In the previous blog from our series on the maturity of regulatory reporting, we discuss the need for a firm-wide data architecture and technology capabilities to manage these data. A firm’s data architecture and the enabling infrastructure, which supports aggregating fit-for-purpose data for reporting, is fundamental to implementing an effective regulatory reporting program. This includes providing the capability to integrate different data sources in a highly automated fashion. Yet, implementing a firm-wide data architecture and IT infrastructure to meet these objectives remains challenging for many institutions due to legacy issues and pressure on costs and technology. At the same time, banking organizations are challenged by ever-increasing demands for detailed data by the regulators with more frequent turnaround times. As a result, a fragmented automation environment continues to exist in the banking industry.
The US Treasury Department (Treasury) has issued its fourth report1 in a series on the Administration’s core principles to regulate the US financial system. It signals a new regulatory approach toward nonbank financial institutions, financial technology (“FinTechs”), and financial innovation. Coupled with the Office of the Comptroller of the Currency’s (“OCC”) same day announcement2 that it is accepting FinTech special purpose charter applications, FinTechs considering entering the banking environment, through a bank charter themselves or indirectly through partnerships, can take a note of encouragement. That said, there were no big surprises relative to past statements about underlying regulations and bank charter applications at this time.
On August 1, 2018, the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (“the Departments”) released a final rule amending the definition of short-term, limited duration (STLD) insurance. Notably, the final rule lengthens the maximum period of STLD coverage, allowing policy durations of up to 12 months, and options to renew policies for up to 36 months. This change is a departure from the current 2016 rule that strictly limits STLD coverage to less than three months.
The final rule is set be published in the Federal Register on August 3, 2018, with the rule taking effect on October 4, 2018.
On Friday, June 29, the Federal Deposit Insurance Corporation (“FDIC”) released the Information Technology Functional Guide (“Tech Guide”) draft Guide Version 2.0 to assist Covered Institutions (“CIs”) with the implementation of information technology systems capabilities required for Part 370.1 The following provides some context to the provisions that were materially changed from the original guide. Since the Tech Guide is in draft form with comments due August 1st, CIs should be informed by its contents, but cannot make material changes until the Tech Guide is final or having discussed those changes with the FDIC.
On July 25, 2018, the Centers for Medicare and Medicaid Services (CMS) released the proposed rule for the 2019 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System (ASC), laying out proposals aimed at moving forward the Administration’s efforts on site-neutral payment policy as part of an effort to address health care spending growth.
In particular, the proposed rule includes proposed changes to payments for off-campus provider-based departments (PBDs), including a proposal that would reimburse clinic visits at non-excepted PBDs using the Physician Fee Schedule (PFS)-equivalent payment rate rather than the outpatient payment rate. In addition, CMS proposes to allow ASCs to provide a wider array of services, potentially creating a new incentive to deliver more care in non-hospital settings in certain circumstances.
On July 24, 2018, the Physician-Focused Payment Model Technical Advisory Committee (PTAC) issued a request for public comments on its process for the submission and review of proposed innovative health care delivery and finance models.
Comments are due to PTAC by September 7, 2018.
On July 24, 2018, the Centers for Medicare and Medicaid Services (CMS) issued an Interim Final Rule that provides additional explanation around the risk adjustment methodology used for qualified health plans (QHPs) offered in Exchanges established under the Affordable Care Act (ACA). CMS is issuing the interim final rule in response to a recent federal court decision; the rule is intended to satisfy an administrative requirement in order for CMS to move forward with risk adjustment collections and payments for the 2017 benefit year.
Importantly, the interim final rule does not make any changes to the previously published Department of Health and Human Services (HHS)-operated risk adjustment methodology for the 2017 benefit year. Instead, the rule provides an additional explanation of the rationale behind the use of statewide average premium and the budget-neutral approach that CMS used to implement the program.
On July 12, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule detailing the payment updates and policy proposals for the Medicare Part B Physician Fee Schedule (PFS) and the Quality Payment Program (QPP) under the Medicare Access and CHIP Reauthorization Act (MACRA).
As CMS moves forward with implementation of MACRA, the agency proposes raising the performance thresholds under the Merit-based Incentive Payment System (MIPS) for 2019. As a result, a greater percentage of clinicians participating in MIPS would face larger negative payment adjustments in 2021, while a lesser percentage of clinicians would qualify for an additional positive payment adjustment for exceptional performance. The proposed increase in the weight of the Cost measure in MIPS would be an additional challenge for many clinicians, especially as they work to adapt to new performance measures including measures that focus on the efficiency of care delivery in eight episodes of care.
The proposed rule would present unique opportunities for health plans as the All Payer Combination Option begins on January 1, 2019, and CMS opens up the payer-initiated process for commercial and other private payers to submit payment models to CMS for qualification as an Other Payer Advanced APM for the 2020 performance year. In addition, a demonstration project under consideration would present a unique opportunity for Medicare Advantage organizations (MAOs) who incorporate certain risk-based payment arrangements into their contracts with clinicians.
For other health care stakeholders, the higher performance standards under MIPS and the move away from fee-for-service reimbursement will present opportunities to partner with clinicians on efforts to more effectively monitor and improve performance in the Cost and Quality performance categories.
With regard to proposed coding changes under the PFS, health care provider organizations may want to consider an analysis as to how the proposed workflow and payment changes might affect them.
The proposed rule also moves forward with implementation of health care provisions of the Bipartisan Budget Act of 2018 (BBA).
The proposed rule is scheduled to be published in the Federal Register on July 27, 2018. Public comments are due to CMS by September 10, 2018.
Highlights of key provisions of the proposed rule are detailed below.
Continue reading “CMS proposes higher performance standards for year 3 of MACRA Quality Payment Program, significant changes to part B coding requirements”
On July 9, 2018, the Board of Governors of the Federal Reserve System (“FRB”) and the Federal Deposit Insurance Corporation (“FDIC”) (collectively, the “Agencies”) released the public sections of the resolution plans for the four foreign banking organizations’ (“FBOs”) overseen by the Large Institution Supervision Coordinating Committee (“LISCC”).1 The four FBOs were required to submit their plans by July 1, 2018, which included both private and public sections.
The 2018 public sections are comparatively longer than those submitted in the firms’ last full submissions in 2015—a total of 214 pages in 2018 compared to 162 pages in 2015—and contain significant new details about the FBOs’ completed and forthcoming enhancements to resolution planning capabilities. This expansion was largely expected as this submission marked the FBOs’ first reaction to regulatory guidance published in April 2017 2 and FAQs in September 2017 3 (collectively “2017 FBO Guidance”) that was specifically directed at these four banks.
The 2017 FBO Guidance is generally consistent with the guidance previously issued to the eight US global systemically important banks (“US G-SIBS”) for 2017.4 Most notably in the 2017 FBO Guidance, the Agencies incorporated Supervision and Regulation (SR) Letter 14-1 (Principles and Practices for Recovery and Resolution Preparedness),5 which previously was technically applicable to US-GSIBs only. The guidance contained in SR 14-1 outlines specific and more substantive expectations for resolution capabilities.6 While overall the 2017 FBO guidance follows that for the US G-SIBs, it contains certain modifications and tailoring to address issues unique to FBOs such as the relationship and alignment between the US and group resolution plans, the role of branch entities, and guidance for permissible parent support.
Continue reading “FRB, FDIC release public sections of 2018 Resolution Plans of the four LISCC FBOs”
On June 27, 2018, the Centers for Medicare and Medicaid Services (CMS) approved a Medicaid State Plan Amendment (SPA) allowing Oklahoma to negotiate with drug manufacturers for supplemental rebates under value-based purchasing agreements. Other states have won approval for Supplemental Rebate Agreements (SRAs), but Oklahoma’s SPA is the first specifically to provide for additional rebates to be made to the state if a prescription drug falls short of negotiated clinical benchmarks.
Products covered under an SRA with Oklahoma will have preferred status on the state’s Medicaid formulary and may be placed on lower tiers of the state’s drug listings, granting exemptions to utilization management policies such as prior authorization. The updated agreement applies to drugs dispensed effective January 1, 2019.
Drugs developed and marketed by manufacturers who do not participate in the supplemental rebate program will still be available to Medicaid recipients.
Continue reading “MEDICAID NEWS: CMS approves first state Medicaid plan aimed at value-based purchasing of prescription drugs, rejects application for formulary restrictions; court blocks approval of Kentucky Medicaid waiver for work requirements”