backCMS Considers Delaying MACRA Start Date – On July 13, 2016, CMS Acting Administrator Andy Slavitt testified before the Senate Finance Committee regarding the possibility of a delay in implementation of the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA’s aim is to replace Medicare’s sustainable growth rate formula for physician payment adjustments. Medicare’s new reimbursement approach will change physician incentives, and in turn affect various aspects of physician practices, including the types of information systems and the data that practices can utilize. The final rule is expected to be published November 1, 2016, with implementation effective January 1, 2017.
Prior to Slavitt’s testimony, several healthcare groups, including the American Medical Association and the American Academy of Family Physicians, expressed concern that some physicians, especially those in small practices, may not be prepared for the first reporting period under the physician quality reporting programs established by MACRA and have asked CMS to delay the start date. Senator Orrin Hatch (R-UT), Chairman of the Finance Committee, also voiced concern over the short time frame between when the final rule will be published and implementation.
In his testimony, Administrator Slavitt recognized the administrative burden implementation will place on small and rural practices. The short two-month time frame between the MACRA final rule and the beginning of the CY 2017 reporting period is a concern for all physicians. However, industry observers have commented that the timeframe is particularly challenging for small practices that may lack the resources required to comply with MACRA, and in turn may be forced to join larger practices to ease the administrative burden.
More than 4,000 formal comments were sent to CMS asking for flexibility to allow physicians and other clinicians time to learn about and prepare for the upcoming MACRA changes. Administrator Slavitt stated in his testimony that CMS was looking to alleviate these concerns by considering alternate start dates for implementation, shorter reporting periods, and additional methods to ease physicians into the program. To view the Committee Hearing and member statements, click here. More information regarding MACRA is available here.
Reporter, Kiel Yager, Sacramento, +1 916 321 4811, kyager@kslaw.com.
HHS: Ransomware Attacks Can Trigger Reporting Requirements – On July 11, 2016, the HHS Office for Civil Rights (OCR) released new HIPAA guidance regarding ransomware. The Fact Sheet, issued by OCR on July 11, covers various issues relating to ransomware, including reporting requirements and helpful security protocols. The OCR Fact Sheet is available here. A press release regarding the Fact Sheet is available here.
Ransomware is a malicious form of cyberattack that has become increasingly prevalent in recent years. A ransomware attack typically involves a hacker seizing control of and encrypting an organization’s data. The hacker then demands that the organization pay a ransom in order to receive a decryption key.
OCR warns that ransomware attacks may trigger HIPAA’s reporting requirements. OCR considers the encryption of electronic protected health information (ePHI) during a ransomware attack to be a “breach” under HIPAA. OCR advises that the compromised entity must comply with applicable breach notification requirements—including notification to affected individuals, the Secretary of HHS, and the media (if more than 500 individuals are affected)—unless the entity can demonstrate that there is a low probability that the ePHI has been compromised. The entity can do so by conducting a thorough risk assessment, which should include identification of the specific malware and a determination as to whether any ePHI could have been extracted outside of the entity.
OCR also advises that certain measures required by the HIPAA Security Rule can help organizations prepare for ransomware attacks. The Fact Sheet specifically highlights the Security Rule’s requirements for organizations to implement plans for data backup, contingency and business continuity, as well as procedures to respond to and report security incidents.
Reporter, J. Gardner Armsby, Atlanta, +1 404 572 2760, garmsby@kslaw.com.
Bill to Make Local Coverage Determinations More Transparent Introduced in House – On July 11, 2016, Reps. Lynn Jenkins (R-Kan.) and Ron Kind (D-Wis.) introduced the Local Coverage Determination Clarification Act (H.R. 5721), with the goal of modifying the LCD process performed by Medicare Administrative Contractors (MACs). Intended to make the LCD process more transparent, the bill would change how individual coverage decisions are made by MACs.
MACs utilize the LCD process to decide reimbursements for medical technologies and services not otherwise covered under CMS national coverage determinations. Twelve MACs throughout the country process Medicare claims, and each has the jurisdiction to determine what technology, services and devices will be covered.
The proposed bill includes provisions for:
- Open and accessible public MAC meetings;
- Providing rationale and evidence for draft and final LCDs within 60 days of publication of a draft LCD;
- Limitations on MACs’ ability to adopt other LCDs from another MAC jurisdiction without an independent consideration process; and
- A meaningful reconsideration process.
The bill has been referred to the House Ways and Means and Energy and Commerce committees, but no Senate companion bill has been introduced. The full text of the bill can be found here.
Reporter, Katy Lucas, Atlanta, +1 404 572 2822, klucas@kslaw.com.
Projected Decline of Americans Lacking Health Insurance Over Next Decade ‒ The CMS Office of the Actuary recently released a report estimating that the percentage of Americans lacking health insurance will decline over the next decade. The actuary’s office predicts that in 2025, 8 percent of the U.S. population is expected to be uninsured, down from approximately 11 percent in 2014. Conversely, the actuary’s office expects U.S. health expenditures to increase at an average rate of 5.8 percent from 2015 to 2025. According to the report, this growth leads to projections that the healthcare sector of the U.S. economy will be 20.1 percent at the end of this period, up from 17.5 percent in 2014.
The CMS actuary releases an annual analysis of how Americans are projected to spend their healthcare funds in the next decade. The currently predicted 5.8 percent growth rate is identical to the rate predicted for 2014-2024 in the July 2015 report.
The report was published in the journal of Health Affairs and is available here.
Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.
ALSO IN THE NEWS
King & Spalding to Host Webinar and Roundtable on Provider-Based Provisions in OPPS Proposed Rule – Join King & Spalding for a webinar or in-person Roundtable on Thursday, July 21, 2016, at 1:00 p.m. EST discussing the major provisions of CMS’s CY 2017 Outpatient Prospective Payment System (OPPS) and Physician Fee Schedule (PFS) Proposed Rules. The 75-minute webinar and in-person roundtable in our Atlanta office will analyze the essential items contained in CMS’s discussion in the Proposed Rules of Section 603 of the Bipartisan Budget Act of 2015. Section 603 directs CMS to pay for most items and services furnished in new off-campus provider-based departments at the applicable non-facility payment rate. The Roundtable will also discuss other provisions included in the OPPS and PFS Proposed Rules and will offer possible solutions to many of the challenges CMS has created. You do not have to be a client to attend, and there is no charge. Find out more information and register here.
King & Spalding Client Alert on Hosting Events at Political Conventions – Organizations that plan to provide entertainment to Members and staff of the United States House of Representatives and Senate at the political party conventions should remind themselves of the unique rules that apply to providing gifts, such as entertainment, dinners, and receptions, to Members and staff who are in attendance at those events. To view King & Spalding’s detailed Client Alert on such rules, click here.
Watch Sessions of the King & Spalding Health Law and Policy Forum Online! – King & Spalding is pleased to share sessions from its Health Law and Policy Forum by video. Currently, we are offering the keynote address by the distinguished associate editor of The Washington Post, Bob Woodward, as well as sessions on hospital consolidation, hot topics and trends in healthcare antitrust enforcement and opportunities and obstacles in healthcare delivery innovations. Find out more and register here.