Legislative Activity

Lawmakers Continue Negotiations on Doc Fix Package, Working Framework Announced

With the current patch expiring on March 31, lawmakers continued over the weekend to negotiate a legislative package to permanently repeal Medicare’s automatic payment cut to physicians. H.R. 1470 is very similar to the bipartisan legislation that key committees in both chambers approved last year. It provides an annual pay increase of 0.5 percent to physicians through 2019 and establishes an incentive payment program, titled “Merit-Based Incentive Payment System” (MIPS), to assess eligible professionals in quality, resource use, electronic health record (EHR) Meaningful Use (MU), and clinical practice improvement activities. It consolidates three current incentive programs – the Physician Quality Reporting System (PQRS), the Value-Based Modifier, and MU of EHRs. The legislation also provides financial incentives for professionals to become involved in alternative payment models.

Other provisions of H.R. 1470 address care management for individuals with chronic care needs, transparency of utilization and payment data for physicians and professionals, expansion of claims data availability, automatic renewal for professionals who opt-out of Medicare, and the reporting of such professional characteristics. The bill requires EHRs to be interoperable by 2018 and prohibits the purposeful blocking of information sharing with other EHR vendor products. The Secretary of the Department of Health and Human Services is required to issue a report providing recommendations on a permanent physician-hospital gainsharing program, as well as a report to examine the feasibility of establishing mechanisms to assist providers in comparing and selecting EHR technology products. The Government Accountability Office is to report on aspects of telehealth and remote patient monitoring services.

The working summary of the SGR package released by the House committee leaders includes fully funding the Children’s Health Insurance Program (CHIP) through September 30, 2017. It extends all of the extenders in the current patch, in addition to funding for Community Health Centers, through 2017. The framework would permanently extend the Qualifying Individual Program and the Transitional Medical Assistance program, and the Tennessee Disproportionate Share Hospital (DSH) Allotment would be extended through 2015. The legislation also includes two Medicare bills: H.R. 284, the Medicare DMEPOs Competitive Bidding Improvement Act and H.R. 1021, the Protecting Integrity to Medicare Act.

The policies that reduce the legislation’s cost that are provided in the working framework include: income-related Medicare Part B and D premium adjustments, Medigap reforms, an increase of levy authority on payments to Medicare providers with delinquent tax debt, an incremental phase-in of the 3.2 percentage point adjustment to hospital’s base payment rate in FY 2018, a delay of Medicaid DSH changes until FY 2018 and extension of the policy through 2025, and a 1 percent market basket update for post-acute care providers.

Negotiations are steadily making progress, and the House could consider the legislation as early as this week. Notably, Democrats on the Senate Committee on Finance have expressed concerns about the current package, including the two-year extension of the Children’s Health Insurance Program (CHIP) (they would like a four-year extension), offsets that would increase costs to beneficiaries, and the impact of health centers language on women’s health services. On the other side of the aisle, some conservative lawmakers remain concerned about the cost of the total proposed package and the potential approach that would only provide for partial offsets.

This Week’s Hearings:

  • Tuesday, March 24: The House Committee on Ways and Means Subcommittee on Oversight will hold a hearing titled “The Use of Data to Stop Medicare Fraud.”
  • Tuesday, March 24: The House Committee on Agriculture will hold a hearing titled “Examination of the Costs and Impacts of Mandatory Biotechnology Laws.”
  • Tuesday, March 24: The House Committee on Energy and Commerce Subcommittee on Health will hold a hearing titled “Examining the 340B Drug Pricing Program.”
  • Tuesday, March 24: The Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a hearing titled “Continuing America’s Leadership: Advancing Research and Development for Patients.”
  • Tuesday, March 24: The Senate Committee on Veterans’ Affairs will hold a hearing titled “The Veterans Choice Act – Exploring the Distance Criteria.”
  • Wednesday, March 25: The House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a hearing titled “Centers for Disease Control and Prevention Budget.”
  • Wednesday, March 25: The House Committee on Veterans’ Affairs will hold a hearing titled “Examining Access and Quality of Care and Services for Women Veterans.”
  • Wednesday, March 25: The Senate Committee on Appropriations Subcommittee on Defense will hold a hearing to review the FY 2016 funding request and budget justification for the Defense Health Program.
  • Wednesday, March 25: The Senate Committee on Aging will hold a hearing titled “The Fight Against Alzheimer’s Disease: Are We on Track to a Treatment by 2025?”
  • Thursday, March 26: The House Committee on Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing titled “Examining the Growing Problems of Prescription Drug and Heroin Abuse: State and Local Perspectives.”
  • Thursday, March 26: The House Committee on Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies will hold a hearing titled “Federal Investments in Neuroscience and Neurotechnology Oversight.”
  • Thursday, March 26: The Senate Committee on Veterans’ Affairs will hold a hearing titled “VA Opioid Prescription Policy, Practice, and Procedures.”

Regulatory Activity

Final Rule Clarifies Eligibility for Wraparound Benefits

On Wednesday, March 18, the Internal Revenue Service (IRS), the Employee Benefits Security Administration, and the Centers for Medicare and Medicaid Services (CMS) issued a final rule that amends the regulations regarding excepted benefits. Excepted benefits include those benefits that are more limited or tangential to medical care, such as limited scope vision or dental benefits, coverage for a specified disease or illness, or Medicare supplement policies.

This final regulation amends the definition of “limited excepted benefits” in the group market to provide employers with two options for offering limited wraparound coverage. Under the first option, an employer could offer limited wraparound benefits to part-time and retired employees, as well as their dependents, who are enrolled in eligible individual health insurance. This regulation clarifies that the Basic Health Program, a state-based coverage program for low-income residents who are otherwise ineligible for marketplace coverage, qualifies as eligible individual health insurance. Alternatively, under the second option, an employer could offer wraparound coverage for employees enrolled individually in Multi-State Plans, provided that the wraparound coverage meets the requirements outlined in the regulation and is approved by the Office of Personnel Management.

Under the final rule, wraparound coverage could first be offered as excepted benefits between January 1, 2016 and December 31, 2018. The wraparound coverage pilot program sunsets on the later of either three years after the wraparound coverage was first offered or upon expiration of the last collective bargaining agreement relating to the plan.

Stakeholders Push Back on MU Stage 3 Reporting Period

On Friday, March 20, CMS released a proposed rule which would specify the Stage 3 MU criteria for providers and hospitals to qualify for Medicare and Medicaid EHR incentive payments and to avoid downward payment adjustments under the Medicare EHR Incentive Program. Stage 3 is expected to be the final stage of MU, and its requirements focus on the advanced use of certified EHR technology (CEHRT) in an effort to bolster information sharing and deliver high-quality, efficient, and coordinated care for patients.

Beginning in CY 2017, the proposed rule would change the EHR reporting period from 90 days to a full calendar year for all providers except for Medicaid providers in their first year of MU. Additionally, the proposed rule would support efforts to align the EHR Incentive Programs with other EHR quality reporting programs, including the Hospital Inpatient Quality Reporting (IQR) and Physician Quality Reporting (PQRS) programs.

Hospitals and provider groups immediately criticized CMS for requiring year-long reporting periods in future years, without first keeping its promise to shorten the reporting period for 2015. In January, the agency had stated that it will change the 2015 reporting period to 90-days, but has yet to release its flexibility rules for 2015.

The comment period for the proposed rule ends on May 29, 2015.

ONC Proposes Changes to the Health IT Certification Program

On Friday, March 20, the Office of the National Coordinator for Health Information Technology (ONC) released a proposed rule relating to the Health IT Certification Program. The Health IT Certification Program was established by the Health Information Technology for Economic and Clinical Health (HITECH) Act to oversee national health IT programs. This proposed rule identifies ways to boost interoperability and proposes modifications to make the Health IT Certification Program more “open and accessible” to different types of health IT besides EHRs.

ONC National Coordinator Karen DeSalvo stated that this proposal, which was released in tandem with CMS’s MU rule, will support Stage 3’s effort to build a coordinated, interoperable health IT system.

The comment period ends on May 29, 2015.