2016

CMS: Hospital and Critical Access Hospital (CAH) Changes to Promote Innovation, Flexibility, and Improvement in Patient Care Proposed Rule

CMS recently released a proposed rule updating the Conditions of Participation (CoP) for 6,228 hospitals and critical access hospitals (CAH) that participate in the Medicare and Medicaid programs. By incorporating elements of the Department of Health and Human Services' (HHS) Quality Strategy and Centers for Disease Control and Prevention's (CDC) Strategy to Combat Antibiotic Resistant Bacteria, CMS says the revisions aim to reduce readmissions; ease barriers to care; stem hospital-acquired conditions, including infections; address workforce shortages; and advance non-discrimination protections. Comments on the proposed rule are due by Aug. 15. 

The implication of these and various other provisions will cost the industry between $773 million to $1.1 billion, according to the CMS. However, CMS also expects complying with the various parts of the policy will result in a net savings of up to $284 million.

"Working with tools provided by the Affordable Care Act, hospitals have taken significant steps to improve safety and quality in the past several years. Already, efforts to reduce healthcare-associated infections have resulted in reducing health care costs by nearly $20 billion and saving 87,000 lives," said Kate Goodrich, M.D., M.H.S., Director, Center for Clinical Standards & Quality, CMS. "This proposal further supports hospitals' safety and quality efforts by requiring all Medicare and Medicaid hospitals to have designated leaders in charge of specialized programs to prevent infections, improve antibiotic use, and follow nationally recognized guidelines."

Rule Details

Highlights of the rule include a requirement that hospitals must have infection prevention and antibiotic stewardship programs for healthcare-related infections and for the appropriate use of antibiotics. In addition, hospitals would be required to designate qualified leaders of such programs. In a statement to The Wall Street Journal, the American Hospital Association said, "The emphasis on good infection control and antibiotic stewardship is consistent with the important work hospitals are doing to reduce infections and preserve the effectiveness of our current antibiotics. We join CMS in recognizing the importance of these programs and are always looking to make them more effective."

The rule further requires hospital adopt non-discrimination policies on the basis of race, religion, national origin, sex and gender identity, sexual orientation, age, or disability. CMS specifically says that "discriminatory behavior, or even the fear of discriminatory behavior, by healthcare providers remains an issue and can create barriers to care and result in adverse outcomes for patients." The rule also proposes a clarification of the requirement for patient access to their health records to account for the electronic format in which records may be accessible. It notes that "the patient has the right to access their medical records, including current medical records, upon an oral or written request, in the form and format requested by the individual, if it is readily producible in such form and format (including in an electronic form or format when such medical records are maintained electronically); or, if not, in a readable hard copy form or such other form and format as agreed to by the facility and the individual, within a reasonable time frame."

This rule will also enable hospitals to create a policy that specifies the outpatient departments which would not be required to have a registered nurse physically present and alternative staffing plans established under such a policy. Hospitals would also be required to incorporate quality indicator data related to hospital admission and hospital-acquired conditions. Hospitals already compile data for the Hospital Inpatient Quality Reporting program, the Hospital Value-Based Purchasing Program, the Hospital-Acquired Condition Reduction Program, the Medicare and Medicaid Electronic Health Record Incentive Programs, and the Hospital Outpatient Quality Reporting program.

CMS further proposes that a patient's medical record contain information to justify all admissions and continued hospitalizations, support the diagnoses, describe the patient's progress and responses to medications and services, and document all inpatient stays and outpatient visits to reflect all services provided to the patient. The agency notes that it emphasizes "the distinctions between discharges and transfers as well as between inpatients and outpatients by proposing to revise ยง482.24(c)(4)(viii) so that the content of the medical record would contain final diagnoses with completion of medical records within 30 days following all inpatient stays, and within 7 days following all outpatient visits."

Some of the other proposals in the rule include changing the existing "licensed independent practitioner" term to only "licensed practitioner" which is intended to facilitate hospitals' use of physician assistants as appropriate. CMS also establishes a requirement that a CAH develop, implement, maintain and evaluate its own QAPI program to monitor and improve patient care and a requirement that individual patient nutritional needs are met in accordance with recognized dietary practices and the orders of the attending practitioner or a qualified, state-approved nutrition professional.

   

   

April 05, 2016

2015 Front Line of Healthcare Report โ€“ CME and Conferences are a More Frequently Utilized Source of Information

Bain & Company, Inc. has published their Front Line of Healthcare Report 2015, a report that focuses on the shifting United States healthcare landscape by the numbers.

Bain & Company took a natural survey of 632 physicians across specialties and 100 hospital procurement administrators in the United States in an attempt to update their 2011 Physician Attitudes Survey. To highlight the idea that the dynamics of change vary substantially across different regions of the country, Bain oversampled two regions with distinct market characteristics (Massachusetts and Mississippi/Alabama). Bain found that in states like Massachusetts, the pace of change is faster because of several factors in play: more competition among payers and provider organizations, and an activist policy and regulatory environment that promotes change.

Since the report is focused on the shifting United States healthcare landscape, the report opens with a brief infographic that includes a variety of information on just how much the landscape is changing. For example, of physicians who have changed employment in the past five years, almost three-fourths, 72%, now work in large management-led organizations. Additionally, it was noted that in the last three years, the percentage of surgeons who state that procurement officers influence most of the purchasing decisions for devices has more than doubled, and 65% of physicians say that formularies limit their prescribing decisions.

Bain found that CE and conferences were a much more influential to physicians than their interviews in 2011 with a 23% increase in the utilization of CE as a source of information. Physicians are relying more and more on CME to help them figure out what to do next for their patients. Other sources of information that increased included Key Opinion Leaders (16%), Manufacturer Websites (9%) and Academic Journals (7%) big losers included Colleagues (-10%), Pharmacists (-18%) and Sales Reps (-26%). One could hypothesized that systems integration has actually lead to less communication between colleagues and discussions with pharmacists. In large systems physicians have quota's to meet and patient discussions are happening less and less with colleagues. In the same vein sales reps have been continuing to lose access especially to physicians who join integrated health systems as time is a huge commodity in those systems.

Financing and Delivery of Healthcare

Even though healthcare costs have slowed, per capita costs do not seem to have decreased. Organizational shifts and the trend toward consolidation and more professionally managed organizations have produced many changes, including: increasing the use of standardized clinical protocols and electronic medical records, more objective metrics for measuring clinical performance, payment models that put providers at risk for outcomes, and a shift in physicians' perceptions of their own cost responsibility.

When physicians were asked about their change in use of analytic and clinical tools over time, they responded that over the last two years alone, their use of electronic medical records (EMRs) has nearly tripled, and use of treatment protocols more than doubled. Bain also found that physicians who work in management-led systems of care tend to be significantly less likely to recommend their organization to others than those in physician-led organizations. One explanation could be that physicians in management-led organizations also report having less knowledge of their organization's mission and being less engaged in the organization's activities.

Direct Impact on MedTech and Pharma

These changes in healthcare affect the entire supply chain, and as delivery systems continue growing larger and more complex, decisions become more focused on outcomes and economics.

While centralized purchasing in healthcare organizations is not new, Bain found that there is an increasing use of preferred vendor lists by procurement departments, which is quickly reducing the number of available products and putting lower-share players at risk. It is estimated that forty percent of surgeons no longer use a particular product because it is no longer available at their hospital.

The decline in physician autonomy is also affecting the pharmaceutical sector, with the exception of selected specialties that are highly differentiated and require drugs with a high-impact nature (i.e. oncology).

These shifts in decision-making power also have an effect on where physicians and surgeons obtain information about new products. For decades, sales representatives have been a common and highly valued source of information. Today, however, physicians are relying more on manufacturer websites, academic journals, and conferences. In Bain's recent survey, only 41% of physicians reported sales reps as being one of their top three sources of information about a new drug, compared to 56% three years ago. This holds true for medical devices as well, with 48% of surgeons reporting that sales reps are an important source of information, down from 59% three years ago.

However, those figures vary widely from state to state, as well as physician demographics. Of surgeons in Alabama and Mississippi, 69% rate sales reps as one of their top sources of information, compared with only 31% in Massachusetts. More experience physicians, orthopedic surgeons, and cardiologists, also report a higher reliance on sales representatives, as do self-employed physicians.

What Does This Mean?

With the purchase of drugs and devices becoming more competitive and centralized in hospitals and drug benefit plans, it is important for sales representatives to adapt to serve a more complex customer. To meet the likely challenges ahead, manufacturers will need to develop more sophisticated and flexible go-to-market models that reflect both regional and practice differences. The pharmaceutical, device, and MedTech companies that come out ahead will be those that can achieve flexibility while minimizing the complexity of their operating model. Manufacturers should also recognize that category leadership will likely continue to matter more than range in a company's portfolio when it comes to both loyalty and advocacy.

March 01, 2016

Senate Develops Policy Measures to Help Those Battling Chronic Illness

In 2014, the United States Senate Committee on Finance took a step toward improving care for the millions of Americans who are managing chronic illness. During a hearing entitled "Chronic Illness: Addressing Patients' Unmet Needs," Senators heard compelling testimony from individuals who are battling multiple chronic medical conditions, and who are seeking more effective tools to help them navigate the healthcare system. Senators have also heard from providers, employers, and health plans about the unique challenges each of them face in trying to offer quality healthcare at low costs.

The Senators in attendance at the first hearing began to understand the problems faced by many Americans, and they set a second hearing in May 2015, "A Pathway to Improving Care for Medicare Patients with Chronic Conditions." During that second hearing, Senators once again heard testimony, this time from experts at the Centers for Medicare and Medicaid Services (CMS) and the Medicare Payment Advisory Commission (MedPAC). This hearing allowed Senators to better understand how current chronic care coordination programs are working today, the challenges that remain, and possible solutions to improve health outcomes for Medicare beneficiaries.

The May 2015 hearing prompted the creation of the Finance Committee chronic care working group, co-chaired by Senators Johnny Isakson and Mark Warner. The working group studied stakeholder input and comments and conducted 80 stakeholder meetings to discuss various ideas to improve the way care is delivered to Medicare beneficiaries with chronic diseases. After reviewing all submissions and taking into account all meetings, the working group outlined three main bipartisan goals that each policy under consideration should strive to meet. Each proposed policy should:

  1. Increase care coordination among individual providers across care settings who are treating individuals living with chronic diseases;
  2. Streamline Medicare's current payment systems to incentivize the appropriate level of care for beneficiaries living with chronic diseases; and
  3. Facilitate the delivery of high quality care, improve care transitions, produce stronger patient outcomes, increase program efficiency, and contribute to an overall effort that will reduce the growth in Medicare spending.

The working group strives to operate in an open and honest fashion, and as such, has released an options document summarizing key policy ideas they are considering. This document remains a working document, and eventually the Committee and working group realize that they will have to involve the Congressional Budget Office (CBO) in scoring proposals to determine their impact on federal spending. The Chairman and Ranking Member both agree that any future legislation must either realize savings, or be budget neutral.

The policy ideas included in the options document are essentially grouped into six different categories: receiving high quality care in the home; advancing team based care; expanding innovation and technology; identifying the chronically ill population and ways to improve quality; empowering individuals and caregivers in care delivery; and other policies to improve care for the chronically ill.

While the Committee is not endorsing any of the options listed, it is unlikely that they will stray from the list when they eventually move to draft legislation next month. While some of the proposed options are obvious and beneficial, others are innovative and may help to innovate care delivery and advance CMS efforts to improve quality and value payment.

One obvious proposal made is to generally improve the integration of care for individuals with both a chronic disease and a behavioral health disorder. Behavioral health disorders are under-diagnosed and under-treated, and when combined with a chronic disease, make life excruciatingly tough. Members should explore lifting billing restrictions that prohibit qualified non-physicians from treating beneficiaries with behavioral conditions. Currently, clinical psychologists, clinical social workers, and medical family therapists, are qualified but excluded from billing under the chronic care management (CCM) code, evaluation and management codes, and Health Behavior Assessment and Intervention codes.

The Committee also touches upon the hot topic of telehealth by providing several ideas to expand it: permitting MA plans to include telehealth in their annual bid amount; waiving the originating site requirement for at risk ACOs; and expanding its use to encourage home hemodialysis and a more timely diagnosis of stroke.

The Committee proposed that CMS develop a list of quality measures to improve chronic disease care that includes measure for patient engagement, care planning, and shared decision making.

Currently, there is no comparative effort underway in the House of Representatives, and, considering it is an election year, it is uncertain how much work even the Senate will continue to put in on this effort. However, the Committee members and their staff deserve great praise for acknowledging such a serious issue, and working to create bipartisan solutions to solve it.

A list of public comments received on the options document can be found here, including comments from AARP, AdvaMed, American Medical Association, Biogen, PhRMA, and Sanofi.

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