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March 17, 2016

National Update

Senate passes bipartisan opioid abuse legislation

The U.S. Senate on March 10 passed the Comprehensive Addiction and Recovery Act (CARA) (S.524) by a vote of 94 to 1. The bill, which was introduced by Sens. Sheldon Whitehouse, D-R.I.), and Rob Portman, R-Ohio, authorizes funding for a number of federal grant programs to address the ongoing epidemic of opioid abuse, including:

Companion legislation has been introduced in the U.S. House of Representatives, although no action has been scheduled.

The AMA supported many elements of the legislation and continues to promote efforts to address the national epidemic of opioid misuse, abuse, addiction, overdose and death by encouraging physicians to use prescription drug monitoring programs and take advantage of educational resources in the areas of pain management and substance abuse treatment, among other priorities. Learn more about the efforts of the AMA Task Force to Reduce Prescription Opioid Abuse.

ONC proposes steps to enhance EHR oversight

The U.S. Department of Health and Human Services’ Office of the National Coordinator for Health IT (ONC) recently proposed a new rule to enhance oversight and accountability of the testing and certification of electronic health records (EHR). Certified EHRs are required for participation in the meaningful use program and will be required for participation in new Centers for Medicare & Medicaid Services’ payment programs going forward.

The proposed rule expands the ONC’s ability to identify issues with EHRs in the field and promotes health IT vendors’ accountability for the performance, reliability and safety of their products. The AMA has highlighted these issues in a number of letters sent to the Obama Administration and also identified EHR usability testing and certification issues in its vendor assessment released last year. The AMA welcomes the ONC’s increased attention on these issues and will be reviewing and commenting on the proposed rule.

Health app use scenarios and HIPAA

The U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) recently issued guidance on its mHealth Developer Portal, which addressed questions of how the Health Insurance Portability and Accountability Act (HIPAA) applies to app developers and any health information created, managed or organized by a health app.

The OCR stated that it hoped the scenarios contained in the guidance would “help developers determine how federal regulations might apply to products they are building [and] reduce some of the uncertainty that can be a barrier to innovation.”

App developers are not covered entities under HIPAA. However, when app developers create, receive, maintain or transmit protected health information on behalf of a physician or practice, they may be considered business associates. As such, physicians—particularly those who contract with app developers for patient management services—should review it to consider whether they need to enter into business associate agreements with developers.

The AMA has a variety of resources aimed at assisting physicians with HIPAA compliance, including a sample business associate agreement (log in).

AMA responds to CMS measure development plan

Under the Medicare Access and CHIP Reauthorization Act (MACRA, Section 102), the Centers for Medicare & Medicaid Services (CMS) was required to develop and post a draft plan on the development of quality measures related to the new Medicare Merit-Based Incentive Payment System (MIPS) and alternative payment models (APM). In response, the AMA submitted comments (log in) calling on CMS and payers to re-think the design of quality programs for the MIPS and APMs.

The AMA urged CMS to take into consideration the varying specialties within medicine and to start viewing measures as a guide to address broad problems. The AMA strongly encouraged CMS to improve upon the current quality programs and avoid adopting the one-size-fits all approach as currently constructed under the value-based modifier and meaningful use programs, which have diverted physician efforts and resources away from participating in activities that truly have a positive impact on patient care.

The final Measure Development Plan is required to be released by CMS by May 1, followed by annual updates or as otherwise appropriate. The AMA will continue to actively monitor and comment.

CMS proposes test of drug payment alternatives

As had been signaled earlier in a prematurely posted notice to Medicare Administrative Contractors, the Centers for Medicare & Medicaid Services (CMS) has officially proposed a series of far-reaching changes in the way Medicare pays for physician-administered drugs.

The changes, imposed under demonstration authority provided the agency in the Affordable Care Act, will vary from region to region. The proposal—similar to several suggested by the Medicare Payment Advisory Committee (MedPAC)—has triggered widespread concerns and was immediately questioned in a statement from the chairmen of all three Medicare oversight committees.

The AMA also has specific concerns with the proposal and will be submitting a letter to CMS.

In the first prong of the plan, which could start as early as late summer, reimbursement to physician practices and hospitals that purchase the drugs would be reduced from average sales price (ASP) plus 6 percent to ASP plus 2.5 percent. A flat fee of $16.80 per drug per day would then be added. In reality, the percentage above ASP that Medicare is paying today is subject to a budget sequester requirement that reduces Medicare payments by 2 percent so that the actual impact of the proposal is to reduce the ASP add-on from 4.3 percent today to 0.8 percent when it takes effect (Only 80 percent of the add-on paid by Medicare rather than beneficiaries is subject to the sequester.)

An impact table included in the rule predicts that some specialties (such as hematologists, oncologists, ophthalmologists and rheumatologists) will face losses of 0.5 percent or more in their total Medicare revenues, while others (including family physicians, physical medicine and rehabilitation, orthopedic surgeons, pain medicine and anesthesiologists) will see increases of 1-2 percent. Infectious disease specialists gain 3.2 percent. Hospitals are expected to see a reduction of 0.3 percent in their overall Medicare revenues.

A second round of changes that CMS says it gleaned from studying private sector initiatives to curb drug spending would begin “no sooner than Jan. 1, 2017.” Potential strategies include:

Both phases’ modifications would be implemented at the level of the Primary Care Service Areas. Some areas could be subject to multiple parts of the proposal.

Concerns the AMA intends to address with CMS include: (1) ensuring adequate opportunity for public input; (2) unrealistic timelines for implementation; (3) the very real possibility that practice’s inability to cover their costs will force some physicians to stop providing these drugs in the office; (4) the potential increase in Medicare expenditures that would follow a shift of care from physician offices to hospital outpatient departments; and (5) the risk that policies that vary by region will lead to different and inequitable availability of lifesaving drugs for beneficiaries.

The proposed rule will be open to a 60-day comment period that ends May 9.

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Issue Spotlight

Raising tobacco purchasing age: California poised to become second state

The California legislature last week passed a package of bills to reduce tobacco use by increasing the purchasing age for tobacco products from 18 years of age to 21, adding e-cigarettes to state tobacco regulations and adopting other measures. Gov. Jerry Brown is expected to sign the legislation soon.

Hawaii is the first state to raise the minimum age for purchasing tobacco to 21 years old, and at least 135 cities and counties in nine other states have done so as well. New York City, Boston, Cleveland and both Kansas Cities are among those that have raised the minimum purchasing age. Many other states and cities across the country are considering such measures.

Tobacco use remains the No. 1 cause of preventable death in the United States. A report from the Surgeon General shows that nearly 90 percent of adults who smoke on a daily basis had their first cigarette by age 18, and 90 percent of cigarettes purchased for use by those under age 18 are purchased by those aged 18-20.

The National Academy of Medicine, formerly the Institute of Medicine, last year concluded that raising the tobacco age would significantly reduce smoking among youth and young adults, reduce smoking-caused deaths, and immediately improve the health of youth, young adults and young mothers who would be dissuaded from smoking.

The report also predicts that raising the minimum age will reduce over time the smoking rate by about 12 percent and smoking-related deaths by 10 percent. This reduction translates into 223,000 fewer premature deaths, 50,000 fewer deaths from lung cancer and 4.2 million fewer years of life lost.

The AMA has long-standing policy regarding increasing the age of tobacco purchase to 21. In January, the AMA submitted a letter (log in) to N.J. Gov. Chris Christie, urging him to sign legislation (AB 3254/SB 602) that would raise the age for purchasing tobacco and electronic smoking devices as well as the age of a person to whom a vendor may sell, offer for sale, distribute, give or furnish such products in the state. Christie vetoed the legislation.

Action in California may provide momentum to the numerous bills pending across the nation. Over the last two years, bills have been filed in more than 16 states: Connecticut, Iowa, Kentucky, Maryland, Minnesota, New Jersey, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington and West Virginia.

Email Carrie Armour of the AMA or visit the AMA’s Advocacy Resource Center if you are working on important legislation to raise the tobacco purchasing age or for more information on how you can get involved.

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State Update

15,000 Flint residents gain access to health care

On March 3, Michigan received federal approval to extend Medicaid coverage to an additional 15,000 children and pregnant women exposed to lead in drinking water. Effective immediately, the emergency Medicaid expansion is available to those with household incomes up to 400 percent of the federal poverty level.

Both existing and newly eligible beneficiaries will receive full Medicaid benefits to promote healthy child development, including comprehensive pregnancy care, early and periodic screening, diagnosis, and treatment (EPSDT) services; lead-blood level monitoring; and behavioral health services. Approximately 30,000 current Medicaid beneficiaries also will become eligible for expanded services, including targeted case management to ensure access to necessary health, educational and social services. The Section 1115 demonstration waiver will remain in effect for five years.

More information on Medicaid is available on the AMA’s Medicaid campaign Web page.

New York physicians required to e-prescribe all medications

New York soon will be the first state in the nation where physicians and other prescribers will be required to e-prescribe all medications, including legend drugs and controlled substances. The requirement, which goes into effect March 27, was part of New York’s 2012 “I-STOP” law.

While many New York physicians and hospitals are ready, many more have requested waivers of the requirement. The Medical Society of the State of New York (MSSNY) continues to seek legislation that would exempt “low-volume” prescribers and nursing home prescriptions. Currently, a waiver can be obtained for one year. The new legislation would, among other things, provide that a low volume prescriber (fewer than 25 prescriptions per year) does not need to re-apply for a waiver each year.

MSSNY has created multiple resources for New York physicians to learn more about and comply with the e-prescribing requirement. For more information, contact Pat Clancy of MSSNY.

Telemedicine bills gain steam in state legislatures

After a record year for telemedicine legislation in 2015—particularly legislation supporting coverage of medical care delivered via telemedicine—2016 is off to a similarly busy start. More than 20 states are considering legislation to expand private and/or public coverage of telemedicine services. Of these bills, several are based on the AMA model Telemedicine Act, which provides guidance to states on telemedicine licensure, payment and practice matters.

Contact Kristin Schleiter of the AMA for more information on the AMA model Telemedicine Act.

Physicians ask Florida attorney general to block mega-merger

This week the AMA joined with the Florida Medical Association (FMA) and the Florida Osteopathic Medical Association (FOMA) in calling on Florida Attorney General Pam Bondi to reject the proposed merger of health insurer giants Aetna and Humana.

In a letter to the attorney general (log in), the physician organizations outlined their strong concern that the anticompetitive consequences of the merger would negatively impact health care access, quality and affordability in Florida. An AMA analysis (log in) found the proposed Aetna-Humana merger would run afoul of federal antitrust guidelines in highly populated metropolitan areas across the state.

“Competition, not consolidation, is the right prescription for Florida’s health insurance markets,” said AMA President-elect Andrew W. Gurman, MD. “Less competition in Florida’s already consolidated health insurance markets will lead to price increases, not to greater efficiency or lower health care costs. Given the negative long-term consequences of the proposed merger, any remedy short of rejection would not adequately protect 2.4 million people in Florida.”

The physician appeal to the attorney general’s office follows the conditional consent order issued last month by the Florida Office of Insurance Regulation. While state insurance regulators documented the extensive anticompetitive effects of the proposed merger, physicians charge that the consent order relies on flawed arguments that regulation can substitute for competition.

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Judicial Update

Case could leave physicians exposed to large fines

Physicians are in a constant state of education to keep their skills and knowledge at the forefront so that their patients get the best care possible. But sometimes unintentional missteps on the business side of medicine can have serious ramifications for both physicians and their patients. A case before a state supreme court could put physicians in danger of exposure to large fines based on a legal technicality.

At stake in Allstate Insurance Co. v. Northfield Medical Center, currently before the Supreme Court of New Jersey, is whether liability under the New Jersey Insurance Fraud Prevention Act (IFPA) can be based on what the medical group or practice should have known, as opposed to what they actually knew.

The IFPA is designed to protect against fraud in a way similar to the federal Stark Law and False Claims Act, which may subject physicians to large penalties for referring patients to health care facilities with which they have certain financial relationships.

“There is no argument to support deliberate fraud,” the Litigation Center of the AMA and State Medical Societies said in an amicus brief (log in). “But there is a [difference] between deliberate fraud and mistake. An appropriate standard and definition of ‘knowing’ prevents that [difference] from becoming a slippery slope that punishes health care practitioners who reasonably believe that they are in conformance with their professional ethical obligations and with state law.”

The cause for concern in this case is not to challenge the Stark Law or the IFPA, but rather to encourage a narrow interpretation of complex and changing regulations to prevent medical professionals from being exposed to large unnecessary fines when they have not deliberately violated those regulations.

Northfield Medical Center, the health care group in question, thought it was in compliance with state regulations concerning the corporate practice of medicine. But because regulations are in a constant state of change—a position many physicians could find themselves dealing with—they suddenly found they were on the wrong side of the fence.

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Other News

2016 value-based payment modifier results announced

128 physician groups will be seeing payment increases of 15.9 percent or 31.84 percent per claim this year as a result of the value-based payment modifier (VBM). The sizeable increases for these practices were financed by payment reductions of 1-2 percent for 5,477 other practices, many of which are appealing the cuts. Claims adjustments will start March 14, with retroactive adjustments for claims paid prior to that time.

The 2016 payment adjustments are based on cost and quality data from 2014, when 13,813 practices of 10 or more physicians and other practitioners were subject to the VBM. Any practice that failed to participate successfully in the Physician Quality Reporting System (PQRS) was subject to an automatic 2 percent VBM penalty as well as a 2 percent PQRS penalty. Those who met the PQRS reporting requirement then were subject to a “quality tiering” process in which their cost and quality scores were compared with other practices. Those with the best cost/quality combination win payment bonuses, and those with the worst cost/quality score are subjected to payment penalties.

8,208—or 98 percent—of the 8,395 successful PQRS participants will see no change in payments as a result of the “quality tiering” process. However, 59 participants will face 1 or 2 percent penalties because they “performed poorly,” while 128 others will see bonuses that are much larger than anticipated.

Due to a number of systemic reporting problems, many practices that have reported successfully in the past were judged as failing this year. More than one-quarter of the practices subject to PQRS and/or VBM penalties this year are appealing that determination.

The AMA has repeatedly called on the Centers for Medicare & Medicaid Services (CMS) to improve the reporting process and has urged that all practices that attempted to report PQRS data be held harmless from penalties this year. The AMA also will seek more detailed information needed to do pattern analysis and evaluate the impact of the VBM.

45-day Sunshine Act review and dispute period begins in early April

The Centers for Medicare & Medicaid Services (CMS) is required under the Sunshine Act to publicly report on an annual basis items of value that are given to physicians and teaching hospitals. Preceding the public data release, physicians are given a brief window of time to review their data and dispute errors. This review period typically begins in early April.

Physicians planning to review their 2015 data in what is known as the Open Payments program should test their CMS Enterprise Portal (EIDM) login credentials beforehand. Locked accounts and other login issues can be fixed before the beginning of the review and dispute period: Consult the frequently asked questions for EIDM users. For answers to additional questions, email Medicare’s Open Payment Help Desk, or call (855) 326-8366.

VA works to ease administrative burden and timeliness of physician payments

In response to concerns raised by the AMA and others, the Veterans Administration (VA) announced changes to its payment process that will help ensure non-VA physicians delivering care through the Veterans Choice Program are paid more quickly. Non-VA physicians will no longer be required to submit a copy of patients’ medical records before getting paid under the Choice Program.

Visit the VA website for more details about this policy change. For detailed instructions on how to apply to deliver care through the Veterans Choice Program, visit the AMA website.

New analysis on health care spending available

A new AMA Policy Research Perspective (log in) examines how much the U.S. spends on health care, where that money goes and how spending is financed. Health spending grew at a rate of 5.3 percent in 2014 to a level of $3,031.3 billion, or $9,523 on a per capita basis. In comparison, spending grew by 2.9 percent in 2013 and by an average of 4.0 percent per year over the five-year period from 2007 to 2012.

Important factors behind the 2014 uptick in growth include the coverage expansions of Affordable Care Act as well as the introduction of new drug treatments for hepatitis C, cancer and multiple sclerosis. Learn more about health spending.

Medical students visit Capitol Hill

More than 350 medical students attended this year’s AMA Medical Student Advocacy and Region Conference in Washington, D.C., March 10-12. Sen. John Barrasso, R-Wyo., and Michael Botticelli, director of the White House Office of National Drug Control Policy, delivered keynote addresses.

The students visited with the offices of U.S. senators and representatives from 40 states, discussing the need to protect federal funding for the Public Service Loan Forgiveness Program and graduate medical education.

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Upcoming Events

March 20–22: AMA-MGMA Collaborate in Practice Meeting
Join the AMA and MGMA in Colorado Springs to gather leadership techniques to help propel you and your organization to future success. Former U.S. Sen. Bill Bradley, D-NJ, and Richard Deem, AMA senior vice president of advocacy, will speak on leadership and the changing health care landscape. Register online now through the conference for a discount.

March 28-31: National Rx Drug Abuse and Heroin Summit
Register to attend the National Rx Drug Abuse and Heroin Summit, the largest national collaboration of stakeholders to impact the opioid crisis. The summit will be held March 28-31 in Atlanta. Attendees will learn about the latest research and hear from expert speakers, including a vision session led by Patrice A. Harris, MD, chair-elect of the AMA Board of Trustees and chair of the AMA Task Force to Reduce Prescription Opioid Abuse. Learn more and register.

April 13–17: AMPAC Campaign School
Register for the 2016 AMPAC Campaign School, which is for AMA members who wish to become involved in the political process as advocates and volunteers for medicine-friendly candidates. For more information or to apply, see the online registration form or email Jim Wilson of the AMA.

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