The Health Policy War Room

Medicare is an important aspect of the healthcare system in the United States and plays a crucial role in providing medical coverage to millions of seniors. In recent years, Medicare spending and financing has been a topic of great concern and debate, with many questioning the sustainability of the program. In this article the Kaiser Family Foundation takes a look at some trends in Medicare spending and financing and what policy solutions might address these concerns. In 2020, Medicare spending accounted for 3.7% of the Gross Domestic Product (GDP), and this number is expected to grow in the future. KFF projects that Medicare spending will reach 5.8% of GDP by 2040. The main drivers of this spending growth are the increasing number of beneficiaries, rising healthcare costs, and the increasing costs of new medical technologies. This trend highlights the need for finding solutions to reduce the growth of healthcare costs and improve the efficiency of the healthcare delivery system. With...

On August 2, 2021, CMS placed on display at the Federal Register the final fiscal year 2022 Inpatient Prospective Payment System Final rule. Amongst the over 2,000 pages are CMS's final decisions on New Technology Add-on Payments (NTAP) for FY 2022. The NTAP program was designed to identify new technologies and to ensure that payment under the IPPS would be adequate so that early adopters of  new technologies would not be financially disadvantaged. Under the traditional NTAP pathway, a technology must be considered "new",  the charges of cases involving the technology must be more than 75 percent of the unadjusted rate for the MS-DRG to which the technology is assigned, and the technology must represent a substantial clinical improvement over existing technologies.  Beginning in 2021, CMS implemented an alternative NTAP pathway for technologies granted "break-through" approval by the FDA and for certain antimicrobial products. For this alternative pathway, techn...

  Since January 1, 2020, CMS has made separate payment for the treatment of opioid use disorder when furnished by qualified opioid treatment practitioners (OTP). This new Medicare benefit, established by the SUPPORT Act, allows CMS to make bundled payments for weekly episodes of care. Medicare will pay for episodes of care that include drugs, for non-drug episodes of care, for intake and periodic assessments, take-home dosages of methadone and buprenorphine, as well as for additional counseling. Pricing The episodic payment rate includes reimbursement for the drug- and non-drug-components of the encounter. Pricing for the drug component of the bundle is set using the most appropriate pricing mechanism currently in place and varies depending on the drug. Annual updates to the drug component of the bundle are made using the most recently available data from the applicable pricing mechanism. The non-drug portion of the bundle is updated based on the Medicare Economic Index. To reflect...

In the CY 2022 Physician Fee Schedule Proposed Rule, released yesterday (https://public-inspection.federalregister.gov/2021-14973.pdf) CMS is proposing two changes to its long-standing policies on drug pricing.  First, CMS is proposing to require manufacturers of drugs covered under Part B to report ASP data even if the manufacturer does not have a Medicaid rebate agreement. Noting that many manufacturers without a Medicaid rebate agreement currently report ASP data to CMS, CMS believes its proposed will cause little upset to manufacturers and would in fact preserve the status quo.  In a 2017 report (http://medpac.gov/docs/default-source/reports/jun17_ch2.pdf), MEDPAC presented findings many repackagers do not report ASP data to CMS and that this failure to report could be skewing Medicare payment rates. In this year’s proposal, CMS presents its own findings that exempting repackagers from reporting ASP data could increase errors in ASP calculations and delay CMS’s ability to ...

On June 22, Senator Ron Wyden (D-Ore.), Chairman of the Senate Finance Committee released his own set of “principles” for lowering prescription drug prices. Characterized as a step toward “comprehensive legislation” on the matter, the principles are said to guide Wyden’s work during the summer months with the ultimate goal of delivering relief from high prescription drug prices. Wyden’s principles largely reflect the concepts that have been widely circulated as parts of many prior statements on reducing drug prices. Medicare negotiation, limiting out-of-pocket costs at the pharmacy counter, controlling price increases for older drugs, and rewarding innovation are concepts that have been debated at length in the past. Wyden also suggests that any drug pricing proposals should apply to all Americans – not just those covered by Medicare. Acknowledging the work already done by the Senate Finance Committee, Wyden’s goal is to develop a legislative package, with bipartisan support, that can ...

I don’t normally get involved in things political but the Supreme Court’s recent decision to uphold the Affordable Care Act by a 7-to-2 margin got me thinking about the highest court and its history. After spending way too much time in the Number One First Street rabbit hole I discovered so much about the rich history of this esteemed institution. If you are interested in reading eight fun facts, follow along. John Warren is the Owner and Principal Consultant at Gettysburg Healthcare Consulting in Hanover, Pennsylvania. He worked at CMS for 22 years and he directed divisions responsible for rate setting and payment policy development as well as program integrity and medical review. He has consulted with numerous clients in the Medicare space interested in navigating Medicare coverage, coding and reimbursement. Visit http://www.policypros.net for information about GHC and its services.

Legislators and policymakers alike have struggled with finding effective ways to reconcile the differences between drug prices in the United States and prices for those same drugs in foreign countries. Many factors including Government price controls, varied supply chains, and differences in the volume and mix of drugs prohibit the direct comparison of drug prices between countries. The concept of developing a price index to track differences in prices over time and across markets is not new. The Medicare program has used market basket updates – a form of price indexing, to keep growth in payments under its prospective payment systems from falling behind prices in the market.  However, the concept of a price index for drugs has not been widely recognized by policy makers. That was, until President Trump released his “American Patients First” (1) blueprint to lower drug costs . In the blueprint, President Trump urged the Department of Health and Human Services to take steps to “addr...

On May 13th, CMS released the latest in a series of rules intended to support the control of the spread of COVID-19 infections in long-term care (LTC) facilities and intermediate care facilities for individuals with intellectual disabilities (ICF-IID). The interim final rule with comment (IFC) went into effect on May 21st; however, CMS is accepting comments from interested stakeholders until July 12, 2021. With the implementation of these new rules, CMS is requiring LTC facilities and ICF-IID to develop and implement policies and procedures to ensure that they offer residents and staff vaccination against COVID–19 when vaccine supplies are available. CMS is defining “staff” as those individuals working in the facility in a full-time capacity as well as those individuals who provide weekly services on-site. CMS chose not to extend this requirement to individuals who infrequently enter facilities -- such as service technicians, plumbers and others who may enter the facility only a few ti...

It seems like CMS comes under constant fire for their efforts to serve as responsible stewards for the Medicare program. Lately it seems that CMS is taking fire for not going far enough with payment cuts. In this entry, I will look at the latest round of payment cuts to drugs purchased under the 340B Drug Discount Program. Read on for more... In 1992, the Veteran's Health Care Act amended the Public Health Services Act by creating section 340B and its eponymous Drug Discount Program. Originally intended to provide certain hospitals that cared for underserved populations a way to "stretch scarce federal resources" and provide funding to help provide care to their patient population. The program was originally limited to so-called Disproportionate Share Hospitals, Federally Qualified Health Centers, and Ryan White HIV Clinics. It has since been expanded to allow children’s hospitals, freestanding cancer clinics, critical access hospitals and others to participate. The progr...

Automated multichannel chemistry (AMCC) tests are a subset of diagnostic tests that are focused on overall well-being. Testing analytes like glucose, cholesterol, potassium, trigylcerides and others is part of almost every doctor's visit. The 23 tests that are generally identified as AMCC tests are relatively simple in nature using basic testing methods and the simple nature of these tests is reflected in the amounts that Medicare pays for these tests. The average Medicare Clinical Laboratory Fee Schedule (CLFS) payment rates for these tests is just over $6.50 per test. Despite the low per-test payment rate, AMCCs are big business, accounting for $194 million in Medicare spending in 2018. Read on for more...  There has been alot said about Medicare payment for AMCC tests since the Protecting Access to Medicare Act (PAMA) reformed the CLFS. Part of the way PAMA was implemented required Medicare to set payment rates and make payments for individual tests as described by their bil...