Legislative & Regulatory Update Wisconsin Association of Hematology & Oncology Matt Farber, MA Director, Provider Economics and Public Policy

Overview • Regulatory Update – HOPPS Rule – PFS Rule

• Sequester – HR 1416

• SGR – 25% potential cuts – HR 2810

• Oral Parity – HR 1801

• ACA Implementation – What do providers need to know?

Regulatory Issues • On July 8th, CMS released both the Physician Fee Schedule (PFS) and Hospital Outpatient Prospective Payment System (HOPPS) Rules • ACCC submitted comments to CMS on Sept. 6th • CMS now in its “reading period,” with final rules due in early November

Concerns with PFS Rule • ACCC raised numerous concerns, including: – SGR fix (you hear more on this later) – Measuring payment to newly created offcampus hospital based programs – New G-code for complex chronic care management – Value-Based Modifier – Caps on payments based on rates in ASC/HOPPS settings

Impact of FY 2014 Proposed Rule by Specialty 2014 PFS Proposed Rule Estimated Impact on Total Allowed Charges (Based on Tables 71 & 72 in Proposed Rule)

Specialty Total

Allowed Charges (mil)

Impact of Work and MP RVU Changes

Impact of PE RVU Total Input 0f Changes Combined OPD/A Impact SC cap

Impact of MEI Revision

$86,995

0%

0%

0%

0%

0%

08-Emergency Medicine

$2,929

3%

0%

3%

0%

3%

13-General Surgery

$2,236

3%

-2%

1%

0%

1%

16-Hem/Oncology

$1,890

2%

-3%

-1%

1%

-1%

18-Internal Medicine

$11,416

3%

-2%

1%

1%

0%

37-Radiation Oncology

$1,783

1%

-6%

-5%

-4%

-2%

38-Radiology

$4,635

2%

-3%

-1%

0%

-0%

$812

1%

-27%

-26%

-25%

-2%

$62

0%

-13%

-13%

-8%

-5%

48-Independent Labs 57- Rad Therapy Centers

Health Policy Alternatives

Impact of Proposed Rule on Radiation Oncology Codes

HCPCS

Description

77373

Stereotactic body radiation tx, SBRT

77418

Radiation tx delivery, IMRT

FY 2013 NonFacility Payment (CF = 34.023)

FY 2014 Proposed Non-Facility Payment (CF = 35.6653)

Proposed Change in NonFacility Payment

Proposed % Change in NonFacility Payment

$1,268.72

$1,222.960

-$45.02

-3.6%

$405.55

$392.67

-$12.88

-3.2%

77427

Radiation tx management, x5

$178.28

$185.46

$7.18

4.0%

77413

Radiation treatment delivery

$231.36

$188.67

-$42.69

-18.5%

77301

Radiotherapy dose plan, IMRT

$1,990.35

$1,453.36

-$536.98

-27.0%

77421

Stereoscopic x-ray guidance

$74.51

$73.11

-$1.40

-1.9%

Health Policy Alternatives

Impact of Proposed Rule on Chemotherapy Codes

HCPCS Description 96401

Chemo, anti-neopl, sq/im

FY 2013 NonFacility Payment (CF = 34.023)

Proposed FY 2014 Proposed % Proposed Change in Change Non-Facility Nonin NonPayment (CF Facility Facility = 35.6653) Payment Payment

$75.87

$73.47

-$2.40

-3.29%

96409

Chemo, iv push, sngl drug

$111.94

$107.71

-$4.23

-3.80%

96413

Chemo, iv infusion, 1 hr

$143.24

$132.02

-$5.21

-3.60%

96415

Chemo, iv infusion, addl hr

$30.62

$29.96

-$0.66

-2.2%

96417

Chemo iv infus each addl seq

$71.11

$68.83

-$2.27

-3.2%

Health Policy Alternatives

Payments to Off-Campus Facilities • CMS is recognizing the consolidation in healthcare – They are noticing higher payments to facilities under the OPPS that previously were under the PFS – Asking for input on how to best collect data to determine if higher payments justified • Modifiers, new service codes, or break out costs

Complex Chronic Care Management • 2nd year in a row CMS has proposed to create new code for patient management – Designed to increase payment to PCPs, but specialists can bill as well – To bill, services are expected to last 12 months or until the death of the patient – 2 codes will be used, to cover the first 90 days of services, and the subsequent 90 – 24/7 access to care; care plan, management of transitions – Beneficiary informed consent required; also annual wellness visit

What is the Value-Based Payment Modifier? • The ACA requires Medicare phase in a value-based payment modifier (VM) that would apply to Fee-for-Service payments • The VM increases or decreases FFS payments based on an assessment of both quality and cost of care. • The ACA requires the phase in begin in 2015 and apply to all physicians by 2017. Health Policy Alternatives

Value Based Modifier • In 2015, CMS applied the modifier to all groups of physicians with 100 or more eligible professionals – Non-reporters or groups that do not satisfactorily report would be subject to -1.5 payment adjustment – Groups that satisfactorily report can receive a payment adjustment of “0” – Groups that satisfactorily report can elect to participate in a quality-tiering approach that provides for upward and downward payment adjustment based on specific quality and cost measures

• In 2016, CMS proposes to apply the modifier to all groups with 10 or more eligible professionals Health Policy Alternatives

Value-Based Modifier and PQRS Groups with 100+ EPs in 2015 Groups with 10+ EPs in 2016

Cat. 1: Satisfactory PQRS Reporters: Quality tiering optional in 2015 Quality tiering mandatory in 2016

Groups with 10-99 EPs: upward or no adjustment in 2016

Groups with 100+ EPs: upward , downward, or no adjustment in 2016 Health Policy Alternatives

Cat. 2: Nonsatisfactory PQRS Reporters

-1.0% downward in 2015 -2.0% downward in 2016

OPPS/ASC Cap • CMS proposes to limit the 2014 nonfacility PE RVUs for individual codes so that the total nonfacility PFS payment amount would not exceed the amount paid in the facility setting in 2013 • CMS proposes to exempt the following services: 1. 2. 3. 4. 5. 6.

Services without separate OPPS payment rates Codes subject to the DRA imaging caps Codes with low volume in the OPPS or ACS setting (5 percent or less of the total volume) ASC rates based on PFS payment rates Codes paid in the facility setting at nonfacility PFS Codes with PE RVUs developed outside the PE methodology Health Policy Alternatives

OPPS/ASC Cap • Proposed Rule identifies 210 codes subject to the cap – Wide range of utilization in the ASC/OPPS – Wide range of decrease in payments

• Proposal includes Radiation Oncology Codes – – – – – –

Therapeutic simulation-aided setting (77280 & 77290) Basic radiation dosimetry calculation (77301) Radiation treatment delivery (77403, 77404 & 77406) Radiation tx delivery, 3 or more sites (77412 – 77416) Neutron Beam treatment delivery (77422 & 77423) Hyperthermia (77605,77610, 77615) Health Policy Alternatives

HOPPS Concerns • Implement the proposal to reimburse hospitals for the acquisition cost of separately payable drugs at ASP+ 6% • Not implement the proposal to change the calculation for payment rates of computed tomography (CT) scans and magnetic resonance imaging (MRI) • Not implement the proposal to consolidate clinic and emergency department evaluation and management (E&M) codes from five levels to one level • Not implement the proposal to expand packaging for additional items and services until the agency corrects the significant errors and inconsistencies in the proposed rates, provides opportunity to comment on the corrections and clarifications, and reviews those comments.

ASP+6% • ACCC was again happy to see CMS proposed ASP+6% – Also asked CMS to freeze packaging threshold; not to raise it to $90

• CMS is continuing methodology from the 2013 rule

CCRs and Cost Centers • Beginning in CY 2014, CMS proposes to calculate OPPS relative payment weights using distinct CCRs for: » Cardiac catheterization » Computed tomography scans » Magnetic resonance imaging

• This proposal reduces payment for CT and MRI APCs by 15-38% and increases payment for other imaging APCs by 15-32% • Due to the Deficit Reduction Act caps on physician payment, the OPPS cuts also affect payment for these services in physician offices

Hospital Outpatient Visits • CMS proposes to collapse the five levels of hospital clinic and emergency department (ED) visits and replace them with a single HCPCS G-code for each of the three types of visits: – Clinic visit: GXXXC - $88.31 proposed payment rate (2013 payment ranges from $56.77 - $175.79) ((Updated to $91)) – Type A ED Visit: GXXXA - $212.90 proposed payment rate (2013 payment ranges from $51.82 - $344.71) – Type B ED Visit: GXXXB - $84.85 proposed payment rate (2013 payment ranges from $67.78 - $207.31) • Aligns with agency strategy to use larger payment bundles to maximize hospitals’ incentives to provide care in an efficient matter, reduce administrative burdens, and minimize incentives to “upcode” patient visits • Concern this will disproportionally harm cancer hospitals

Expanded Packaging CMS proposes to package the following seven categories of items and services: 1) Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure  Contrast agents and diagnostic radiopharmaceuticals that do not have pass-through status currently packaged  Includes stress agents and Cysview® 2) Drugs and biologicals that function as supplies or devices when used in a surgical procedure  Includes skin substitutes and implantable biologicals 3) Certain clinical diagnostic laboratory tests  Packaged if integral, ancillary, supportive, dependent, or adjunctive to the primary service when ordered by the practitioner who ordered the primary service and provided on the same date of service  Excludes molecular pathology tests

Expanded Packaging (cont’d) 4) Procedures described by add-on codes  Includes procedures that always are performed in addition to a primary procedure and are generally supportive, dependent, or adjunctive to the primary procedure 5) Ancillary services, except for preventative services, that are assigned status indicator “X”  Includes many radiation therapy services that are proposed to be conditionally packaged 6) Diagnostic tests on the bypass list, except for preventative services 7) Device removal procedures when they are billed with other surgical procedures involving repair or replacement

Payment for Drug Administration Proposal to package payment for all add-on codes significantly affects drug administration services • No separate payment for drug administration add-on codes, including the codes for sequential, additional, and concurrent drug administration services • Substantial increase for separately payable drug administration services from 38 to 298% • Drugs below the packaging threshold and policypackaged drugs also would be included in the packaged payments

CMS Proposes to Create 29 Comprehensive APCs for the 29 Most Costly Device-Dependent Services • •

•

A comprehensive APC is a classification for the provision of a primary service and all adjunctive services provided to support it CMS would make a single, all-inclusive prospective payment based on the cost of all individually reported codes packaged into the comprehensive APC CMS proposes to include:  Devices  Implantable durable medical equipment (DME)  Implantable prosthetics  DME, prosthetics, and orthotics when used as supplies  Supplies used in support of the items and supplies listed above  Otherwise packaged services and supplies

 Adjunctive services  Outpatient department services reported by therapy Healthcare Common Procedure Coding System (HCPCS) codes  Costs reported with room, board, and nursing revenue centers  Non-pass through drugs provided to the beneficiary as part of the comprehensive service and pursuant to a physician order

Regulatory Overview • Final Rules to be released early November • ACCC will hold calls for membership on final rules in mid-November – Summaries on website, blog, etc.

Questions??

Congressional Overview • Where do we stand today? – Government shutdown over • Until Jan. 15th

– Debt Ceiling Raised • Until Feb. 7th (or later)

– Sequestration still on the books – Committee will work to make recommendations so this does not happen again in early Jan. 2014 • Recommendations by Dec. 13 • Eerily similar to 2011 and the super committee

Sequestration • Debt “Super Committee” of 2011 failed to find $1.2 trillion in deficit reduction • CMS reduced reimbursement by 2% across the board started April 1 • Is this the “new normal”? • Results of ACCC survey: • Of those impacted by sequester • 78% reducing operating expenses, including reductions in staff • 35% referring patients to another site of service • 13% delaying treatment as a result of the sequester

HR 1416 • 2% Medicare sequester cuts reimbursements for everything (services, E&M, overhead, drugs, etc.) • Cancer Patient Protection Act of 2013 – Exempts cancer drugs from sequester, leaves rest of sequester in effect • Introduced by Rep. Renee Ellmers • 107 bi-partisan co-sponsors

HR 1416 If the Cancer Patient Protection Act of 2013 (HR 1416) has 107 co-sponsors, why hasn’t it passed? – Concern of piecemeal approach – Few complaints

Sustainable Growth Rate • Not part of the sequester – SGR formula tied to GDP – designed to keep medical spending in line with other areas of our economy, when spending outpaces GDP, cuts must be made

• Congress historically passes “doc fix” at least 1x/year – Congress faced with fixing another 25% reduction

• But, 2013 is different – CBO scored straight SGR repeal at $138B – That’s a bargain!

SGR Repeal: HR 2810 • Medicare Patient Access and Quality Improvement Act of 2013 repeals current SGR formula and replaces it with: – Phase 1: +0.5% annual update to conversion factor for 5 years – Phase 2: +/-0.5% annual update based on achievement of pre-determined quality measures

HR 2810: Questions Remain 1.

Bill allows CMS to reduce reimbursement for potentially misvalued codes by 1% from 2016 – 2018, those savings do not have to be put back into pot

2.

CBO re-scored HR 2810 with 5 year 0.5% update at $175B

3. No pay-for identified House W&M and Senate Finance Committees looking at their own language • What does recent shutdown mean for SGR?

Oral Parity: HR 1801 • Cancer Drug Coverage Parity Act of 2013 – Ensures private health insurance plans cover oral anti-cancer medications under the same terms used to cover IV-infused medications

• 26 states plus DC have passed oral parity legislation – Federal legislation required to cover all patients the same way, and to reach plans not regulated by states (ERISA)

HEALTH REFORM (ACA) IMPLEMENTATION

What do providers need to know?

Affordable Care Act (ACA) Status • ACA drastically changed the healthcare landscape – Expanded the number of patients covered by Medicaid (optional) – Created Health Insurance Exchanges – Sunshine – Insurance reforms, including pre-existing conditions, young adult coverage, etc.

Avalere State Reform Insights, July 15, 2013. *UT announced that it will not pursue a state-run individual exchange but continues to request HHS certify its existing small group exchange, Avenue H. **OH and VA have indicated they will perform plan management functions and QHP certifications.

Essential Health Benefits Minimum Essential Benefits – EHBs must at least include: Ambulatory Patient Services ER services Hospitalization Maternity and newborn care Mental health/substance abuse services

Rx Drugs Rehab/Habilitative services and devices Lab services Preventative services Pediatric services (including oral and vision)

EHBs Apply to all individual and small group plans

Actuarial Value All individual and small group plans in the exchange must offer Silver and Gold

BRONZE SILVER GOLD PLATINUM

60% of costs covered 70% of costs covered 80% of costs covered 90% of costs covered by plan

Out-of-Pocket Limits (OOP) Applies to all plans (eventually) – roughly $6,350 for an individual and $12,700 for a family in 2014

How Much Will It Cost? Rates for 2014: Silver Plan, 40 y/o non-smoker • Varies by city within state, approved monthly premiums before financial help Source: Health Affairs Blog, Premium Rate Variation in Exchanges Is an Eye Opener Joel Ario, Adam Block, Ian Spatz, 8/7/13

WI Exchange • www.healthcare.gov • Original plan was to have a state run marketplace in WI, but plans failed in the legislature • Received nearly $40 million in grants to implementation • Conflicting reports from WI OCI and US HHS on costs of premiums

WI Exchange

WI Exchange • In the new report, HHS says that, on average, premiums for the second lowest cost silver plan for 47 states and DC are 16 percent lower than projections, and individuals will have an average of 53 QHP choices in the 36 states where HHS is partly or completely running the exchange. – See handout

QUESTIONS REMAIN ABOUT ACA IMPLEMENTATION… Patient access Delays

Patient Out of Pocket Costs Out-of-Pocket Cap: The ACA limits annual out-of-pocket (OOP) costs for EHBs Annual OOP limit, self-only coverage

$6,350

Annual OOP limit, family coverage

$12,700

– Applies to most plans, including those with separate caps in place currently, even if they employ multiple caps for different benefits (can have multiple caps for 2014 only) – Some exemptions for 2014, including: • Plans with multiple administrators for different benefits (1 cap for major medical, 2nd cap for pharmacy) • Plans without caps currently do not need to implement cap until 2015

Non-Network Spending: OOP costs for non-network providers will not count toward the OOP limit or any annual limit on a deductible – Thus, plans will have a strong ability to require patients to adhere to provider networks, even once patients have reached the OOP maximum

ACA and Employers: delays, delays… • ACA says small employers purchasing insurance for their employees through the exchange (SHOP) must give employees choice of plans – 2014 only, small employers can pick just 1 plan for all employees

• Large employers (50+) required to provide health insurance for F/T employees (“employer mandate”) – 2014 only, no penalty (up to $3,000/’ee) for failure to provide EHBs at a minimum

• Mandates begin 2015, after mid-term elections…

Questions? Thank you. Matt Farber [email protected] www.accc-cancer.org (301) 984-9496