CMS Releases Medicare Proposed Rules

The Centers for Medicare & Medicaid Services (CMS) released the long-awaited proposed rules for 3 Medicare payment programs that comprised 2,850 pages, or about an 11-inch-high stack of printer paper.
Calendar Year (CY) 2020 PFS Proposed Rule
CY 2020 Conversion Factor (CF)
The 2020 proposed physician CF is $36.0896, fractionally higher than 2019’s $36.0391.

Payment for Evaluation and Management (E/M) Services
For office/outpatient E/M visits starting in CY 2021, CMS is proposing to adopt the new coding framework outlined by the American Medical Association (AMA) and the Current Procedural Terminology (CPT) Editorial Panel. The CPT coding changes retain 5 levels of coding for established patients, reduce the number of levels to 4 for office/outpatient E/M visits for new patients, and revise the code definitions. Additionally, in last year’s rule, CMS finalized for CY 2021 a single blended rate for E/M office/outpatient visit levels 2 through 4 (one for established and another for new patients), while maintaining separate payment rates for level 5 visits. Rather than continuing with this blended rate, CMS is proposing to establish separate values for levels 2 to 4 office/outpatient E/M visits for both new and established patients for CY 2021. Specifically, CMS proposes to adopt the AMA RUC-recommended work and time values for E/M visit codes, which would increase payment for office/outpatient E/M services. Finally, CMS is seeking comment on a proposal to consolidate the add-on codes for E/M visits for primary care and non-procedural specialty care into a single code.

Merit-based Incentive Payment System (MIPS) Value Pathways
CMS is proposing to implement a new conceptual framework for MIPS, called MIPS Value Pathways (MVPs), which would take effect after the 2021 performance period. The new framework would move MIPS from its current state, which requires clinicians to report on many measures across the multiple performance categories (eg, quality, cost, promoting interoperability, and improvement activities) to a system in which clinicians will report less. Under MVPs, clinicians would report on a reduced set of measures that are outcomes-based, specific to a clinician’s specialty, and more closely aligned with Alternative Payment Models.

PFS proposed rule was accompanied by a press release and fact sheet. The final rule is expected around the beginning of November and will become effective January 1, 2020.

CY 2020 OPPS Proposed Rule
CY 2020 CF

CMS proposes to set the OPPS conversion factor for CY 2020 at $81.398, an increase of 2.7% over the 2019 CF of $79.490. Hospitals that fail to meet the Hospital Outpatient Quality Reporting Program reporting requirements are subject to an additional reduction of 2.0%.

Drug Payment
CMS proposes a packaging threshold for CY 2020 of $130, up from $125 in CY 2019.

For non-340B-acquired separately payable drugs, the proposed rule retains the average sales price (ASP)+6% payment methodology for CY 2020. For biosimilars, CMS is proposing to continue the policy to make all biosimilars eligible for pass-through payment and not just the first biosimilar biological product for a reference product. For 340B-acquired biosimilars, CMS is proposing to continue the policy to pay non-pass-through biosimilars acquired under the 340B program at the biosimilar’s ASP minus 22.5% of the biosimilar’s ASP instead of the biosimilar’s ASP minus 22.5% of the reference product’s ASP.

CMS proposes that the pass-through payment status of 6 drugs and biologicals would expire on December 31, 2019 (Table 14, page 302 of unpublished version), and that pass-through payment status will continue for 61 drugs and biologicals (Table 15, page 305).

340B Payment Policy
CMS is proposing to continue reimbursing for 340B-acquired drugs at ASP minus 22.5%—despite the recent US District Court/DC holding that the Secretary exceeded his statutory authority in implementing this policy in CY 2018. CMS indicates that the agency plans to appeal the decision. Nevertheless, CMS is soliciting public comments on a remedy in the case of an adverse decision on appeal.

Site-Neutrality Pay Structure
CMS is completing the 2-year phase-in of the reduction in payment for the clinic visit services described by HCPCS code G0463 furnished in expected off-campus provider-based departments as a method to control “unnecessary” increases in the volume of this service. CMS indicates that the proposal would result in lower copayments for beneficiaries and savings for the Medicare program and taxpayers that total of $810 million for 2020.

Disclosure of Negotiated Rates
As originally foreshadowed in an executive order, hospitals would be required to publicize their standard charges negotiated with insurers for items and services and post them online in an easily comparable format. They would also have to disclose negotiated rates for “shoppable services” (eg, X-rays and lab tests) in a way consumers can understand. This is different from previous pushes to publish the hospital’s chargemaster, which shows the non-negotiated “rack” rates.

OPPS proposed rule was accompanied by a press release and fact sheet. The final rule is expected around the beginning of November and will become effective January 1, 2020.

ESRD PPS and DMEPOSCY 2020 Base Rate
The proposed CY 2020 ESRD PPS base rate is $240.27, an increase of $5.00 from the current base rate of $235.27.

Eligibility Criteria for the Transitional Drug Add-on Payment Adjustment (TDAPA)
CMS proposes revisions to drug0designation process regulation for new renal dialysis drugs and biological products that fall within an existing ESRD PPS functional category. Specifically, CMS proposes to exclude the following New Drug Application (NDA) types from being eligible for the TDAPA, effective January 1, 2020:
  • Type 3, 5, 7, or 8
  • Type 3 in combination with Type 2 or Type 4
  • Type 5 in combination with Type 2
  • Type 9 when the parent NDA is Type 3, 5, 7, or 8

ASP Conditional Policy for the Application of the TDAPA

CMS proposes to no longer apply the TDAPA for a new renal dialysis drug or biological product under the following ASP submission conditions:
  • If CMS does not receive a full calendar quarter of ASP data within 30 days of the last day of the third calendar quarter after it begins applying the TDAPA
  • Beginning no later than 2 calendar quarters after it determines a full quarter of ASP data is not available
  • If CMS does not receive the latest full calendar quarter of ASP data for the product, beginning no later than 2 calendar quarters after the agency determines that the latest full calendar quarter of ASP data are not available

Discontinuing the Application of the Erythropoiesis-Stimulating Agent (ESA) Monitoring Policy (EMP) Under the ESRD PPS
CMS proposes to discontinue the application of the EMP under the ESRD PPS. CMS no longer believes the EMP is necessary because ESAs are now bundled into the per-treatment payment amount and “overutilization and the incentive for overutilization has been eliminated from the ESRD PPS.”

ESRD PPS proposed rule was accompanied by a press release and fact sheet. The final rule is expected around the beginning of November and will become effective January 1, 2020.

Health Policy Weekly is written by Xcenda, a consultancy and business unit of AmerisourceBergen Specialty Group. Visit Xcenda’s online archive to access more health policy news.

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