The policy change constitutes a 40% reduction for some hospital outpatient departments.
Despite objections from powerful hospital groups and lawmakers, the Centers for Medicare & Medicaid Services on Friday finalized a site-neutral payment policy for outpatient clinic visits.
The change, which came in the 2019 Outpatient Prospective Payment System (OPPS) final rule, calls for hospital outpatient departments to be paid at a rate equivalent to the Physician Fee Schedule (PFS) for clinic visits. That's 40% less than their current reimbursement.
"Today's rule advances competition by creating a level playing fieldfor providers so they can compete for patients on the basis of quality and care," CMS Administrator Seema Verma said in a statement Friday. "The final policies remove unnecessary and inefficient payment differences so patients can have more affordable choices and options."
This may not be the final word on the matter, however, as both the American Hospital Association (AHA) and America's Essential Hospitals (AEH) have suggested CMS seems to be overstepping its legal authority. The AHA announced Friday that it and the Association of American Medical Colleges intend to challenge the site-neutral provisions in court.
"Hospitals have been fighting to little avail," Lyndean Brick, JD, president and CEO of The Advis Group, told HealthLeaders in an email Friday. Congress expressly exempted certain outpatient facilities from site-neutrality in 2015, so CMS appears to be breaching these statutory limits with this rule, she said.
"We expect the implementation of the site neutral reduction to excepted grandfathered [hospital outpatient departments] to be one of the first rules challenged," Brick said.
The most consequential change in this rule is the site-neutral payment rate for the clinic visit under code G0463, Brick added.
"This is the most commonly billed service in off-campus hospital outpatient departments," she said, arguing that the policy will inhibit hospitals' ability to offer these clinic visits in outpatient settings in compliance with federal quality standards.
"We may see a number of off-campus hospital outpatient departments convert to hospital-owned 'freestanding' sites as a result," she added. "This transition will allow hospitals to maintain an integrated continuum without being subjected to the higher federal quality/safety standards. This rule, however, will not ultimately benefit patient care."
The administration released a fact sheet summarizing the changes along with a draft of the final rule.
Blair Childs, senior vice president of public affairs for Premier, said the site-neutral payment policy is "misguided" not only because it exceeds CMS' statutory authority but also because it fails to recognizes "the overhead cost differences between physician practices and provider-based outpatient clinics."
"At a time when providers are focusing on total cost of care and two-sided risk, this policy applies micro-managing cuts that foreclose health system decision-making based on how to best deliver care to patients," Childs said in a statement.
AEH President and CEO Bruce Siegel, MD, MPH, said the final OPPS rule "undermines stability and choice for vulnerable patients."
"It's especially troubling that CMS has framed these changes as empowering patients and providing more affordable choices and options," Siegel said in a statement. "In fact, these changes create new road blocks to care in communities with chronic provider shortages—health care deserts plagued by severe economic and social challenges."
Editor's note: This story has been updated to include a note that the American Hospital Association and the Association of American Medical Colleges intend to file a legal challenge.
The announcement coincides with the release of the 2019 Physician Fee Schedule and Quality Payment Program final rule.
A plan to simplify the way physicians bill Medicare for evaluation and management (E/M) visits has been finalized and will begin to take effect next year, but the controversial payment component of the plan will be delayed until 2021, giving stakeholders more time to influence policymaking, the Centers for Medicare & Medicaid Services announced Thursday.
The announcement coincides with the release of the 2019 Physician Fee Schedule (PFS) and Quality Payment Program (QPP) final rule.
"We know that this is going to have a tremendous impact on many doctors in America, and we want to make sure we get this right," CMS Administrator Seema Verma said Thursday during a call with reporters, adding that the two-year extension will afford time to incorporate additional improvements into the policy.
For decades, physicians have been billing Medicare for these E/M visits with a system of thorough documentation that many have argued is overly burdensome. So CMS proposed a dramatic overhaul last July. The simplified structure, as proposed, would enable practitioners to elect to document E/M visits based on the time spentwith the patient or on their own medical judgment.
The proposal sought to transform the current five-tier E/M system into one with blended payment rates for office and outpatient visits billed at the second through fifth levels. But some doctors balked at this change, arguing that the relatively small time-saving change didn't warrant the planned reduction in payment. The American Medical Association praised efforts to reduce burnout-inducing red tape but cautioned that the proposed payment structure came with "a number of unanswered questions and potential unintended consequences."
In response to these comments and others, CMS finalized several items designed to reduce the regulatory burden on physicians, effective January 1, 2019, but other changes to documentation, coding, and payment would be implemented in calendar year 2021, according to a CMS fact sheet. The current coding and payment structure for E/M visits will continue, using either the 1995 or 1997 documentation guidelines.
Rather than collapsing all five tiers into one, as proposed, the final rule will collapse the first four tiers into one and preserve the fifth level "to better account for the care and needs of complex patients," the CMS fact sheet states.
Verma said the agency has finalized "the bulk" of the rule as proposed, but not all of it.
In light of the comments on the proposed rule, CMS opted against finalizing several controversial items, including reduced payment for E/M visits furnished on the same day as procedures, separate coding and payment for podiatric E/M visits, and standardized allocation of practice-expense relative value units (RVU) for certain codes, according to the fact sheet.
The three health systems in Boston and Providence, Rhode Island, had been discussing a potential deal since February.
Eight months after three-way talks of a potential partnership involving Care New England and Partners HealthCare began, Lifespan has abandoned its efforts to make a deal happen.
Despite working "creatively and tirelessly" toward a partnership, Lifespan board chair Lawrence A. Aubin Sr. said the Providence, Rhode Island–based health system could not come to an agreement with Boston-based Partners HealthCare, as the Providence Journal reported this week.
"We remain open to collaborations with like-minded organizations that are committed to our mission," Aubin added.
Partners HealthCare said last year that it intended to acquire Providence-based Care New England, the second-largest health system in Rhode Island.
Providence-based Brown University said in January that it was working to acquire Care New England to keep services in Rhode Island, rather than letting Partners HealthCare shift services into Massachusetts. But Care New England decided to proceed with Partners HealthCare instead.
Rich Copp, a spokesperson for Partners HealthCare, said the talks with Care New England continue to move forward.
"While our current discussions with Lifespan are not moving forward," Copp told the Journal, "we are hopeful that in the years ahead we can continue to work collaboratively with them to ensure that patients in Rhode Island have access to excellent care."
After repeatedly delaying implementation of the 340B rule, the Trump administration is proposing to accelerate the timeline by six months.
Rather than defend its decision to delay regulatory changes to the 340B Drug Pricing Program that were finalized in the final weeks of the Obama administration, the Trump administration is proposing to accelerate implementation of those changes by six months.
In a notice of proposed rulemakingreleased Wednesday, Health and Human Services said it aims to move the effective date up from July 1, 2019, to January 1, 2019. This comes after HHS said last year that it needed additional time to develop new policies affecting drug prices, and it marks a win for the hospitals and groups suing to end the delay.
"We are encouraged that, in response to our lawsuit, the government has proposed to begin enforcing rules demanding transparency and accountability for pharmaceutical manufacturers participating in 340B," Maureen Testoni, interim president and CEO of 340B Health, said in a statement.
Healthcare providers will see significant benefits if enforcement of the changes begins on New Year's Day, Testoni said.
"This would protect 340B providers from overcharges that sap them of their ability to care for patients in need," she said. "Now HHS must ensure that date does not slip."
American Hospitals Association General Counsel Melinda Hatton similarly said her organization is pleased by HHS' decision.
"We encourage HHS to stick by this commitment and to publish the final rule in time to meet that deadline," Hatton said in a statement released to HealthLeaders.
"The rule also requires that HHS make pricing information available online to 340B hospitals and other providers," Hatton added. "We strongly encourage HHS to publish that website promptly, which is critical to enforcement of the 340B program, as soon as possible after January 1."
Attorneys for HHS have asked a federal judge to place the hospitals' legal challenge on hold in light of the proposal; otherwise, the government has a November 13 deadlineto respond to the complaint.
In addition to AHA and 340B Health, the plaintiffs in the lawsuit were America's Essential Hospitals, the Association of American Medical Colleges, and three individual hospitals: Rutland Regional Medical Center in Vermont, Genesis HealthCare System in Ohio, and Kearny County Hospital in Kansas.
The state is the fifth to secure approval for such a program, but a federal judge blocked Kentucky's waiver last summer, so Wisconsin is the fourth with an active waiver.
The federal government formally approved Wisconsin's plan Wednesday to impose work requirements on certain Medicaid recipients, signaling that the Trump administration is not backing down from the controversial policy position.
Wisconsin is the fifth state to secure such an approval; since a federal judge blocked the approval of Kentucky's waiver last summer, however, only four have active approvals, including Indiana, Arkansas, and New Hampshire.
Some of the same groups that won their challenge to Kentucky's waiver have filed a similar action to challenge the program in Arkansas.
"I recognize that there are people who disagree with this approach," Centers for Medicare & Medicaid Services Administrator Seema Verma wrote in a blog post announcing the approval of Wisconsin's waiver. "Some believe that our sole purpose is to finance public benefits, even if that means lost opportunity and a life tethered to government dependence."
"Instead," Verma added, "what's needed are local solutions crafted by policy makers who are closer to the people they serve and the unique challenges their communities face."
"We will not retreat from this position," Verma wrote.
Who's Affected?
Each state tailors their Medicaid waivers to meet local needs and policy priorities, so the details of the work requirements—which the Trump administration calls "community engagement requirements"—vary from one state to another. Wisconsin's work requirements will apply to adults younger than 50 who don't have children and who don't qualify for an exemption.
What Must They Do?
Wisconsin's waiver calls for non-exempt Medicaid beneficiaries to take part in employment, job training, volunteer work, or enrollment in a qualified work program for at least 80 hours per month. They have four years to bring themselves into compliance; if they fail to do so, they will be deemed ineligible for Medicaid for six months before the four-year timeline starts over.
Health Risk Assessment
The waiver also includes a provision for a new Health Risk Assessment program. Adults subject to the work requirements must also undergo an assessment of their health risks when they apply for Medicaid coverage.
"This will allow the state to collect important information that can be used to help individuals identify their own health risks, reward beneficiaries for proactively avoiding certain health risks, and equip health plans with information to better address health needs in a more timely and complete manner," Verma wrote in her blog post.
More specifically, beneficiaries could have their premiums reduced by up to 50% if they avoid health risk behaviors, including excessive alcohol consumption, failure to diet or exercise, illicit drug use, tobacco use, or failure to wear a seatbelt, according to CMS documents.
Political Timing
This decision comes as Wisconsin Gov. Scott Walker, a Republican, seeks another term in next week's election.
Citing an unnamed source, Politico's Dan Diamond reported Wednesday morning that the Trump administration has been ready to approve Wisconsin's waiver for weeks but that Walker has been uneasy with the timing of the waiver approval. The governor's administration disputed that account.
While critics contend Medicaid work requirements are designed to kick people off the program, the Trump administration and its allies have argued that such requirements help people rise out of poverty.
"This is a thoughtful and reasonable policy, and one that is rooted in compassion," Verma wrote in her blog post. "That's because true compassion is giving people the tools necessary to achieve self-sufficiency and to experience the dignity of a job, of contributing to their own care, and gaining a foothold on the path to independence. It is not compassionate to lower our expectations such that we are content to leave Americans with inherent worth on the sidelines of life."
President and CEO Jeffrey Romoff thanked the UPMC team for their preparedness, hard work, and sacrifice in the face of a hate-fueled shooting that left 11 dead. 'As an organization, we embrace inclusion and reject that which seeks to divide us,' he wrote.
The aftermath of Saturday's mass shooting at Tree of Life synagogue in Pittsburgh, believed to be the deadliest attack on the Jewish community in U.S. history, has placed a heavy burden on medical staff at the University of Pittsburgh Medical Center.
In addition to taking the trauma-care lead in response to the attack that left 11 dead and several more injured, the UPMC team lost one of its own members to the violence, and a second remains hospitalized in critical condition.
"He was beloved and respected by his patients and colleagues," UPMC President and CEO Jeffrey Romoff wrote in a letter released publicly Monday. "We extend our sympathies to his family, friends, patients, and colleagues who loved him."
Among the six survivors injured in the attack was UPMC chaplain Daniel Leger, who remains in critical condition, as the Pittsburgh Post-Gazette reported. Leger, a nurse, has been a major force behind UPMC's "No One Dies Alone" program, Romoff said.
Leger was scheduled to lead a service Saturday morning at Tree of Life, the Post-Gazette reported.
Rabinowitz and Leger weren't the only UPMC community members to witness the aftermath firsthand. University of Pittsburgh assistant professor of emergency medicine Leonard Weiss, MD, who also serves as EMS Medical Director and assistant medical director of STAT MedEvac, resides near the scene of the shooting and arrived within minutes, before the area was secured, as the Pittsburgh Business Times reported.
The city's four Level 1 trauma centers—UPMC Presbyterian, UPMC Mercy, Allegheny General Hospital, and UPMC Children's Hospital—received an emergency operations alert to prepare for the mass-casualty incident. The city's coordinated mass-casualty plans worked exactly as designed, UPMC emergency medicine chair Donald M. Yealy, MD, FACEP, told the Pittsburgh Business Times.
"We have one of the most advanced EMS systems in the country ... It's not by luck. It's by design of local government and the local health care facilities," Yealy said.
Explicitly Rejecting Hate
Beyond thanking the UPMC for their preparedness, hard work, and sacrifice, Romoff's letter included a reminder of how embedded UPMC is within the broader community and a specific rebuke of the hatred that appears to have motivated the shooter.
"These are our neighbors and our friends. These are our patients," Romoff said of those affected. "They are us."
"As an organization, we embrace inclusion and reject that which seeks to divide us," Romoff added. "Dignity & Respect guides us all as a core value at UPMC. It governs how we treat our patients, how we treat one another, and how we can ultimately work to overcome hate and bias."
"These are difficult, solemn times," he said. "In these coming days and weeks, let's continue to take great care of our community and of one another."
Even if the Trump administration were to delay its proposed site-neutral payments policy for outpatient facilities another year or longer, the political debate isn't going away.
A controversial proposal to cut reimbursement rates for hospital outpatient departments could be finalized this week if the Centers for Medicare & Medicaid Services hits its target date to publish the final rule.
The proposed change to the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System unveiled last July has drawn criticism from the American Hospital Association (AHA), America's Essential Hospitals (AEH), lawmakers in both houses of Congress, and others who contend the so-called "site-neutral" payment policies fail to account for the added burden hospital-owned facilities shoulder.
Both AHA and AEH said in formal comments last month that the OPPS/ASC proposal for 2019 appears to be illegal. And lawmakers raised related concerns in two separate letters to CMS Administrator Seema Verma, suggesting the proposal flouts congressional intent.
A bipartisan group of 48 senators signed a letter last month urging CMS to rethink its approach, and a bipartisan group of 138 representatives followed suit this month with a letter of their own.
The political pressure could very well leave an imprint on the final version of the rule, which has been under review by the Office of Management and Budget since October 10. A spokesperson for CMS told HealthLeaders that the agency would not speculate on the potential outcome of the review process, reiterating the agency's plan to publish the final version on or about Thursday, November 1.
But even if the Trump administration were to postpone the site-neutral payments policy another year or longer, hospitals should still be preparing for site-neutrality, since this political debate will play itself out over the next several years one way or another, says Greg Hagood, a senior managing director with the financial advisory firm SOLIC Capital.
That preparation for site-neutrality should include an ambulatory strategy with investments in outpatient settings, Hagood said, with a word of caution for hospitals and health systems.
"I think they need to do their budgeting, though, with an eye toward the fact that certain areas that have historically been anchors to the hospital—whether that's the emergency room, cardiac care, or some of these hospital outpatient departments—are likely to see diminished margins," he said.
Basing a budget around more-conservative revenue estimates for these service lines could prompt hospitals to rationalize their cost structures or even adjust their infrastructure, such as by reducing their number of clinics or inpatient beds, Hagood said.
Although the concept of site-neutrality "makes a ton of sense" on the surface, there's also a complex history in how American reimbursement models have evolved over the past few decades, and hospitals provide expensive services that other outpatient facilities often don't, such as indigent care, Hagood said. Switching to a site-neutral system would have "a very economically disruptive impact on a lot of large health systems," he added.
The debate gains another layer of intrigue when you consider how any action taken by lawmakers will be perceived by their constituents.
"If you want to make a congressman vulnerable," Hagood said, "you'll say he was supportive of a policy that results in a closure of a hospital in your district."
Enrollees would have access to telehealth benefits regardless of whether they live in rural or urban areas, unlike the current Medicare fee-for-service program.
Medicare Advantage plans will have greater leeway to offer telehealth services to their beneficiaries in plan year 2020 under a proposed rule released Friday by the Centers for Medicare & Medicaid Services.
The proposal would allow Medicare Advantage plans to offer enrollees telehealth benefits regardless of whether they live in rural or urban areas, unlike the current Medicare fee-for-service program's telehealth benefit, which includes geographic restrictions, CMS said.
The proposal will pave the way for innovations that are more responsive to patient needs, CMS Administrator Seema Verma said in a statement.
"I am especially excited about proposed changes to allow additional telehealth benefits, which will promote access to care in a more convenient and cost-effective manner for patients," Verma said.
The proposed changes would also make it easier for Medicare Advantage beneficiaries to connect with telehealth providers from their homes. The proposals were authorized by the Bipartisan Budget Act of 2018.
There's a fact sheet on the proposal on the CMS website, and the proposed rule itself will be published in the Federal Register.
No banking, federal tax, or protected health information was exposed in the breach announced last week, officials said.
A week after announcing that the files of about 75,000 people were exposed in a data breach on the federally facilitated Affordable Care Act exchanges, a spokesperson for the Centers for Medicare & Medicaid Services said Friday that the affected pathway is back online.
Suspicious activity on the direct enrollment pathway for agents and brokers had prompted an investigation that led to a breach being declared last week. That pathway was restored with new security measures installed with assistance from the Health and Human Services Office of Inspector General and HHS Chief Information Officer, the CMS spokesperson said.
Although authorities are continuing to investigate, they can now confirm that no banking, federal tax, or protected health information was exposed, the spokesperson said. Those who were affected will be notified after the assessment of the breached information is complete, and they will be offered free credit protection.
The downtime concluded within a week of open enrollment, which begins on Thursday. It was limited to the pathway for agents and brokers, and it did not affect other enrollment channels, including the marketplace call center and consumer-facing HealthCare.gov, officials said.
The members also indicated that they want Arkansas to slow down its rollout to incorporate more protection for enrollees.
A federal panel of advisers will ask the Trump administration to pull back a bit from its enthusiastic embrace of Medicaid work requirements.
Members of the Medicaid and CHIP Payment and Access Commission (MACPAC) decided Thursday that they would ask the federal government to hold off on further approvals for the controversial state-level policy changes, as Bloomberg Law's Victoria Pelham reported.
The MACPAC members also indicated that they want Arkansas—which was the first state to implement the requirements—to slow down its rollout to incorporate more protection for enrollees, Pelham reported.
While the administration and its allies argue the so-called community engagement requirements help to raise beneficiaries out of poverty, critics contend that the underlying goal of these policies and their potentially cumbersome reporting requirements is to cull people from state Medicaid rolls.
More than 4,100 beneficiaries in Arkansas lost their Medicaid coverage on October 1 for failing to meet the new requirements, according to the Center on Budget and Policy Priorities, which cited numbers from the state. If current trends continue, then thousands more will lose coverage in the coming months.
