WEEKLY E-BULLETIN


March 14, 2016

141,000 Physicians Hit with VBM Penalties: CMS

Medicare reimbursement rates in 2016 will go up by either 16% or 32% for 4273 physicians in 128 group practices that performed well in the Value-Based Payment Modifier (VBM) program in 2014, CMS announced last week. The VBM bonuses will amount to an estimated $79.5 million in higher revenue.  In a zero-sum game of Medicare reimbursement, these bonuses are being funded by 141,382 physicians in 5477 group practices hit this year with VBM penalties also totaling $79.5 million. The bonuses and penalties, called upward and downward adjustments, will begin showing up in Medicare fee-for-service payments within the next 6 weeks, according to CMS.  Click here for details from CMS.

  • Next year, all physicians, including soloists, will come under the VBM, followed by other clinicians such as nurse practitioners and physician assistants in 2018. In 2019, the VMB will be folded into the new Merit-Based Incentive Payment System (MIPS) created by the Medicare Access and CHIP Reauthorization Act of 2015. Click here for more on what’s coming with the VBM next year.
  • Physicians are spending $15.4 billion per year tracking and reporting quality measures to private insurers, Medicare and Medicaid, according to a new study in Health Affairs. The authors calculated the spending figure from an MGMA survey in which physician practices from common specialties said they spent an average 785 hours per physician per year on reporting and entering data. Click here for the news summary.  Here for the study.

Senate Approves Substance Abuse Legislation

The Senate has approved the Comprehensive Addiction and Recovery Act (CARA), S. 524, which would address the opioid epidemic. With a vote of 94-1, the bill cleared the Senate without additional funding to the legislation Democrats were calling for to fund its programs. CARA would allow the Department of Justice and the Department of Health and Human Services to provide grants for states to expand treatment efforts and access to overdose-prevention drugs – click here for the text of legislation.

  • A day after the CARA passed the Senate, HHS announced it would award $94 million to health centers to help tackle the prescription drug abuse and heroin epidemic. Click here for the statement from HHS.

Rx Spending Continues Rapid Rise: HHS Report

A new HHS report on Rx spending contradicts many of the arguments used by the industry to defend the cost of their medicines. A few key findings: Spending on prescription drugs is rising and is projected to continue to rise faster than overall health spending. This contradicts PhRMA’s claim that spending on prescription drugs accounts for the same percentage of health spending as it did decades ago. HHS says the majority of growth appears to be related to rising prices, not a change in the total number of prescriptions.  Cumulatively from 2013 to 2018 prescription drug spending is projected to rise by an average of 7.3 percent annually, while spending on total health care services is expected to grow at a slower pace of 5.2 percent. Total drug spending is estimated to reach $535 billion in 2018 – about 16.8 percent of all personal health spending, up from 15.3 percent in 2013. Click here for the report.

PhRMA Promotes Plan To Control Drug Prices

At its annual conference last week, PhRMA, the brand-drug lobby, released a report containing a holistic approach for controlling health care costs. The group advocated a mix of FDA reforms, information-sharing with payers and providers, insurer transparency, scaled-back 340B drug discounts, and new commercial insurance policies. Click here to read PhRMA’s report.

CMS’ Proposed Part B Drug Reforms Raising Concerns

CMS unveiled a highly anticipated Part B drug demonstration last week that would restructure the Part B physician add-on payment to a combination of a flat fee and a lower percentage rate that is still based on drug prices in its first phase. CMS is seeking information on five policies for the second phase that would move Part B toward the system used in the commercial market and in Part D retail drug benefit. Currently, Medicare Part B pays providers the average sales price of a drug, plus 6 percent, the proposal would change the add-on payment to 2.5 percent, plus a flat fee of $16.80 per drug per day. This first phase approach is similar to one recommended by the Medicare Payment Advisory Commission in its June 2015 report. To read the CMS fact sheet, click here. And for the proposed regulations, click here.

  • Congressional Republicans have voiced concerns over the new program. Click here for the Senate letter to CMS, and here for the House response.

Union Pushing Ballot Measure in Massachusetts that would Shift Payments Between Hospitals

The Service Employees International Union is pushing a ballot measure to level out payments to the state’s hospitals, based on the prices they charge. It would be a dramatic change in how hospitals get paid, and is only the latest effort to scrutinize Massachusetts providers’ market power. If the measure goes through, Partners HealthCare would lose $440 million in payments. But Steward HealthCare – the lone hospital system to support the proposal – would gain $21 million. Click here for the story.

CMS To Investigate SNF Therapy Overbilling

CMS is turning its auditors loose to investigate skilled nursing facilities for overbilling.  CMS has issued a report that instructs Medicare auditors to look at SNFs to determine if they are overbilling for therapy services.  “To help ensure that patient need rather than payment incentives are driving provision of therapy services, CMS is providing approval to the Medicare Fee-for-Service Recovery Auditor Contractors (RACs) to investigate this issue,” the report read. Click here for the report.  Click here for a good summary.

Senate Investigators Say CO-OPs Failed Because HHS Ignored Evidence

HHS ignored evidence that many of the 23 nonprofit health plans seeded with ACA loans lacked sound business plans and were in financial peril, according to a report released last week by a Senate subcommittee.  Just over half of those co-op plans collapsed last year because of financial distress. The 11 remaining plans lost nearly $400 million last year, according to financial filings.  Specifically, the Senate report found that seven of the 12 failed start-ups had been flagged by Deloitte Consulting for having defective enrollment strategies. The shortcomings included a lack of sound actuarial analysis and inadequate knowledge of the customers they were targeting. Click here for the report.

Senate Committee Releases Draft Mental Health Legislation

The Senate Health Committee released a draft of its bipartisan mental health bill last week. The draft would address the provider workforce shortage and care access issues and makes changes at the Substance Abuse and Mental Health Services Administration (SAMHSA). The bill would require SAMHSA to hire a chief medical officer and report to Congress every two years on its activities. It also would require HHS to establish a committee dedicated to work on serious mental illnesses. To read the draft, click here.

Physician Assistants Gaining More Autonomy in More States

An increasing number of states are granting physician assistants more autonomy to increase access to patients amid a shortage of doctors and an influx of patients with health insurance under the Affordable Care Act.  In some cases, states are removing bureaucratic barriers that in the past led to redundant tasks or slowed the ability of patients to get the care they needed. In New Jersey, for example, Gov. Chris Christie in January signed into law legislation that removed the so-called “countersignature requirement,” which previously required the PAs’ collaborating physician to countersign all medical orders.  Click here for the story.

12.7 Million, Including 4.9 Million New Customers, Sign Up for Obamacare

New HHS data shows that 4.9 million new customers selected Obamacare plans nationwide during 2016 open enrollment.  The nationwide numbers were released as part of a detailed HHS report about who selected plans and qualified for subsidies in the most recent sign-up season. About 12.7 million people either chose a plan for the first time or renewed coverage in the the third open enrollment season, which began in November and ended Jan. 31. Click here for the HHS report.

National Health Spending Moderates

National health spending growth in January 2016 was 4.9 percent, the second straight month that health spending grew at less than five percent. It may be a signal that after health spending ticked up in 2014 and into 2015, sparking concern that the sector’s historically low growth had come to an end, perhaps the spending slowdown isn’t over quite yet. Health care prices in January 2016 were 1.6 percent higher year-over-year, which is the highest rate since December 2014.  Click here for the Altarum Institute report.

CMS Announces Second Round Application for Next Gen ACOs

CMS’ Innovation Center announced the second and final round of applications for the Next Generation Accountable Care Organization Model. The Model will begin its second performance year on January 1st, 2017. The Next Generation ACO Model is a healthcare delivery and payment model created by the CMS Innovation Center and builds upon experience from the Pioneer ACO Model and the Medicare Shared Savings Program. According to CMS, the Next Generation ACO Model will set predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care. Click here for more information from CMS.

NIH Guide Focuses on Preventing Childhood Drug Abuse

On March 8th, the NIH’s National Institute on Drug Abuse (NIDA) released an online guide about interventions in early childhood that can help prevent drug use and other unhealthy behaviors. The guide offers research-based principles that affect a child’s self-control and overall mental health, starting during pregnancy through the eighth year of life. Principles of Substance Abuse Prevention for Early Childhood guide addresses the major influences on a child’s early development such as lack of school readiness skills, insecure attachment issues, and signs of uncontrolled aggression in childhood behaviors. Click here for the NIDA guide.

Senate Committee OKs Biomedical Reform Package

The Senate Health Committee approved seven bills last week as part of a broader biomedical reform package it’s crafting as a counterpart to the House-approved 21st Century Cures Act. Among the approved legislation: a bill that would establish a breakthrough pathway for medical devices, a bill addressing FDA’s regulation of combination products, and a bill exempting some medical software from FDA oversight. Click here for the full list of approved bills.

Lawmakers Say Reinsurance Payments Violate Federal Law

House Energy and Commerce Committee leaders stated in a letter last week to AHIP CEO Marilyn Tavenner that CMS’s reinsurance payments to insurers for 2015 violate federal law. The lawmakers allege that the payments amount to “billions of dollars in handouts to insurance companies” that they say should have gone to the Treasury. Committee Leaders requested a briefing and documents on the reinsurance program. They also noted that Tavenner was CMS administrator when many decisions about the program were made. Similar letters were also sent to Aetna, Anthem, the Blue Cross Blue Shield Association, Cigna, Humana and UnitedHealth Group. Click here for the AHIP letter.

CMS Should Clarify Medicaid Supplemental Payment Policies: GAO

A new GAO report recommends that CMS should clarify its policies on Medicaid supplemental payments to hospitals. The report examined how hospitals in four states – Florida, Texas, New Mexico, and Oklahoma – spent their supplemental funding. GAO states that CMS guidance should require states to link the payments to the provision of Medicaid services, and not to make them contingent on the availability of local financing. Click here to read the report.

CDC Chief Sounding Alarm over Zika

The head of the CDC is sounding the alarm over Zika.  Thomas Frieden said the mosquito-borne virus is sweeping through the hemisphere and its growing links to a broad array of birth defects and neurological disorders are worse than they originally suspected, increasing the risk for devastating harm during pregnancy. Puerto Rico is a Zika target that has Frieden “very concerned.” He just returned from the island and said he expects hundreds of thousands of people there will be infected by year’s end, including thousands of pregnant women. Click here for the report.

Do You Have a Food Insecurity Solution that’s Working in Your Community?

Do you know of a hospital or health care system that is addressing food insecurity – or a community group working with a health care entity to address food insecurity? The Public Health Institute in collaboration with the Centers for Disease Control and Prevention (CDC), the CDC Foundation, ProMedica and the AARP Foundation is conducting a study to identify promising practices in health care to address food insecurity – and they want to hear from you.  Click here to learn more and nominate an innovative policy or program.

Rap Video: the Trials and Tribulations of the Electronic Health Record

Do you have problems with your EHR?…Concerns that patient care is taking a back seat to technology? Well, apparently you’re not alone. Click here for a very funny/sad rap video that captures some of the concerns about EHRs.