Keep your finger on the pulse: Healthcare update March 2, 2015

At the agencies

On February 20, the Centers for Medicare and Medicaid Services (CMS) released its proposed payment rate changes and new policies for Medicare Advantage (MA) and the Part D Prescription Drug programs.  CMS announced these changes in an Advance Notice and Draft Call Letter, on which comments will be accepted until March 6, 2015. The final rates will be announced on April 6, 2015. The rate change proposal reflects a 0.9 percent overall cut to MA plans. However, according to the CMS press release regarding the Advance Notice, CMS expects MA risk plan scores to rise due to better coding and therefore expects that the actual revenue change for MA plan rates will be a “positive growth of 1.05 percent.” Proposed program policy changes include improved accuracy of provider directories in plans and working with Part D sponsors regarding the use of preferred cost sharing pharmacies.

On February 12, CMS revealed that it will be modifying its calculation for determining star ratings for nursing homes. Nursing Home Compare is the resource that CMS created for consumers to search for and compare nursing homes and as part of that resource, CMS includes a star rating for each home. The star ratings are based on health inspections, staffing level requirements, and various quality measures set forth by CMS. According to the February 12 announcement, CMS is concerned that too many nursing homes currently have high ratings thus making it more difficult for consumers to compare facilities easily. Changes to the calculations and methods to determine ratings will include increased onsite state surveys to determine the validity of reports from facilities, a minimum of 3-stars for certain aspects of staffing levels, and two new quality measures related to the use of antipsychotic drugs for both long and short-term patients. The new calculations will begin to be used on Nursing Home Compare on February 20 and CMS expects that at least one-third of nursing homes will experience a drop in their star ratings.

On February 12, the Center for Medicare and Medicaid Innovation at CMS announced the Oncology Care Model, a five year demonstration program that will begin in the spring of 2016. This demonstration program was created to assist the agency with achieving its goal of transitioning 30 percent of Medicare fee-for-service providers into a value-based payment system by the end of 2016. Providers that choose to participate and transition to the value-based payment model will be evaluated throughout an “episode,” which is a six-month period of time. During these “episodes,” provider participants in the demonstration program will receive financial assistance from CMS to transition their practices to the value-based payment system. Participants may also receive additional financial incentives if their treatment goals are met during the six-month episodes.

On February 17, CMS announced that it would be delaying release of its final rule regarding the collection of Medicare overpayments to providers. The final rule will now be delayed until February 16, 2016 according the Federal Register notice published by the agency. The original proposed rule was released in February 2012 and included proposals for the time period in which providers must return overpayments and a “look back” period of 10 years for claims not previously identified by providers or suppliers. Even with the final rule delay, providers are still currently responsible for paying back identified overpayments.

On February 6, CMS finalized its rule on 2016 private Medicare plans and the program’s prescription drug coverage. Quality improvement and chronic care improvement to plans were expanded under the rule, as well as outlining private Medicare plans requirements in the event of a natural disaster. The final rule did not lift the “protected class” status on antidepressants, antipsychotics, or immunosuppressants for transplant rejection. The protected class status for these medications had been lifted in the proposed rule. The final rule also omitted the “any willing pharmacy” policy and did not outline CMS’s ability to intervene on negotiations between providers and insurers.

On the Hill

The House Energy and Commerce Subcommittee on Health held a hearing on February 11 regarding ICD-10 implementation. The hearing focused on the cost and benefits of implementing ICD-10 by the October 1, 2015 deadline.  All but one of the witnesses, which included physicians, advocacy groups, professors, and vendors, were in favor of keeping the ICD-10 October 1, 2015 deadline.  Although some of the subcommittee members expressed support for considering another delay of implementation, the majority of the members were in favor of keeping the current deadline.

In the states

On February 9, newly elected Pennsylvania Governor Tom Wolf (D) announced that he will be expanding traditional Medicaid in the state as opposed to continuing to implement his predecessor’s alternative plan. Former Governor Tom Corbett (R) had crafted his “Healthy Pennsylvania” alternative and although it had been approved by CMS this past summer, current Governor Wolf has said the plan caused confusion and reduced treatment to recipients. 

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AICPA issues guidance on new mortality tables for nongovernmental employee benefit plans