CMS proposes higher performance standards for year 3 of MACRA Quality Payment Program, significant changes to part B coding requirements

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.
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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

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.
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CMS proposes increase in home health payments for 2019, lays groundwork for implementation of value-based payment provisions

On July 2, 2018, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would increase payments to home health agencies (HHAs) by approximately 2.1% for calendar year 2019 and outlines the implementation of policy changes included in the Bipartisan Budget Act of 2018 (BBA) that are intended to hasten the movement to value-based payments in the home health sector.

The proposed rule will be published in the Federal Register on July 12, 2018. Comments are due by August 31, 2018.

Highlights of key provisions of the proposed rule are summarized below.
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CMS issues request for information on Direct Primary Care

On April 23, 2018, the Centers for Medicare and Medicaid Services (CMS) released a Request for Information (RFI) seeking input on opportunities to create Direct Primary Care (DPC) arrangements between traditional fee-for-service Medicare, Medicaid, and Medicare Advantage (MA) plans and primary care or multi-specialty group practices. In addition to potential roles for DPC in CMS programs, CMS also requested comment on how DPC can be a part of current Accountable Care Organization (ACO) initiatives like the Medicare Shared Savings Program.

The RFI also refers to Direct Primary Care as “Direct Provider Contracting.”

Comments are due on May 25, 2018.

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Budget agreement includes technical changes to MACRA, notable policy changes to other health care programs

The President on February 9, 2018, signed H.R. 1892, the Bipartisan Budget Act of 2018, which sets discretionary spending caps for the federal government for fiscal years (FY) 2018 and 2019 while also reauthorizing federal funding and making important policy changes to a number of health care programs. The Medicare Part B physician fee schedule, including implementation of the Medicare Access and CHIP Reauthorization Act (MACRA); the Children’s Health Insurance Program (CHIP); and state allotments to Medicaid Disproportionate Share Hospital (DSH) payments are among the health care issues addressed in the law.

Health care providers, plans, and other industry stakeholders may consider revisiting strategic, operational and compliance plans in light of a number of provisions of the law.

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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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Making Progress on Health Insurance Exchanges Without Definitive Guidance

Making Progress on Health Insurance Exchanges Without Definitive GuidancePosted by Kelly Sauders, Partner, Deloitte & Touche LLP

Health plans are waiting for CMS (The Centers for Medicare and Medicaid Services) to provide detailed requirements and guidance about participating in federal health insurance exchanges. In the meantime, we believe their leading bet is to refer to the managed care manuals for Medicare Part C and D. Or in the case of a state-run exchange, it probably makes sense to follow the state’s Medicaid guidelines.

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