DCMedical News: Thursday, December 13, 2018
DCMedical News-DCMN
Washington, D.C.
Thursday, December 13, 2018
DCMedical News is published every day either the House or the Senate is in session.
THE BIG STORY TODAY IN HEALTH CARE
Physicians Prepare for 2019 Medicare Payment Change, Related Challenges: This is the third (see DCMN December 6 and 10) of a three-part summary of the final 2019 Medicare Physician Payment and Quality Reporting changes “Final Rule” (here).
Previous reports focused on general updates and on technology-based services. In addition to deferring evaluation and management (E/M) payment changes (collapsing office visit levels 2 through 4) until calendar year 2021, CMS has implemented other coding changes. On the revenue side, there are both add-on codes for use in certain visits, and a “multiple procedure payment reduction” for same-day services. Physicians are no longer required to re-record elements of history and physical examinations when there is evidence that the information has been reviewed and updated by ancillary staff. Also, physicians no longer need to document medical necessity of furnishing visits in the home, rather than in the office. All of these changes begin in calendar year 2019.
Beginning in calendar year 2021, as noted above, the framework for E/M visits changes, with office levels 2 – 5 collapsed. But practitioners might choose to continue with existing 1995 or 1997 E/M guidelines for the history, physical exam and medical decision-making. Or they might choose to be paid based on physician time spent face-to-face with patients (being paid like lawyers!). All of this may be modified, as were plans to implement the collapsed E/M visits this year, based on physician and other provider pushback.
Some other documentation changes include: The presence of a teaching physician during an E/M visit can be demonstrated by note to the medical record; the non-excepted provider based department rate (physician services delivered through a hospital-acquired practice) will be 40% of the Outpatient Prospective Payment System rate; clinical laboratory testing data collection will be widened, as required under the Protecting Access to Medicare Act (PAMA) of 2014; Part B drugs will be reimbursed on wholesale acquisition costs plus 3% instead of the current 6%, before the required sequester reduction, and, after the first three months a drug is on the market, Part B drugs are will be paid according to the average sale price plus 6%. For diagnostic imaging services, “appropriate use criteria” (AUC) are introduced, and are required to be consulted through a “qualified clinical decision-support mechanism or applicable imaging services.” This AUC use is voluntary until December 2019, then mandatory beginning in 2020. For the quality measures, CMS has eliminated ten and added one for the Medicare Shared Savings Program, beginning in 2019, resulting in a total of 23 measures for which accountable care organizations are accountable.
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Hospice Services: At its December 6 – 7 meeting, the Medicare Payment Advisory Commission (MedPAC) discussed hospice reimbursement (slides here). There are 4,500 hospice providers enrolled in the Medicare program, with 1.5 million beneficiaries using hospice services in 2017, more than 50% of Medicare decedents during the year. Hospice cost Medicare (Fee-For-Service measure only) $18 billion in 2017. Eligibility is limited to those with a life expectancy of six months or less, certified as such by a physician, for two 90-day and then additional 60-day periods, with agreement to “forgo conventional care for the terminal condition and related conditions.” MedPAC had found in March 2009 that long hospice stays were very profitable for the hospice, leading to a revised payment system in 2016, emphasizing routine home care in additional payments for the last seven days of life.
In general, the supply of hospices has increased from 2,250 in the year 2000 to the current 4,500, with the growth generated beginning in 2005 by the for-profit hospitals. In that year, for-profits amounted to 1,250 of the total number, but now they account for 3,000 of the 4,500. The percentage of Medicare decedents using hospice has increased from 23% in the year 2000 to more than 50% in the year 2017, accompanied by an increase in Medicare spending from $3 billion in 2000 to $18 billion in 2017. The average length of stay for hospice decedents varies by diagnosis, patient location, free-standing vs. provider-based, and ownership. For the for-profit hospices, the average length of stay is 109 days, for the non-profits 67 days. In general, financial reports suggest the sector is viewed favorably by private equity investors and other health care companies seeking mergers and acquisitions. The “Medicare margin” (not equivalent to standard measures of profit margin) for 2016 was 11% for all hospices, 17% for all for-profit, less than 3% for all non-profit facilities.
Red State Representatives Rediscover Rural Health Care Challenges: Republican Members of the House Ways and Means Committee have introduced a variety of bills to “cut excessive red tape” for health providers in rural areas. A new release from the Committee (here) describes the “Reducing Administrative Burden and Becoming Increasingly Transparent Act,” the “Remove Extraneous Measures that Obstruct Value and Efficiency Act,” the “Incentivizing Shared Risk in Medicare Advantage,” the “Rural Hospital Regulatory Relief Act of 2017,” the “Critical Access Hospital Relief Act,” and two bills intending to reduce or remove the burden of prior authorization, a problem for urban and rural physicians alike.
MEDICARE, MEDICAID, COMMERCIAL HEALTH INSURANCE
Outpatient Dialysis Service Analysis: At its meeting December 6 – 7, MedPAC received a report (here) on outpatient dialysis services. For the 400,000 Fee-For-Service beneficiaries, and 7,000 facilities, Medicare Fee-For-Service dialysis spending was $11.4 billion. Treatment stations increased by 3% 2016 – 2017, with a net increase of 250 facilities. Those closing in 2016 tended to be smaller, non-profit and hospital-based. The Medicare “marginal profit” (not a standard financial measure) was 17%. A dramatic drop in drug utilization has taken place from more than $80 per treatment in use in 2007 to less than $40 in 2017, coincident with change in reimbursement. Free-standing dialysis centers furnish 95% of all Medicare Fee-For-Service dialysis treatments. The “Medicare margin” for all free-standing facilities was a negative 1.1%, with the largest losses among the smallest providers.
Medicare Advantage Update: At its meeting December 7, MedPAC received a report on the Medicare Advantage (MA) program (here). Benchmarks for payment range from 115% of Medicare Fee-For-Service to 95% of Fee-For-Service, depending on the denominator; the higher numbers, in other words, took place in the lowest Fee-For-Service counties. If the actual bid by a plan is less than the benchmark, the plans receive a percentage of the difference, nominally to use for additional benefits, Medicare retaining the difference. Enrollment growth by plan type has taken place in HMOs, local PPOs and regional PPOs, with “private Fee-For-Service” losing ground. Most of the growth in numbers has taken place in the HMO area, with most of the growth proportionately amongst the plans with local PPO networks. The presentation to MedPAC emphasized that there is a financial incentive for the MA plans to code diagnoses, since there is higher payment for more health care conditions that are documented, and higher “risk scores” based on health status. This contrasts with Medicare Fee-For-Service, which the MedPAC staff characterized as having “little incentive to code diagnoses.” For 2017, overall MA risk scores were 7% higher than Fee-For-Service, reduced to 1 – 2% higher based on retroactive estimated coding adjustment. One phenomenon noted during 2017 and 2018 is “contract consolidations” to transfer MA enrollees from lower “quality” scoring to higher “quality” scoring contracts managed by the same plan. Nearly 5 million enrollees were so moved during the past five years, more than one-half million alone at the end of 2018, resulting in “unwarranted bonus payments of approximately $200 million in 2019.”
Got Some Good Ideas? Senator Lamar Alexander, Chair of the Senate HELP Committee (Health, Education, Labor, and Pensions), sent a letter (here) to a number of think tanks, asking them for good ideas for controlling the costs of health care, deadline March 1, 2019.
EVENTS & MEETINGS (Events Newly Added to This List Noted in Bold)
Dec. 13
9:30-4:45 p.m., The December 2018 meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC) is on Thursday, December 13 from 9:30am–4:45pm and Friday, December 14 from 9:00am–12:00pm at the Ronald Reagan Building and International Trade Center’s Horizon Ballroom. This month’s Commission meeting covers a broad array of issues, including state innovations in drug spending, Medicaid managed care network adequacy, proposed rules on Medicaid managed care and care for dually eligible beneficiaries, and Medicaid in Puerto Rico. The Commission will also review potential 2019 recommendations on hospital payment. Complete agenda here, December MACPAC data book here.
Dec. 18
First meeting, the HHS Deputy Secretary’s Innovation and Investment Summit. Program announced, here; participants selected, list here; FAQs here.
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here), 2019 House Calendar (here).
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
December publication dates: 14
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com