United States: Health Care Provisions In Bipartisan Budget Act Of 2018

On Friday, February 9, President Trump signed The Bipartisan Budget Act of 2018 (the “2018 Act”) into law. Among other things, the 2018 Act makes changes to the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), revises some provisions of the Affordable Care Act (“ACA”), and provides funding for various federal health care programs. This Alert details some of the most notable provisions for health care industry stakeholders.

Changes to MACRA’s Merit-Based Incentive Payment System (“MIPS”) and Physician Fee Schedule

In 2015, MACRA was signed into law, ending years of annual “doc fixes.” MACRA adopted a two-track Quality Payment Program, replacing the plagued sustainable growth rate formula for setting the Medicare Part B physician fee schedule. One of the MACRA tracks establishes the so-called Advanced Alternative Payment Models, or “APMs.” That is unchanged by the 2018 Act. The 2018 Act’s changes focus on the so-called Merit-based Incentive Payment System, or “MIPS,” which is the “default” track under MACRA. MIPS scores participating clinicians based on performance in four domains (quality, advancing care information, improvement activities, and cost). Under MACRA, Medicare Part B reimbursement for participating clinicians is adjusted up or down according to weighted scores in these four categories. The 2018 Act changes scoring and weighting within MIPS. In addition to changes to MIPS, the 2018 Act reduces the annual increase established by MACRA for the physician fee schedule. Specifically, the 2018 Act provides for:

  • CMS Flexibility to Reduce Weighting of the Cost Domain. MACRA originally intended for cost, while disregarded in the first year, to account for 30% of performance scores by 2021. The 2018 Act provides CMS with discretion to determine the weight of the cost domain for years two through five of MIPS, provided that CMS stays within a band of 10%–30%. Conceivably, the cost domain could remain as low as 10% through 2021. This change responds to stakeholder concerns that the cost domain relied on problematic data and flawed methodologies, and that the domain required additional review and alteration by CMS before comprising a larger percentage of the MIPS score.
  • Elimination of Part B Drugs and Other Separately Billed Items from MIPS Cost Domain and MIPS Eligibility Determinations. The 2018 Act excludes separately billed items—including Medicare Part B drugs—from associated MIPS calculations and thus from MIPS payment adjustments. Since drugs and other separately billed items can be a significant driver of cost, this change will have a major impact on clinicians who bill Medicare Part B for costly medications, and whose cost scores otherwise could have varied from year to year based on drug volumes. The 2018 Act also excludes separately billed items from determining whether a clinician meets the threshold of $90,000 of Medicare Part B billed claims required for participation in MIPS. Consequently, small practices that use many and/or expensive Part B drugs or other separately billed items may find that they are exempt from participation in MIPS.
  • Slower Implementation of Performance Threshold. One feature of MIPS is a “performance threshold” that providers must exceed in order to avoid payment reductions. For 2019, the threshold would have been set at the average MIPS score—meaning that approximately half of all clinicians would fall below the threshold and would be subject to a Medicare Part B payment reduction. The 2018 Act gives CMS discretion to set gradually increasing point values for the performance threshold until 2022 when the threshold must be set at the average MIPS score, thereby limiting until at least 2022 the number of clinicians who will be exposed to payment reductions. The threshold is currently set at 15 points for 2018. CMS has not yet determined what the gradual increase in point value will be for 2019 through 2021. Conversely, given that MIPS must be budget-neutral, this change also reduces the degree to which high-performing clinicians will receive significant positive payment adjustments.
  • Reduction in Base Physician Fee Schedule Update. MACRA established annual 0.5% increases to the Medicare Part B physician fee schedule for each year through 2019. The 2018 Act reduced that increase for 2019 to 0.25%. This may be a result of the changes described above—MACRA, and MIPS specifically, funded annual fee schedule adjustments in part by reducing payments to low-performing clinicians. By backing away from features of MACRA that could have yielded reductions to low-performing physicians, the 2018 Act constrained Medicare’s ability to fund general fee schedule increases established by MACRA.

The changes to MACRA appear to be well-received by stakeholders, reflecting Congressional response to concerns that had been raised about the complexity of MACRA generally, and of MIPS specifically. What remains to be seen, however, is if this marks the beginning of future efforts to re-shape and reduce the reach of MACRA programs. In 2017, the Trump administration made regulatory changes that reduced the number of clinicians required to participate in MIPS. Further, in early 2018, the Medicare Payment Advisory Commission, which advises Congress on Medicare policy, voted to eliminate MIPS altogether. Those changes and the changes adopted under the 2018 Act could portend further changes to MACRA in the years ahead.

Other Federal Health Care Program Changes

In addition to the changes to MACRA, the Act also revises some provisions of the ACA, extends coverage under the Child Health Insurance Program (“CHIP”), and provides other changes to health care programs and reimbursement. Specifically, the Act:

  • Accelerates the Reduction of the Medicare Part D “Donut Hole” Coverage Gap. The Medicare Part D “donut hole” requires enrollees to pay a larger out-of-pocket share of any annual drug expenditures in excess of $3,750, until out-of-pocket expenses reach $5,000, at which point full coverage resumes. In 2011, Medicare Part D drug plans and pharmaceutical manufacturers started to share a part of enrollees’ medication expenses incurred in the coverage gap. Beginning in 2019, the 2018 Act requires manufacturers to give larger prescription drug discounts (70%) to enrollees in the coverage gap, so that, when combined with Part D coverage (5%), enrollees’ cost-sharing liability is 25%. Previously, enrollees’ cost-sharing liability was scheduled to be reduced to 30% in 2019 and 25% in 2020. The 2018 Act also changes how much cost each party bears, materially increasing the burden on manufacturers and decreasing the burden on plans. To achieve the 25% enrollee cost share, the 2018 Act increases the planned manufacturer discount from 50% to 70% and decreases the Part D contribution from 25% to 5%.
  • Delays for Two Years Reductions in Reimbursement to Disproportionate Share Hospitals (“DSH”). The ACA anticipated reductions in DSH reimbursement, which would have been offset by increased reimbursement from growing rolls of insured individuals. Congress has delayed those cuts repeatedly, following determinations that increased reimbursement did not offset the anticipated cuts and the reality that states have not expanded Medicaid eligibility as originally contemplated by the ACA. The 2018 Act extends the delay for two years.
  • Expands Telehealth Coverage for Medicare Advantage Patients. The 2018 Act allows Medicare Advantage plans to provide telehealth benefits, such as telemonitoring and medication therapy management, as a basic plan benefit, starting in 2020. This would permit enrollees to pay the same for telehealth consultations as they would for in-person visits, which would be a significant reduction from current cost-sharing obligations, in which telehealth services are treated as a costlier “supplemental” benefit.
  • Adds a Four-Year Funding Extension for the Children’s Health Insurance Program (“CHIP”). Together with the January spending bill, which provided for six years of CHIP funding, CHIP now has funding for 10 years. The 2018 Act also extends funding for Community Health Centers by two years.
  • Eliminates the Independent Payment Advisory Board (“IPAB”). The ACA authorized the creation of the IPAB, which was intended to serve as a check on the rising costs of Medicare. The purpose of the IPAB was to recommend specific cost-savings measures to be implemented if Medicare spending was projected to grow faster than certain benchmarks. The IPAB was never utilized, and none of its 15 seats was ever filled, because spending growth has stayed below target growth rate. However, the IPAB’s elimination now removes an advisory board that could have identified and recommended Medicare cost reductions should Medicare costs rise in the future.

Conclusion

The 2018 Act reduces the immediate impact of the MACRA programs by allowing CMS flexibility in setting performance score weights and thresholds. Together with regulatory changes from the Trump administration in 2017, this legislation marks meaningful changes to the still-new MACRA, presenting at least some question as to whether further changes to MACRA’s complicated framework may be to come. If you would like to discuss the implications of the Act, please contact your usual Ropes & Gray attorney.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions