Tag: cms

Between a rock and a hard place: medical-device stakeholders disappointed by cancelled CMS rulemaking

By Emmie Futrell, Class of 2018; Denise D. Burke, Partner at Waller

Another attempt at bridging the gaping lag between FDA approval for medical devices and CMS’s Medicare coverage determinations has been struck down, after a nine-month standstill.

CMS’s proposed rulemaking included a promising new program called EXCITE, or expedited coverage of innovative technology. The proposed rulemaking had not been made public in substance, and the reasons for its cancellation are still unclear.

CMS officials confirmed that EXCITE was intended to improve access to innovative medical-device technologies for Medicare patients.

Members of the medical-device industry, however, believe that EXCITE was patterned after a 2016 industry proposal that had been presented to CMS to correct the backlog.

The 2016 proposal, known as PACER, or the provisional accelerated coverage to encourage research initiative, suggested that CMS grant provisional coverage under Medicare for FDA-approved devices. This would ensure that patients could access innovative technology, while CMS could gather the information necessary for its own approval process.

The provisional coverage would also alleviate pressure on device sponsors, who would not suffer from having to bankroll expensive and highly specific clinical tests before devices are even on the market.

EXCITE is not CMS’s first attempt to reduce the backlog between FDA and Medicare approval for medical devices.

This backlog, which can sometimes last years, results from the independent statutory mandates that tie the hands of the respective agencies. FDA must ensure that the drugs and devices it approves are “safe and effective,” while CMS can only approve products for Medicare coverage if the products are “reasonable and necessary.” This coverage determination requires CMS to evaluate the necessity of devices for typical Medicare patients, which are generally more medically complex than those of patients in FDA clinical trials.

In 2011, the Department of Health and Human Services attempted to address the lag between FDA and Medicare approval by initiating a parallel review program. This program focused on increasing communication between CMS, the FDA and device manufacturers, including providing medical-device stakeholders and manufacturers with detailed information about the study data that each agency would require in the approval process.

It was believed that this would speed the review process by allowing manufacturers to tailor their studies to encapsulate necessary data for each agency.   Lack of resources, however, largely doomed this program before it was effectively launched. Critics have condemned the program, which only resulted in two approvals by CMS.

CMS’s cancellation of the EXCITE program is a strong indication that, for at least the immediate future, medical-device manufacturers will continue to suffer from the bottleneck between the FDA and CMS and experience lengthy delays between FDA approval and CMS reimbursement.

CMS unveils new bundled payment model

By Chase Doscher, Class of 2018; Elizabeth N. Pitman, Counsel at Waller; Zachary D. Trotter, Associate at Waller

Earlier this month, CMS announced the launch of the Bundled Payment for Care Improvement Advanced (BPCI Advanced) payment model.

This is the first Advanced Alternative Payment Model (Advanced APM) introduced under the Trump Administration and the start of the next generation of BPCI models offered through the Center for Medicare and Medicaid Innovation and authorized under the Affordable Care Act.  Under the MACRA Quality Payment Program, providers will be subject to Medicare payment adjustments through one of two tracks: Merit-based Incentive Payment System (MIPS) or Advanced APM.

Under MIPS, a provider may receive a negative, neutral or positive adjustment with the expectation that the majority of participants will experience either negative or neutral adjustments. The BPCI Advanced model, however, entices providers to participate in an Advanced APM by offering the potential for bonus payments under MACRA for those who meet or achieve certain benchmarks during a 90-day episode of care, including the all-cause hospital readmission measure and advance care plan measure.  As with other Advanced APMs, BPCI Advanced requires that participants assume some of the risk and ties payment to quality performance metrics and the required use of certified healthcare technology.

After cancelling an Obama-era proposal for converting certain of the BPCI episode models to mandatory bundled-payment models, the Trump Administration effort to maintain voluntary participation is an attempt to decrease the administrative burdens such models placed on providers. Voluntary participation in BPCI models, such as Comprehensive Care for Joint Replacement and the Cardiac Rehabilitation Incentive model, has been offered since 2016.

This new model will give providers, “an incentive to deliver efficient care,” Seema Verma, CMS Administrator, said. “BPCI Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and toward paying for value.”

Thirty-two clinical care episodes will initially be included in BPCI Advanced, 29 inpatient-setting episodes of care and three outpatient-setting episodes of care and the potential for episode revision for new and existing participants beginning January 1, 2020.   The clinical care episodes include services such as major joint replacement of a lower extremity, percutaneous coronary intervention and spinal fusion.

BPCI Advanced performance period is from October 1, 2018 through December 31, 2023.  Participants joining in the initial stage may not exit prior to January 1, 2020.

Providers interested in at least one of the 32 clinical episodes to apply to the model have until 11:59 pm EST on March 12, 2018 to apply via the application portal.

Back to the Future: CMS revives Obama-era proposed rule on critical access hospitals

By Emmie Futrell, Class of 2018; Kristen A. Larremore, Partner at Waller; Amber Green Arnold, Associate at Waller

Since the 1997 Balanced Budget Act, which created the designation for Critical Access Hospitals (CAH), the requirements for Medicare and Medicaid participation for these rural facilities have largely remained untouched.  But, a recent decision by CMS to revive and finalize an Obama-era proposed CAH rule will change certain Medicare participation requirements for CAHs.

According to a recent rulemaking notice, CMS intends to issue a final version of the proposed CAH rule sometime in the next 17 months.

The CAH designation was created to protect financially vulnerable rural hospitals that provide vital care to rural communities and combat a string of rural hospital closures. However, the intervening years since 1997 have brought many changes to healthcare in the United States, and in June 2016 CMS issued a proposed rule in an attempt to modernize Medicare participation requirements for CAHs and other hospitals.

Highlights of the wide-ranging proposed rule include a requirement that CAHs maintain an infection prevention program, as well as an antibiotic stewardship program to promote the appropriate use of antibiotics.  CAHs would also be required to designate leaders for each of these programs.

CMS hopes these programs will result in a reduction in hospital-acquired infections, including those that may be drug-resistant, which can lengthen inpatient stays and result in increased costs to the Medicare program. However, critics of these proposed requirements have noted that many drug-resistant organisms come into hospitals from other settings and have questioned whether these anti-infection requirements will improve patient care if care delivered outside of the hospital setting is not subject to similar requirements.

The proposed rule also establishes an explicit requirement that CAHs comply with federal anti-discrimination laws — – a requirement already applicable to Medicare providers.  The proposed rule would address this disparity and seek to address reports of discriminatory barriers to access by requiring CAH facilities to adopt and implement nondiscrimination policies.

In addition, the proposed rule would clarify that each patient’s medical records must contain adequate documentation justifying the patient’s admission and continued hospitalization, support the patient’s diagnoses, and describe the patient’s progress and response to medications and services.  The proposed rule also clarifies that patients should be able to access their medical records in form and format requested by the patient, including electronically, if readily producible in that form and format.

In light of recent findings in a Bipartisan Policy Center report that was published in January 2018, CMS may consider additional revisions to the proposed rule.

The report considered the rural communities of seven upper Midwest states and the relationship between local communities and CAHs. The report indicated that, while in many of the smaller localities studied, there were still barriers to access of critical primary care services, CAHs would not necessarily be helpful in addressing such access issues in each rural community.

The report found that, in some instances, CAHs are not financially sustainable due to low occupancy of patients requiring inpatient services. Proposals are wide-ranging to correct this issue, but many proposals include modifying the CAH designation to allow these facilities to include primary care and other outpatient services in addition to the inpatient care that they are already required to provide.

Although the extent to which the Trump administration will finalize the rule as initially proposed remains unclear, CAHs should closely monitor developments for any new CMS proposals addressing CAHs and a final rule implementing changes, because CAHs continue to be a focus of lawmakers and healthcare policy advisors.

CHOW Time: Change of Ownership Changes

By Chase Doscher, Class of 2018; Colbey B. Reagan, Partner at Waller; Daniel Patten, Associate at Waller

Last April, the Center for Medicare & Medicaid Services (CMS) issued a change request making revisions to Chapter 15 (Medicare Enrollment) of the Medicare Program Integrity Manual. Specifically, this change request made significant alterations to Section 15.7.7.1.5 – Electronic Funds Transfer (EFT) Payment and CHOWs. Prior to the change request, when dealing with a change of ownership (CHOW), Medicare Administrative Contractors (MACs) continued to pay the Seller of a healthcare provider or facility until they received the tie-in notice from the CMS Regional Office. MACs would reject any application submitted by either the Seller or the Buyer to change the EFT account or special payment address prior to receiving approval from CMS. The ultimate responsibility for determining payment arrangements was left to the Buyer and Seller while the MAC and CMS processed the CHOW application.

Effective May 15, 2017, when the Seller and the Buyer initiate a CHOW, the provider agreement in existence, alongside the CMS Certification Number (CCN), is assigned automatically from the Seller to the Buyer effective on the transfer date. It is important to note that the Buyer retains the ability to reject the automatic assignment prior to the transfer date. To reject the automatic assignment of the provider agreement, the Buyer must file an initial participation application with the Medicare program. The assigned provider agreement is still subject to all applicable statutes and regulations as well as the terms and conditions under which it was issued. Any contractor will continue to adjust payments to the provider to account for both prior overpayment and underpayment, even if the claims relate to services provided before the CHOW. Additionally, the Buyer in a CHOW may obtain a new National Provider Identifier (NPI) or maintain the existing NPI. Once the CHOW processing is complete, the Seller will no longer be allowed to bill for services furnished after CHOW processing, and only the Buyer is permitted to submit claims using the existing CCN. It is important for parties undergoing CHOW processing to understand that under the implemented changes, any payment arrangement for services furnished during the CHOW processing period is left up to the parties to work out. One primary implication of this is that the Buyer will have some long-term responsibility to bill for services provided by the Seller during CHOW processing.

 

CMS Proposes Change to Joint, Episodic, and Cardiac Rehabilitation Payment Models

By Emmie Futrell, Class of 2018; Patsy Powers, Partner at Waller; Daniel Patten, Associate at Waller

On August 17, 2017, CMS published a proposed rule that could bring about significant changes to some of its Innovation Center’s major payment models. Specifically, the Proposed Rule would:

  • reduce the number of mandatory geographic area participants of the Comprehensive Care for Joint Replacement (CJR) model;
  • cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model; and
  • increase the pool of practitioners that qualify under the Advanced Alternative Payment Model.

These changes may be surprising to some as these models are still in their infancy. The CJR model started last year, and the EPMs and CRs were not scheduled to begin until January 1, 2018.

Perhaps the most striking element of the Proposed Rule is the removal of 33 geographic areas (of the currently 64 geographic areas) where participation in the CJR model has been mandatory. Instead, CMS proposes that such hospitals participate in the CJR model on a voluntary basis, especially hospitals with low volume or those located in rural areas. These hospitals are provided with a one-time option whereby continued participation in the CJR model will be left to their discretion. CMS believes that moving the CJR model away from a mandatory requirement will increase the likelihood that providers will participate in future voluntary initiatives. Hospitals that choose to continue participation in the CJR model will receive a target price for these procedures from CMS each year, and the proposed rule includes refinements and clarifications to this payment process.

CMS is accepting public comments on these revisions, which can be electronically submitted here, until October 16, 2017.

CMS Modernizes Conditions of Participation for Home Health Agencies

By Will Blackford, Class of 2017

On January 13, 2017, the Centers for Medicare and Medicaid Services (“CMS”) published in the Federal Register its Final Rule pertaining to the Conditions of Participation (“CoPs”) for home health agencies (“HHAs”). The rule represents the first modernization in over two decades of the fundamental requirements for HHA participation in Medicare and Medicaid, despite efforts in 1997 to revise the entire set of HHA CoPs. With enforcement of the new provisions beginning July 13, 2017, CMS has given HHAs a six-month window for adapting their policies, procedures, and practices to comply with the new standards.

The most significant changes under the Final Rule revolve around four categories:

  • Patient Rights. CMS added an expansive CoP that sets forth the specific rights that HHAs owe each patient and the steps they must take to protect such rights.
  • Care Planning. The final rule updates the comprehensive patient assessment requirement to focus on all aspects of patient wellbeing. It also requires that a HHA provide its patients with a written copy of the plan of care and utilize an integrated communication system to identify and coordinate care between the HHA and the patient’s physicians.
  • Quality Assessment and Performance Improvement. To ensure continual evaluation and improvement of care for patients, CMS will now require that HHAs initiate a data-driven, agency-wide quality assessment and performance improvement (QAPI) program that is capable of measuring improvement in indicators that are linked to improvement in patient outcomes, safety and care quality.
  • Infection and Prevention Control. The new infection prevention and control requirement that focuses on the use of standard infection control practices, and patient/caregiver education and teaching.

In addition to the modified care standards, CMS also refined the definition of “Representative” to expressly distinguish between a patient-selected representative and a legal representative with legal decision-making authority under the law. There are numerous updates throughout the Final Rule that are shaped by this two-tiered approach to representation.

To meet these new requirements, HHAs need to familiarize themselves with the Final Rule and analyze their current policies and procedures to formulate a plan for tackling implementation of these significant changes. Agencies that fail to comply with any of the new CoPs by the July 13, 2017 deadline are at risk of penalties ranging from imposition of sanctions for marginal issues, to program termination for major infractions.