CMS Decreases Clinic Visit Payments to Hospital-Employed Physicians and Expands Decreases in Drug Payments 340B Cuts

The Centers for Medicare and Medicaid Services (CMS) has reimbursed hospital-employed physicians more than self-employed physicians. However, CMS is moving forward with plans to expand its site-neutral payment policy to clinic visits, a move that could save the agency hundreds of millions of dollars (1).

Clinic visits are the most common service billed to CMS. CMS estimates that it is now paying about $75 to $85 more on average for the same service in hospital outpatient settings compared to physician offices. Beneficiaries are responsible for 20% of that increased cost. The payment change is projected to save Medicare $610 million and patients about $150 million. Higher CMS payments to hospital-employed physicians have also been have associated with higher commercial prices and spending for outpatient care which could save CMS even more money (2).

However, CMS abandoned its 2016 plan to expand a site-neutral rule. That regulation would have paid hospital off-campus facilities less than hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015. Following pushback from the American Hospital Association and others, the agency said it decided to not finalize that provision.

CMS’ 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to eligible hospital-based departments at significantly reduced prices. CMS will expand last year's cuts to 340B discounts given to outpatient facilities. Last year, the agency cut 340B drug payments by $1.6 billion, or 22.5% less than the average sales price. CMS is expanding the 340B cut to off-campus provider-based departments to prevent hospitals from moving their drug administration services for 340B-acquired drugs to an off-campus facility to receive a higher payment.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Dickson V. CMS slashes clinic visit payments, expands 340B cuts. Modern Healthcare. November 2, 2018. Available at: https://www.modernhealthcare.com/article/20181102/NEWS/181109978 (accessed 11/2/18).
2. Neprash HT, Chernew ME, Hicks AL, Gibson T, McWilliams JM. Association of financial integration between physicians and hospitals with commercial health care prices. JAMA Intern Med. 2015 Dec;175(12):1932-9. [CrossRef] [PubMed]

Cite as: Robbins RA. CMS decreases clinic visit payments to hospital-employed physicians and expands decreases in drug payments 340b cuts. Southwest J Pulm Crit Care. 2018;17(5):136. doi: https://doi.org/10.13175/swjpcc115-18 PDF 

CMS’ Star Ratings Miscalculated

Modern Healthcare is reporting that the Centers for Medicare and Medicaid Services (CMS) has miscalculated hospitals star ratings since they were first released in 2016 (1). Officials at Rush University Medical Center in Chicago exclusively disclosed their analysis and correspondence to Modern Healthcare. The investigators found that instead of evenly weighting the eight measures in the safety of care group, the CMS' star ratings formula relied heavily on one measure— The Patient Safety and Adverse Events Composite, known as PSI 90 —for the first four releases of the ratings and then complication rates from hip and knee replacements for the latest release. The single measure accounted for about 98% of a hospital's performance in the safety group, according to Rush's analysis. The safety group can also greatly influence a hospital's overall star rating, the analysis concluded. Rush's findings likely prompted the CMS to announce this week that it would postpone the July release of its star ratings (1).

The statistical model the CMS uses likely caused the miscalculation. The model, called latent variable modeling, uses scores for seven groups of measures to calculate the star ratings:

1. Mortality
2. Safety of Care
3. Readmission
4. Patient Experience
5. Effectiveness of Care
6. Timeliness of Care
7. Efficient Use of Medical Imaging

The three outcome groups—mortality, safety and readmissions—are each weighted the most at 22% each. Measures within each group are supposed to be evenly weighted to calculate the hospital's performance in that area. Rush's analysis found that the weight given to the PSI-90 measure was much greater than the seven other measures in the safety group. Specifically, PSI-90 was weighted 1,010 times stronger than the catheter-associated urinary tract infections measure, 81 times stronger than the C. difficile infection rates measure, 51 times stronger than the central line-associated bloodstream infection rates measure and 20 times stronger than either the surgical site infection rate measure.

Latent variable modeling changes the weighting and is inappropriate for measuring clinical outcomes, said David Levine, senior vice president of advanced analytics and informatics at Vizient (1). "Given the disproportionate weighting of the safety scores over time, they did not represent a composite measure," said Dr. Omar Lateef, an author of the analysis and Rush's senior vice president and chief medical officer (1). Lateef said he and his colleagues at Rush were alarmed by a rating drop from 5 to 3 stars because they have improved performance on five of the eight safety measures since the December release. " Lateef added that although CMS was initially dismissive of Rush’s concerns that CMS has come around since presented with Rush’s analysis.

CMS announced earlier this week that it was delaying release of the star ratings "to address stakeholders concerns." No date has been set for when the new ratings will be released.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Maria Castellucci M. CMS star rating system has been wrong for two years, health system finds. Modern Healthcare. June 15, 2018. Available at: http://www.modernhealthcare.com/article/20180615/TRANSFORMATION01/180619933?utm_source=modernhealthcare&utm_medium=email&utm_content=20180615-TRANSFORMATION01-180619933&utm_campaign=am (accessed 6/15/18).

Cite as: Robbins RA. CMS' star ratings miscalculated. Southwest J Pulm Crit Care. 2018;16(6):338-9. doi: https://doi.org/10.13175/swjpcc078-18 PDF 

Healthcare Payments Under the Budget Deal: Mostly Good News for Physicians

In the early morning hours last Friday (2/9/18) Congress passed and President Trump signed a massive budget agreement (1). The spending package will cost about $320 billion over 10 years, according to the Congressional Budget Office. Payments for healthcare substantially increase under the deal. Most praised the agreement. "Congress made the right choice this morning for patients and communities by voting to halt damaging cuts to hospitals that care for low-income working families and others who face financial challenges," said Dr. Bruce Siegel, CEO of America's Essential Hospitals, which represents the nation's safety-net facilities. Marc Goldwein of the Center for a Responsible Federal Budget called the healthcare provisions the one "beacon of light" in what otherwise is an exorbitantly costly budget bill. Goldwein praised its mix of structural reforms with "reasonable policy” and liked that the bill pays for the increased healthcare spending.

The bill extends Medicare physician fee cuts that provide about $38 billion in offsets to the increased spending (2). The bill preserves the planned physician fee cuts at 0.5% in 2018 but would reduce the cut to 0.25% in 2019. Not all were pleased by the continuation of the cuts. Calling it "contrary to Congress' intent” ACP President Jack Ende called on Congress to enact permanent relief from the physician fee cuts.

Other major healthcare provisions include (1,2):

• Continued funding for community health centers for two years.
• A two-year delay to the already-in-effect payment cuts to Medicaid disproportionate-share hospitals (DSH) which predominately represent safety net hospitals.
• A two-year delay in the low-volume adjustment program which predominately affects rural hospitals.
• An additional 4-year extension of the Children's Health Insurance Program (CHIP), which had received a 6-year extension in the continuing resolution that was approved in January.
• Forcing pharmaceutical companies to pay 75 percent of the cost of drugs for seniors in Medicare’s coverage gap a year earlier than planned.
• Repeal of the "therapy cap”, a move long pushed by therapy provider groups and the American Association of Retired Persons. This would permanently repeal Medicare's coverage limit on physical therapy, speech-language pathology, and outpatient treatment.
• $6 billion for the opioid epidemic, which will go toward state grants, public prevention programs, and law enforcement.
• Funding for the Maternal, Infant, and Early Childhood Home Visiting Program, which helps at-risk pregnant women and families navigate the social safety net.
• A reduction in Medicare payments to Home health agencies. They're expected to lose $3.5 billion in Medicare payments starting in 2020 due to a change in the way Medicare calculates annual payment updates.
• Funding the Chronic Care Act, which opens up new flexibilities for Medicare Advantage and care for chronically ill Medicare beneficiaries.
• A 2-year delay in implementing The Affordable Care Act's high-cost plan tax, popularly known as the “Cadillac tax”. This was a 40 percent excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. The tax is now scheduled to take effect in 2020.
• Repeal of Independent Payment Advisory Board (IPAB). Provider groups from the American Medical Association to the American Hospital Association applauded the move, even though Congress has never triggered the panel, which was charged to find and implement Medicare savings.

However, not all were pleased by the repeal of cost containments. IPAB repeal doesn't cost much in the grand scheme of things, said Mark Goldwein from the Center for a Responsible Federal Budget but “the long-term policy implications are huge, and a big mistake” (2). Kaiser Family Foundation Senior Vice President Larry Levitt chided that the bill demonstrates “…healthcare cost containment generally seems better in theory than in practice” (2).

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Luthi S. Beacon of light: Healthcare additions in budget law pleasantly surprise providers. Modern Healthcare. February 9, 2018. Available at: http://www.modernhealthcare.com/article/20180209/NEWS/180209895 (accessed 2/12/18).
2. Ault A. Trump signs budget deal, cuts Medicare fee in 2019. Medscape. February 9, 2018. Available at: https://www.medscape.com/viewarticle/892491 (accessed 2/12/18).

Cite as: Robbins RA. Healthcare payments under the budget deal: mostly good news for physicians. Southwest J Pulm Crit Care. 2018;16(2):88-9. doi: https://doi.org/10.13175/swjpcc032-18 PDF 

CMS Announces New Payment Model

On Tuesday, 1/9/18, the Centers for Medicare and Medicaid (CMS) announced a new voluntary bundled-payment model that will be considered an advanced alternative payment model under Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (1). The new model is the first advanced Alternative Payment Model (APM) to be introduced by the Trump administration. The Trump administration has been a vocal advocate of reducing administrative burden for clinicians and has touted voluntary models as a solution (2). The new, voluntary model comes less than two months after the CMS officially decided to eliminate two mandatory bundled-payment models created during the Obama administration.

Under the model, clinician payment will be based on quality measures during a 90-day episode of care. Participants must select at least one of the 32 clinical episodes to apply to the model. The inpatient clinical episodes are listed in Table 1 (3).

Table 1. Clinical inpatient episodes under proposed payment model.

• Acute myocardial infarction
• Back & neck except spinal fusion
• Cardiac arrhythmia
• Cardiac defibrillator
• Cardiac valve
• Cellulitis
• Cervical spinal fusion
• COPD, bronchitis, asthma
• Combined anterior posterior spinal fusion
• Congestive heart failure
• Coronary artery bypass graft
• Double joint replacement of the lower extremity
• Fractures of the femur and hip or pelvis
• Gastrointestinal hemorrhage
• Gastrointestinal obstruction
• Hip & femur procedures except major joint
• Lower extremity/humerus procedure except hip, foot, femur
• Major bowel procedure
• Major joint replacement of the lower extremity
• Major joint replacement of the upper extremity
• Pacemaker
• Percutaneous coronary intervention
• Renal failure
• Sepsis
• Simple pneumonia and respiratory infections
• Spinal fusion (non-cervical)
• Stroke
• Urinary tract infection

Providers will be eligible for bonuses based on their performance. For more information about the model and its requirements, or to download a Request for Applications document (RFA), the application template, and the necessary attachments, please visit: https://innovation.cms.gov/initiatives/bpci-advanced. Applications must be submitted via the Application Portal, which will close on 11:59 pm EST on March 12, 2018. Applications submitted via email will not be accepted.

The CMS Innovation Center will hold a Q&A Open Forum on Tuesday, January 30, 2018 from 12 pm – 1 pm EDT. This event is open to those who are interested in learning more about the model and how to apply. Please register in advance here - https://preaward.adobeconnect.com/e3cdwg6hgx9f/event/registration.html.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Centers for Medicare and Medicaid Services. CMS announces new payment model to improve quality, coordination, and cost-effectiveness for both inpatient and outpatient care. January 9, 2018. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-01-09.html (accessed 1/10/18).
2. Castellucci M. CMS launches new voluntary bundled-payment model. Modern Healthcare. January 9, 2018. http://www.modernhealthcare.com/article/20180109/NEWS/180109905 (accessed 1/10/18).
3. Centers for Medicare and Medicaid Services. BPCI Advanced. January 9, 2018. Available at: https://innovation.cms.gov/initiatives/bpci-advanced (accessed 1/10/18).

Cite as: Robbins RA. CMS announces new payment model. Southwest J Pulm Crit Care. 2018;16(1):29-30. doi: https://doi.org/10.13175/swjpcc006-18 PDF 

Medicare Bundled Payment Initiative Did Not Reduce COPD Readmissions

Implementation of the Medicare bundled payments for care improvement initiative has failed to cut readmission rates following hospitalization for acute exacerbation of chronic obstructive pulmonary disease (COPD), according to a study published in the Annals of the American Thoracic Society (1).

Bhatt and colleagues (1) from the University of Alabama at Birmingham enrolled 78 consecutive Medicare patients in 2014 compared to 109 patients in the historic group from 2012. They found that patients from 2014 were more likely to have compliance with the bundled care payment requirements. However, there was no difference in all-cause readmission rates at 30 days (15.4% vs.17.4%; p=.711), and 90 days (26.9% vs 33.9%; p=.306).

The bundled care requirements include regular follow-up phone calls, pneumococcal and influenza vaccines, home health care, durable medical equipment, pulmonary rehabilitation, and to attend pulmonary clinic which were significantly increased after implementation of the bundled care requirements. However, these COPD interventions were implemented despite having not been shown to decrease COPD readmissions (2). Furthermore, Shah et al. (3) have reported that only 27.6% of COPD hospital readmissions are for COPD making these COPD interventions even less likely to reduce readmissions.

References

1. Bhatt SP, Wells JM, Iyer AS, et al. Results of a Medicare Bundled Payments for Care Improvement Initiative for COPD Readmissions. Ann Am Thorac Soc. 2016 Dec 22 [Epub ahead of print]. [CrossRef] [PubMed]
2. Robbins RA, Wesselius LJ. Reducing readmissions after a COPD exacerbation: a brief review. Southwest J Pulm Crit Care. 2015;11(1):19-24. [CrossRef]
3. Shah T, Churpek MM, Coca Perraillon M, Konetzka RT. Understanding why patients with COPD get readmitted: a large national study to delineate the medicare population for the readmissions penalty expansion. Chest. 2015;147(5):1219-26. [CrossRef] [PubMed]

Cite as: Robbins RA. Medicare bundled payment initiative did not reduce COPD readmissions. Southwest J Pulm Crit Care. 2016;14(1):26. doi: https://doi.org/10.13175/swjpcc104-17 PDF