HHS Office of Inspector General flags MACRA vulnerabilities related to clinician awareness, program integrity

The Health & Human Services (HHS) Office of the Inspector General (OIG) in December 2017 released a report indicating that with regard to the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), the Centers for Medicare and Medicaid Services (CMS) continues to face vulnerabilities related to clinician awareness of MACRA’s Quality Payment Program (QPP) and program integrity to avoid fraud and improper Medicare Part B payment adjustments.

In a similar report from 2016, HHS OIG highlighted vulnerabilities related to providing guidance and technical assistance to clinicians and to developing information technology (IT) systems to support data reporting, scoring and Part B payment adjustments. HHS OIG found that CMS has made “significant efforts” to address these vulnerabilities.

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CMS releases part II of the 2019 Medicare Advantage and Part D Advance Notice and Draft Call Letter

The Centers for Medicare and Medicaid Services (CMS) on February 1, 2018, released the second part of the 2019 Medicare Advantage (MA) and Part D Advance Notice, and the Part D draft Call Letter, proposing average increases to MA payment rates for 2019 of 1.84% plus a potential further increase of 3.1% as a result of expected changes to risk scores for MA Plans.

The first part of the Call Letter was released on December 27, 2017, in compliance with provisions of the 21st Century Cures Act that require CMS to fully implement changes to the Medicare risk adjustment model by 2022.

Comments for both parts of the proposed Advance Notice and the Part D Call Letter are due to CMS by March 5, 2018. CMS expects to publish the final 2019 Rate Announcement and final Call Letter by April 2, 2018.

Highlights of key provisions of the advance notice and draft call letter are provided below.

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CMS issues guidance for states to seek Medicaid waivers including work requirements

On January 11, 2018, the Centers for Medicare and Medicaid Services (CMS) released a State Medicaid Director Letter that provides detailed guidance for states interested in establishing work or other community engagement requirements for certain adult beneficiaries to enroll in or continue coverage under their state’s Medicaid program under a waiver of Section 1115 of the Social Security Act.

CMS on Friday, January 12, 2018, approved Kentucky’s 1115 waiver including work requirements, making it the first of the 10 states seeking such waivers to win approval. At least one other state has expressed interest in such a waiver since CMS released the letter.

The Obama Administration rejected work requirements as part of state 1115 waiver applications, asserting that such requirements were not permitted under federal law. A number of advocacy organizations have said they will consider court challenges to block waivers including work requirements from taking effect.

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CMS announces new voluntary bundled payment model

On January 10, 2017, the Centers for Medicare and Medicaid Services (CMS) through the Center for Medicare and Medicaid Innovation (CMMI) announced a new Medicare bundled payment model, Bundled Payments for Care Improvement Advanced (BPCI-Advanced), which will be an advanced alternative payment model (AAPM) under the Medicare Access and CHIP Reauthorization Act’s (MACRA) Quality Payment Program (QPP). The model establishes alternative payment structures for 32 distinct clinical episodes, where providers can participate on a voluntary basis and receive performance-based payments for delivering care at less than a target amount and meeting quality standards.

Following on the 2013 CMMI BPCI initiative, BPCI-Advanced demonstrates CMS’ continued support of bundled payments on a voluntary basis to encourage both providers and suppliers to coordinate care across multiple settings and meet cost and quality benchmarks. This program is intended as an opportunity for providers to gain experience in care coordination and shared payment structures on their own terms. Details on BPCI-Advanced are described below.

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Judge allows 340B drug payment cuts for 2018 to proceed pending a final ruling

On December 29, 2017, a ruling by a US District Court Judge denied a preliminary injunction to the cuts to Medicare Part B reimbursement rates for 340B drugs pending a final legal decision in a suit filed by a group of about 30 affected hospitals and related associations. The plaintiffs initially filed suit on November 13, with an initial hearing held on December 21 in which the plaintiffs advocated for a preliminary injunction of the rule. In denying of the preliminary injunction, the rate cuts took effect on January 1, 2018.

The suit stems from a provision in the Medicare Outpatient Prospective Payment System (OPPS) final rule issued on November 1, 2017. In the final rule, the Centers for Medicare and Medicaid Service (CMS) announced that it would no longer reimburse certain 340B-purchased drugs at the standard Part B rate of Average Sales Price (ASP) plus 6 percent, instead paying a rate of ASP minus 22.5 percent.

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CMS finalizes changes to bundled payment models

The Centers for Medicare and Medicaid Services (CMS) on Thursday, November 30, 2017, released a final rule, reducing the number of geographic areas where participation in bundled payments for certain knee and hip replacements would be mandatory and canceling other orthopedic and cardiac bundled payment models that had been slated to begin January 1, 2018. In general, the final rule codifies policies that CMS put forward in a proposed rule in August.

The cancellation or ending of mandatory participation in certain payment models is part of a larger change in thinking at CMS, moving in favor of a more voluntary approach to provider participation.

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CMS proposes policy changes to Medicare Advantage, Medicare prescription drug benefit

The Centers for Medicare and Medicaid Services (CMS) on Thursday, November 17, 2017, released a proposed rule outlining policy changes to Medicare Advantage (MA) and the Medicare Part D prescription drug benefit (Part D). The proposed rule is intended to provide an opportunity for stakeholders to provide feedback to CMS ahead of the annual call letter process, with the draft call letter historically released in February.

The proposed rule includes policies intended to further CMS’ recently announced Patients Over Paperwork initiative, which aims to reduce regulatory and administrative requirements for health care stakeholders. In addition, the proposed rule continues the Administration’s efforts to exercise regulatory authority to help reduce out-of-pocket spending on prescription drugs.

The policies outlined in the proposed rule would apply to contract year 2019.

The proposed rule is scheduled for publication in the Federal Register on November 28, 2017, and CMS will accept comments through January 16, 2018.

Key provisions of the proposed rule are highlighted below.

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CMS moves forward with implementation of MACRA, other policy changes in Physician Fee Schedule Update

The Centers for Medicare and Medicaid Services (CMS) on Thursday, November 2, 2017, released final rules on Medicare reimbursement for 2018 that will have significant implications for providers’ margins and drive many provider and payer organizations to revisit their strategic objectives. The final rules for the 2018 performance period under the Quality Payment Program (QPP) of the Medicare Access and CHIP Reauthorization Act (MACRA) and the 2018 Part B Physician Fee Schedule Update include critical details that will have implications for providers related to value-based care, coding compliance, health information technology investments and telehealth services, among other issues.

The final rule for the MACRA QPP 2018 performance period is scheduled for publication in the Federal Register on November 16, 2017, and the final rule on the Part B PFS update is scheduled for publication in the Federal Register on November 15, 2017. Provisions of both rules will take effect January 1, 2018.

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CMS finalizes changes to payment policy under the 340B drug discount program

The Centers for Medicare and Medicaid Services (CMS) on November 1, 2017, released the 2018 Hospital Outpatient Prospective Payment System (OPPS) final rule, moving forward with a significant change in payment policy under the 340B drug discount program that was included in the proposed rule earlier released in July.

Beginning January 1, 2018, CMS will no longer reimburse most 340B-purchased drugs at the standard Part B rate of Average Sales Price (ASP) plus 6 percent, and instead will pay a rate of ASP minus 22.5 percent. The change in payment policy has drawn sharp criticism from hospital organizations, including litigation by the American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals and member hospitals to block the change in payment policy.

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Open enrollment period for ACA Exchanges begins under President Trump for first time amid ongoing debate over cost-sharing reduction subsidies, ACA waivers

The open enrollment period for coverage for 2018 through the health insurance Exchanges created under the Affordable Care Act (ACA) begins today, Wednesday, November 1, 2017. This is the fifth open enrollment period since the Exchanges opened in 2014 and the first open enrollment period of President Trump’s Administration. The open enrollment period for the 39 states using the HealthCare.gov platform for plan year 2018 will close December 15, 2017; the open enrollment period in previous years ran through January 31 of the plan year. A number of states running their own Exchanges for plan year 2018 will have longer open enrollment periods than states using the HealthCare.gov platform.

This year’s open enrollment period begins after nine months of debate in Congress over various proposals to repeal and replace select provisions of the ACA, President Trump’s October 12, 2017, decision to stop reimbursing health plans for cost-sharing reduction (CSR) subsidies without congressional authorization, and a number of other regulatory decisions reflecting the Trump Administration’s position on the ACA.

Highlights of the current status of select issues related to the ACA Exchanges are provided below.

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