Life Science Compliance Update

February 20, 2018

The Congressional Budget Deal's Effect on Health Care


In early February, Congress passed a massive bipartisan budget deal to fund the government through March 23, 2018, suspend the debt ceiling until 2019, raise budget caps by nearly $300 billion over two years, and fund various parts of the government.

Naturally, passage of the budget agreement means that quite a few health care priorities made their way into the law. For example, several health care “extenders” were reauthorized, community health centers (CHCs) were funded, cuts to safety net hospitals were delayed, as were cuts to the CHRONIC Care Act and the Part B Improvement Act, while revisions to the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) were made.

Then, the deal reached in the Senate added $6 billion in funding to address opioid and mental health treatment, $4 billion for VA hospitals, and $2 billion in new funding for research at the National Institutes of Health (NIH). The Senate deal also extend funding for the Children’s Health Insurance Plan (CHIP) by an additional four years — a ten-year extension when combined with the six-year reauthorization secured last month.

Interestingly, the agreement also permanently repeals Medicare’s moribund Independent Payment Advisory Board (IPAB), while also making adjustments to the prescription drug “donut hole” that will require pharmaceutical companies to provide steeper discounts for seniors in the coverage gap.

IPAB Repealed

Before it could go into effect, Congress included the repeal of the unpopular Affordable Care Act (ACA) Independent Payment Advisory Board (IPAB), which would have been responsible for identifying potential Medicare savings to Congress. Congressional representatives of both parties had disdain for IPAB because it had the ability to limit Congress’ power over its recommendations. While Medicare spending has yet to hit the designated threshold that would have triggered the creation of the panel, the most recent Medicare trustees report estimated that it may have been enacted as soon as 2021.

The repeal of IPAB is likely to benefit drug makers and private Medicare plans as without the repeal, the Board would have been precluded from rationing care, increasing beneficiary spending, or cutting payments to hospitals and hospices.

The Donut Hole is Closed

The bill increased the discounts that drug companies pay to beneficiaries whose drug costs fall into the coverage gap of Part D, from the current 50 percent level to 70 percent. This change is estimated to save the federal government $10 billion over the course of a decade but is expected to cost drug companies close to $40 billion over that same decade.

Part D plan sponsors, on the other hand, had a decrease in their liability from the 25 percent they were expected to pay to begin in 2020 all the way down to 5 percent. The hole will remain the same for patients – 25 percent.

Changes to MACRA

The Medicare Access and CHIP Reauthorization Act (MACRA) had several changes made to it by way of the budget deal, including excluding the cost of Part B drugs from the calculation of doctor pay, delaying the use of cost measures in doctor performance scores, giving CMS three more years to transition to the performance threshold, and allowing the Physician-Focused Payment Model Technical Advisory Committee (PTAC) weigh in earlier on the payment models that providers design.

Physician advocate groups had been lobbying for the ability to exclude the cost of drugs they administer from the calculation of their Merit-Based Incentive Payment System (MIPS) scores because they were concerned that specialty therapies do not always have consistent coverage in reimbursement. In addition to listening to the concerns on that front, lawmakers also allowed CMS the flexibility to determine the weight of the cost performance category between 10 percent to 30 percent for three years.

February 13, 2018

OIG Releases Review of QPP


The Office of the Inspector General (OIG) released a review of the Quality Payment Program (QPP), concluding CMS has made progress towards implementing the QPP, but challenges remain. CMS appears on track to deploy the IT systems needed for data submission but the OIG has identified two vulnerabilities that are critical for CMS to address in 2018 because of their potential impact on the program's success.

OIG Study

According to the OIG, it interviewed CMS staff and reviewed internal CMS documents as well as publicly available information. The OIG conducted qualitative analysis to identify key milestones (both those achieved and those yet to come), priorities, and challenges related to QPP implementation.

In 2016, OIG conducted an early implementation review of CMS’s management of the QPP. It found that CMS had made significant progress towards implementing the QPP, including fostering clinician acceptance, adopting integrated business practices, building IT systems, and developing key program policies.

However, the review also identified two potential vulnerabilities that were critical for CMS to address in 2017 because of their potential impact on the program’s success: (1) Completing information technology systems to support critical QPP functions. In the past, CMS has experienced delays and complications related to major information technology (IT) initiatives. If CMS does not complete the complex IT systems underlying the QPP on schedule, implementation of quality-based payment adjustments may be delayed. (2) Ensuring clinician readiness to participate in the QPP. If clinicians lack sufficient information and assistance, they may struggle to meet QPP reporting requirements or choose not to participate at all.

The OIG’s objectives in this follow-up review were to assess CMS’s progress in mitigating these potential vulnerabilities and to identify emerging challenges. If CMS fails to sufficiently address these issues, the QPP may be unable to achieve its goal of promoting high-value care and patient outcomes while minimizing burden on clinicians.

Large IT System Necessary to Support QPP

As described by the OIG, building the IT systems to support the QPP is a significant undertaking for CMS, requiring both public-facing products (e.g., an interface for data submission) and back-end systems (e.g., a module to calculate MIPS final scores). These complex systems must be completed on schedule so that key elements of the program, such as data submission, can occur according to the timeframe specified in statute and regulation. The IT systems for the QPP encompass the following six products:

  • The platform is the infrastructure that underlies and supports all of the other QPP products. It ensures that various development efforts are coordinated and employ common methods.
  • The website is the central site where all clinicians, their partners, and developers interested in interacting with the QPP come to perform tasks. Ultimately, it will include both public webpages with general information and other pages where individual users can access secure, authenticated accounts providing QPP performance information.
  • The eligibility product uses CMS data sources to determine clinicians’ eligibility for the QPP (i.e., whether they are required to participate to avoid a negative payment adjustment), including whether they are qualified to participate under the MIPS track or the Advanced APM track.
  • The data submission product enables clinicians, as well as other staff or vendors authorized to provide data on their behalf (e.g., office administrators, registries), to submit MIPS data to CMS. CMS will support a variety of submission mechanisms.
  • The scoring product will enable CMS to calculate each clinician’s final MIPS score based on the data submitted. These scores will also be used to determine the payment adjustment that each MIPS clinician will receive in 2019.
  • The feedback product will produce individualized reports providing clinicians with information about their performance, including their respective final MIPS scores and payment adjustments.

In its assessment, the OIG states, “IT development appears on track to deploy all products necessary for data submission to begin on January 1, 2018.” This is good news for CMS, as the first vulnerability described by the OIG is related to the agency’s IT systems. Specifically: “If clinicians do not receive sufficient information and assistance, they may struggle to succeed under the QPP or choose not to participate. This is of particular concern for small practices and clinicians in rural or medically underserved areas, who may lack the resources to fully engage in the QPP without customized technical assistance to meet practice-specific needs,” says the OIG.

Clinician Readiness for QPP

As described by the OIG, CMS officials have consistently stated that clinicians’ acceptance of and readiness to participate is crucial to the program’s success. For 2017—the program’s first performance period—CMS set a goal of 90 percent participation in QPP. To reach this goal, CMS has used multiple channels to educate clinicians, provide technical assistance, and collect feedback. For example, CMS held numerous webinars and other events; issued subregulatory guidance; and established a Service Center to respond to questions and resolve problems. CMS also awarded a variety of contracts to provide technical assistance specific to clinicians’ practice types and needs.

Through these efforts, CMS has raised awareness of the QPP, and a majority of eligible clinicians have reported to CMS that they intend to participate. CMS staff said that because the QPP was an entirely new initiative, it was necessary for early outreach efforts to focus on general education and awareness. However, CMS staff report that as QPP implementation continues, a greater focus on specialized, practice-specific technical assistance will be needed to help clinicians fully participate in the new program.

This results in the second vulnerability outlined by the OIG. If clinicians do not receive sufficient technical assistance, they may struggle to succeed under the QPP or choose not to participate. According to clinician feedback collected by CMS demonstrates widespread basic awareness of the QPP, but also indicates uncertainty regarding details of participation such as who must report and how to submit data.

Further, to date, CMS contractors have focused largely on general education initiatives, with fewer resources devoted to more customized, practice-specific technical assistance. CMS needs to continue to assess progress and increase the proportion of contractors’ efforts devoted to specialized technical assistance to support high levels of clinician participation. Small practices and clinicians in rural or medically underserved areas, who may have fewer administrative resources and less experience with prior CMS quality programs, should be prioritized for assistance, according to the OIG.

January 18, 2018

Study Highlights Physician QPP Preparedness


Fewer than one in four physicians feel they are prepared to meet requirements under the CMS’ Quality Payment Program (QPP), a new American Medical Association and KPMG survey shows. Out of 1,000 physicians involved in practicing decision-making related to the QPP, only 8% said they were “deeply knowledgeable” about MACRA and QPP. In contrast, almost 92% said they were “somewhat knowledgeable” or not knowledgeable. All of this spells danger for the new program as CMS struggles to inform physicians about the new requirements even as a performance year has almost already been completed.

Study Results

According to the study, 7 in 10 respondents had in fact begun preparing to meet the requirements of the QPP for 2017. Nearly 9 in 10 feel somewhat prepared or well prepared to meet the low-bar requirements set forth by CMS in the first year. Of those participating in the MIPS track of QPP, only 65% felt prepared to meet the requirements, indicating that alternative payment model members have a higher likelihood of feeling prepared. Additionally, of those participating in MIPS, 90% felt the requirements are slightly or very burdensome, with over half responding they were at the higher level of burden.

Respondents to the survey indicated the reporting time required to comply is the most significant challenge and suggest it will be one in future years. Respondents also struggled to understand requirements like MIPS scoring and the cost of reporting.

Previous programs like PQRS and the VBPM contributed to the level of readiness for QPP. The legacy programs set up physicians to be more successful than those with no experience with them. Only 25% of physicians with prior reporting experience felt well prepared for the QPP, however.

An interesting finding in the study is that even among those who feel prepared, they do not fully understand the total impact of the QPP. While they may be prepared to check boxes and complete forms, they lack “long-term strategic financial vision to success in 2018 and beyond.” Only 8% of respondents feel they are very prepared for long-term success with 26% feel not prepared at all.

Findings Support Number of Assumptions About QPP

According to the study, its results confirm assumptions that are widely held regarding physician knowledge and preparedness for QPP requirements:

  • Some challenges are universal regardless of practice size, specialty, or previous value-based payment experience, particularly the time required and the complexity of reporting.
  • Physicians, especially in small practices, need more help to prepare.
  • Physicians want more alternative payment models available to them.
  • Physicians with value-based payment reporting experience are more confident about their preparedness regarding performance under MIPS.
  • Physicians remain deeply concerned about the long-term financial ramifications of the QPP.


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