House Bill Repeals, Replaces Payment Policy for Docs
Key Takeaway: A much-anticipated vote in the House of Representatives sets the stage for a repeal of the Medicare Sustainable Growth Rate (SGR) for physicians. The new policy would encourage broad participation in alternative payment models or in traditional fee-for-service augmented by a system of performance-based incentives. A delay to ICD-10 was not included as part of the bill. Meanwhile, penalties associated with meaningful use will no longer pertain to eligible professionals (EPs) beginning in 2019.
Why it Matters: If the Senate passes H.R. 2, the White House has indicated its support to transition Medicare payments away from the current fee-for-service reimbursement model. To do this, a new federal system to assess physician quality will be developed, and providers will need to meet yet-to-be-defined performance requirements. When considered alongside goals set earlier in the year by the Department of Health and Human Services (HHS), these policies create much momentum for alternative payment models.
As a means to help steer Medicare away from fee-for-service reimbursement, the House of Representatives passed H.R. 2 by a wide margin of 392-37 last week. The bill would reimburse Medicare physician by an increase of 0.5% each year from 2015-2019. The rates in 2019 will be maintained through 2025, while providing professionals with the opportunity to receive additional payment adjustments through a new Merit-based Incentive Payments System (MIPS). In 2026 and subsequent years, professionals participating in Alternative Payment Models (APMs) that meet certain criteria would receive annual updates of one percent, while all other professionals would receive annual updates of 0.5 percent.
Observers focused on the bill’s implications for health IT note a number of provisions, including the “interoperability mandate” which will require EHRs to be interoperable by 2019 and instructs HHS to develop performance metrics around interoperability. They also note the absence of another delay to the transition date for ICD-10. Despite the introduction of an amendment to delay the new coding set to 2016 by freshman Representative Gary Palmer (R-MS-04) it was not allowed to be included in the bill by House leadership. Finally, the bill sunsets penalties for EPs participating in MU in 2019, when MU joins other incentives, such as PQRS and value-based modifiers, as part of the newly developed MIPS.
The Senate is expected to take up the legislation upon their return from a two-week break in early April.
Follow-On Meaningful Use Rule at OMB
Key Takeaway: A proposed rule that would modify the EHR incentive program through 2017 has been sent to the White House for final review, according to the Office of Management and Budget’s website. This rule is additive to the recent rules released by CMS and ONC for Stage 3 Meaningful Use.
Why it Matters: The rule, announced by CMS in late January, would shorten the meaningful use reporting period in 2015 to 90 days, align the hospital reporting periods to the calendar year, and propose other changes to reduce the program’s complexity and burdens.
A rule signaled by CMS acting principle deputy administrator and chief medical officer Dr. Patrick Conway in a January blog is now at the Office of Management Budget (OMB) for final review. “These intended changes would help to reduce the reporting burden on providers, while supporting the long term goals of the program,” Dr. Conway, wrote. Organizations such as CHIME encouraged CMS to quickly release this follow-up proposed rule after the release of proposed rules for Stage 3 Meaningful Use. “We were encouraged by the signals to shorten the 2015 EHR reporting period from 365 to 90 days and make other program improvements through a follow-on rule,” CHIME said in a press statement. “We call on CMS to propose policy changes to the ‘all-or-nothing’ construct, lengthen timing between required Stage upgrades, and consider much-needed revisions to the hardship exception categories. These changes will enable far better participation among providers, which will in turn, keep them on a path towards improved care through health IT.”
Legislation & Politics
Bipartisan Hearing on Medical Innovations Accompanied by Calls for New Funding
Key Takeaway: A hearing held by the Senate Health, Education, Labor and Pensions (HELP) Committee discussed ways to “promote the research, development, and approval or licensure of the most cutting-edge, safe and effective medical treatments, devices, and cures for American patients.” Legislators and witnesses alike underscored the need to provide more financial support to the National Institutes of Health (NIH) if the goals of cutting-edge cures are to be realized.
Why it Matters: The hearing is part of the HELP Committee’s bipartisan Innovation for Healthier Americans initiative to examine the process for getting safe treatments, devices and cures to patients more quickly. The budget amendment announced last week sets the stage for more difficult discussions over how to pay for the initiative, which has a companion effort in the House of Representatives – also as yet unfunded.
Members of the Senate HELP Committee held a hearing last week in support of their Innovation for Healthier Americans initiative, where Democrats called for an end to sequestration to boost budgets for the National Institutes of Health (NIH) and the Food & Drug Administration (FDA). Both Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) said they support increasing funds for NIH, but Republicans maintained that new funding could come from increased savings through reduced administrative burdens for NIH grant recipients, rather than new appropriation levels.
The Senate efforts in this area are joined by long-standing work in the House through the Energy & Commerce Committee’s 21st Century Cures initiative. The House is rumored to be working on a second discussion draft of their 21st Century legislation, due for release within the next week or two.