May 12, 2016

National Update

CMS releases MACRA proposed rule

The Centers for Medicare & Medicaid Services (CMS) released a notice of proposed rulemaking (NPRM) to implement the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which repealed the Medicare sustainable growth rate (SGR) formula for calculating annual updates to the physician fee schedule. The NPRM outlines CMS’ proposals for how to implement the new Merit-based Incentive Payment System and establishes incentives for participation in certain alternative payment models.

The AMA has prepared a high-level summary of key provisions in the NPRM, along with other MACRA resources. The summary will be periodically revised, so please check the website to make sure you have the most recent version. In the coming weeks, the AMA will engage the Federation to ensure a broad physician perspective is reflected in the AMA’s formal comments on the NPRM, which are due to CMS by 5 p.m. Eastern time June 27.

New payment mechanism model proposed for physician-administered drugs

The Centers for Medicare & Medicaid Services (CMS) is proposing to implement a two-phase, multipronged nationwide research model under its §1115A innovations waiver authority that would restructure the way Medicare reimburses physicians for Part B drugs.

The AMA submitted a comment letter to CMS May 9, arguing that the payment cuts proposed in phase 1 of the model could undermine Medicare beneficiaries’ access to care from their established physician in their local community. Depending on where patients live, it could move their treatment to hospital outpatient offices, which are higher cost delivery sites. Neither physicians nor their patients manufacture, distribute, market or establish prices for Part B drugs, so phase 1 of the model will not reduce the price of Part B drugs.

The AMA has urged CMS to withdraw the model and seeks to work collaboratively with the agency to develop appropriately designed and scaled value-based payment models as part of new proposed §1115A models. This would improve patient care while also addressing overall health care costs, including risk-sharing agreements based on outcomes, evidence-based clinical decision support, and targeted reduction or elimination of copays.

FDA releases long-awaited final rule regulating e-cigarettes and cigars

The U.S. Food and Drug Administration (FDA) last week released its final rule regulating e-cigarettes, cigars, hookah and other previously unregulated tobacco products. The new rules are sweeping in scope, and for the first time, extend federal regulatory authority to e-cigarettes, banning their sale to minors under the age of 18 and requiring health warnings.

Also required under the rules:

As recommended by the AMA and other public health stakeholders, the FDA extended the rules to all cigars, rejecting proposals to exempt so-called “premium cigars.” The AMA has long called for e-cigarettes to be subject to the same regulations and oversight that the FDA applies to tobacco and nicotine products, and supports the final rule as an important step in protecting the public’s health, especially that of minors.

However, the AMA believes further regulation is necessary with regard to marketing e-cigarettes and banning flavored e-cigarettes, which are particularly enticing to minors. The rule goes into effect in three months.

Also last week, California became the second state after Hawaii to raise the tobacco purchasing age when Gov. Jerry Brown signed bills that raise the tobacco and e-cigarette purchasing age from 18 to 21 years, among other measures. Read more at AMA Wire®.

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Issue Spotlight

4 steps to prepare for Medicare’s new payment systems

While the details of the Medicare Access and CHIP Reauthorization Act (MACRA) regulations still are being hammered out, physicians should start preparing for the new payment systems now. Make sure you’re on track by taking four important steps.

The lengthy proposed rule released by the Centers for Medicare & Medicaid Services (CMS) outlines the draft regulations the agency is considering for implementation. This is just the beginning of the official rulemaking process, but what is known for sure is that physicians will have a choice in whether to participate in the Merit-based Incentive Payment System (MIPS) or meet requirements for an alternative payment model (APM).

Here are the steps you can take to prepare your practice for one of the two new Medicare paths:

For more information on how to prepare for the new Medicare payment systems, review the AMA’s MACRA checklist, or check out the AMA’s STEPS Forward™ collection of practice improvement strategies that can help your practice prepare for value-based care.

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State Update

Overriding veto, Maine legislature increases access to naloxone

The Maine legislature April 29 voted to override the governor’s veto on a bill that would increase access to naloxone, a lifesaving opioid overdose reversal drug. The Maine Medical Association (MMA) led the successful effort, which resulted in votes of 29-5 in the Maine Senate and 132-14 in the Maine House. The AMA and the American Society of Addiction Medicine sent letters to the leadership of the legislature, urging the override.

“Nearly every state in the nation has moved to increase access to naloxone in these ways because they have recognized not only the importance of increasing naloxone access but [also] the science that shows that increasing access to naloxone saves lives,” AMA CEO and Executive Vice President James L. Madara, MD, wrote to the Maine’s legislative leaders.

“The vote was strong and clear,” said MMA Executive Director Gordon Smith. “This is a win that will help save the lives of patients throughout our state.”

Alabama legislature votes to increase access to naloxone, protect pregnant women

Alabama’s governor has two bills for signature on his desk that will help save lives. The first bill, H.B. 379, would allow for more first responders to carry naloxone. The bill also allows the state health officer and county health officers to issue broad standing orders with pharmacies.

The second bill passed by the legislature, S.B. 372, clarifies state law that the normal practice of maternal medicine does not constitute chemical endangerment of unborn children. The bill clears up an issue that arose from a court ruling that criminalized aspects of providing normal, routine medical care to pregnant women.

This bill protects pregnant women and their physicians by ensuring that the following do not constitute the crime of “chemical endangerment of a child”:

The bill also provides that neither of these activities trigger “reportable events” to any authorities. Both bills were championed by the Medical Association of the State of Alabama.

Arizona restores Children’s Health Insurance Program

Arizona Gov. Doug Ducey last week signed a bill into law that will restore the Children’s Health Insurance Program (CHIP) in the state. Arizona had been the only state in the country without a CHIP program for low- and moderate-income children since the state froze CHIP enrollment in 2010 because of budgetary constraints.

The program is expected to cover 30,000 children in families with incomes between 138 percent and 200 percent of the federal poverty limit, which is about $32,000-$48,000 for a family of four. Arizona’s CHIP program will be fully funded by the federal government at no cost to the state until September 2017.

For more information about the AMA’s advocacy activities related to CHIP, contact the AMA Advocacy Resource Center.

13th state joins Interstate Medical Licensure Compact

This week New Hampshire became the lucky 13th state to join the Interstate Medical Licensure Compact, a new, voluntary expedited pathway for licensure for qualified physicians who wish to practice in multiple states. A handful of additional states are expected to join later this year.

The AMA is a strong supporter of the compact, which promises to modernize the state licensure system while preserving state regulation of the practice of medicine. More information about the compact can be found on the AMA website or by contacting Kristin Schleiter of the AMA.

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Judicial Update

Court case could lead to unlimited awards of punitive damages

The Tennessee Supreme Court is weighing the state’s limit on punitive damages in medical and other liability cases. A ruling to lift the ceiling could mean unlimited awards against physicians and other defendants.

From life insurance to medical liability
The case, Lindenberg v. Jackson National Life Insurance Co., originated in a dispute between an insurance company and the beneficiary of a life insurance policy. The company withheld the proceeds of the policy from the ex-wife of the deceased policyholder based on concerns over competing claims.

A jury in December 2014 found the insurance company had breached the terms of the policy contract and awarded the ex-wife $350,000 in actual damages, totaling the face amount of the policy. In addition, jurors awarded her $3 million in punitive damages. The insurance company asked a court to overturn the punitive damages award, citing a 2011 state law that caps punitive awards at $500,000 or twice the amount of actual damages, whichever is higher.

A federal judge heard the plaintiff’s arguments that the cap violates her right to a jury trial and encroaches on the powers of the courts. The judge in November referred the question to the Tennessee Supreme Court.

The case holds broader implications than for the scenario in question because lifting the cap on damages could leave physicians exposed to unlimited awards for punitive damages.

What physicians are saying
The limit on awards ensures fairness and predictability in liability cases, theLitigation Center of the AMA and State Medical Societies, the Tennessee Medical Association and 20 other insurers and employers argued in an April 15 friend-of-the-court brief (log in).

The organizations underscored that the 2011 law should remain in place, citing laws in other states and previous court rulings as evidence that the cap does not violate the right to a jury trial or encroach on the powers of the courts.

“Both sound legal and economic public policies support Tennessee’s reasonable limits on punitive damages,” the organizations said in their brief. They also made the case that the cap helps the state compete economically with other states and nations—physicians and others make decisions on where to set up business, in part, on the risk of excessive punitive awards.

“If Tennessee’s legal climate is viewed as having excessive, unpredictable and disproportionate liability exposure,” the brief said, “then job-creators, physicians and others will have an incentive to go where they will receive fairer treatment.”

The Tennessee law and others like it were enacted to combat a wave of punitive awards that had grown out of all proportion to actual damages, the brief said, and physicians face inflated penalties without the cap.

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Other News

New podcast provides guidance on HIPAA’s patient access rule

A new podcast produced by the AMA and the Healthcare Information and Management Systems Society (HIMSS) answers questions about providing patients access to their health information, as required by the Health Insurance Portability and Accountability Act (HIPAA). The podcast follows up on guidance released earlier this year by the U.S. Department of Health and Human Services (HHS) Office for Civil Rights.

In addition to providing general information about HIPAA’s patient access rule, the podcast specifically considers whether certified electronic health record technology can help physicians comply with HIPAA’s patient access requirements. It features Dr. Salvatore Volpe, MD, a physician in solo practice, and Adam Greene, an attorney in Washington, D.C., and former regulator at HHS, where he was responsible for determining how HIPAA rules apply to health information technologies.

A second AMA-HIMSS podcast, “The nuts and bolts of achieving HIPAA Security Rule compliance through effective risk assessment,” is available for continuing medical education credit. This and other free HIPAA resources can be found on the AMA website.

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News You Can Use

Following is suggested content to use in your association’s communication vehicles beginning this month. Please email Terri Marchiori of the AMA to let us know if you’re placing this material, your distribution channels, the response from your members and any other metrics, such as audience reach.

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