House Energy and Commerce Committee Approves “Doc Fix” Bill [08-10-13]

Filed under: Industry Updates — Editor @ 2:00 pm

Seal_of_the_United_States_House_of_Representatives.svgJust before Congress broke for the August recess, the House Energy and Commerce Committee approved a bill that would eliminate the Sustainable Growth Rate (SGR) methodology under the physician fee schedule, implement a new Medicare reimbursement system for physicians and providers paid pursuant to the fee schedule, and establish a process for the development of Alternative Payment Models (APM.) While the Committee’s action marks significant progress in the effort to fix the physician fee schedule, a long road lies ahead.

The House Ways and Means Committee, which has been working on the legislation with the Energy and Commerce Committee must markup its version of the bill and the two committee bills must be reconciled before they are brought to the House floor for a vote. In the Senate, the Finance Committee is yet to produce a draft bill although Chairman Baucus has indicated that one will be forthcoming in September or October. After the Finance Committee completes its action, the bill must be passed on the Senate floor. Thereafter the two bodies must reach a compromise on their respective versions of the legislation.

Complicating the legislative process is the fact that the legislation could cost approximately $140 billion over the next decade and that cost must be paid for in the legislation. It is beyond cavil that whatever health care provider type(s) are targeted to produce the requisite savings will fight tooth and nail against them.

Energy and Commerce Committee Action
On July 30th , the Committee marked up and reported out the “Medicare Patient Access and Quality Improvement Act of 2013” (H.R. 2810.) At the markup, Rep. Michael Burgess (R-TX) offered a manager’s amendment that proposed certain revisions in the base bill but, by and large, left the underlying structure of the legislation intact. His amendment proposed several technical, aligning, and conforming changes to the proposed legislation and clarified policy intent to reflect a more realistic timeline for implementation. It also set out additional safeguards for providers utilizing new models of care. The manager’s amendment had bipartisan support, including co-sponsorship by Health Subcommittee Ranking Member Frank Pallone (D-NJ) and full Committee Ranking Member Henry Waxman (D-CA).

Chairman Fred Upton (R-MI) stated that H.R. 2810 will stabilize physician payments and eliminate the looming specter of a 25 percent across-the-board fee reduction on January 1, 2014. He stressed that the proposed legislation will “bring Medicare into alignment with the best practices of the medical community and emphasize quality over quantity” while working with the medical community to define the benchmarks of quality medicine. Rep. Waxman applauded the bipartisan support for the legislation and said the bill promotes greater accountability through quality measurements, including clinical care and outcomes, patient experience, and overall beneficiary needs. He emphasized that H.R. 2810 would support primary care and care coordination through “new payments for care coordination in patient-centered medical homes and patient-centered specialty practices.”

Provisions of H.R. 2810
H.R. 2810 would repeal the SGR and modify the physician fee schedule to ultimately reward providers who meet or exceed quality measures and penalize those who do not comply with them. The Secretary of HHS would develop new metrics by which providers would be evaluated for purposes of determining the annual update applied to their Medicare reimbursement. Additionally, HHS would begin developing Alternative Payment Models that providers could opt to use in the future instead of the new Medicare payment system.

Fee Stability Period
The bill replaces the SGR with a 5-year period of stable payments with annual inflationary baseline adjustments of 0.5 percent. The “stability period”, which would run from 2014 to 2018, is intended to provide the medical community and other stakeholders time to develop and test quality measures and clinical practice improvement activities.

Quality Update Incentive Program (QUIP)
The stability period would terminate with the implementation of the Quality Update Incentive Program which would couple payments to provider excellence. The bill requires HHS to oversee a process to create “final core measure set[s]” for each “peer cohort” that “shall consist of quality measures and may also consist of clinical practice improvement activities.” Providers will be allowed to choose the peer cohort that they join for purposes of being evaluated against final core measure sets so that a payment update can be calculated. The legislation defines “Clinical Practice Improvement Activities” as “an activity that relevant eligible professional organizations and other relevant stakeholders identify as improving clinical practice or care delivery and that the Secretary determines, when effectively executed, is likely to result in improved outcomes.”

The bill delineates the process that HHS is to use in developing the “quality measures.” HHS must work with “eligible professional organizations and other relevant stakeholders” so that they “submit best practices and clinical practice guidelines for the development of quality measures that address quality domains for potential inclusion in such core measure sets.” The bill identifies five “quality domains”: Clinical Care; Safety; Care Coordination; Patient and Caregiver Experience; and Population Health and Prevention. Additionally, HHS is directed to develop “meaningful outcome measures (or quality of life measures in cases for which outcomes may not be a valid measurement), functional status measures, and patient experience measures.” In any event, quality measures must be developed “to the extent possible, in accordance with best practices and clinical practice guidelines.”

H.R. 2810 specifies that “final core measure sets” “shall be composed of quality measures (and, as applicable, clinical practice improvement activities) with respect to which eligible professionals within such peer cohort shall report.” The bill details the process to which HHS must adhere in formulating the sets. HHS must make publicly available the criteria it will use “for selecting such measures and activities for potential inclusion in such a final core measure set.” Additionally, the agency must ensure “that all peer cohorts, and to the extent practicable all quality domains, are addressed by measures and, as applicable, clinical practice improvement activities.” HHS must obtain input from “relevant eligible professional organizations and other relevant stakeholders.” Before HHS can publish a set in the Federal Register, it must submit the set “for publication in applicable specialty-appropriate peer-reviewed journals.” After doing so, HHS must “provide for notice of the proposed regulation in the Federal Register” for a period of public comment.

Before a final core measure set for a peer cohort can take effect, it must be published in the Federal Register no later than the November 1st preceding the year in which it is proposed to be effective. After a final core measure set has been implemented, HHS must ensure through “periodic review” that each set and the quality measures and clinical practice improvement activities that constitute the set continue to work as intended. If a final core measure set, or some element thereof, is found lacking, HHS may change or alter the set utilizing the same public, transparent process used to promulgate the set.

In terms of evaluating provider performance against the final core measure sets, HHS would establish “an eligible professional quality update incentive program” that would utilize “appropriate methodologies for assessing the performance of eligible professionals with respect to quality measures and clinical practice improvement activities included within the final core measure sets.” Specifically, HHS would “establish one or more methods, applicable with respect to a performance period, to assess (using a scoring scale of 0 to 100) the performance of an eligible professional with respect to…quality measures and clinical practice improvement activities included within the final core measure set…applicable for the period to the peer cohort in which the provider self-identified.” These methods “may provide for the assignment of different scoring weights or, as appropriate, other factors—

(I) for quality measures and clinical practice improvement activities;
(II) based on the type or category of measure or activity; and
(III) based on the extent to which a quality measure or clinical practice improvement activity meaningfully assesses quality.”

The legislation directs HHS to utilize “appropriate risk adjustments” in creating a method of evaluation. HHS may also establish an option for some providers to be evaluated at the “group practice level” and not individually.

Providers that are rated at 67 (out of 100) or higher would receive a 1% “quality adjustment,” those rated between 34 and 67 would receive a 0% “quality adjustment,” and those rated at 34 or lower would receive a -1% “quality adjustment.” Providers would receive feedback at least quarterly on how they are performing versus the appropriate final core measure set, including the quality measures and clinical practice improvement activities comprising the set. To aid HHS in this task, the bill mandates that the agency develop “an electronic interactive eligible professional mechanism through which…a professional may receive performance data.”

Alternative Payment Models
Under the bill, HHS must create a process by which Alternative Payment Models can be proposed, tested, evaluated, and possibly implemented so that providers may be reimbursed by Medicare apart from the new payment system described above. In so doing, H.R. 2810, requires HHS to take several specific steps. First, HHS must contract with an “independent entity” that would ultimately evaluate and submit recommendations on APMs proposed by stakeholders. The independent entity would recommend those APMs that HHS should test through demonstration programs and those that should be utilized by HHS without having to go through testing and evaluation. The independent entity would be empowered to modify, as needed, the proposed APMs if doing so would “reduce spending…without reducing the quality of care…or…improve the quality of care without increasing spending.” After a required demonstration has been conducted, the independent entity would make a recommendation whether the APM is suitable for adoption by the HHS.

HHS must enter into the contract with the independent entity no later than January 1, 2019 and within 90 days, the entity would begin accepting “APM contracting proposals,” but the legislation makes clear that the independent entity should focus on “submissions for such models that are intended to improve care coordination and quality for patients through modifying the manner in which physicians and other providers are paid.” At least once a quarter, the independent entity is required to recommend to HHS those APMs worthy of testing and evaluation through demonstration programs. The independent entity may recommend only those proposed APMs that demonstrate the “significant likelihood to successfully manage the cost of furnishing items and services” that would not result in greater Medicare expenditures while maintaining or improving the “overall quality of patient care.” Additionally, the independent entity may recommend APM proposals to HHS without the need for a demonstration if the proposal meets certain specified criteria. The independent entity must detail the reasons why it opts against recommending an APM proposal for demonstration or approval.

HHS is directed to review recommended APM proposals on the basis of the Chief Actuary’s determination that the APM would “reduce spending…without reducing the quality of care…or improve the quality of care without increasing spending.” Moreover, HHS must consider whether the APM proposal is significantly likely to result in provider participation in the APM. HHS is afforded the discretion to modify the APM proposal as it sees fit before approving it for demonstration.

If HHS decides to conduct a demonstration of an APM proposal, it shall do so for three years unless it determines from frequent reviews of the demonstration that the proposal is not meeting the specified criteria. Pursuant to the bill, HHS has the option to either terminate or modify an underperforming proposal. HHS must make public a list of the APMs for which demonstrations shall be conducted and providers may apply to participate in the demonstration subject to HHS approval. Providers would be required to sign contracts and agree to report on quality measures, which the independent entity would evaluate and analyze. Within six months of the end of the demonstration, the independent entity will submit a report to HHS, MedPAC, and the Chief Actuary. This report must include the outcomes under the proposed APM and whether HHS should implemented as an eligible APM or extend and expand the demonstration.

HHS must review the report for any APMs the independent entity recommends for adoption and determine whether the payment model will “reduce spending…without reducing the quality of care; or…improve the quality of patient care without increasing spending.” HHS would accept input from the Chief Actuary and MedPAC and then publish a final rule in the Federal Register “as part of the applicable physician fee schedule rulemaking process.” In order for an APM to be used in a calendar year, it must be published before April 1 in the preceding year. Even after an APM is implemented, HHS must continue to review and if the quality of care is compromised and/or spending increases, then HHS must terminate the APM.

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