On August 27, 2015, the Health Resources and Services Administration (HRSA) released the much-anticipated mega-guidance for the 340B Drug Pricing Program. The 340B program provides discounted outpatient drug pricing for specified safety-net healthcare organizations, known as covered entities. The guidance was long-requested by covered entities and drug manufacturers, both of whom seek clarity in definitions and various elements of the program. HRSA considered proposing a regulation last year, but determined it did not have rulemaking authority. Consequentially, it has now proposed guidance, which while not legally binding, does inform 340B program participants on how HRSA believes the program should operate. From the perspective of a healthcare provider seeking to avoid audit under the 340B program, HRSA’s guidance should be given significant weight.
Providers should note HRSA’s definitions of both a 340B patient and a covered entity. The guidance appears to narrow the definition of a patient, allowing 340B drug eligibility on a drug-by-drug basis, specific to the medical issue for which the patient is being treated as an outpatient at the covered entity. Previously, a covered entity could provide a patient with any necessary drugs under 340B pricing, regardless of the scope of treatment.
The guidance also proposes a new standard that a child site of a covered entity hospital must provide services with associated Medicare outpatient costs and charges, in addition to the current standard that the child site be listed on a reimbursable line of the covered entity’s Medicare cost report. HRSA also makes clear that a covered entity’s inclusion in a larger organization such as an accountable care organization, does not qualify the larger organization for the 340B program. Finally, HRSA requests feedback on ways to demonstrate eligibility of off-site facilities.
Also notable from the provider perspective is guidance related to audit processes. HRSA proposes a notice and hearing process for 340B audits by the agency. Covered entities found not to be in compliance may be subject to corrective action plans, and loss of eligibility in the 340B program. HRSA also tightens standards for manufacturer audits of covered entities, requiring “reasonable cause,” while failing to impose any requirement that the agency act upon manufacturer audit results.
ACCC will continue to review this 340B mega guidance leading up to the October 28, 2015 comment deadline, and welcomes member input and questions.
On June 25, the Supreme Court issued their decision in the highly watched King v. Burwell case, ruling that the more than 6 million people currently purchasing insurance through a federal exchange can continue to access subsidies. At issue was the legality of federal subsidies for those in states that opted not to create a state health insurance exchange. Without these subsidies, the Court felt that the insurance markets would have essentially collapsed in the 34 states with federally run marketplaces, with the majority of those accessing subsidies unable to afford coverage when faced with full premium costs and, as a result, costs rising exponentially for those remaining in the market. Specifically, the court said: “[t]he combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral.”
A different decision in King would have likely created much disruption in the marketplace for both patients and providers. According to Kaiser Family Foundation, more than 6 million Americans might have lost subsidies, and faced an average premium increase of 287%. RAND estimated the number of insured Americans would have declined by 9.6 million. The healthy insured may have elected to discontinue coverage, leaving high-cost patients to constitute the majority of the insurance pool. Cancer patients might have been faced with paying unsubsidized and substantially increased premiums, which for some may have been unattainable.
Overturning subsidies would have also placed providers in the precarious position of caring for patients that became uninsured. The financial and ethical implications of treating newly uninsured patients are great. While providers may have chosen not to terminate patients undergoing a course of treatment regardless of a change in insurance status out of ethical obligation, the financial result would have been challenging, particularly for those community-based practices that lacked programs for low-income patients. For hospital-based providers, the financial implications would also have been great, undermining provisions in the Affordable Care Act that reduced Disproportionate Share Hospital (DSH) Medicare payments in exchange for a substantially reduced uninsured population. In short, without current federal subsidies in place, the mechanisms for providing and funding care for millions of Americans would have needed to be revisited. With a lack of agreement in Congress on the best approach to renewed healthcare reform, providers would have faced a great deal of uncertainty.
With a 6-3 decision, Justice Roberts’ Court concluded that “Congress passed the Affordable Care Act to improve health insurance markets, not destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”
Post updated 6/26/2015
As the clock ticks down to the May 7 deadline for CMMI Oncology Care Model (OCM) provider Letters of Intent (LOIs), some ACCC members may still be on the fence about submitting an LOI. CMS introduced the Oncology Care Model—the agency’s first specialty-specific alternative payment model—back in February. Those physician practices selected for OCM participation will begin receiving reimbursement for chemotherapy treatment episodes of care under the Oncology Care Model in spring 2016.
Since the introduction of the OCM, ACCC members have raised numerous questions as they weigh whether to apply for participation. In general, these questions have focused on three main issues: performance benchmarking methodology, payer collaboration, and the financial feasibility of achieving the practice transformation requirements. CMS has responded to some of these concerns, but we hope the agency will continue to provide clarity as the LOI submission period closes and our members prepare final applications for the June 18 deadline. Read on for a summary of CMS’s responses on these three key issues.
Performance Benchmarking Methodology
The initial Request for Applications (RFA) from CMS generated questions about the benchmarking methodology used to calculate a provider’s baseline or target price for specific episodes of care. Providers raised concerns about outliers with extremely high costs of care. CMS has responded that it will use Winsorization, resetting the outlying episode to a specific percentile within the provider’s total average care costs. Providers also raised concerns about how an already lean practice may benefit from OCM participation, where the benchmark for performance is based on the specific practice’s past performance. CMS has responded that the baseline period will likely be a three-year period beginning in 2012. The agency believes that this will help account for any very recent practice improvements. CMS has also indicated that the baseline for the entire five-year model will remain that same three-year period, ensuring practices that quickly adopt performance targets are not penalized in later years.
In CMS’s applicant scoring methodology, participation with other payers (i.e., in addition to Medicare) will represent 30 points out of 100, a signal that the agency highly values the expansion of the OCM beyond Medicare. CMS has announced that 48 payers have submitted LOIs, and providers have raised concerns about whether to apply if no payer will be participating in their region. CMS has indicated that while it is an advantage for provider practices to partner with other payers, it is possible for a practice to be selected to participate in the OCM with only Medicare. There have also been indications that once the list of providers submitting LOIs is made public, there may be opportunity for payers to expand their participation regions.
ACCC members have also raised concerns about whether the $160 per beneficiary per month fee is sufficient to achieve all of the practice transformations called for in the OCM. CMS has noted that other payers are expected to provide enhanced payments, which can also be used for the infrastructure changes called for in the OCM. For patients that do not fall within the OCM, practices may also continue to bill for chronic care management and transitional care management. CMS believes that this will provide sufficient revenue to support the required infrastructure changes. However, ACCC welcomes further feedback from members.
As we enter the post-SGR era, ACCC will be working to keep members informed on alternative payment model initiatives. We are pleased to hear that several members will apply to participate in the CMMI Oncology Care Model, and will continue to provide updates on this and other relevant alternative payment models as details become available.
By Maureen Leddy, Policy Coordinator, ACCC
On April 14, 2015, after years of uncertainty and 17 short-term “doc fix” patches to prevent severe annual cuts to physician payments, Congress approved H.R. 2, Medicare Access and CHIP Reauthorization Act (MACRA). This bipartisan, bicameral compromise finally puts an end to the sustainable growth rate (SGR) formula. MACRA provides physicians with the predictability in payments needed to continue to provide high-quality cancer care, while transitioning over a 10-year period to a new dual Medicare reimbursement system.
What’s in Store?
Under MACRA physicians must eventually participate in a Merit-Based Incentive Payment System (MIPS) or an Alternative Payment Model System. Through June 2015, MACRA calls for Medicare physician reimbursement at the rate set by last year’s “doc fix” patch. Then, for five years, through 2019, annual 0.5% increases to payment rates are established.
In 2020, a second five-year phase begins during which reimbursement rates remain flat. During this second phase, providers will need to transition to the Merit-Based or Alternative Payment Model Systems. Ultimately MACRA encourages providers to participate in Alternative Payment Model Systems through higher incentive payments; beginning in 2026, physicians will receive automatic payment updates of 0.75% if participating in an APM, and 0.25% if participating in MIPS, with an opportunity to receive additional bonus payments based on performance. Payments under the MIPS will be subject to positive or negative adjustments based on the following performance criteria:
- quality of care
- resource use
- clinical practice improvement activities
- use of electronic health records (EHR) technology.
During the second five-year phase through 2024, providers participating in an Alternative Payment Model will be eligible for annual lump-sum bonuses equaling 5% of the prior year’s payments upon achieving specified targets in transitioning from fee-for-service payments. Providers participating in MIPS will be eligible during this second five-year period for additional positive adjustments in rates for exceptional performance.
Payment Model Technical Advisory Committee
MACRA encourages the development of Alternative Payment Models applicable to specialties and small practices, as well as models that align private and state-based payers. The legislation calls for creation of a Payment Model Technical Advisory Committee that will recommend additional Alternative Payment Models to CMS. CMMI’s recently launched Oncology Care Model (OCM) already provides one venue for many cancer providers to participate in an Alternative Payment Model. Visit ACCC’s Oncology Care Model Resource Center for answers to providers’ questions on eligibility, reimbursement, and key considerations for participation in this new payment model, plus links to application forms and CMMI OCM materials.
Going forward, ACCC will be vigilantly monitoring the Payment Model Technical Advisory Committee recommendations for other Alternative Payment Models that may be relevant to oncology practices.
ACCC looks forward to working with our members to effectively implement the bill and transition towards a new future for physician reimbursement.
On Wednesday, April 22, ACCC is hosting a members-only conference call with presenter Dan Todd, former Senior Health Counsel, Senate Finance Committee, and a primary author of MACRA, that will provide an in-depth look at what MACRA means for oncology providers and the future of physician reimbursement. ACCC members can access call-in information here.
As ACCC members know, last week brought unprecedented momentum on an issue physicians and Congress have been struggling with for over a decade: repealing the sustainable growth rate (SGR). Just days before the current SGR “patch” expired, the House of Representatives overwhelmingly passed H.R. 2, the Medicare Access and CHIP Reauthorization Act, legislation that would permanently replace the SGR formula with stable Medicare payment updates and encourage physicians to increasingly participate in alternative payment models. The bill builds on last year’s bipartisan, bicameral compromise that ultimately hit roadblocks when legislators struggled to find a way to pay for it.
The Senate was expected to take up the House bill, but on March 27, the chamber recessed for two weeks, leaving a very small window to consider the bill when they return on April 13.
Senate Majority Leader Mitch McConnell has said the bill should move “very quickly” when the chamber comes back into session, and there is “every reason” to believe the bill will pass.
Meanwhile, the current “patch” expired March 31, and CMS has indicated that it will hold claims for two weeks, or 10 business days, through April 14.
We’re in the homestretch; we’re closer to a permanent fix to the SGR than we have ever been before. But are we there yet? Not quite. Now is the time to contact your Senators, and urge them to support passage of H.R. 2, to ensure that physicians have the predictable, appropriate payments they need to continue to provide high-quality cancer care.
Stay tuned. And make your voice heard. Contact your Senators today.
On Thursday, March 26, the U.S. House of Representatives passed H.R. 2, legislation to permanently repeal and replace Medicare’s sustainable growth rate (SGR) formula for physician reimbursement. Read a summary of the legislation here.
Unfortunately, the Senate announced late Thursday evening that they will not consider the SGR repeal bill until they return from recess on April 13, 2015. CMS has indicated it will hold claims for two weeks, through April 14.
ACCC urges members to contact your Senators in the next two weeks and ask them to support a permanent repeal of the SGR.
On March 26, by a vote of 392-37 the U.S. House of Representatives overwhelmingly passed H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, legislation to permanently repeal and replace Medicare’s sustainable growth rate (SGR) formula for physician reimbursement. Read a summary of the legislation here.
Rep. Michael C. Burgess, MD, (R-Texas), the bill’s primary sponsor, said in a statement, “This is the work of a collaborative body. . . .It is time to end the SGR. Let us never speak of this issue again.”
On March 25, the White House expressed support for the bill.
The Senate is expected to vote on the bill March 27, before Congress recesses for two weeks.
ACCC urges members to contact your Senators and ask them to support a permanent repeal of the SGR. As an expert in cancer care, they need to hear from you!
by Leah Ralph, Manager, Provider Economics and Public Policy, ACCC
With another SGR deadline looming, leaders in the U.S. Senate and House are coming close to striking a bipartisan, bicameral deal to finally replace the broken Medicare Sustainable Growth Rate (SGR) formula.
On March 24, bipartisan leaders of the House Energy and Commerce and House Ways and Means Committees introduced H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA), to permanently replace Medicare’s Sustainable Growth Rate (SGR). The agreement builds upon H.R. 1470, introduced last week.
H.R. 2 would create an improved physician payment system that rewards quality, efficiency, and innovation and put an end to the cycle of annual “doc fix” crises that have created uncertainty for millions of Medicare providers and beneficiaries for over a decade. As you well know, physicians need the assurance of predictable, appropriate payments in order to plan for the future and invest in the personnel and technologies that are essential to providing high-quality cancer care.
This is historic momentum on an issue that has plagued providers—and Congress— for years. This year’s compromise builds on last year’s efforts, and the window to get this bill across the finish line is narrowing. Join us in urging Congress to continue to work together to pass responsible legislation that appropriately reimburses patient care.
Contact your member of Congress to support a permanent repeal of the SGR. As an expert in cancer care, they need to hear from you!
by Amanda Patton, ACCC Communications
March 23 marked the five-year anniversary of President Obama’s signing of the Affordable Care Act into law. Over the last five years, nearly 16.4 million Americans have gained health coverage under the ACA.
Last week, at ACCC’s Annual Meeting, CANCERSCAPE, in Arlington, Va., panelists Steven D’Amato, BSPharm, BCOP, executive director, New England Cancer Specialists; Wendy Andrews, BS, practice manager, Hematology/Oncology at the University of Arizona Cancer Center; and George Dahlman, executive vice president, Federal Affairs & Operations, National Patient Advocate Foundation, explored the impact of the ACA from the patient advocate and provider perspective, sharing the view from the frontlines of care delivery and patient advocacy. The discussion was moderated by ACCC Executive Director Christian Downs, JD, MHA.
One challenge panelists identified is meeting the increased demand for services driven by growing numbers of insured patients.
“In Maine we have an exchange, Maine Community Health Options. It’s been so successful that the challenge is having adequate staff to manage the program,” said Steven D’Amato. “The big challenge will be the workforce challenge as we have more insured patients.”
Wendy Andrews, who is a practice manager, noted that Arizona has expanded Medicaid, which has moved many patients from self-pay to Medicaid. While they are seeing more patients with insurance, these patients all tend to be underinsured.
Another challenge expressed by each of the panelists is the pressing need to help patients understand their insurance coverage and, especially, their out-of-pocket costs.
During the first year of the Marketplace in Arizona, those trying to help consumers with plan selection often had a lack of knowledge [about coverage] and patients were “actually given the wrong information,” Ms. Andrews said. Now, in the Marketplace’s second year, this problem continues.
From the patient advocate’s perspective, George Dahlman finds that the Marketplace experience is exposing consumers’ education gaps. “We have 200 case workers that help patients with insurance problems and copay programs. [This is exposing] the biggest education gaps for consumers. Most people look at the insurance premiums—not what’s included in the benefits program” when purchasing coverage.
Andrews agreed, finding that “ninety percent of all patients really, truly do not understand their insurance benefits.”
Providers and patient advocate organizations alike are challenged to help educate consumers about their coverage. “These are complicated insurance products, and you’re educating two patient populations: previously insured and those who’ve never had insurance before. It’s a brave new world for consumers,” said Dahlman. Patients need information about whether they can keep their current providers when considering insurance options, and what their out-of-pocket costs will be.
“In our practice, it’s essential that patients meet with a financial advocate first,” said D’Amato. Wendy Andrews agreed. “We pre-register all of our patients and verify their benefits.” Her practice requires that patients also verify that they’ve made premium payments. As a result, the front-end administrative burden for providers has increased.
Finally, the panel touched on the impact of narrow networks within marketplace plans. In a rural state, like Maine, “you always worry about access,” said D’Amato. “Creation of narrow networks creates inconvenience for patients.” In Arizona, Andrews said,“the problem we see the most is lack of providers being available in all the plans. What does a patient do when there isn’t a provider in their plan and they have to travel long distances [for care]?”
In summary, the panelists’ described three key challenges post-ACA implementation:
- Access challenges, i.e., having enough providers to meet increased patient demand; narrow networks potentially limiting patient access to providers
- Education challenges, i.e., increased need to help patients, both previously insured and those who are newly insured, understand their coverage and out-of-pocket costs, and
- Front-end administrative burdens, i.e., verifying coverage, understanding patients’ insurance plan coverage, and helping identify resources for underinsured patients.
by Amanda Patton, ACCC Communications
On Tuesday, March 17, at ACCC’s Annual Meeting, Ron Kline, MD, Medical Officer with the Center for Medicare and Medicaid Innovation (CMMI), and Kavita Patel, MD, MS, of the Brookings Institution helped bring a little more clarity to CMMI’s Medicare’s Oncology Care Model (OCM).
The OCM has been developed by CMMI to test new payment and service delivery models, as part of its overarching triple aim of better care, smarter spending, and healthier people. OCM goals center on care coordination; appropriateness of care; and access for beneficiaries going through chemotherapy, Dr. Kline said. Learn more here.
In his overview of the five-year pilot, Dr. Kline pointed to the multi-payer nature of the OCM. “Payers are encouraged to work as part of the model. The point is to leverage the OCM to bring in more and more payers and patients to this model.”
Finally, he stressed the OCM is not intended to be a one-size-fits-all model.
“Part of the point of OCM is that we don’t have all the right answers for all the parts of the country…and the best way to move forward is to learn best practices [through the model].”
CMMI plans to hold webinars, site visits, and meetings at ASCO and elsewhere to share OCM best practices, he said.
So, What’s Everyone Asking?
According to Dr. Patel, the top OCM hot topics are:
# 1 Eligibility. CMMI wants the OCM to “include everyone as much as possible as long as we adhere to the principles of the OCM, attribute, and benchmark appropriately,” said Dr. Kline.
“ACCC is exactly the audience the Oncology Care Model is tailored for—those providing ongoing services for cancer care,” said Dr. Patel.
#2 If you have a practice, can only some providers participate? The short answer is, if you participate, anyone in the practice who is prescribing chemotherapy would be automatically included in the OCM. This includes NPs or PAs who might be prescribing. Simply put: It’s an inclusive model.
#3 Data requirements. Participants need the administrative and technological resources to support these.
For those contemplating OCM participation Patel suggests the following steps:
- Evaluate what infrastructure investment you will need to make.
- Perform a serious “gut check” with providers on what OCM participation will mean.
- Consider how you’ll get all those involved in the OCM to understand the model’s total cost of care framework. (This last item is likely the biggest organizational hurdle, Patel said.)
- Finally, consider the staffing requirements for participation.
What components will be needed for OCM success? Dr. Patel identified three:
- Bringing on primary care physicians
- Learning how to do robust data exchange inside the practice, e.g., having an EMR able to deliver clinicians what they need at point of service
- Being able to predict which patients in your population will need more intensive services (risk stratify).
Perhaps it’s not surprising that even during the OCM discussion, the SGR made a cameo appearance. Dr. Patel noted that details of an SGR fix currently being negotiated on Capitol Hill will likely include some provisions that will force doctors to enter into alternative payment models in the next five years.