Health Headlines – June 26, 2017

Senate Unveils Repeal and Replace Legislation, the Better Care Reconciliation Act of 2017 – On June 22, the Senate Budget Committee posted the discussion draft, available here, of its Affordable Care Act (ACA) repeal and replace legislation, the Better Care Reconciliation Act of 2017 (BCRA). Similar in structure to the House-passed American Health Care Act (AHCA), BCRA would eliminate the ACA individual and employer mandates, repeal or delay many of the ACA taxes, phase out Medicaid expansion and convert Medicaid to a per capita allotment, continue cost sharing reductions, establish a short term stabilization fund, and provide premium tax credits for individuals to purchase insurance. The Senate bill retains the prohibition on pre-existing conditions and the requirement to extend coverage to dependents up to age 26, although the bill would allow states to apply for waivers from health insurance requirements.

As early as today, the Congressional Budget Office (CBO) is expected to release its “score,” outlining the bill’s costs, savings, and impact on health care coverage. Senate Republican leaders hoped to bring the bill to the Senate floor on Thursday or Friday of this week, before a week long July 4 recess, but the debate and final vote on the bill may slip into July, in order to amend the bill. Under the rules of budget reconciliation, Senate Majority Leader Mitch McConnell (R-KY) can only lose the support of two Republican Senators and still have the 50 votes necessary—with Vice President Pence casting the tie-breaking vote—for BCRA to pass the Senate. Five Republican Senators have announced their opposition to the current discussion draft.   

Within hours of the discussion draft’s release, Senators Rand Paul (R-KY), Ted Cruz (R-TX), Mike Lee (R-UT), and Ron Johnson (R-WI) charged that that the bill did not deliver on the promises of repealing Obamacare and lowering health care costs, announcing “we are not ready to vote for this bill, but we are open to negotiation and obtaining more information.” Senator Ron Johnson outlined his specific concerns in a New York Times op-ed, charging that the bill retains too much of the ACA structure and does not go far enough in pursuing private sector solutions. Senator Dean Heller (R-NV) commented last Friday that Medicaid expansion states have to be protected and noted: “It’s going to be very difficult to get me to a yes.” 

Under the budget reconciliation process, there will be 20 hours of debate, equally divided between Democrats and Republicans. Democrats are expected to raise points of order that provisions of the Senate bill violate the Byrd rule, so named for the former Senator Robert Byrd (D-WV). The Senate Parliamentarian will rule on such questions. 

The Senate bill specifies $2 billion for opioid treatment in 2018, as compared with the $15 billion over 10 years set aside for mental health, substance abuse, and maternity care. Like the House-passed bill, the Senate proposal would eliminate Medicaid funding for Planned Parenthood for one year.  The Senate bill also eliminates the $1 billion Prevention and Public Health Fund, but the Senate bill does so in 2018, one year earlier than the House-passed bill. 

Unlike the House bill, the Senate bill would add a new provision to Employee Retirement Income Security Act of 1974 (ERISA), to establish Small Business Health Plans (SBHPs), under which multi-state plans could sell health insurance to small businesses across state lines. Under these plans, requirements for community rating and essential benefits would not apply.

King & Spalding will post a detailed summary of BCRA provisions following Senate passage.

Reporter, Allison Kassir, Washington, D.C., +1 202 626 5600, akassir@kslaw.com.

CMS Issues Proposed Rule on Physician Quality Payment Models – In October 2016, CMS issued a Final Rule for the new physician payment system under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA replaced the Medicare Sustainable Growth Rate (SGR) with a new physician payment method, the Quality Payment Program (QPP). To participate, physicians must join in either the Merit-Based Incentive Payment System (MIPS) or an Advanced Alternative Payment Model (Advanced APM). King & Spalding’s summary of the existing policy is available here. On June 20, 2017, CMS announced a Proposed Rule to implement Year 2 of MACRA.  Significant proposed changes include an easier-to-meet MIPS low-volume program exemption threshold, the ability for MIPS providers to participate in a “Virtual Group” with other small practices, additional MIPS bonus points and generally less burdensome timing and risk APM requirements.

To provide “additional flexibilities” for small practices (15 or fewer clinicians), CMS proposes the following:

• Increasing the low-volume threshold (mandating MIPS participation) from $30,000 to $90,000 a year in Medicare Part B allowed charges and from 100 to 200 Medicare Part B patients. CMS estimates that this will exclude an additional 134,000 clinicians, on top of the already-excluded 700,000 under the previous, lower thresholds.
• Allowing for MIPS opt-in starting with 2019 performance period for individual physicians or groups that would otherwise be excluded from MIPS reporting (and a potential positive payment adjustment) due to a failure to meet the low-volume threshold. CMS proposes to allow an opt-in if just one of two of the thresholds is met. CMS is also seeking comments on adding third opt-in measurement based on the number of Part B items and services. Further, CMS is seeking comments on whether there should be a required length of participation for opt-in clinicians and whether quality benchmarks might have to be adjusted (due to potentially small patient sample sizes). Allowing for the creation of Virtual Groups for MIPS-eligible solo practitioners or groups with 10 or fewer eligible clinicians based on formal written agreement prior to 2018 performance period. Virtual Groups to be maintained for one-year period, with election made prior to the 2018 performance period. Virtual Groups would need to exceed low-volume threshold at the group level (and not necessarily at an individual clinician level). Previously, groups were limited to NPIs that had assigned their billing rights to a single TIN.

Other proposed MIPS changes include:

• Changes to MIPS composite score weights for the 2018 performance year, quality is to be set at 60 percent, cost at 0 percent, advancing care information at 25 percent and improvement activities at 15 percent.
• Awarding bonus points to eligible clinicians if caring for complex patients (up to 3 points), participating as part of a small practice (5 points) or exclusively using 2015 Edition CEHRT (10 points). As proposed, the small practice bonus would only apply for the 2018 performance period, to be re-evaluated annually thereafter. CMS is seeking comments on whether those who practice in rural areas should also receive bonus points in the future. 
• Adding a “significant hardship exception” from the advancing care information MIPS performance category, meaning that category would be set at zero percent upon a showing of significant hardship.  If the exception applies, CMS proposes to re-allocate the weight to the quality performance category. Examples of potential significant hardships include clinicians lacking internet connectivity, facing “extreme and uncontrollable circumstances,” lacking control over the availability of CEHRT, or lacking face-to-face interactions with patients.
• Setting the performance threshold at 15 points (compared to 3 during the transition year), the exceptional performance threshold at 70 points, and setting a payment adjustment for the 2020 payment year at a range from -5 percent to (5 percent x budget neutrality scaling factor). The 15 points represents the final school that would earn a neutral MIPS adjustment. CMS proposes to set aside $500 million in total to serve as positive payments adjustments for exceptional performers.
• Allowing for voluntary public reporting on Physician Compare for excluded clinicians, such as those exempt under the low-volume threshold and clinicians practicing through Rural Health Centers and Federally Qualified Health Centers.
• Allowing facility-based MIPS eligible clinicians to use hospital’s performance rates as proxy for individual quality and cost performance categories beginning in the 2018 performance period for 2020 payments. For better alignment, CMS proposes to include all measures adopted for the FY 2019 hospital Value-Based Purchasing Program on the MIPS list of quality and cost measures. Groups would also be able to participate at the facility-level if meeting certain requirements. CMS estimates that 17,943 MIPS eligible clinicians and 264 groups would be able to take advantage of this option.

CMS has also proposed a number of updates to the APMs:

• Extending the general revenue-based risk standard at 8 percent through performance year 2020 for Advanced APMs; the standard would otherwise have risen starting in 2019. CMS is requesting comments on whether this amount should be higher or lower, and whether rural or small practices should have a lower risk standard. The MACRA statute requires that participating APM entities bear financial risk for monetary losses that are in excess of a “nominal amount.” Advanced APMs meet the “nominal amount” requirement either through the 8 percent risk standard, or a 3 percent standard based on the expected expenditures for an APM Entity. 
  • Medical Home Model APM Entities would not have to meet the 8 percent revenue-based standard. Instead, CMS proposes to require an increase of 1 percentage point each year from 2018 to 2021, starting with 2 percent of the average estimated total Parts A and B revenue of all providers/suppliers in participating APM Entities. The risk would top off at 5 percent for performance periods 2021 and later.
  • To better “align” with the Advanced APM (Medicare Option), CMS adds a revenue-based risk amount (also 8 percent) to “Other Payer” (i.e., non-Medicare) Advanced APMs requirements, only to the extent in which risk in the APM entity is based upon revenue. This proposal is in addition to the existing expenditure-based standard.
• Modifying the timeframe for which payment amount/patient count data are included in Qualifying APM Participant (QP) calculations for Advanced APMs that do not run a full performance period. CMS proposes to only use data from dates of active testing of Advanced APMs, provided the APM operates continuously for a minimum of 60 days during the period. This is instead of using payment amount and patient count data from the whole QP performance period (January 1 through August 31). As previously finalized, QPs meeting the payment or patient count threshold are excluded from MIPS for the year and receive a 5 percent APM Incentive Payment for each qualifying year 2019 through 2024. Eligible clinicians participating in an Advanced APM who do not meet the thresholds are subject to MIPS reporting and payment adjustments.
• Modifying the timeframe for QP determinations under the All-Payer Combination Option, which is used to make determinations based on both Medicare (i.e., Advanced APM) and Other Payer Advanced APMs starting in payment year 2021. While the Medicare QP determination typically runs from January 1 through August 31, determinations using Other Payer Advanced APMs will run from January 1 through June 30. CMS believes that the additional time between the end of the performance period and the December 1 information submission deadline will allow clinicians to better collect and submit payment and patient information from all payers. CMS is also seeking comments on whether to implement an alternate timeframe of January 1 to March 31.
• Making QP determinations under the All-Payer Combination Option based on individual clinicians only, although CMS is considering reporting at the group level.

Ultimately, CMS estimates that between 180,000 and 245,000 physicians will participate in an APM in the 2018 performance period.

CMS’s proposed rule is available here, and is scheduled to be published in the Federal Register on June 30, 2017. Comments to the rulemaking must be filed by August 21, 2017. CMS’s fact sheet on the Proposed Rule is available here.

Reporter, Elizabeth Swayne, Washington, D.C., +1 202 383 8932, eswayne@kslaw.com.

FTC Votes to Close Investigation of Texas Medical Board’s Conduct – On June 21, 2017, the Federal Trade Commission (Commission) voted to close its investigation into whether the Texas Medical Board (TMB) violated federal antitrust laws by adopting rules that restricted the practice of telemedicine and telehealth in Texas. The Commission stated that it voted to close the investigation after Texas enacted a law that would override the restrictive rules. 

On June 21, 2017, Secretary of the Commission, Donald Clark, sent a closing letter to the Office of the Attorney General of Texas stating that upon further review, it appeared no further action was warranted by the Commission, and that it was closing its non-public investigation into whether the TMB was engaging in conduct that violated Section 5 of the Federal Trade Commission Act through TMB’s adoption and enforcement of rules related to the provision of telemedicine services by physicians.

In a statement released June 21, 2017, the Commission stated that it closed the investigation after Texas enacted a law that establishes a regulatory structure “that fosters the growth of competitive and innovative healthcare services for Texas consumers, overriding the TMB’s restrictive rules.” Specifically, the Commission’s statement noted that the Texas law would likely promote competition and expand consumer choice through the following:

• Preventing TMB and other regulatory agencies from adopting rules that impose a higher standard of care for telemedicine or telehealth services than would be required for in-person services;
• Overriding current regulations that block telemedicine or telehealth providers from providing healthcare services, by expressly allowing a practitioner-patient relationship to be established through the use of telemedicine or telehealth services; and
• Repealing an earlier law that allowed TMB to adopt rules requiring an in-person consultation within a designated period following an initial telemedicine appointment.

The Commission’s statement is available here.  A copy of S.B. No. 1107, which was signed by Texas Governor Greg Abbott on May 27, 2017, is available here.

Reporter, John Whittaker, Sacramento, +1 916 321 4808, jwhittaker@kslaw.com.

ALSO IN THE NEWS

CMS and the Office of Medicare Hearings and Appeals (OMHA) Announce Informational Call Regarding Improvements to the Medicare Claims Appeal Process and Statistical Sampling Initiative – CMS and OMHA are hosting a call on Thursday, June 29, 2017, from 1:00 - 3:00 p.m. Eastern to discuss the HHS Medicare Appeals Final Rule published on January 17, 2017, and improvements to the appeals process. Please click here to register.