Life Science Compliance Update

May 13, 2016

The American College of Cardiology Scientific Session on MACRA

The American College of Cardiology recently held the 65th Annual Scientific Session and Expo, where several sessions focused on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). During the session it was clear that CMS's intention was to only accept ACO's that accept risk in the APM model payments.

Piecing Together the MACRA Puzzle

One session, entitled Piecing Together the MACRA Puzzle, was hosted by Robert Furno, Nancy Foster, and Harold Miller. This session started out with a broad overview of the MACRA program, followed by a presentation on how hospitals are preparing for MACRA, and then a presentation focused on how to implement physician-focused alternative payment models under MACRA. The session ended with a panel discussion with all three presenters.

As an overview, MACRA repeals the Sustainable Growth Rate (SGR) formula and changes the way the Medicare pays clinicians, while also streamlining multiple quality reporting programs into one new program (known as MIPS).

MACRA will affect clinicians who operate under Medicare Part B, and the specific types of Medicare Part B clinicians affected by MIPS could possibly expand after the first two years of implementation. During the first two years, physicians, physician assistants, nurse practitioners, clinical nurse specialists, and nurse anesthetists are affected. However, the Secretary may broaden the eligible professionals group to include others, such as: physical or occupational therapists, speech-language pathologists, audiologists, nurse midwives, clinical social workers, clinical psychologists, and dieticians/nutritional professionals.

As noted above, MACRA changes how Medicare pays clinicians. Previously, a physician provided services, was owed payment according to the Medicare fee schedule, and then adjustments were made through one of three programs (i.e., Physician Quality Reporting Program (PQRS), Value-Based Payment Modifier, or the Medicare EHR Incentive Program), before final payment was made to the clinician. Now, with MACRA, instead of adjustments being made through one of the three aforementioned programs, there is only one program through which adjustments are made: the Merit-Based Incentive Payment System (MIPS).

MIPS adjusts payments based on a composite performance score, while can result in positive or negative, or even neutral, adjustments being made, to the Medicare Part B payment they are owed. The maximum adjustment varies from year to year in the beginning, starting with a maximum of 4% in 2019, maximum of 5% in 2020, a maximum of 7% in 2021, and a maximum of 9% from 2022 into the foreseeable future. The composite performance score will factor in performance in four different weighted categories: quality, resource use, clinical practice improvement activities, and use of certified EHR technology.

There are, however, three groups of clinicians who will not be subject to MIPS: clinicians who are in their first year of Medicare Part B participation, clinicians who are below the low patient volume threshold, and certain participants in eligible Alternative Payment Models (APMs). MIPS also does not apply to hospitals or facilities.

An APM is a new approach to pay for medical care through Medicare that tries to incentivize quality and value. APMs that are eligible under MACRA are the most advanced APMs, or those who meet the following criteria: base payment on quality measures comparable to those in MIPS, require use of certified EHR technology, and either (a) bear more than nominal financial risk for monetary losses or (b) be a medical home model expanded under CMMI authority.

MACRA provides additional rewards for participating in an APM: you will receive the MIPS adjustments as well as APM-specific rewards. However, if you are in an eligible APM (as outlined above), you do not receive MIPS adjustments (because you are excluded from MIPS), but instead, you receive APM-specific rewards as well as a 5% lump sum bonus. APM bonuses are set to expire after 2025.

Nancy Foster spoke on the implications for hospitals, some of which include: the cost of implementation and compliance by employed physicians and the increased pressure on hospitals to participate in risk-bearing arrangements. She suggested hospitals adopt a system that is fair, focused on important issues, and sustainable. She suggested that in order to do so, one should streamline the number of measures that are required and employ the risk adjustment rigorously – including sociodemographic adjustments where appropriate. She also suggested that CMS should allow for a hospital-based physician measure reporting option and to allow flexibility in how group practices identify themselves for the purposes of the MIPS.

Harold Miller spoke about how to achieve better care for patients, savings for payers, and keep physician practices and hospitals financially viable. He spoke of how patient care will not be driven by dozens of narrow quality measures, and that an over-emphasis on narrow quality measures can harm patients. He also suggested that providers will be penalized for having patients with higher needs, as patient characteristics are not taken into account and that hospitals with high readmission rates may be penalized based on the patients they serve.

New Payment Models

Another session of note, entitled New Payment Models: What Does This Mean for Interventional Cardiology, discussed the specialty designation for interventional cardiology, tips on MIPS, ACO versus the traditional fee for service, and bundled payment for PCI.

Benefits of Specialty Designation

James Blankenship presented briefly on what benefits exist for specialty designation, and why such a designation is so important to interventional cardiologists. Some benefits include: increased status of the Specialty, increased recognition on CMS Physician Compare Website, ability to get paid for consultations referred by general cardiologists, and not being compared to general cardiologists on costs or on adverse outcomes.

Dr. Blankenship also noted, interestingly, that you do not need to be Board certified to identify as an Interventional Cardiologist, but that your specialty designation should reflect your clinical practice.

Tips on MIPS

Thomas M. Maddox offered some tips on making the most of MIPS, and how to handle the new process. He suggested that when it comes to expanded practice access, practitioners should allow for same day appointments for urgent needs and occasionally offer after-hours clinician advice. When it comes to population management, physicians should monitor the health conditions of their patients and provide timely intervention, as well as participate in a qualified clinical data registry.

He further suggested that when it comes to beneficiary engagement, clinicians should work to establish care plans for complex patients, to assist in beneficiary self-management assessment and training, and to share decision-making with beneficiaries. Further, as far as care coordination, physicians should timely communicate test results to patients, engage in a timely exchange of clinical information with patients and providers, as well as learn and utilize remote monitoring and telehealth.

Quality Improvements

William Borden explained the structure, process, and outcomes related to quality improvements, and what takeaways interventional cardiologists should have when it comes to quality improvements. He suggested interventional cardiologists should understand, among other things, that: payments are still currently based on fee for service; quality and cost performance reporting is important; risk-adjustment is crucial, and documentation really matters; that coordination with episode-based payments is important; and innovation can still exist.

April 22, 2016

American College of Physicians Calls on Federal Government to Regulate Prescription Drug Prices

Late last year, we reported on the AMA's House of Delegates vote to adopt several recommendations in support of regulating medication pricing, including a recommendation that the AMA encourage the Federal Trade Commission to limit anticompetitive behavior by companies attempting to reduce competition from generic manufacturers through manipulation of patent protections and abuse of regulatory exclusivity incentives. Now, the American College of Physicians (ACP) has come out with some of their own suggestions in a paper published in the Annals of Internal Medicine.

ACP paper

The ACP's Health and Public Policy Committee's paper urges the federal government to tackle rising prices, noting that the United States is the only member of the Organization for Economic Cooperation and Development that does not impose government regulations on drug pricing. Other recommendations include a call for the federal government to allow Medicare to negotiate prescription drug prices with manufacturers, the re-import prescription drugs from other countries, a requirement that manufacturers disclose actual research and production costs for drug development and manufacturing, and requirement that manufacturers disclose the prices of drugs that were developed using research funded by the federal government. The American College of Physicians says it plans to bring its messages about drug prices to Washington in May, when its members will call on legislators in Congress to press for action.

Industry reaction

Industry is less than pleased with the paper. Biotechnology Innovation Organization's President and CEO Jim Greenwood issued a statement slamming several parts of the ACP report.

"Many of the proposals released by the American College of Physicians would significantly hinder the ability of emerging biotechnology companies to develop the new cures and therapies that patients need to live longer, more productive lives. Several provisions of this plan, including the reimportation of prescription drugs from other countries and allowing HHS to negotiate prices in Medicare Part D, have been proposed many times in the past, and have always been rebuffed on a bipartisan basis because of the widely recognized fact that they are simply bad ideas for patients, or would produce scant savings. The Congressional Budget Office has estimated that allowing HHS to negotiate prices for drug covered under Medicare Part D, as recommended by the ACP, would produce a 'negligible effect.' On reimportation, the College itself acknowledge the 'various safety concerns' posed by the proposal."

Greenwood did try to find some common ground: "However, we share the College's concern with the rising use of specialty tier cost-sharing, in which patients must pay a relatively high percentage of their drug costs rather than a flat co-payment. The College rightly calls upon payers to ensure that patient cost sharing for specialty drugs do not create a 'substantial economic barrier' to patients obtaining needed medicines."

The Coalition for Healthcare Communication's Executive Director John Kamp echoed Greenwood's criticism of ACP when it came to the paper's position on direct-to-consumer (DTC) drug advertising. According to the ACP's report, "the practice of DTC advertising for prescription drugs is concerning," and that the group of 143,000 physicians "believes that DTC is inappropriate because it may undermine the patient-physician relationship and foster confusion." The paper argues that if the government will not ban DTC advertising, as the AMA recently called for, then there should be "broad efforts by federal regulators to ensure that information about a drug's effectiveness and safety, and about alternative treatments, is clearly disclosed to patients".

"What the ACP and other entities do not seem to recognize is that in numerous ways, DTC ads actually help to improve the patient-physician relationship because the ads often get patients talking to their doctors about conditions – many of which are underdiagnosed and undertreated – that they have seen or heard about in DTC ads," said Kamp. "And, to the ACP's point about both the effectiveness and safety of treatments and alternative treatments," Kamp continued, "the duty to interpret and relay that information has and will continue to fall on the physician, who ultimately is the individual writing prescriptions for patients."

The ACP also states that the "many of the largest pharmaceutical companies are spending more on marketing and administration than they are on research and development." However, the Pharmaceutical Research and Manufacturers of America (PhRMA) counters that the biopharmaceutical sector is the single largest funder of business R&D in the United States, and that biopharmaceutical companies invested more than 12 times the amount of R&D per employee than manufacturing industries overall between 2000 and 2010. According to PhRMA, economists also believe that biopharmaceutical healthcare communication costs are overstated, because they are grouped with other costs, such as pension costs and office furniture and supply costs, which are not directly related to marketing.

April 04, 2016

Courts to Finally Take Up CMS Recovery Audit Contractors Appeals Backlog

According to HHS, a backlog exists of more than 800,000 appeals from health care providers challenging denied Medicare claims, most of them generated by the program's Recovery Audit Contractors (RACs). That is about 10 times as many as the program can adjudicate in a year at its current funding levels. However, a federal appeals court has given new life to a lawsuit that seeks to force the government to complete the appeals more quickly. The court's ruling sends the case back to the district court for reconsideration. This moved was quickly celebrated by the American Hospital Association.

We have previously reported on problems related to RACs, including an OIG report suggesting CMS may not be catching sufficient numbers of overpaid claims. The report found problems with CMS' action--or inaction--regarding improper payment vulnerabilities and referrals for potential fraud, as well as with RAC performance evaluations. While CMS identified 46 vulnerabilities that resulted in improper payments, it only took corrective action to address 28 of them and failed to evaluate the effectiveness of these actions. The OIG pointed out that by not evaluating corrective actions CMS could not determine if they effectively reduce improper payments.

What are RACs?

Congress authorized the program in the Medicare Modernization Act of 2003 and made permanent in the Tax Relief and Health Care Act of 2006. Its intended goal is to detect and correct improper Medicare payments. Over a billion claims are submitted to Medicare each year and it is estimated 3.9% of the dollars paid do not comply with coverage rules. This has been confirmed by GAO reports and as a result, there has been a renewed interest by the DOJ and the OIG to combat health care fraud and protect Medicare in the process. The RAC program is designed to detect improper payments, both under and overpayments, and corrects errors by collecting money or repaying money depending on the original payment.

Appeals Process

The RAC appeals process mirrors the five-level Medicare claims appeal process through which fee-for-service providers appeal reimbursement decisions. The five levels of appeal include:

1. Redetermination by the Fiscal Intermediary

2. Reconsideration by a Qualified Independent Contractor

3. Administrative Law Judge Hearing

4. Medicare Appeals Council Review

5. Judicial Review in U.S. District Court

If RAC determination appeal requests are not filed within the specified timeframe for the applicable level of appeal, the opportunity to appeal is lost.

AHA Lawsuit

According to FiereceHealthFinance, the American Hospital Association (AHA) filed the suit in 2014 to try and clear a backlog of RAC appeals at the administrative law court level. There were at least 800,000 appeals at that level as of 2014. A lower federal court had dismissed the lawsuit due to lack of jurisdiction, concluding because Congress was working on trying to procure more funding to review claims, it did not yet have the authority to act further. However, the case was recently reinstated by an appeals court.

The AHA notes that in December 2013, with the large backlog of appeals mounting, HHS imposed a two-year moratorium on assigning new appeals of claim denials. The court's opinion observed that the department "has the capacity to process only about 72,000 appeals per year, a far cry from the almost 400,000 appeals it received in fiscal year 2013, or from the more than 800,000 appeals that composed its backlog in July 2014. These figures suggest that at current rates, some already filed claims could take a decade or more to resolve." That administrative logjam delays billions of dollars in Medicare reimbursements to hospitals, the AHA noted.

This was illustrated in 2014 when, as an example, it was reported administrators at Baxter Regional Hospital in Mountain Home, Ark., said it had so much money tied up in endless Medicare appeals that it could not afford to replace the roof over their surgery department or buy new beds for their intensive-care unit. Baxter joined other providers with the AHA in the 2014 lawsuit.

Next steps?

Modern Healthcare reported a number of potential next steps after this ruling. The outlet cited Jessica Gustafson from Health Law Partners, who called the decision a "positive development for hospitals," but did say she would be surprised if the district court mandated HHS to more quickly address the appeals. There is legislation in Congress introduced last year that would make changes to the appeals process and reduce the backlog.

Other suggested possibilities include an added push on Congress to pass the bill, but that court action may be necessary if the political will is not there. Should the lower court force HHS to comply with the statutory timelines, HHS may need to find ways to reduce audits or hire more administrative law judges. The court could also not make an order, or ask HHS to issue status reports on efforts to deal with the backlog.


 

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