MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

The issues on MedPAC’s January agenda were:

  • The Medicare prescription drug program (Part D):  status report and options for restructuring
  • Redesigning the Medicare Advantage quality program:  initial modeling of a value incentive program
  • Hospital inpatient and outpatient payments
  • Physician payments
  • Outpatient dialysis payments
  • Skilled nursing facility, home health, inpatient rehabilitation facility, and long-term-care hospital payments
  • Hospice and ambulatory surgery center payments
  • The 340B program
  • ACO beneficiary assignment

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

Good News and Bad for Hospitals on Outpatient Payments

A federal court has provided relief to hospitals that saw reduced Medicare payments for some outpatient services in 2019.

But that relief is only partial.

In response to a suit filed by several hospital groups, a federal court ruled that the Centers for Medicare & Medicaid services had illegally reduced Medicare payments for services provided in some hospital off-campus outpatient departments beginning on January 1, 2019 and ordered the federal government to repay the hospitals for the Medicare revenue they lost.  The reduced payments were part of a new Medicare site-neutral payment policy for outpatient services, and CMS has announced a plan for reimbursing affected hospitals for their losses.

At the same time, however, CMS announced that despite the court’s ruling, it will implement the same policy of reduced payments for outpatient care provided in some hospitals’ off-campus outpatient departments in 2020, and an effort by hospitals to persuade the court to ban this payment reduction was rejected by the same court that ruled against CMS on the 2019 payments.

Learn more about the ruling that CMS must reimburse  hospitals for lost payments in the Healthcare Dive article “Hospital group cheers CMS move to pay back outpatient payment cuts.”  Learn about the court decision not to impose the same decision on 2020 payments in the Fierce Healthcare article “Judge strikes down AHA’s bid to halt CMS’ site-neutral payment cuts for 2020.”

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

Among the issues on MedPAC’s December agenda that were of special interest to private safety-net hospitals were:

  • Assessing payment adequacy and updating payments: Physician and other health professional services
  • Assessing payment adequacy and updating payments: Ambulatory surgical center services
  • Assessing payment adequacy and updating payments: Hospital inpatient and outpatient services
  • Assessing payment adequacy and updating payments: Home health care services
  • Assessing payment adequacy and updating payments: Inpatient rehabilitation facility services
  • Assessing payment adequacy and updating payments: Long-term care hospital services

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy – policies that often have a major impact on private safety-net hospitals.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

Hospital Groups Critical of CMS 340B Proposal

The federal government should not survey providers to determine their costs for drugs covered by the section 340B prescription drug discount program, hospitals and hospital groups have told the Centers for Medicare & Medicaid Services.

Their comments came in response to a regulation CMS proposed in September that would require hospitals to report their acquisition costs for 340B-covered drugs.  CMS proposed such data collection after federal courts ruled against its attempt to reduce 340B reimbursement to hospitals that participate in the program.  Among the court’s objections were CMS’s lack of data about those drug acquisition costs.

Among the reasons hospitals conveyed in expressing their opposition were the cost of reporting the data in question; the design of the survey; the flawed premise underlying the survey; and the proposed rule’s requirement that all hospitals complete the survey and not just those that participate in the 340B program.

Among the groups criticizing the proposed regulation were the Association of American Medical Colleges, which wrote in its comment letter that

Congress did not design the 340B program to pay hospitals at acquisition costs…Congress designed the program so that eligible hospitals could purchase covered drugs at a discounted rate below the Medicare reimbursement rate and use the difference to reach more eligible patients and provide more comprehensive services.

The National Alliance of Safety-Net Hospitals was among the groups commenting on the proposed regulation.  Writing on behalf of private safety-net hospitals, NASH observed in its November 27, 2019 formal comment letter that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities.  The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients:  provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents.  This was the purpose of the 340B program when Congress created it in 1992 and Congress has done nothing to modify that purpose since that time:  it has not directed that special assistance to qualified providers be reduced; it has not insisted that participating providers document the expenditure of their savings in service to their communities; and it most certainly has not dictated that 340B payments to eligible providers be reduced so that payments to non-340B providers could be increased.  NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

Learn more about hospital industry opposition to the proposed 340B regulation in the Fierce Healthcare article “Hospitals blast CMS’ proposed 340B survey.”

Hospitals Sue Over Hospital Price Transparency Requirement

The federal government should be prohibited from implementing its new price transparency requirement for hospitals, a group of hospital trade groups and health systems has declared in a lawsuit against the U.S. Department of Health and Human Services.

The requirement exceeds the federal government’s authority, the suit maintains, and its implementation would create an undue burden on hospitals, cost a great deal of money, require hospitals to divulge proprietary information, inhibit competition, and overwhelm their information systems.  Even after all of that, the suit claims, consumers would still not have useful information because insurers, not hospitals, are the key in determining what consumers pay for the care they receive.

In response to the suit, an HHS spokesman, according to the online publication Healthcare Dive, said that

Hospitals should be ashamed that they aren’t willing to provide American patients the cost of a service before they purchase it.

NASH conveyed its opposition to the price transparency requirement in a September 26, 2019 letter to the Centers for Medicare & Medicaid Services in response to that agency’s proposed outpatient prospective payment system regulation, which included the transparency requirement.

The requirement will take effect on January 1, 2021.  The hospital groups and systems that filed the suit have asked the court for a prompt ruling.

Learn more in the Healthcare Dive article “Hospitals sue HHS, warning price transparency rule would chill competition, crash computers.”

 

Administration Shares Regulatory Priorities for 2020

The Trump administration’s health care regulatory priorities for 2020 have been outlined by the Office of Management and Budget in a newly released “Statement of Regulatory Priorities for Fiscal Year 2020.”

The statement, an annual OMB document, organizes the priorities as follows:

  • Facilitating patient-centered markets
  • Fixing health care financing through protecting private insurance and Medicare
  • Fixing health care financing through reforming the individual market
  • Fixing health care financing through making the ACA and Medicaid fiscally sustainable
  • Bringing value to health care through price and quality transparency
  • Bringing value to health care through patient-centered health IT
  • Bringing value to health care through deregulation, especially for coordinated care
  • Bringing value to health care through tackling the high cost of prescription drugs
  • Bringing value to health care through accelerated drug and device approval and reimbursement
  1. Promoting health and protecting life
  • Addressing impactable health challenges: kidney health
  • Addressing impactable health challenges: combatting the opioid crisis
  • Protecting conscience and life at all stages
  • Reducing the disease and death associated with tobacco use
  1. Promoting independence
  • Returning TANF to promoting work, marriage and family
  • Supporting adoption
  • Empowering Americans to improve their nutrition
  • Promoting flexibility for states, grantees, and regulated entities

Learn more about the regulatory directions the administration intends to take for the rest of its 2020 fiscal year in the newly released “Statement of Regulatory Priorities for Fiscal Year 2020.”  Go here to see the complete list of regulations that the Department of Health and Human Services intends to pursue in FY 2020, including 55 by the Centers for Medicare & Medicaid Services (CMS).

 

Court Upholds Delay of Medicare Site-Neutral Payment Cut

Medicare cannot proceed with its plan to pay for outpatient care on a site-neutral basis while it appeals a court ruling rejecting that policy, a federal court has ruled.

A federal judge found that Medicare has not articulated an adequate reason to delay the $380 million a year in site-neutral payment cuts while the Centers for Medicare & Medicaid Services appeals the September decision rejecting the payment policy change.  The court also found that, contrary to CMS’s claim, Medicare still has an appropriate methodology for making payments that are not site-neutral and that the agency has not proved that it would suffer irreparable harm if the cuts are delayed while it considers CMS’s appeal.

The cut took effect on January 1, 2019 but the court did not address how Medicare should compensate hospitals for lost payments, instead ordering CMS and the plaintiffs in the case to submit reports on how the payment shortfalls can best be addressed.

NASH has opposed implementation of the site-neutral payment policy on several occasions in recent years, doing so most recently in its letter last month to CMS (scroll down to page 5) about the agency’s proposed policy for paying for Medicare-covered outpatient services for 2020.

Learn more about the Medicare site-neutral payment cut and why the federal court again ruled against that cut in the Fierce Healthcare article “Judge denies bid to preserve site-neutral payment cuts while awaiting appeal.”

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

Among issues on MedPAC’s October agenda of potential interest to private safety-net hospitals were:

  • restructuring Medicare Part D
  • updates to the methods used to assess the adequacy of Medicare’s payments for physicians and other health professionals
  • population-based outcome measures: avoidable hospitalizations and emergency department visits
  • aligning benefits and cost-sharing under a unified payment system for post-acute care

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program. While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

NASH Comments on Proposed Medicare Outpatient Payment Regulation (part 4 of 4)

The National Alliance of Safety-Net Hospitals has submitted extensive comments to the Centers for Medicare & Medicaid Services about its proposed changes in the Medicare outpatient prospective payment system for 2020.

In its letter to CMS, NASH focused on four issues:

  • CMS’s price transparency proposal
  • Reimbursement for 340B-covered prescription drugs
  • Medicare site-neutral payment policy
  • Proposed updates of the inpatient-only list of medical procedures

Today this blog features NASH’s comments about proposed updates of Medicare’s list of medical procedures that can only be performed on an inpatient basis but that Medicare now proposes can be performed for outpatients as well.  Last Wednesday we presented NASH’s views on CNN’s price transparency proposal and last Thursday we presented NASH’s views on reimbursement for 340B-covered prescription drugs.  Last Friday we presented proposed changes in Medicare’s site-neutral payment policies for outpatient care.

See the complete NASH letter to CMS here.

Updates of the Inpatient-Only List

In the proposed rule, CMS proposes removing arthroplasty – acetabular and proximal femoral prosthetic replacement total hip arthroplasty with or without autograft or allograft – from the list of procedures and services that will be paid only under Medicare’s inpatient prospective payment system.  NASH objects to this change as it has been proposed.  While we acknowledge that it may be possible to perform hip replacement on an outpatient basis on some patients under some circumstances, hip replacement is medically complex and invasive surgery – far more so than knee replacement, which has already been removed from the inpatient-only list.  Complications can arise even in the most otherwise healthy of patients.  Often, in fact, hip replacement is performed on an emergency basis, which can complicate both the procedure and recovery from it.  The opportunity for full and safe convalescence is important:  patients who have hip replacement on an outpatient basis and who end up needing post-acute care because of complications would not even, under this proposed rule, be eligible for Medicare-covered skilled nursing care because they spent less than 24 hours in a hospital.  This could jeopardize their complete recovery from serious surgery.  In this respect, this proposed change is not in the best interests of the Medicare population.  NASH suggests that before implementing this proposal, CMS address this problem through additional rule-making.

NASH also is concerned about how making hip replacement available on an outpatient basis could affect private safety-net hospitals that participate in the Comprehensive Care for Joint Replacement (CJR) and Bundled Payments for Care Improvement (BPCI) Advanced programs.  These programs face the prospect of decreases in inpatient volume and the effect of such decreases on provider target prices, yet the regulation does not address how this would be addressed in the context of those programs.  This, too, would benefit from additional rule-making before hip replacement is removed from the inpatient-only list.

NASH supports CMS’s proposal to establish a one-year exemption from medical review activities for procedures removed from the inpatient-only list beginning with 2020.  While a step in the right direction, more can and should be done to allow time both for provider education and to ensure that CMS and its quality review contractors are aligned on medical review guidance for providers.

In addition, NASH supports CMS’s proposal to continue quality reviews of short-stay inpatient claims for procedures that have been removed from the inpatient-only list within the first year.  Such claims will not be counted against a provider in the context of the two-midnight rule.  We do not believe medical review guidance questions have been fully addressed and think additional time is needed for processing claims and for contractors to gain experience in medical review in this area before putting hospitals at risk for recovery audit contractor (RAC) referrals.

We appreciate that these procedures would not be eligible for referral to RACs for non-compliance with the two-midnight rule and RAC patient status review during their first calendar year of removal from the list but believe one year is not enough time.  NASH urges CMS to consider the challenges that occurred when procedures were removed from the inpatient-only list in the past and give itself and contractors additional time to develop guidance that can be shared for stakeholder input prior to implementation.

See the complete NASH letter to CMS here.

NASH Comments on Proposed Medicare Outpatient Payment Regulation (part 3 of 4)

The National Alliance of Safety-Net Hospitals has submitted extensive comments to the Centers for Medicare & Medicaid Services about its proposed changes in the Medicare outpatient prospective payment system for 2020.

In its letter to CMS, NASH focuses on four issues:

  • CMS’s price transparency proposal
  • Reimbursement for 340B-covered prescription drugs
  • Medicare site-neutral payment policy
  • Proposed updates of the inpatient-only list of medical procedures

Today this blog features NASH’s comments about proposed changes in Medicare’s site-neutral payment policy for outpatient services.  On Wednesday we presented NASH’s views on CNN’s price transparency proposal and yesterday we presented NASH’s views on reimbursement for 340B-covered prescription drugs.  On Monday we will present NASH’s perspective on CMS’s proposal to permit Medicare to pay for certain medical services on an outpatient basis rather than limiting them to being performed only on patients admitted to a hospital.

See the complete NASH letter to CMS here.

Site-Neutral Payment Policy

In the proposed regulation, CMS calls for completing its two-year phase-in for paying for off-campus clinic visits at the same rates as the physician fee schedule even if those clinics are grandfathered.  As a result, clinic visits to grandfathered, off-campus outpatient departments would be reimbursed at the site-neutral rate of 40 percent of the outpatient fee.

NASH continues to oppose the implementation of site-neutral payment policy for Medicare-covered outpatient services.  Implementation of this policy is based on authority granted to the Secretary under §1833t)(2)(F) to “develop a method for controlling unnecessary increases in the volume of covered OPD services.”  NASH disagrees with the idea that reducing reimbursement for clinic visits is an appropriate method for controlling unnecessary increases in the volume of covered outpatient services.  First, and most fundamentally, there has been no credible finding that Medicare is experiencing “…unnecessary increases in the volume of covered outpatient services.”  Increased volume?  Yes.  Unnecessary increases?  There is no evidence that this increase is unnecessary.  In fact, the federal government for years now has pursued policies that seek to reduce hospital inpatient utilization and encourage the delivery of more care on an outpatient basis.  If anything, increased outpatient utilization should be viewed as a sign that this effort has succeeded and should be further encouraged, not discouraged and suddenly viewed as “unnecessary” and punished.

Second, although similar outpatient services can be safely provided in more than one setting, CMS’s conclusion that providing care in the more expensive setting is unnecessary presumes that patients who require these services have access to both types of settings.  In reality, they often do not:  many private safety-net hospitals that operate off-campus, provider-based departments do so because they are addressing a need in their communities.  Rather than increasing the volume of unnecessary services, the payment differential enables safety-net hospitals to create access to necessary services in communities where these services would otherwise be unavailable in any setting.  NASH asks CMS to stop this misguided drive to “throw out the baby with the bath water” by continuing to cut reimbursement for necessary outpatient department services just because there may be circumstances in which alternative settings might be available.  The proposed regulation continues to take the site-neutral payment policy too far, and in so doing it ultimately could jeopardize access to vital forms of care for the residents of many low-income communities served by private safety-net hospitals.

This continued practice of reducing payments even to exempted hospital-based, off-campus facilities is harmful:  harmful to those medical practices, harmful to the hospitals that own and operate those practices, and most of all harmful in the long run to many of the patients these practices serve.  NASH continues to object to Medicare reimbursing non-excepted, provider-based physician practices at physician fee schedule rates.  These rates fail to reflect the hospital-related costs associated with such practices – costs such as maintaining emergency departments, operating laboratories, offering comprehensive radiology services, complying with regulatory requirements not imposed on independent physician practices, and much more.  These are valid costs that benefit entire communities, and further reducing these payments, as proposed in this regulation, would jeopardize major parts of the health care infrastructure that every community truly needs.

Finally, last week a federal court ruled that CMS’s implementation of its site-neutral payment policy for Medicare-covered outpatient services exceeded the agency’s authority.  NASH understands that CMS may appeal this ruling, as is certainly its right, but we suggest that continued implementation of the policy be suspended until this matter is adjudicated.

See the complete NASH letter to CMS here.