CMS proposes to scale back scope of bundled payment model for joint replacement, cancel other mandatory bundled payment models

The Centers for Medicare and Medicaid Services (CMS) on Thursday, August 17, 2017, published a proposed rule that would reduce the number of geographic areas where hospitals and clinicians would be required to participate in the Comprehensive Care for Joint Replacement (CJR) bundled payment model focused on knee and hip replacements, and cancel cardiac and other orthopedic bundled payment models that are scheduled to begin on January 1, 2018.

As a member of Congress and in his confirmation hearings as Secretary of the Department of Health and Human Services (HHS), Secretary Tom Price raised concerns about regulations issued by the Obama Administration to test the orthopedic and cardiac bundles payment models in so many geographic areas on a mandatory basis.

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What’s next after Senate defeat of latest ACA repeal effort?

The Senate early in the morning of Friday, July 28, 2017, voted 49-51 to defeat the Health Care Freedom Act, which would have repealed targeted provisions of the Affordable Care Act (ACA). Three Republican Senators joined all Democrats in voting against the legislation, prompting Senate Majority Leader Mitch McConnell (R-KY) to pull the bill from the Senate schedule. Leader McConnell and Speaker of the House Paul Ryan (R-WI) have not indicated how they will proceed on legislation related to the ACA.

The House adjourned for its August recess from Friday, July 28, 2017, through Tuesday, September 5, 2017. Leader McConnell has said the Senate will adjourn Friday, August 8, 2017, through Tuesday, September 5, 2017.

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A renewed focus on the future of the 340B program

On Thursday, July 13, 2017, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that updates the payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS). In the provisions, CMS proposes to change the payment rate for certain Medicare Part B drugs purchased by hospitals through the 340B program.

The proposed changes include adjusting the applicable payment rate for drugs acquired under the 340B program from average sales prices (ASP) plus 6 percent to ASP minus 22.5 percent. This potentially represents a significant reduction to how much Medicare pays 340B hospitals for Part B drugs under OPPS.

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CMS proposes changes to MACRA Quality Payment Program for 2018

The Center for Medicare and Medicaid Services (CMS) on June 30, 2017, published a proposed rule outlining changes for the 2018 performance year of the Quality Payment Program (QPP) under the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA’s QPP includes the incentive payments for advanced alternative payment models (A-APMs) and the Merit-based Incentive Payment System (MIPS). Performance in 2018 will determine payment adjustments to clinicians that will be applied to their Medicare Part B payments in 2020.

The first performance year began January 1, 2017, for Part B payment adjustments in 2019.

MACRA repealed the sustainable growth rate (SGR) formula for updates to the Medicare Part B Physician Fee Schedule and sets payment updates for all years in the future. Through the QPP, the law is intended to link Medicare payment updates to quality and performance and drive the health care payment system across all payers away from fee-for-service reimbursement models.

Select key provisions of the proposed rule are highlighted below.

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Congressional legislative agenda dominated by the intermix of health care and tax issues

Health care and tax issues are at the top of the US legislative and regulatory agendas in 2017, as Republican majorities in the House of Representatives and the Senate work on legislation to repeal and replace key provisions of the Affordable Care Act (ACA) and to reform the tax code for both businesses and individuals. Republicans are using the budget reconciliation process to advance health care to make it easier to bring the legislation up for a vote in the Senate so long as certain conditions are met. They are expected to use a similar process for tax reform. Specifically, all provisions of legislation considered under budget reconciliation must be related to the federal budget deficit, taxes, mandatory spending programs (like Medicare or Medicaid but not Social Security, which is exempt from reforms under budget reconciliation) or the federal debt limit. Provided these and a few other conditions are met and the Congressional Budget Office (CBO) does not project that the bill will increase the federal budget deficit outside the operable budget window, the Senate can bring up legislation for a vote and pass it with a simple majority of 51 votes.

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House-passed health care bill would increase uninsured by 23 million in 2026, nonpartisan analysis projects

The number of uninsured people in the US would increase by 23 million by 2026 if the American Health Care Act (AHCA, HR 1628) as passed by the House of Representatives were enacted, the nonpartisan Congressional Budget Office (CBO) projected in a report issued late Wednesday, May 24, 2017.1 A CBO analysis of a previous version of the AHCA projected that enactment of the legislation would have increased the number of uninsured by 24 million in 2026.

The House on May 4, 2017, narrowly approved the bill.

The release of the CBO report clears the way for the bill to move to the Senate for consideration under the budget reconciliation process, which would make it possible for the Senate to pass the AHCA with a simple majority of 51 votes, rather than 60 votes generally needed to bring legislation up for a vote under Senate rules. Significant changes may be under consideration in the Senate.

Overall, the AHCA would:

  • Reduce federal health care spending;
  • Redesign advanceable, refundable tax credits for individuals who do not have access to employer-sponsored coverage;
  • Restructure and cap federal Medicaid funding to the states;
  • Repeal most taxes and fees enacted under the Affordable Care Act (ACA);
  • Provide $138 billion over 10 years in federal funding for state programs intended to help stabilize and reduce health insurance premiums in the non-group market.

Organizations representing hospitals, physicians, health plans and consumers have issued statements critical of the bill.

Key highlights of the CBO’s analysis of the AHCA as passed by the House are provided below.

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CMS releases final Medicare audit protocol updates

The Centers for Medicare and Medicaid Services (CMS) has released the final protocols for 2017 audits of Medicare Parts C and D plans. This is the latest step in a process RegPulse has reported on during the initial release and as draft protocols underwent updates during the last year.

The audit protocol revisions affect the ways in which plan sponsors—such as Medicare Advantage Organizations (MAOs), Prescription Drug Plans (PDPs), and Medicare-Medicaid Plans (MMPs)—prepare and present information about their data universes to CMS. Sponsors that take part in these programs should review the changes and continue or update their programs assessments to identify the changes that affect them and plan appropriate responses.

Here is a summary of the relevant changes to the audit protocols in the final release, listed by program type:

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House approves bill to replace key provisions of the Affordable Care Act; All eyes turn to the Senate

The House of Representatives on May 4, 2017, narrowly voted 217-213 to pass the American Health Care Act (AHCA, H.R. 1628). No Democrat voted in favor of the bill and 20 Republicans voted against the bill. As many recall, the House on March 24, 2017, cancelled a planned vote on the AHCA due to a lack of support in the Republican conference.

In the ensuing weeks, three amendments to the AHCA were drafted by House members in an effort to win additional votes for the underlying bill. This ultimately paved the way toward passage in the House today on a slim majority vote. Following the vote, the House went into recess until May 16, 2017.

The AHCA now goes to the Senate for its consideration and likely modification in the coming weeks. Based on the next steps in the process, it may take well into the summer months before a final piece of legislation could be signed into law by President Trump.

The House bill seeks to repeal key provisions of the Affordable Care Act (ACA) and enact alternative health care policies that in general would:

  • Redesign advanceable, refundable tax credits for individuals who do not have access to employer-sponsored coverage
  • Restructure and cap federal Medicaid financing to the states
  • Repeal most taxes and fees enacted under the ACA; and
  • Provide $138 billion over 10 years in federal funding for state programs intended to help stabilize and reduce health insurance premiums in the non-group market.

Next week, Deloitte will produce a detailed summary of the AHCA as amended and passed by the House.

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Amidst ongoing debate over future of ACA Exchanges, CMS finalizes rule for 2018 and a timeline for submission of plans

The Centers for Medicare and Medicaid Services (CMS) last week released a final rule on the 2018 benefit year for Exchanges established under the Affordable Care Act (ACA), as well as a final timeline for health insurers to submit products for federally-facilitated Exchanges and other tools plans will need to submit products for ACA Exchanges for 2018. Notably, the final rule was published in the Federal Register on the same day that health insurers met with CMS Administrator Seema Verma and other Administration officials about the ACA Exchanges.

The final rule is intended to reduce volatility in the non-group and small group health insurance markets, and it finalizes with few changes policies included in a proposed rule published in the Federal Register on February 17, 2017. The final rule was published in the Federal Register on Tuesday, April 18, 2017, and its provisions take effect June 19, 2017. The policies in the final rule include changes requested by health insurers in previous years.

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CY 2018 changes and policy updates for Medicare health and drug plans

Summary of provisions and impacts

The Centers for Medicare and Medicaid Services (CMS) released its Advance Notice of Methodological Changes for Calendar Year (CY) 2018 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2018 Draft Call Letter on February 1, 2017.

The purpose of the Advance Notice and draft Call Letter was to notify Medicare Advantage Organizations (MAO) and Part D sponsors of proposed changes to the Part C and Part D programs for the following plan year, including but not limited to:

  • Planned changes in the MA capitation rate methodology and risk adjustment methodology applied under Part C for CY 2018
  • Proposed changes in the Part D payment methodology for CY 2018
  • Proposed changes to the quality rating system and information the MAOs and Part D sponsors should consider while preparing their 2018 bids

CMS received many submissions in response to the request for comments on the Advance Notice and released final updates to MA and Part D Prescription Drug Programs for 2018 on April 3, 2017.
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