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MACRA repealed the sustainable growth rate (SGR) formula for updates to the Medicare Part B Physician Fee Schedule and sets payment updates for all years in the future.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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CCAR: Reaching the summit

The Federal Reserve (“Fed”) released the results of its Comprehensive Capital Analysis and Review (CCAR) for 2017 on June 28.  Key Facts:

  • For the first time in CCAR’s seven-year history, the Fed did not object to any of the capital plans or capital distributions.
  • One firm, Capital One, was required to resubmit its capital plan to address certain capital planning process weaknesses.
  • The aggregate quantitative results were very similar to last year’s test, with all 34 firms exceeding required minimums.
  • Two firms, American Express and Capital One, adjusted their original requested capital distributions taking advantage of a so called “mulligan” to fine tune their capital levels.

The prior week’s release of the Dodd-Frank Act Stress Test (DFAST) results provided more detailed information on the Fed’s stress test.  Compared to CCAR, those results exclude buybacks and capital issuances and hold past common dividends constant.

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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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2017 Dodd-Frank Act Stress Test (DFAST): Our take

The Federal Reserve (“Fed”) released the results of its Dodd-Frank Act Stress Tests (DFAST)1 that measure the potential impact of adverse or severely adverse economic conditions on the performance and condition of the 34 banks subject to the rule.  These results will be followed on June 28, 2017 by the Fed’s conclusions regarding the adequacy of bank capital plans as evaluated through the Comprehensive Capital Analysis and Review (CCAR).

Key takeaways for the severely adverse scenario results include:

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Key points from the CDRH and FDA draft guidance under 21 CFR part 11

In June 2017, the Center for Devices and Radiological Health (CDRH) of the US Food and Drug Administration (FDA or Agency) issued a draft guidance document titled “Use of Electronic Records and Electronic Signatures in Clinical Investigations Under 21 CFR Part 11 – Questions and Answers”.  While focused on the use of electronic records and signatures for clinical trial documents, the concepts and requirements outlined in the guidance reflect the Agency’s latest thinking on this topic and should be considered when implementing electronic records and signatures across the medical product lifecycle.  At 28 pages, the document has a lot of content in keeping with FDA’s current policy of providing guidance documents that include more practical examples to help industry comply with the requirements.

Some key points from the draft guidance include:

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SWIFT Customer Security Program: Implementation considerations

The 2016 Bangladesh Bank cyber-attack and multiple other cyber events connected to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) have brought renewed attention to the effectiveness of SWIFT security and fraud controls.

SWIFT’s Customer Security Program (CSP)1 is a set of core security standards intended to help mitigate specific cybersecurity risks that SWIFT clients face due to the cyber threat landscape.  The CSP, which is based on three objectives, eight strategic security principles, and a common set of 27 security controls (16 mandatory and 11 advisory), is aimed at reducing these fraud and cyber incidents. All SWIFT customers must comply with the mandatory controls under the CSP and provide a detailed annual attestation with respect to their compliance, the first of which is due in December 2017.

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Getting started with RegTech

As financial services firms look for ways to harness the power of risk & regulatory technologies (RegTech), one of the first questions that comes to mind is where to start. Different parts of the business present very different challenges and opportunities, and the activity areas you choose to focus on can have a big impact on the results. Here are some tips for getting started:

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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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