Friday, July 8, 2016

CMS Releases CY2017 Proposed Physician Fee Schedule Rule: Start Hearing about PAMA 220

On Friday, July 8, CMS released the Proposed Physician Fee Schedule Rule for CY2017.

The CMS website for the rule, and its extensive attachments, is here.
The rule is online here (July 15, 2016; 81:46162-746; Tracking number CMS-1654-P).

For Medscape's early summary, see here.
For high points in Becker's Hospital Review, see here.

More after the break.
Unlike the Hospital Outpatient Rule a few days earlier, CMS did not appear to provide a press release.

The Federal Register publication date will be July 15.
The comment period will run until September 6, 2016.

PAMA 220 Kicks Into Gear
New Pricing Power for CMS Against the PFS

Many in the Medicare community track PAMA Section 216, an April 2014 law that completely reboots the Clinical Laboratory Fee Schedule.  Medicare recently finished two years of policymaking on PAMA 216, and it will be implemented at the end of 2017 for CY2018.

Much less attention has been given to PAMA 220.  I wrote about this at some length in April 2014 (here).

This lawmaking gives CMS vastly increased authority to seek data on RVU valuations and reset RVUs.   It makes the CMS potentially much less dependent on the RUC, at least whenever CMS is unhappy with RUC results.   It's a wide open law.  For example, CMS has authority to collect information from physicians, other eligible professionals, institutions...or any source it wants.  It has authority to seek information to price new codes, rapidly growing codes, expensive codes...or any code it wants.   It may also look to "alternative systems" to set PFS values...with no limit on what "alterative systems" means.

CMS didn't have time to do anything with PAMA 220 between April and June 2014, and left the new law virtually unmentioned in June 2015 PFS rulemaking.  Medicare policymakers are just starting to use its PAMA 220 authorities in the new rulemaking but, from my first reading, just putting its toe in the water and flexing its muscles.

Expansion of Diabetes Prevention Program

Last March, CMS announced that a pilot community diabetes prevention program had been successful (here).  See the rule at page 46413 forward.  Further, CMS certified the program was both clinically effective and cost-saving, the type of program that CMMI can roll into a permanent national Medicare benefit.

While I am happy the program will go forward, the "analyses" conducted by CMS to justify the program as effective and "cost saving" were shaky.  See my discussion (here).  My point was that a program or product CMS does not like, will be "pecked to death" by the agency's critical, and sometimes speculatively critical analysis.   In contrast, a program the agency wants to push forward is bulldozed forward however thin or contradictory its data.  One of my main points is that many DPP trials have found these interventions to be cost-effective (e.g. dollars per QALY), but never before as "cost-saving."  Unexpected claims that the quickly-done and thinly-documented CMS DPP will be "cost saving" (a pesky legal requirement for program expansion) should trigger skepticism under the perspective of a systematic review of it and other efforts.  If anyone actually reads the supporting documents, the flaws are all over the place.  But, as the saying goes, nobody reads anymore.

The DPP program could be adopted by CMS the unilateral action of the CMMI; or, if the program were an approved preventive service by the USPSTF.   The latter channel is not available, which I explain next.

As buried on page 46,414 of the rulemaking, CMS notes it has authority to add additional preventive services under 1861(ddd) if and only if they are approved as grade A or B by USPSTF.  DPP isn't so approved.  Therefore, CMMI will use its authority to waive any section of the statute (1115A(d)(1)), and waive the requirement for USPSTF A or B grading which is otherwise the main pillar of the preventive benefit law (1861(ddd)) being invoked.

Maybe USPSTF standards are too strict - , the ADA has complained that USPSTF is not doing enough regarding diabetes prevention (here).  On the other hand, at almost the same time the Medicare rule came out, the WSJ ran an article critical of excess hype and alarm over prediabetes and its new industry of diagnostics and prevention, here.   While "prevention is worth a pound of cure," parallel concerns about medicalization and/or commercialization of mild conditions dates back to at least 2002 (here; see also a 2005 article here, a 2008 article here and even a 2012 European Parliament review, here).

Also on page 46,414, CMS says it will waive the requirement for new preventive benefits to pass through the hard evidence review and public transparency of the NCD process.  CMS says it is avoiding the NCD process because "it would create implementation problems" because the benefit also creates a new "supplier class" (e.g. a DPP delivery center).   Obviously, the NCD process could have commented on the merits of the proposal while the rulemaking created the supplier class.

CMS has huge problems with fraud, and requests public comment on how to handle potential liabilities with the new DPP supplier class.  The Y (one potential supplier) is not likely a liability.  But CMS writes that "non medical personnel will deliver services in a non medical setting."   CMS already views this class of supplier as a "high risk category."  CMS "recognizes the risks of beneficiary inducement or coercion."

Payments to suppliers are heavily based on weight loss (5% from baseline).  There is a $160 bonus for each patient who meets this in the first six month, and hundreds of dollars of maintenance payments (to the supplier) are predicated on maintenance of a 5% weight loss.  CMS notes this is a payment approach similar to commercial programs.

CMS will include virtual health DPP via remote technologies.   However, here again CMS had concerns about abuse.  CMS writes,

DPP services provided
via a telecommunications system or
other remote technology will not be part
of the current Medicare telehealth
benefits and have no impact on how
telehealth services are defined by
Medicare. We recognize that the
provision of DPP services by such
virtual methods may introduce
additional risks for fraud and abuse, and
if this proposal is finalized, we would
propose specific policies in future
rulemaking to mitigate these risks. We
thus seek comment on whether there are
quality or program integrity concerns
regarding the use of virtual sessions, or
whether they offer comparable or higher
quality MDPP services
when compared
to in-person services. We seek comment
on strategies to strengthen program
integrity and minimize the potential for
fraud and abuse in virtual sessions.