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Medicare Proposes Dollar Figure For New Chronic-Care Code

A Proposal That Could Reduce Revenue for Surgeons

Medicare would begin to pay physicians $41.92 a month next year for managing a patient with two or more chronic diseases outside of face-to-face office visits, according to a proposed physician fee schedule for 2015 released last week by the Centers for Medicare & Medicaid Services (CMS).

Last year CMS authorized a new billing code for chronic-care management to compensate physicians for tasks such as developing a care plan, referring patients to colleagues, and working with home-care agencies that are inadequately reimbursed under current evaluation and management (E/M) payment codes. CMS scheduled the code to take effect in 2015, but did not assign a dollar amount to it.

The proposed fee schedule for 2015 shows physicians the money, down to the cents. If a medical practice had only 20 Medicare patients who qualified for the new chronic-care management fee, it would gain an extra $10,000.

Physicians would bill Medicare for chronic-care management using a new G code. It would apply to at least 20 minutes of management services over 30 days for a patient whose multiple chronic conditions are expected to last at least 12 months, or until death, and that represent a significant risk for death, functional decline, or acute exacerbation or decompensation. Chronic-care services must be available on a 24/7 basis, but a clinical staff member can provide them at the midnight hour on an “incident-to” billing basis without direct supervision.

In the proposed fee schedule for 2015, CMS backed off from earlier notions to limit the new fee to physicians who employ at least one nurse practitioner or physician assistant, or who operate a medical home. However, CMS continued to make a case for requiring physicians to use an electronic health record (EHR) system that is certified under the agency’s meaningful-use incentive program.

Budgeting Medicare

CMS conceived the new billing code for chronic-care management as a way to support financially beleaguered primary care physicians. Another provision in the Medicare’s proposed fee schedule for 2015, however, could reduce revenue for surgeons. CMS wants to stop paying surgeons a set fee for procedures that covers postoperative services — think office visits — during 10-day and 90-day global periods. The agency is proposing that surgeons instead bill postoperative services separately on a piecemeal basis during these time frames.

What helped prompt this change, CMS explained, were reports from the Office of Inspector General in the US Department of Health & Human Services indicating that most surgeons did not perform as many postoperative services as the global period called for. For example, the fee for a 90-day global period may assume 10 postoperative office visits, but the surgeon may conduct only six.

CMS said it wants to convert both 10-day and 90-day global periods into 0-day periods, which would bundle all preoperative and postoperative care on the day of the surgery together with the operation itself. The 10-day global period would be phased out in 2017, the 90-day global period in 2018.
In a small victory for digital healthcare, CMS also said that it wants to expand the list of reimbursable services delivered via telemedicine to include annual wellness visits, psychoanalysis, psychotherapy, and prolonged E/M services. The agency said this change would improve access to healthcare in rural areas.

SOURCE: Medscape

Plan to Limit Some Drugs in Medicare Is Criticized

Opponents warn that the proposal, if enacted, could harm patients. Federal officials say it would lower costs and reduce overuse of the drugs.

An alliance of drug companies and patient advocates, joined by Democrats and Republicans in Congress, is fiercely opposing an Obama administration proposal that would allow insurers to limit Medicare coverage for certain classes of drugs, including those used to treat depression and schizophrenia.

The proposed rule, which would lift a requirement that insurers cover “all or substantially all” drugs in certain treatment areas, is just one of a series of changes to the drug program that are being opposed by the unlikely alliance. Even insurers and drug benefit managers, who have previously supported added limits on drug coverage, oppose the rule. They object to provisions including changes to so-called preferred pharmacy networks, where consumers are steered toward a limited network of pharmacies, and to reducing the number of plans that insurers can offer in any one region.

A House subcommittee plans to hold a hearing on the proposal next week, and the rule is open for public comment until March 7.

“We’ve been scratching our heads over this,” said John J. Castellani, the chief executive of the Pharmaceutical Research and Manufacturers of America, the drug-industry trade group. Medicare Part D, he noted, is the rare government program that not only gets high marks from consumers but also has cost taxpayers billions of dollars less than originally expected. “Why is the administration trying to make such extensive changes to a program that isn’t broken?”

Mr. Castellani’s organization was one of more than 200 groups that signed a letter this week asking that the rule be withdrawn. Earlier this month, Republican and Democratic members of the Senate Finance Committee warned that the proposal could “diminish access to needed medication” without saving much money.

The administration’s proposal would remove the protected status from three classes of drugs that has been in place since the program’s inception in 2006: immunosuppressant drugs used in transplant patients, antidepressants and antipsychotic medicines. They include many well-known drugs, such as Wellbutrin, Paxil and Prozac to treat depression, and Abilify and Seroquel to treat schizophrenia.

Three other categories — cancer, H.I.V. and anti-seizure drugs — would retain their status as protected classes and insurance companies would be required to continue covering nearly all drugs in those treatment areas. Medicare has traditionally required the broad coverage because patients with these conditions must often try several drugs before finding one that works.

In proposing the change last month, the administration said that the policy was envisioned as a temporary measure to help ease patients’ transition to the new Medicare drug program, and that since then, insurers had lost their leverage in negotiating with drug companies because the drug companies knew the insurers were required to cover their drug costs and were therefore less willing to offer lower prices.

In its proposal, the Obama administration cited a 2008 study by the actuarial and consulting firm Milliman that showed that the six protected classes accounted for anywhere from 17 to 33 percent of total outpatient drug spending under Part D of Medicare. In addition, it said that the costs of those drugs were on average 10 percent higher than they would be without the requirement to cover substantially all drugs in these classes.

The administration predicted savings for both beneficiaries and the Medicare program if prescription drug plans could remove some currently covered drugs from their formularies. It could also give insurers additional tools to limit overuse of certain drugs, such as the prescribing of antipsychotic drugs to nursing-home patients with dementia, a common practice that is widely viewed as inappropriate.

“We believe the Part D program has been a phenomenal success,” said Jonathan Blum, principal deputy administrator of the Center for Medicare and Medicaid Services, which oversees the Part D program. But, he added, “We also see vulnerabilities in the program, and we have proposed for public input into ways to improve it.”

Leaders of numerous patient advocacy groups, many of whom met last week with White House officials to express concern about the proposed rule, said they were worried that patients could be harmed if the policy changed.

“The proposal undermines a key protection for some of the sickest, most vulnerable Medicare beneficiaries,” said Andrew Sperling, a lobbyist at the National Alliance on Mental Illness.

Under the proposal, Mr. Sperling said, a Medicare drug plan could have a list of preferred drugs with just two medications to treat schizophrenia. That is inadequate, he said, because antipsychotic drugs work in different ways in the body, and have different side effects. “You get much better outcomes when a doctor can work with patients to figure out which medications will work best for them,” he said.

In a letter written by members of the Senate Finance Committee, the senators suggested that the change could raise costs in other areas. “If beneficiaries do not have access to needed medication,” the letter said, “costs will be incurred as a result of unnecessary and avoidable hospitalizations, physician visits and other medical interventions.”

The new federal health care law requires that Medicare drug plans include all drugs in certain categories and classes “of clinical concern,” and it authorized the secretary of health and human services to identify those categories.

Mr. Sperling said lawmakers had assumed that Medicare officials would keep the original six protected classes and add to them, not cut them. The administration proposal sets a high standard for designating protected classes, saying the drugs must be needed to prevent “hospitalization, persistent or significant disability or incapacity, or death” that would otherwise occur within a week.

Emily Shetty, a lobbyist for the Leukemia and Lymphoma Society, said Medicare beneficiaries, who include older and disabled Americans, should be treated with special care. “They are a more vulnerable patient population as a whole, and having access to a full range of therapies is crucial to ensure that they are able to get the care that they need,” she said.

The Medicare Part D program is unusual in that it requires broad coverage of drugs in these categories.

Commercial insurance plans, including those in the new marketplaces operating under the federal health care law, have more flexibility. Some drugs are simply not covered, and some plans require that patients and doctors go through additional steps — such as trying other drugs first, or getting approval from the insurer — before a drug will be paid for.

Insurers and the companies that manage their drug benefits argue that this arrangement has worked well for consumers, ensuring that drugs are being used properly and helping to keep prices low. But others have identified what they describe as a worrying trend toward more limited drug coverage, and higher out-of-pocket costs for the most expensive drugs.

The rule has some supporters, and many groups back some aspects of the proposal while opposing others.

“Just because a program is popular doesn’t mean that it’s being run the most efficiently, and at the best value for taxpayers and patients,” said B. Douglas Hoey, chief executive of the National Community Pharmacists Association, which supports many aspects of the rule.

This article appeared in print on , in the New York Times with the headline: Plan to Limit Some Drugs in Medicare Is Criticized.

$128B SGR Repeal Deal Needs a Payment Plan

Congress has forged a long-awaited deal to push Medicare’s payment system for physicians to a value-based model. But lawmakers have only seven weeks to agree on how to pay for it.

Analysts, providers, and Medicare patient advocates are cautiously optimistic that the Sustainable Growth Rate formula repeal deal announced Thursday in Congress is a stride forward in the quest to move U.S. healthcare from a fee-for-service model to value-based payment of doctors.

Figuring out how to pay for it may be a bigger challenge.

Put in place a decade ago, the formula for reducing fee-for-service payments to physicians have never taken effect. Instead, Congress has made postponed it year after year.

If a comprehensive deal or new patch is not adopted by March 31, when the most recent “doc fix” patch Congress passed in December is set to expire, the reimbursement rate for doctors is set to be slashed nearly 25 percent.

The bipartisan SGR repeal and replacement deal announced Thursday calls for a five-year period of stability in the Medicare payment system, with a 0.5 percent annual pay rate hike for doctors. In the last five years of the plan, a series of reforms would be launched to push Medicare physician reimbursement to a value-based model.

“This is a classic case of a system put in place and it didn’t work; but every year it was not addressed, it became more expensive,” said NH Rep. Tom Sherman, (D-Rye), a gastroenterologist at Exeter Hospital who has been championing healthcare reform in the state Legislature.

“The longer Congress didn’t deal with it, the less palatable it became for doctors and other providers. A 25-percent pay cut would put most physicians out of practice, out of business… No business can absorb that kind of pay cut.”

Rich Scheinblum, VP of fiscal services at Monadnock Community Hospital in Peterborough, NH, says it’s critically important to end the uncertainty linked to the cycle of annual SGR extensions and threats of reimbursement cuts.

“Assuming it goes through, at least it will provide some sense of stability over the next five years as our organization grapples with all the changes in healthcare delivery,” Scheinblum said. “Hopefully, both parties will come together on a permanent fix before the legislation expires.”

Transition to Value-Based System
In addition to providing a period of provider payment stability, the SGR repeal deal proposes a series of reforms intended to transform Medicare reimbursement to a value-based system.

Advocates for a value-based system say the fee-for-services model gives physicians an incentive to order unnecessary tests and procedures, which drives up costs. “Doctors were encouraged to fit in as many procedures as possible,” said a legislative aide to US Rep. Allyson Schwartz, (D-PA), who introduced a bill with Congressman Joe Heck, (R-NV), that helped form the framework of the SGR repeal deal.

Read the full story here.

Hospitals Push to Clear RAC Appeals Backlog

The two-year backlog of Recovery Audit Contractor (RAC) appeals is unacceptable and the Centers for Medicare & Medicaid must come up with a long-term plan to clear it up, according to the American Hospital Association.

The AHA this week urged CMS to collaborate with the Office of Medicare Hearings and Appeals (OMHA) to fix the problems that led to the backlog of appeals of Recovery Audit Contractor (RAC) inappropriate denials.

“Without fundamental reform, the RAC program will continue to improperly harm Medicare beneficiaries and hospitals,” AHA Executive Vice President Rick Pollack said in an open letter to the 177 members of Congress who are co-sponsoring the Medicare Audit Improvement Act.

“Delays of at least two years in granting an ALJ [Administrative Law Judge] hearing for an appealed claim are not only unacceptable, they are a direct violation of Medicare statute that requires ALJs to issue a decision within 90 days of receiving the request for hearing,” Pollack wrote in a separate open letter to CMS Administrator Marilyn Tavenner. “Further, this is not a new problem; prior to OMHA’s suspension of appeals assignments, ALJs were not adhering to their statutory deadline.”

Until the CMS can develop a lasting solution, Pollack made several recommendations as to how it can temper the negative effects of RAC denials, including:

  • Suspending RAC audits until all levels of the determination and appeals process clear their backlogs;
  • Enforcing timeframes for appeals decisions by entering default judgments in favor of the provider if an appeal is not made by the deadline;
  • Addressing the underlying structural issues with RACs that result in avoidable claim denials; and
  • Lowering the additional documentation request (ADR) limit to minimize the number of claims that end up in the appeals system (similar to the ADR adjustment made last year).

The AHA endorses the bipartisan Medicare Audit Improvement Act, but RACs have sharply criticized it, saying it will “send Medicare crashing to the ground” .