Life Science Compliance Update

January 06, 2017

A Review of CMS' Hospital Compare Website


As we reported, in July CMS released its first-ever hospital quality star ratings on its Hospital Compare website. The overall star ratings are based on 64 quality measures grouped under three process categories—effectiveness of care, efficient use of medical imaging, and timeliness of care—and four outcomes categories: mortality, patient experience, readmissions, and safety of care. Many of the hospitals widely considered to be the nation’s best were unable to achieve a five-star rating.

Unfairly punishes hospitals

According to a recent analysis, this star rating system rewards hospitals that serve mostly affluent patients and punishes those serving the poor. The research by Bloomberg BNA compares star ratings of hospitals, indicating a correlation between high star ratings and high household income, and a corresponding correlation between low ratings and low income.

Critics of the rating system point out that low-income patients are more likely to have difficulty accessing transportation for both routine primary care and post-discharge follow-up care. That can and does affect readmission rates, which are a key component of quality ratings. Critics of the system also point to anomalous results such as the consistently low ratings of academic medical centers, which are generally considered among the nation’s best hospitals and which are often located in low income urban areas. 

As published by Bloomberg BNA:




Outcome reporting issue

As reported in Health Affairs, CMS calculated and published star ratings for hospitals that had sufficient data to report on as few as three quality domains, including some hospitals that only had data from one clinical outcome domain. The fewer the clinical outcome domains a hospital reports, the less that hospital’s overall star rating is actually tied to performance on patient outcomes. Based on the July 2016 release of hospital compare data, 40 percent of the 102 hospitals that received a five-star rating did not have the minimum data necessary to report on either mortality or readmissions. Of those, 20 performed at only the national average on patient safety. Are all the shining stars here an accurate representation of quality?

This inconsistent value matrix leads to a wide performance divide among five-star hospitals. As shown by the Health Affairs research, among the 30 five-star hospitals that had sufficient data to report only the minimum number of quality domains required—three out of a total of seven (red bars)—14 had performed higher than the national average on only one quality domain, 15 performed above average on two domains, and a single hospital excelled at those three quality domains. Hospitals that reported all seven quality domains (yellow bars), however, needed at least three quality domains with above national average performance to receive a five-star rating:


MedPAC: Change the program

In October, the Medicare Payment Advisory Commission (MedPAC) sent a letter to CMS raising concerns about the agency's methodology for calculating hospital quality star ratings. Specifically, MedPAC is concerned the ratings do not fully consider the intrinsic health risks that patients bring to hospitals, therefore creating an output score that is not “apples-to-apples”. For example, at one-star hospitals, an average of 78 percent of admissions were admitted through the emergency department. At five-star hospitals, only 36 of admissions were admitted through the emergency department. One-star hospitals treat a higher share of more severe cases from emergency rooms.

MedPAC is also concerned regarding overlapping quality payment and reporting programs.

The Commission asks CMS to align the star rating methodology as much as possible with existing CMS programs, like the Hospital Value-based Purchasing program, which scores hospitals on a set of quality and cost measures and redistributes payments from lower- to higher-performing hospitals. This may perhaps be the only way for CMS to save the program and correct the methodological challenges that currently call into question the utility of the hospital star ratings.

December 01, 2016

Price, Verma Picked for Top Trump Cabinet Slots


Ever since the election, there has been much hubbub about who President-Elect Donald Trump will choose to fill important cabinet positions in his administration. Step by step, we are slowly seeing the Cabinet be put together. Recently, Mr. Trump announced his picks for the head of Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS).

Health and Human Services

Georgia Representative Tom Price, an orthopedic surgeon, has been tapped by Mr. Trump to take the helm as Secretary of Health and Human Services. One of the main refrains we heard from Mr. Trump throughout the campaign was that he would “repeal and replace” the Affordable Care Act (ACA). While many have made similar calls, not many have actually drafted, let alone introduced, alternatives with which to “replace” the ACA.

Dr. Price has introduced bills that have offered detailed, comprehensive replacement plans in every Congress since 2009, when Democrats started their work on the ACA. During a 2009 debate, Dr. Price discussed a “stifling and oppressive federal government,” and his concerns that the ACA and other laws interferes with the ability of patients and doctors to make medical decisions.

The Empowering Patients First Act, legislation introduced by Dr. Price, would repeal the Affordable Care Act and offer age-adjusted tax credits for the purchase of individual and family health insurance policies. The bill would also create incentives for people to contribute to health savings accounts; offer grants to states to subsidize insurance for high-risk populations; allow insurers licensed in one state to sell policies to residents of others; and authorize business and professional groups to provide coverage to members through association health plans.

According to Michael C. Burgess, a Representative from Texas, believes Mr. Trump made a good choice, noting that, “the practicing physician and the patient could not have a better friend in that office than Tom Price.”  

Centers for Medicare and Medicaid Services

Reuters announced Mr. Trump’s selection for the administrator of CMS, Seema Verma, an Indiana health policy consultant. Ms. Verma would bring with her experience in implementing the ACA, working across the aisle, and working with Vice President-elect Mike Pence. She was the architect of the Healthy Indiana Plan, Indiana’s coverage expansion for low-income individuals.

The Healthy Indiana Plan is an interesting plan, as it was designed to appeal to both political parties. HIP 2.0 asks covered patients to make a small monthly payment in order to access their health insurance. If they miss a payment, it can result in a six-month lockout from insurance coverage. While those provisions are not allowed under traditional Medicaid, Indiana received a federal waiver to implement them. Now, other Republican-led states have contacted Verma’s consulting firm to help submit their own Medicaid expansion proposals to the federal government, to include more conservative provisions.

If confirmed by the senate, Ms. Verma would likely grant even more latitude to states in crafting their Medicaid programs, similar to the latitude she worked to get for Indiana.

Dr. Price and Ms. Verma still have to be confirmed by the Senate before officially taking office, but one can make some assumptions about priorities of each individual, as well as the administration overall, given their history.  

October 17, 2016

Long-Awaited MACRA Rule Released


On Friday, October 14, 2016, the Department of Health and Human Services (HHS) finalized its rule on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program. MACRA replaces the Sustainable Growth Rate (SGR), and is set to equip clinicians with the tools and flexibility to provide high-quality, patient-centered care. The Obama Administration is building a system that delivers better care, where clinicians work together and have a full understanding of patient needs, Medicare pays for what works and “spends taxpayer money more wisely,” and patients are the center of care.

This final rule creates two pathways for payment, allowing physicians to pick the right pace for them to participate in the transition from a fee-for-service health care system to one that uses alternative payment models that reward quality of care over quantity of services.

According to the CMS Press Release,

The first path gives clinicians the opportunity to be paid more for better care and investments that support patients. It reduces existing requirements, while still emphasizing and rewarding quality care. In the first year, it also provides a flexible performance period, so that those who are ready can dive in immediately, but those who need more time can prepare for participation later in the year.

The second path helps clinicians go further by participating in organizations that get paid primarily for keeping people healthy. For example, they could be part of an Accountable Care Organization where clinicians come together to coordinate high-quality care for the patients they serve. When they get better health results and reduce costs for the care of their patients, the clinicians receive a portion of the savings.

Compared with the draft rule issued in April, the final rule eases the reporting burden for clinicians and triples the “low-volume” threshold dollar amount for mandating participation. Any provider who bills Medicare more than $30,000 in a year or provide care to at least 100 Medicare patients qualify for MACRA. Providers who are new to Medicare in 2017 are not required to participate next year. Providers who are ready to start collecting performance data can do so as early as January 1, 2017. However, CMS is offering providers the option to start anytime between January 1, 2017, and October 2, 2016. Data will be due to CMS by March 31, 2018, and will be used to determine payment adjustments beginning January 1, 2019.

Additionally, as noted at the American Academy of Ophthalmology (AAO) meeting in Chicago,  for the transition year of 2017, the reporting period has been shortened from a full year to ninety days, including for "Advancing Care Information" (Meaningful Use), for providers who want to be eligible to earn a bonus. The Quality Reporting burden has also been lowered from the proposed rule, from 80-90% to 50%.

The AAO meeting also discussed the importance of Clinical Practice Improvement as part of MIPS, including a wide variety of activities, such as: offering expanded evening and weekend hours; offers same- or next-day care when urgent care needed; using telehealth services; participating in Maintenance of Certification Part IV; and timely seeing new and follow-up Medicaid patients.  


Slide recreated from AAO Meeting Slideshow

Transition Period for MIPS Reporting 

The final rule confirms that there will be “transitional policies,” allowing physicians to “pick their pace” of participation for the first performance period under the MIPS program, beginning January 1, 2017. The transition period allows Medicare physicians to choose one of four reporting paths outlined below. CMS has also established a “performance threshold” of three points, allowing clinicians participating in each option to avoid a negative payment adjustment. The first two paths allow for a potential positive adjustment.

The four paths are as follows: 1) report to MIPS for either a ninety day or one year period; 2) report to MIPS for less than a year but more than ninety days and report more than one quality measure, more than one improvement activity, or more than the required measures in the advancing care information performance category; 3) report one measure in each MIPS category (besides resource use which is automatically reported); or 4) participate in an Advanced APM.

Small Practice Considerations

Some of the key finalized policies for small practices include: a low volume threshold (as noted above to be "less than or equal to $30,000 in Medicare Part B allowed charges or less than or equal to 100 Medicare patients."); and virtual groups, a MIPS reporting option where up to ten clinicians can combine reporting as one group (this will not be implemented in the transition year).

Resource Costs, Quality, and EHR

Please see the below-recreated slide from the AAO meeting for a brief synopsis of resource costs, quality, and EHR use, and how they would work in MIPS.




CME Component

Unfortunately, Continuing Medical Education (CME) was not included as a Clinical Practice Improvement Activity, as many had hoped. For transition year 2017, CMS did not feel as though they had enough data to determine which CME’s should be included, and will consider comments and other submissions for activities in future years.

In the Final Rule, CME was acknowledged on page 735,

Comment: Many commenters suggested that CMS recognize continuing medical education (CME) activities provided by national recognized accreditors, completion of other state/local licensing requirements and providing free care to those in need as improvement activities, particularly those CME activities that involve assessment and improvement of patient outcomes or care quality, best practice dissemination and aid in the application of the “three aims” (better care; healthier people and communities; smarter spending), the National Quality Standards and the CMS Quality Strategy. The commenters also recommended that inclusion of surveys or interviewing clinicians to determine if they have applied lessons learned to their practice for at least 90 days following an activity should meet compliance requirements.

Response: We appreciate the suggestions that we grant improvement activities credit for activities already certified as CME activities, however, for the transition year of the MIPS program we do not have sufficient data to identify which CMEs could be included as activities. We will consider these recommendations for additional activities in future years as part of the nomination process.

The Making of the Rule

The rule has been in the making for months, and was formed in part by “a months-long listening tour with nearly 100,000 attendees and nearly 4,000 public comments.” According the HHS, a common theme was “the need for flexibility, simplicity, and support for small practices.”

Through its outreach, HHS crafted six strategic objectives to drive continued progress and improvement: (1) to improve beneficiary outcomes and engage patients through patient-centered Advanced APM and MIPS policies; (2) to enhance clinician experience through flexible and transparent program design and interactions with easy-to-use program tools; (3) to increase the availability and adoption of robust Advanced APMs; (4) to promote program understanding and maximize participation through customized communication, education, outreach and support that meet the needs of diversity of physician practices and patients, especially the unique needs of small practices; (5) to improve data and information sharing to provide accurate, timely, and actionable feedback to clinicians and other stakeholders; and (6) to ensure operational excellence in program implementation and ongoing development.

Industry Response

Industry reactions were varied, and as more organizations have time to review the rule, it is almost certain we will hear more feedback.

The American Medical Association issued a statement,

“By announcing the ‘Pick Your Pace’ approach to give physicians greater flexibility and increased options for participating in MACRA in 2017, HHS Secretary Burwell and Acting Administrator Slavitt took a significant step last month to address AMA concerns about the original proposal. The final rule includes additional steps to help small and rural practices by raising the low volume threshold exemption, and practices of all sizes will benefit from reduced MIPS reporting requirements.

Our initial review indicates that CMS has been responsive to many of the concerns raised by the AMA, and in the days ahead, the AMA will conduct a comprehensive review of the final rule to ensure that it promotes flexibility and innovation in the delivery of care to help meet the unique needs of all patients. With the flawed Sustainable Growth Rate (SGR) formula – and its annual threat of steep payment cuts – permanently eliminated, the new law gives many physicians the opportunity to be rewarded for the improvements they make to their practices and for delivering high-quality, high-value care to Medicare patients.

The American College of Rheumatology also issued a statement on the final rule, noting,

While we have not had time to review the final rule in its entirety, we are encouraged to see that the Centers for Medicare and Medicaid Services (CMS) is listening to the concerns raised by the American College of Rheumatology (ACR) regarding the need for reporting requirements that are simple, transparent, and tenable – especially for small and rural rheumatology practices.  Giving providers the flexibility of multiple options for participation in the first and second years will help ensure a smooth transition to the new payment system, and the continued delivery of quality care to Medicare patients living with rheumatic diseases. We also appreciated the broadening of exemptions from the program, which will help to protect small practices that already struggle to keep up with administrative burdens, along with the reduction in the number of required measures to be reported.


Sylvia M. Burwell, HHS Secretary, noted, “Today, we’re proud to put into action Congress’ bipartisan vision of a Medicare program that rewards clinicians for delivering quality care to their patients. Designed with input from thousands of clinicians and patients across the country, the new Quality Payment Program will strengthen our health care system for patients, clinicians and the American taxpayer.”

According to Andy Slavitt, the Acting Administrator of the Centers for Medicare & Medicaid Services (CMS), “It’s time to modernize the Medicare physician payment system to be more streamlined and effective at supporting high-quality patient care. To be successful, we must put patients and clinicians at the center of the Quality Payment Program. A critical feature of the program will be implementing these changes at a pace and with options that clinicians choose. Today’s policies are designed to get all eligible clinicians to participate in the program, so they are set up for successful care delivery as to program matures.”

This final rule incorporates some of the input HHS has received, but they are launching a new interactive website to help clinicians understand the program and aid in their successful participation. HHS will continue to host listening and learning sessions throughout the country, and will welcome feedback from patients, caregivers, clinicians, health care professionals, Congress, and others, on how to better achieve these goals.

HHS will continue to receive feedback on the final rule with comment period and will accept comments until sixty days after the rule’s release date. Comments may be submitted electronically here.  

In the coming weeks, once we have had time to fully review the rule, we will provide an in-depth analysis.In the interim, AAO recommends that you designate a physician to oversee planning; attend Medicare physician payment reform sessions at industry events; consider EHR adoption; and plan to attend post-rule finalization webinars on implementation. 


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