Washington Watch Weekly May 4, 2012

This week, several bipartisan Senate Finance Committee members sent an open letter to the healthcare community requesting input regarding the fight to “better prevent and combat” waste, fraud, and abuse in the Medicare and Medicaid programs. The letter, which was signed by Senate Finance Committee Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT), as well as Senators Tom Coburn (R-OK), Chuck Grassley (R-IA), Tom Carper (D-DE), and Ron Wyden (D-OR), states that all healthcare stakeholders, including healthcare consumers and providers, could identify some areas where improvement is needed and requests white papers in three categories: program integrity reforms, payment integrity reforms, and fraud and abuse enforcement reforms.

The senators stressed that they have a duty to ensure taxpayer funds are being spent wisely and indicated that combating Medicare and Medicaid fraud has been a challenge for the Centers for Medicare & Medicaid Services (CMS), the Office of Inspector General (OIG), and the Department of Justice. They believe that collecting ideas from other groups and professionals with differing experiences could offer new solutions that have not been previously considered. Last week, at a Senate Finance Committee hearing on Medicare fraud, Senator Hatch did mention that committee members would be requesting stakeholder involvement. The goal is to compile a summary of the white papers and key proposals, which will be released later this year.

Senate Finance Committee to Hold Roundtable Discussion on “Medicare Physician Payments: Understanding the Past so We Can Envision the Future”

On May 10, the Senate Finance Committee will hold the first in a series of roundtable discussions on Medicare physician payment and the Sustainable Growth Rate (SGR) formula. Four former administrators of the Centers for Medicare & Medicaid Services (CMS) and its predecessor, the Health Care Financing Administration (HCFA), will give background and answer questions regarding the Medicare physician payment system. They include Gail Wilensky, PhD, senior fellow, Project HOPE; Bruce Vladeck, PhD, senior advisor, Nexera, Inc.; Thomas Scully, JD, senior counsel, Alston & Bird LLP; and Mark McClellan, MD, PhD, senior fellow, Brookings Institution.

Medicare Economic Index (MEI) Technical Advisory Panel to Hold First Public Meeting

On May 21, the first public meeting of the MEI Technical Advisory Panel, established by the Health and Human Services (HHS) secretary, will be held at CMS headquarters in Baltimore. The purpose of the panel is to review the inputs, prices measurement, proxies, and productivity adjustments included in the MEI. Panel members include: Robert Berenson, Ernst Berndt, Zachary Dyckman, Kurt Gillis, and Kathryn Kobe.

Ambulatory Surgery Center (ASC) Quality Reporting Manual Released by the Centers for Medicare & Medicaid Services (CMS)

On April 30, CMS released its manual for the ASC quality reporting program, which provides detailed information on how ASCs will be reporting quality data to CMS. The manual provides measure specifications for required measures, including the claims-based measures. For Calendar Year 2014 payment determinations, reporting is required for claims with dates of service beginning October 1, 2012 through December 31, 2012. As a result of collaborative efforts by ASCRS, AAO, OOSS, and the ASC Association, ophthalmic ASCs will only need to report on four claims-based measures during the reporting period (October 1, 2012 through December 31, 2012) to avoid a 2 percent reduction in their Medicare payments in 2014. Also, in a major change to the safe surgery checklist requirement from the proposed version, ASCs now can answer “yes” if they used a checklist at any time during CY2012. Originally, the requirement was ASCs would be able to answer "yes" only if they had a safe surgery checklist in place on January 1, 2012.

Of the measures, listed below, ophthalmic ASCs only need to report on the first four and can do so with a single G-code (G8907) if none of the adverse events occur. The minimum reporting threshold requirement is 50%.

Patient Burn
Patient Fall
Wrong Site, Side, Patient, Procedure, Implant
Hospital Admission/Transfer
Prophylactic IV Antibiotic Timing

ASCRS will continue to work with CMS as implementation of the new ASC quality reporting program continues.

CMS Expects 28 States to Take Part in Duals Demonstration

In March 2012, CMS announced demonstration projects targeted at coordinating care for dual eligibles—individuals who qualify as both Medicare and Medicaid beneficiaries. They often have multiple chronic conditions and account for a disproportionate share of state and federal healthcare spending. The "duals" demonstration aligns payment between Medicare and Medicaid for state residents covered by both programs. However, stakeholders are concerned about the speed at which the federal government is implementing the care coordination plans. According to Melanie Bella, director of the Medicare-Medicaid Coordination Office, 25 states have already posted care coordination plans for dual eligibles for public comment, while seven states have submitted plans to the federal government. CMS has estimated that the demonstrations will enroll up to two million (20%) of the nation’s duals.

In their most recent meeting, Medicare Payment Advisory Commission (MedPAC) Commissioners expressed unease about the demonstrations, concluding their the discussion by emphasizing the need to change the status quo which does not necessarily ensure quality care and is costly. Open enrollment for the demonstration begins in October, and states originally had to be ready to serve beneficiaries Jan. 1, 2013. States may request a delayed implementation deadline, and many have pushed back implementation to January 2014. Most of the states that plan to participate in the demonstration intend to automatically enroll duals in Medicaid managed care plans, a strategy that the medical community opposes.

Medicare Trustee Report Indicates Healthcare Spending to Increase

On April 23, Medicare Trustees issued their annual report on Medicare's financial status. According to this year's report, Part B outlays were 1.5 percent of the Gross Domestic Product (GDP) in 2011, and the Board projects that they will grow to about 2.5 percent by 2086. (Under the illustrative alternative projections, Part B costs would be 4.5 percent of GDP in 2086.) The projections are slightly lower than those shown in last year’s report mostly due to a reduction in the projected growth in prescription drug spending in the U.S. for the next 10 years. In 2011, Medicare covered 48.7 million people: 40.4 million aged 65 and older and 8.3 million disabled. About 25 percent of these beneficiaries have chosen to enroll in Part C private health plans that contract with Medicare to provide Part A and Part B health services. Total expenditures in 2011 were $549.1 billion. Total income was $530.0 billion, which consisted of $514.8 billion in non-interest income and $15.2 billion in interest earnings. Assets held in special issue U.S. Treasury securities decreased to $324.9 billion.

The financial projections for Medicare reflect cost savings resulting from the ACA, but also show that further action is needed to address the program’s continuing cost growth.

Government Accountability Office (GAO) Report Indicates Current Food and Drug Administration (FDA) Conflict of Interest Rules Require Revision

On March 29, the U.S. GAO released a report in response to a request by Senators Richard Burr (R-NC) and Tom Coburn (R-OK) to examine the FDA’s medical device review process. The report, Medical Devices: FDA Has Met Most Performance Goals but Device Reviews Are Taking Longer, indicated the FDA is meeting its performance goals for medical device reviews but that overall medical device review time was increasing. The report also included the detailed steps the agency is taking internally to address issues industry and consumer advocacy groups have raised about the drug and biologic review process. However, GAO noted in the report that the FDA has not taken any steps in its recently released strategy, assessment or guidance documents to address issues raised by industry stakeholders about leveraging outside expertise during the drug review process. Industry stakeholders told GAO that conflict-of-interest rules for advisory committees can extend the time it takes the FDA to complete the review process, although GAO noted that consumer groups are concerned with conflicts of interest that advisory committee members may have. Current conflict of interest requirements, put in place in the 2007 PDUFA, include provisions that prevent clinical thought leaders from participating in FDA advisory committees and bar anyone who has taken any form of compensation from drug companies from participating in these panels.

Conflict-of-interest reforms were part of an FDA reform bill recently introduced by Senators Burr and Coburn, much of which was included in the Senate FDA user fee bill that recently passed the Senate Health, Education, Labor, and Pensions (HELP) committee. In addition, the House user fee bills also include measures to roll back conflict-of-interest rules, including a provision to repeal the 2007 system.

Congressional Research Service (CRS) Report Outlines Latest on FDA’s Medical Device User Fee Program

A CRS report released earlier this week describes current law regarding medical device user fees, the impact of Medical Device User Fee Authorization (MDUFA) on FDA review time of various medical device applications and the agency’s medical device program budget, the MDUFA III proposal (legislative language and performance goals agreement), and issues that Congress is likely to take up as it works on the reauthorization of the medical device user fee program. The report, titled The FDA Medical Device User Fee Program, notes that at the March 29 Senate hearing, CDRH Director Jeffrey Shuren pointed out that if MDUFA reauthorization by Congress has not occurred by early summer, federal regulations require that reduction in force (RIF) notices be sent out in July 2012, giving 60 days’ advance notice to about 250 FDA employees that their employment under the MDUFA program would end by September 30, 2012.

GAO Report Recommends CMS Improve Current Electronic Health Record (EHR) Incentive Program Eligibility Requirements

A GAO report released earlier this week is calling for improvements in measurement of whether hospitals and physicians have met requirements for EHR meaningful use incentive payments. To receive incentive payments, providers must meet both eligibility requirements that specify the types of providers eligible to participate in the programs and reporting requirements that specify the information providers must report to CMS or the states, including measures that demonstrate meaningful use of an EHR system and measures of clinical quality.

The GAO report made four recommendations to CMS to improve processes to verify whether providers met program requirements, including opportunities for efficiencies. The recommendations are as follows:

The administrator of CMS should establish timeframes for expeditiously implementing an evaluation of the effectiveness of the agency’s audit strategy for the Medicare EHR program.
The administrator of CMS should evaluate the extent to which the agency should conduct more verifications on a prepayment basis when determining whether providers meet Medicare EHR program’s reporting requirements.
The administrator of CMS should collect the additional information from Medicare providers during attestation that CMS suggested states collect from Medicaid providers.
The administrator of CMS should offer states the option of having CMS collect meaningful use attestations from Medicaid providers on their behalf.

The Department of Health & Human Services, of which CMS is a part, agreed with three of GAO’s recommendations, but disagreed with the fourth—that CMS offer to collect certain information on states’ behalf. GAO continues to believe this action is an important step to yield potential cost savings, GAO officials said in their report.

For the Medicare EHR program, CMS has implemented prepayment processes to verify whether providers have met all of the eligibility requirements and one of the reporting requirements. CMS officials stated that the agency intends to evaluate how effectively its Medicare EHR program audit strategy reduces the risk of improper EHR incentive payments, though the agency has not yet established corresponding timelines for doing this work, according to GAO.

CMS Quality/Cost Reports Not Reaching Intended Audience

In early March, CMS sent quality and resource use reports (QRURs) to nearly 24,000 physicians in Iowa, Kansas, Missouri, and Nebraska. Washington Physician Services (WPS), the Medicare contractor in Iowa, Kansas, Missouri, and Nebraska, emailed practices a web link to access the reports, but as of late March, only 3,300 out of 23,730 had downloaded the reports. CMS compiled individual quality and resource use reports for physicians treating patients in the aforementioned states. The underlying premise for the program is that patients receive better and more efficient care when their various physicians can compare their approach to treatment costs compared with the approaches of other doctors treating similar patients in the same area. All doctors treating a given patient during a specified period of time will be compared collectively with other groups of physicians. The reports rely on data provided via claims through the Medicare physician quality reporting system (PQRS) and detail per capita cost and quality reporting information in 2010. The primary purpose of the reports is to give doctors a preview of how data will be used to adjust Medicare pay for some physicians under a budget-neutral value-based modifier that will take effect in 2015, which means it will not involve additional Medicare funding, so some physicians deemed to be lower performers based on the quality and efficiency of their care will receive reduced payments so higher performing physicians can receive bonuses. CMS has yet to determine which physicians will have the value-based purchasing modifier applied to their payments in 2015. The agency anticipates releasing a proposal this year on how the modifier will work.

ASCRS, the AMA, and medical societies representing physicians in the four states are encouraging doctors to download the reports and provide feedback on the program. Physician input is critical as CMS moves forward with plans to use 2013 Medicare claims to determine bonuses and penalties for selected physicians in 2015. Physicians with questions about specific data within their individual report are asked to email CMS_Medicare_Physician_Feedback_Program@mathematica-mpr.com.

WPS and CMS are also soliciting feedback through a series of calls with physicians, practice administrators and physician representatives. A call will be held at 10 am central daylight time on Tuesday, May 8. We encourage members to participate. The telephone number for the May 8 call is 1-800-665-9175. The Conference ID is 3769368182.

Provider Call: Current Status of Medicare Fee For Service (FFS) Implementation of HIPAA Version 5010 and D.0—Wednesday, May 16; 2:00-3:30 PM EDT

A call on the Current Status of Medicare FFS Implementation of HIPAA Version 5010 and D.0 will take place on May 16, 2:00-3:30 PM EDT. The agenda and registration information has not yet been released by CMS and will be provided in next week’s Washington Watch Weekly.

Congressman Erik Paulsen (R-MN), Co-Chair, House Medical Technology Caucus, Addresses ASCRS/ASOA Members at the Government Relations General Session During the ASCRS/ASOA Annual Symposium in Chicago

Congressman Erik Paulsen was the guest speaker for the ASCRS Government Relations General Session at the recent ASCRSˑASOA Symposium & Congress in Chicago. Rep. Paulsen gave an Update from Washington: Fighting to Maintain American Leadership in Medical Innovation and discussed the status of FDA reform. During the session, Rep. Paulsen said that “the onerous FDA review process is the main hindrance to medical innovation in the U.S.” Legislation to reauthorize FDA user fees began to be considered by Congress last week and is gaining bipartisan support. Rep. Paulsen is hopeful a bi-partisan bill will be signed into law before August recess that will include FDA reforms to the drug approval process and medical device approval process. In addition to his role in the Medical Technology Caucus, Rep. Paulsen is a member of the House Committee on Ways and Means, which has jurisdiction over healthcare, economic and trade policy, and is the chief tax writing committee in the House.

Brock Bakewell, MD, Advocating on Behalf of Ophthamolgy, Spent Last Weekend Hiking with this Year’s ASCRS Government Relations General Session Guest Speaker, Rep. Erik Paulsen (R-MN)

Brock Bakewell, MD, Chair of the ASCRS Government Relations Committee, spent last weekend with Rep. Erik Paulsen (R-MN) who spoke at the ASCRS Government Relations General Session during the recent ASCRSˑASOA Symposium in Chicago. Rep. Paulsen, who is the co-chair of the House Medical Technology Caucus and a member of the House Ways and Means Committee, was in Arizona for the weekend, which gave Dr. Bakewell the opportunity to spend the day hiking and advocating on behalf of ophthalmology. This visit demonstrates grassroots in action and the importance of developing and cultivating relationships with your members of Congress.

A Special Thank You to All eyePAC Contributors Who Attended the Annual eyePAC Reception in Chicago.

On Friday, April 20, over 175 ASCRS eyePAC contributors and their guests gathered at the Art Institute of Chicago. The guests enjoyed a private reception and were given a private tour leading up the grand staircase and into the 19th century impressionist art gallery. eyePAC raised $60,000 from the contributions to attend the event.

To find out more about the articles in this communication or to read more about legislative and regulatory issues that affect you and your practice, visit the ASCRS and ASOA websites. You can also visit http://www.specialtydocs.org/, the web site of the Alliance of Specialty Medicine.

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