News and noteworthy information for July 2016:


2017 Proposed Physician Fee Schedule

On July 7, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2017. The PFS pays for services furnished by physicians and other practitioners in all sites of service. These services include but are not limited to visits, surgical procedures, diagnostic tests, therapy services, and specified preventive services. CMS will accept comments on the proposed rule until September 6, 2016, and will issue the final rule by November 1, 2016.

To set payment rates under the PFS, CMS evaluates three components of medical services/procedures: physician work, practice expense, and malpractice expense. Each component is assigned a value also known as a relative value unit (RVU). The work RVU, practice expense RVU, and malpractice RVU are each multiplied by geographic practice cost indices (GPCI), added together, and then multiplied by a conversion factor that is updated annually. The 2017 proposed conversion factor is $35.7751 (the 2016 final conversion factor was $35.8043).

A full summary of the proposed rule is available here, including a list of new Category I spine codes set to take effect January 1, 2017. A comparison of spine codes from the 2016 final rule to the 2017 proposed rule is available here.


2017 Proposed Hospital Outpatient and ASC Rule

On July 6, 2016, the Centers for Medicare & Medicaid Services (CMS) released the 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System policy changes, quality provisions, and payment rates proposed rule. CMS is accepting comments on the proposed rule through September 6, 2016. The final rule is expected to be released in early November 2016.

(Please note that physician payment is made under the Physician Fee Schedule; hospitals are paid for outpatient services under the OPPS and ASCs are paid under the ASC payment system, both detailed in this rulemaking.)

A full summary of the rule is available here, including a list of spine codes CMS proposes to remove from the inpatient-only list and those spine codes CMS proposes to add to the ASC list of covered surgical procedures. Click here for a list of spine codes and their corresponding payment rates in the hospital outpatient and ASC settings (Note: there are three sheets in this workbook.)


Update on MACRA Implementation

On July 13, the Senate Finance Committee convened a hearing to provide the Centers for Medicare and Medicaid Services (CMS) the opportunity to update committee members on the status of implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA was bipartisan legislation signed into law in April 2015 to permanently repeal the Sustainable Growth Rate (SGR), streamline physician quality reporting programs, and provide incentive payments for physician participation in alternative payment models. MACRA sunsets the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier, and the Medicare Electronic Health Record (EHR) Incentive Program in 2018 and establishes an umbrella Quality Payment Program with two new pathways for payment: 1. Merit-Based Incentive Payment System (MIPS) and 2. Advanced Alternative Payment Models (Advanced APMs).

In April 2016, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to begin the process of implementing MACRA. The proposed rule establishes a framework for the Quality Payment Program including details on the two new tracks for payment: MIPS and APMs.

CMS Acting Administrator, Andy Slavitt, testified before the Senate Finance Committee and responded to members’ concerns about the accelerated timeline for implementation of the Quality Payment Program. Under the proposed rule, CMS established a start-date of January 1, 2017, however Slavitt indicated in his testimony that the agency is considering a delayed start date for the program. CMS has received “significant feedback”, Slavitt said. “Some of the things that are on the table we’re considering include alternative start dates, looking at whether shorter periods could be used, and finding other ways for physicians to get experience with the program before the impact of it really hits them.”

ISASS submitted comments to CMS on issues identified in the proposed rule as well as suggestions to improve the Program’s framework. A copy of the ISASS letter can be found here. A final rule is expected to be released by November 1, 2016. For more information on MACRA and the Quality Payment Program, visit the MACRA resource page on the ISASS website.


DOJ Sues to Block Health Insurer Mergers

On July 21, the U.S. Department of Justice (DOJ) and the attorneys general from several states filed two separate lawsuits in federal court to block the mergers of Aetna/Humana and Anthem/Cigna saying the proposed mergers would “would harm seniors, working families and individuals, employers and doctors and other healthcare providers by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care.”

Eleven states (CA, CO, GA, IA, ME, MD, NH, NY, TN, VA) and the District of Columbia joined the DOJ’s challenge of Anthem’s $54 billion acquisition of Cigna.  Eight states (DE, FL, GA, IA, IL, OH, PA, VA) and the District of Columbia joined the DOJ’s challenge of Aetna’s $37 billion acquisition of Humana. If allowed to proceed, the mergers would create three major national insurers instead of the current five.


ISASS Signs On to Letter in Support of S. 2978

ISASS recently signed on to a multi-specialty letter to U.S. Senator John Barrasso, MD in support of the “Protect Continuing Physician Education and Patient Care Act” (S. 2978), which would protect the dissemination of peer and independent third-party reviewed services and products that improve patient care. The legislation clarifies a provision in the Sunshine Act (Act) that excludes “educational materials that directly benefit patients or are intended for patient use” from being reported under the Act. In interpreting and enforcing this provision, the Centers for Medicare and Medicaid Services (CMS) concluded that medical textbooks, reprints of peer-reviewed scientific journal articles and abstracts are not directly beneficial to patients and not intended for patient use, and therefore must be reported under the Act as financial transfers of value between physicians and industry.

S. 2978 clarifies this reporting exemption by stating, “educational materials” include “peer-reviewed journals, journal reprints, journal supplements, medical conference reports, and medical textbooks.” The legislation also adds two additional reporting exemptions to the Act for 1.) payment or transfer of value for speaking/preparing educational materials for an educational event for physicians or other health care professionals that does not promote a drug, device, biological or medical supply and 2.) payment of transfer of value for medical education including tuition to attend an educational event or materials at an educational event.

More than 105 state and specialty societies signed on to the letter in support of the legislation.


Open Payments Program – 2015 Financial Data Posted

On June 30, the Centers for Medicare and Medicaid Services (CMS) published 2015 Open Payments data, along with newly submitted and updated payment records for the 2013 and 2014 reporting periods. The Open Payments program requires that transfers of value by manufacturers of drugs, devices, biologicals, and medical supplies that are paid to physicians and teaching hospitals be published on a public website. For Open Payments program year 2015, health care industry manufacturers reported $7.52 billion in payments and ownership and investment interests to physicians and teaching hospitals. This amount is comprised of 11.90 million total records attributable to 618,931 physicians and 1,116 teaching hospitals. The amount and distribution of payments and ownership and investment interest categories remained consistent between the 2014 and 2015 reporting periods.


FDA Issues Draft Guidance on the Use of Real-World Evidence for Medical Devices

On July 27, the U.S. Food and Drug Administration (FDA) issued draft guidance on the use of real-world evidence to support regulatory decision-making for medical devices. The FDA is issuing this draft guidance to clarify how they evaluate real-world data to determine whether it may be sufficiently relevant and reliable to generate the types of real-world evidence that can be used in regulatory decision-making for medical devices. The draft guidance also clarifies when an investigational device exemption (IDE) may be needed to prospectively collect and use real-world data for purposes of determining the safety and effectiveness of a device.

The FDA is accepting public comments on the draft guidance through October 25, 2016, at the following link:

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