On October 27, 2015, the Association of Community Cancer Centers (ACCC) submitted comments on the Health Resources and Services Administration (HRSA) “mega-guidance” on the 340B Drug Pricing Program. ACCC supports HRSA’s effort to provide more clarity in the program and we commend HRSA for taking this important step amid legal challenges and Congressional pressure. But just how far the guidance will go remains unclear. While HRSA’s guidance does not have the strength of a rulemaking, it does inform 340B participants how the agency believes the program should operate, and we can expect it will be used as a basis for future audits. It remains to be seen whether Congress will codify the guidance or move any other legislation related to 340B.
HRSA’s guidance largely focuses on laying out a narrower definition of a patient under the program. Essentially the guidance proposes to significantly strengthen the relationship between the 340B covered entity (CE) and patient in order for that patient to qualify for 340B discounted drugs. The CE would now need to provide much more comprehensive service to a patient in order to receive a 340B drug discount.
Specifically HRSA proposes a six-prong test to determine patient eligibility:
- The patient must have received a healthcare service from a registered CE.
- The healthcare service is provided by a CE-associated provider (employed by or an independent contractor of that CE).
- The drug prescription is a result of the service provided by the CE and, importantly, the service is not limited to the dispensing or infusion of a drug.
- The service is consistent with the CE’s grant or contract (typically for grantees only).
- The prescription is the result of an outpatient service, determined by how the CE bills the payer.
- The CE maintains access to auditable health records, demonstrating a provider-to-patient relationship and that the CE is responsible for that patient’s care.
So what does this mean for cancer care? This guidance will likely have significant implications for referrals and follow-up care, limiting the ability of cancer patients to move between sites of care. For example, under the guidance, when a patient sees a physician at a non-340B site as a referral or follow up to care, even though the patient’s care originated at a CE, that patient would no longer be eligible to receive a 340B discount. Further, under the guidance, if a community practice physician (i.e., a non-CE-physician)—potentially without the infrastructure or resources to provide certain oncology services—sends patients to a CE for an infusion, that patient would not be eligible for 340B drug pricing. This is because the guidance stipulates that the service the CE provides cannot be limited to the infusion or dispensing of a drug.
In our comments to HRSA, ACCC weighed in on the potential unintended consequences and administrative burden this revised patient definition may present for CEs. We urge the agency to consider the complexity of today’s multi-site cancer care infrastructure and to ensure that cancer patients retain access to appropriate, quality cancer care. Further, in order to qualify for 340B drug pricing, a CE must provide associated healthcare services to a referred patient beyond just dispensing or the infusion of a drug. ACCC urges HRSA to coordinate with the Centers for Medicare & Medicaid Services (CMS) to ensure CEs understand what constitutes a healthcare service for purposes of 340B drug pricing. ACCC also urges HRSA to clarify any specific requirements regarding the content of a CE’s patient records in order to demonstrate a provider-to-patient relationship for purposes of the 340B program. Finally, ACCC notes the multitude of new administrative and accountability requirements for CEs, and encourages HRSA to work with stakeholders to collect data on the financial and operational impact of these new requirements.
The agency may issue final guidance sometime in the following months. ACCC will be monitoring closely. Stayed tuned.
The Centers for Medicare & Medicaid Services (CMS) on Oct. 30, 2015, released the final 2016 Physician Fee Schedule and Outpatient Prospective Payment System rules. With the exception of radiation therapy codes, the final rules align quite a bit with the proposed rules. A preliminary summary is included below. Stay tuned for detailed summaries and analysis on an upcoming ACCC members-only conference call on these 2016 final rules.
Highlights of 2016 PFS Final Rule
In a noteworthy departure from the proposed 2016 PFS rule, CMS did not finalize new radiation therapy treatment payment codes. CMS responded to concerns expressed by ACCC and other stakeholder groups and delayed implementation of new radiation oncology codes, continuing use of current G-codes and values for 2016. However, the agency did finalize its proposal to increase the linear accelerator equipment utilization rate assumption from 50 percent to 70 percent over two years. CMS continues to seek empirical data on costs and usage of capital equipment, including linear accelerators.
Advance Care Planning
For 2016, CMS finalizes its proposal to establish separate payment for advance care planning services, consistent with the recommendations of the American Medical Association and other stakeholders, including ACCC. These new codes compensate providers for shared decision-making conversations at various stages of a patient’s illness.
For 2016, CMS finalized its proposal to include all biosimilars of a reference biological product within the same billing and payment code. ACCC had commented against this proposal, raising concerns regarding traceability and administrative burdens expected with the use of a single code. While ACCC supports efforts to increase patient access to biologics, ACCC maintains that a system must be in place to track the specific biosimilar product used for each patient.
CMS finalized its proposal to clarify requirements for billing for “incident to” services. CMS now formally requires that the physician or practitioner billing for “incident to” services must have directly supervised the auxiliary personnel providing these services. Addressing stakeholder concerns about the treating physician’s supervisory role in “incident to” services, the final rule clarifies that the supervising physician need not be the treating physician for billing purposes.
Highlights of 2016 OPPS Final Rule
CMS finalized its proposed cut in hospital outpatient payment rates of – 0.3 percent. Within this calculated –0.3 percent rate update is a –2 percent cut, applied due to the agency’s calculation of excess packaged payment for laboratory services in 2014. As a result of this year’s rate cut due to miscalculations in packaging policies, ACCC urged CMS to proceed cautiously with any additional packaging proposals to ensure future negative adjustments would not be necessary. However, CMS finalized its proposal to expand conditionally packaged services to include three new APCs: level 4 minor procedures, and level 3 and 4 pathology services. CMS notes that packaging of these services is consistent with the agency’s overall packaging policy.
Advance Care Planning
ACCC had also advocated for separate payment under advance care planning codes in the hospital outpatient setting. The 2016 OPPS final rule calls for conditionally packaging payment for these services, permitting separate payment in the hospital outpatient setting in limited circumstances.
In the 2016 OPPS final rule, CMS finalized its proposals to pay biosimilars based on ASP+ 6% of the reference biologic product, and to allow biosimilars to be eligible for pass-through status. ACCC supported these proposals, noting that providing equivalent payment rates in the physician office and outpatient setting for biosimilars removes incentives to select one setting over another.
CMS also finalized proposed changes to its two-midnight rule regarding hospitalization payment status. CMS will now allow certain patients not expected to meet the two-midnight stay requirement for inpatient status to still be classified as inpatient. CMS indicates that qualifying patients are those that require inpatient hospital care, as determined by the admitting physician and supported by the medical record, despite the expectation that their stay will last less than two midnights.
ACCC continues to analyze the 2016 payment rules and will update its members in the coming weeks.
By Leah Ralph, Manager, Provider Economics and Public Policy, ACCC
On September 8th, ACCC submitted comments on CMS’ proposed 2016 Physician Fee Schedule rule. This year, the proposed PFS was released later than usual and contained a number of provisions that ACCC will be watching closely in the coming months.
Read on for a quick roundup of major provisions and ACCC recommendations to CMS:
Radiation Oncology Cuts
CMS proposes several significant changes to payment for radiation oncology procedures that would collectively result in drastic cuts for radiation oncology providers – an estimated 3% for radiation oncology and 9% for freestanding radiation therapy centers. CMS is proposing payment rates for new CPT codes that would effectively reduce Medicare reimbursement for IMRT and other radiation treatment delivery services. The agency also proposes to remove several essential direct practice expense inputs from the new radiation treatment delivery codes, including the on-boarding imaging equipment that is essential to providing safe and accurate radiation treatment. Finally, CMS proposes to adjust the equipment utilization rate assumption for the linear accelerator used in image guidance from 50% of available time to 70% of available time over two years, reducing reimbursement for services that make use of that equipment.
In our comments, ACCC expressed significant concern to CMS that these deep, simultaneous cuts in radiation oncology reimbursement will have the effect of forcing some cancer care providers, particularly those operating in rural and underserved areas, to close their doors. ACCC urges CMS to take the necessary steps to mitigate this threat, for example, by not implementing the proposed increase in the equipment utilization rate. ACCC will be monitoring this closely and stands ready to work with CMS to find ways to implement any appropriate changes over a period sufficient to allow providers to absorb the changes while not compromising access to critical radiation oncology services.
CMS proposes a payment methodology for biosimilar products in which all biosimilars with the same reference product would be assigned a single HCPCS code and reimbursed based on the volume-weighted average sales price (ASP) for all products under the code plus 6% of the reference product’s ASP.
ACCC asks CMS not to finalize this proposal. We expressed concern that assigning multiple biosimilar products a single HCPCS code would create new and unnecessary administrative burdens for physicians and other providers when treating patients with biosimilar products, as they would not only need to enter the HCPCS code into the medical record, as they do now, but also the specific biosimilar therapy used for the patient. Additionally, this approach could significantly impede effective tracking of safety information and other information about the patient experience with specific biosimilar products—after these enter the market. We urge CMS to promote effective tracing of safety information and to minimize administrative burdens on providers who prescribe biosimilars.
Advance Care Planning
CMS proposes to establish payment rates for the two CPT codes adopted by the AMA CPT Editorial Panel to describe advance care planning services. ACCC strongly supports this proposal and asks that the payment rates for these services adequately reflect the cost to physicians of providing advance care planning.
As ACCC believes advance care planning services are equally important in the hospital outpatient setting, where they also take substantial time and resources and contribute significantly to the quality of patient care. In our comments to the proposed 2016 Outpatient Prospective Payment System rule, we urged CMS to pay separately for these two CPT codes in the outpatient setting as well.
Chronic Care Management
CMS recognizes that Medicare’s payment rates for the CPT codes for transitional care management (TCM) and chronic care management (CCM) do not fully account for the cognitive work that primary care physicians and other practitioners perform in managing and delivering care, particularly to chronically ill beneficiaries. CMS identifies add-on codes as one potential means of establishing payment rates that appropriately value the additional time and intensity of physicians’ cognitive work often involved in delivering care management services. ACCC encourages CMS to develop such codes, and to work with ACCC and other provider organizations to ensure that any new add-on codes are structured and valued appropriately.
ACCC also has concerns related to CMS’ proposal for chronic care management in the 2016 OPPS proposed rule. On the hospital outpatient side, CMS is proposing to permit only one hospital to bill for CCM services during a calendar month. ACCC points out to CMS that because cancer care is highly multidisciplinary, it can be difficult to agree upon who should be the designated CCM physician, and we are concerned that CMS’ rules for these services already make it very difficult for hospitals to seek payment for them. We urge CMS to continue to consult with hospitals and physicians on the best way to determine which entities should bill for these services.
“Incident To” Services
CMS proposes to require that the physician or other provider who bills for an “incident to” service must also be the physician or other provider who directly supervises the auxiliary personnel in providing that service. If CMS were to finalize this proposal, ACCC urges the agency to provide education to physicians and other providers on the revised requirement to ensure providers do not experience unwarranted disruption in billing for appropriate “incident to” services.
CMS is expected to finalize the 2016 Physician Fee Schedule rule in late October. Stay tuned, as ACCC will keep members updated as CMS revises and finalizes these important proposals.
The Centers for Medicare & Medicaid Services (CMS) 2016 proposed rules are out, and, not surprisingly, we continue to see the agency push outpatient payments toward more bundled services and move full steam ahead to tie Medicare payments at large to quality and value in the coming year.
2016 HOPPS Proposed Rule
Generally speaking, the proposed Hospital Outpatient Prospective Payment System (OPPS) rule includes few surprises, most notably CMS is proposing a -2% across-the-board reduction to compensate for “excessive” packaged payments for laboratory services in CY14. The rule also includes nine new comprehensive ambulatory payment classifications (C-APCs) to add to the 25 introduced last year and proposes consolidation and restructuring of nine APC clinical families. Importantly, CMS will continue to reimburse drugs at ASP+6% in the hospital outpatient department. The agency also provides some flexibility on the “two-midnight” rule. Currently the rule requires that a beneficiary to remain in the hospital for longer than two midnights in order for the stay to be reimbursed as an inpatient stay. Under the proposed rule, CMS would recognize some shorter stays as inpatient, and would evaluate on a “case-by-case” basis.
2016 PFS Proposed Rule
The proposed Physician Fee Schedule (PFS) rule was released later than expected this year, perhaps due to slightly more contentious provisions. The good news – perhaps – is that, as proposed, the 2016 PFS would have no (0%) impact on Medicare payments in hematology/oncology. However, on the radiation oncology side the news is not so good. If all of the proposals in the rule are finalized, radiation oncology will face an estimated -3% cut and freestanding radiation therapy centers will see a -9% cut due to a combination of new code values and a change in assumption involving the overall use of linear accelerators. CMS also indicates how it will treat biosimilars for the purposes of Part B reimbursement, proposing to assign the same HCPCS code to all biosimilars that reference the same innovator drug. These would be paid based on their volume-weighted ASP+6% of the reference product’s ASP. If no ASP data is available, biosimilars would be reimbursed at 100% of their wholesale acquisition cost.
Under the PFS, CMS also proposes to create two new CPT codes for advanced care planning services, one to start the conversation with a patient and the other for continued discussion. The rule also begins the phasing out of the PQRS (the 2018 payment adjustment will be the last); adjustments for quality reporting will now be made under the new Merit-Based Incentive Program (MIPS), created by the legislation that repealed the Medicare Sustainable Growth Rate (SGR). CMS seeks comments on MIPS on issues like the definition of clinical practice improvement activities, how to define a physician-focused payment model, and more.
ACCC will be submitting comments on both rules, due August 31 and September 8, respectively. On Tuesday, July 21, 4:00-5:00 PM EST, ACCC is hosting a members-only conference call with a full rundown of both proposed rules. Stayed tuned.
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
A proposed rule regarding 340B pricing enforcement was published in the Federal Register on June 17. The proposed rule responds to a mandate in the Affordable Care Act, which required the Health Resources and Services Administration (HRSA) to provide for imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge 340B-covered entities. The rule also provides a methodology for ceiling price calculation.
While not addressing more controversial aspects of the 340B program, such as patient definition, hospital eligibility criteria, and contract pharmacy arrangements, the rule does provide some important clarifications. Codification of the ceiling price calculation would provide 340B-covered entities with needed clarity in ensuring appropriate pricing. The rule would also impose a civil monetary penalty of up to $5,000 per instance of knowing and intentional overcharge of a covered entity, regardless of whether the order is placed with a manufacturer, wholesaler, authorized distributor or agent.
ACCC continues to closely watch for developments related to 340B, including expected release this summer of HRSA’s “mega-guidance,” anticipated to clarify several issues for which the agency does not believe it has rulemaking authority. HRSA has also indicated that it intends to release another rule on the administrative dispute resolution process in the near future. Stay tuned.
By Leah Ralph, Manager, Provider Economics & Public Policy, ACCC
Once again attention is focusing on the 340B Drug Pricing Program. With policymakers – and a variety of stakeholders – increasingly clamoring for more clarity and with some calling for more restrictions, HRSA has struggled with its authority to issue regulations on certain topics, including patient definition, hospital eligibility criteria, and contract pharmacy arrangements.
Last week, it looked like policymakers might address the issue legislatively, attempting to insert last-minute language into the House Energy and Commerce Committee-led effort, 21st Century Cures legislation, that would “overhaul” the program and include many of the issues HRSA has attempted to address in regulations and guidance. However, the Committee ran out of time to find consensus on the comprehensive 340B reform plan, and the language ultimately did not make it into HR 6, the bill that passed out of committee last week.
In keeping with the growing momentum, last week MedPAC also released a report on the 340B Program at the request of Congress. The report provides an overview of the program and evaluates the trend in program growth and spending since its inception. This report could be used to set the stage for future reforms.
Perhaps most important, following HRSA’s withdrawal of its “mega-rule” last fall due to a court ruling against the agency’s treatment of orphan drugs under the program, HRSA recently submitted “mega-guidance” to OMB for review. While language is not yet public, we expect the guidance to cover topics where HRSA does not believe it has the rule-making authority, including patient definition, hospital eligibility, contract pharmacy, and audits. While OMB typically has up to 90 days to review submissions, the agency is not required to take the whole period, and we may see guidance published as early as June.
ACCC continues to follow the 340B dialogue closely, and looks forward to seeing clear, comprehensive rules and definitions to ensure compliance and the long-term viability of the program. For more, see the ACCC position statement.
By Maureen Leddy, JD, Policy Coordinator, ACCC
On May 21, the House Energy and Commerce Committee advanced its 21st Century Cures legislation, HR 6, by a unanimous vote of 51-0. The Committee has publicly pledged that HR 6 will be taken up on the House floor sometime in June, with the goal of final passage in the House by the end of the year. The Cures legislation represents a tremendous step toward advancing research in the field of oncology and healthcare, as well as improving the process for bringing new technologies into oncology programs nationwide. ACCC supports these efforts and continues to watch carefully. Read on for background and an analysis of key provisions in the current draft.
21st Century Cures: The Road to Passage
A year ago the House Energy and Commerce Committee, led by Chairman Upton (R-MI) and Representative DeGette (D-CO), issued a call to action on the 21st Century Cures initiative. The focus was to be the discovery, development, and delivery of life-saving drugs and devices to patients. Through a series of hearings and meetings with stakeholders and government officials, the Committee developed draft legislation, originally circulated in January 2015. The most recent draft incorporates the input of multiple stakeholders and represents a collaborative effort toward developing a better pathway to bring new therapies to patients.
Importantly, the prospects in the Senate, at least for 2015, remain uncertain. The Senate Health, Education, Labor and Pensions Committee (HELP) has been conducting a similar effort toward producing draft legislation focused on new drug and device development. The HELP Committee released a white paper in January 2015 that focused on barriers to development and delivery of new drugs and devices to patients, and examined potential solutions within FDA and NIH. On April 28, the Committee held a hearing, “Continuing America’s Leadership: The Future of Medical Innovation for Patients,” its third hearing on development and delivery of new treatments. While we are encouraged by these efforts, Chairman Lamar Alexander (R-TN) has indicated that the Senate may not develop its own legislative draft language until early 2016.
HR 6: Where Was Consensus Reached?
Despite uncertainty around the Senate’s parallel effort, HR 6 represents an extraordinary collaborative effort toward improving the pathway for disease treatment development. Exactly what did they agree to that will impact ACCC members and their patients?
- NIH Funding
ACCC was pleased to see provisions included that would significantly advance NIH biomedical research. Provisions supporting high-risk breakthrough research and facilitating clinical trial and health data sharing would spur the development and use of new cancer treatment technologies. The establishment of a 21st Century Cures Council, consisting of representatives from NIH, FDA, CMS, industry, insurers, patients, providers, as well as academic researchers, would allow for continued collaboration by this wide range of stakeholders. This council is tasked with setting a strategic agenda for cures development, identifying gaps in innovation and proposing recommendations, and identifying opportunities for collaboration in the U.S. and abroad.
- Drug Development Tools and Precision Medicine
HR 6 follows President Obama’s January announcement of the research-focused Precision Medicine Initiative, clarifying terms and the development of precision drugs and biologics, and requiring guidance documents. The bill defines “biomarker” and requires establishment of a framework for development of biomarkers, including a taxonomy for biomarker classification. The FDA would be required to define “precision drug or biological product” as well as issue guidance on development of biomarkers to inform prescribing decisions. The legislation would also establish a pathway for accelerated drug approval through use of surrogate endpoints.
The field of oncology is witnessing a tremendous growth in the number of molecular biomarkers, as well as diagnostic tests. These improvements in classification of biomarkers as well as clear guidance on prescribing are key to the adoption of these new technologies in cancer care programs.
- Clinical Trials
The option to participate in clinical trials is critical to cancer patients that do not respond to standard treatments. HR 6 would advance federal clinical trial participation, requiring NIH to standardize patient inclusion and exclusion information. It would also require the creation of a scientific research sharing system for federally funded trials. 21st Century Cures would also promote clinical trials by eliminating regulatory duplication through harmonization of HHS and FDA Human Subject Regulations. The legislation modernizes provisions and streamlines the review process to account for trials conducted at multiple sites.
ACCC is pleased that consensus was reached on these and other key provisions regarding research and development of innovative cures. We will continue to monitor this legislation as it reaches the House floor, and watch the Senate for parallel legislation. Stay tuned.
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.