On October 9, 2019 the Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) published a proposed rule making changes to the Physician Self-Referral Law (PSR Rule), also called the Stark Law. Among other revisions to the PSR Rule, the proposed rule would modify the group practice special rule that allows physician profit sharing in certain circumstances. Under the proposed rule, the “overall profits” group practice physicians can share must be a combination of all designated health services (DHS) profits, not just the DHS profits from the type of service the physician renders. The clarification is significant as it resolves lingering uncertainty regarding proper compensation arrangements for group practice physicians.
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Centers for Medicare and Medicaid Services
Federal Judge Vacates Final Rule on Drug Pricing Transparency in Consumer Advertising
In a Memorandum Opinion, Judge Amit P. Mehta, of the U.S. District Court for the District of Columbia, vacated a U.S. Department of Health and Human Services (HHS) Final Rule, just days before its July 9 effective date. The Final Rule would have required the list prices of prescription drugs to be included in direct-to-consumer advertisements.
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CMS Amends Regulations to Lower Drug Prices and Reduce Out-Of-Pocket Expenses in Medicare Advantage and Part D Prescription Drug Benefit Program
The Centers for Medicare and Medicaid Services (CMS) announced a final rule, to be published on May 23, 2019, amending the Medicare Advantage program (Part C) and Prescription Drug Benefit program (Part D) regulations. According to CMS, the purpose of the rule is to lower drug prices and reduce out-of-pocket expenses in the Medicare…
CMS Final Rule on Drug Pricing Transparency in Consumer Television Ads
On May 10, 2019, the Centers for Medicare and Medicaid Services published a Final Rule on drug pricing transparency in consumer advertisements. The new rule requires direct-to-consumer (DTC) television advertisements to include the list price of prescription drugs and biological products distributed in the US that are reimbursable by Medicare or Medicaid, whether directly or indirectly.
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CMS Announces New Direct Contracting Care Models
On April 22, 2019, the Centers for Medicare and Medicaid Services (CMS) announced two new voluntary risk-sharing payment models—Professional Population-Based Payment (PBP) and Global PBP. Under the Professional PBP model, CMS will pay participating organizations (referred to as Direct Contracting Entities or DCEs) a monthly, risk-adjusted primary care capitation payment, as well as 50 percent of shared savings/losses for enhanced primary care services. The Global PBP model, which is aimed at larger organizations, offers a higher level of risk and reward. DCEs participating in the Global PBP will receive/be responsible for 100 percent of shared savings/losses and will have two capitation payment options. The first option is the same primary care capitation payment as in the Professional PBP model, and the second option is a total care capitation payment for all services provided by the DCE and preferred providers with whom the DCE has an agreement. Under either model, DCEs may offer patients certain “benefit enhancements” for the purpose of promoting accessibility to innovative and affordable care.
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CMS Finalizes Overhaul of the Medicare Shared Savings Program in “Pathways to Success” Final Rule
By Robinson+Cole's Health Law Group on
On December 31, 2018, the Centers for Medicare and Medicaid Services (CMS) published a final rule (Final Rule) establishing the “Pathways to Success” program that overhauls the Medicare Shared Savings Program (MSSP). The Final Rule largely mirrors CMS’ proposed rule (see our summary here), but with several modifications in response to public comments. Accountable care organizations (ACOs) may participate in the Pathways to Success program beginning July 1, 2019, and those ACOs interested in beginning participation in July must submit to CMS a notice of intent to apply by January 18, 2019. CMS guidance on submission of the NOIA is available here. CMS expects to release application deadlines in the near future.
Significant features of the Pathways to Success program, which are described in detail below, include:
- Replacement of Track 1, Track 2 and Track 3 with two participation options: the BASIC track (consisting of five levels) and ENHANCED track (similar to the current Track 3),
- Creation of a “glide path” that requires ACOs to incrementally accept performance-based downside risk over the agreement period,
- Requiring ACOs experienced with downside risk to assume downside risk, while allowing inexperienced ACOs an option to begin participation with no downside risk before advancing to riskier models,
- Replacement of the previous three-year participation agreement period with a five-year period,
- Creation of a six-month performance year from July 1, 2019 through December 31, 2019 to coincide with the one-time mid-year start date,
- Revisions to the benchmarking methodology to incorporate regional trends from the beginning of an ACO’s participation in the MSSP,
- Expansion of ACOs’ use of telehealth and availability of the SNF Three-Day Rule Waiver, and
- Ability for ACOs to provide monetary incentives to encourage beneficiaries to receive certain primary care services.
CMS Proposes Revised Prescription Drug Regulations to Lower Drug Prices and Reduce Out of Pocket Expenses
The Centers for Medicare and Medicaid Services (CMS) announced a Proposed Rule to amend Medicare Advantage (MA) regulations and Prescription Drug Benefit program (Part D) regulations. The Proposed Rule was published on November 30, 2018. The Proposed Rule is intended to help lower drug prices for health and drug plans and reduce out-of-pocket costs for MA and Part D enrollees. Major provisions include: Providing Plans with increased flexibility in managing drug formularies. Current policy requires Part D formularies to include all drugs in the following categories: (1) antidepressants; (2) antipsychotics; (3) anticonvulsants; (4) immunosuppressants for treatment of transplant rejection; (5) antiretrovirals; and (6) antineoplastics; except in limited circumstances. The Proposed Rule includes three exceptions, allowing: (1) broader use of prior authorization and step therapy; (2) exclusion of drugs that are only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market; and (3) exclusion of drugs with a price increase beyond an inflation-based threshold relative to a baseline month and year.
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2019 Physician Fee Schedule Rule Review: Use of Telehealth Expanded
Telehealth for Treatment of Substance Use Disorders
As part of the CY 2019 Medicare Physician Fee Schedule (PFS), the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule with comment period to expand the use of telehealth for the treatment of substance use disorders and co-occurring mental health disorders. Existing law provides for reimbursement of telehealth services only if the originating site is located in a rural health professional shortage area, is not in a metropolitan statistical area or is an entity that participates in a federal telemedicine demonstration project. The originating site must also be one of a specific type of facility, such as a hospital, physician’s office or skilled nursing facility. With respect to telehealth services used to treat a substance use disorder or co-occurring mental health disorders, the interim final rule removes the originating site geographic restrictions and permits a patient’s home to be an originating site. When the patient’s home is used as the originating site for telehealth services, Medicare will pay no facility fee. The interim final rule is effective for telehealth services performed on or after July 1, 2019. CMS is requesting comments on the interim final rule, and the comment period closes January 22, 2019.
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2019 Physician Fee Schedule Rule Review: Option to Extend MSSP Agreements for Currently-Expiring ACOs Finalized
By Conor Duffy on
On November 1, 2018, the Centers for Medicare & Medicaid Services (CMS) released its 2019 Physician Fee Schedule Final Rule (PFS Rule), which contains a number of significant substantive changes to Medicare payment practices and policies. The PFS Rule will be officially published in the Federal Register on November 23, 2018. The PFS Rule also includes an interim final rule implementing amendments to federal telehealth regulations to maintain consistency with recent changes to the Social Security Act to address the opioid crisis enacted in October 2018 through the SUPPORT for Patients and Communities Act.
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OIG Reports That CMS Paid Practitioners For Telehealth Services That Failed To Meet Medicare Requirements
On April 5, 2018, the Office of the Inspector General (OIG) announced its findings that the Centers for Medicare and Medicaid Services (CMS) paid practitioners for telehealth services that did not meet Medicare requirements. Certain telehealth services are reimbursable by Medicare as Part B services. According to the OIG, it engaged in a review of telehealth services after finding that Medicare paid a total of $17.6 million in telehealth payments in 2015, compared to just $61,302 in 2001.
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