Lawmakers Reach SGR Deal

On February 6, the Senate Finance, House Ways and Means, and House Energy and Commerce Committees reached agreement on an SGR replacement plan and introduced the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015). An identical bill, S. 2000, was introduced in the Senate.

Key components of the plan include:

The SGR would be repealed immediately.

Positive annual payment updates of 0.5 percent would be provided for five years.

The value-based purchasing (VBP) program has been replaced with a similar Merit-Based Incentive Payment System or MIPS, which includes prospectively set performance thresholds and offers flexibility in the imposition of certain performance requirements.

The effective date of the MIPS program would be one year later than the original VBP proposal, and will start in 2018.

The MIPS funding pool was increased and is no longer budget neutral, and the phase-in of penalty risks for those who fall in the lowest performance quartile has been capped at a maximum of 9 percent (as opposed to the previous 12 percent).

The 5 percent added incentive payment for physicians in Alternative Payment Models was retained.

Funding for technical assistance to small practices of 15 or fewer professionals was doubled.

Physicians who opt out of Medicare to engage in private contracting with their patients would no longer be required to renew their opt-out status every two years.

On February 27, the Congressional Budget Office (CBO) released a score for H.R. 2015. CBO estimates that enacting H.R. 4015 would increase direct spending by about $60 billion over the 2014-2019 period and by approximately $138 billion over the 2014- 2024 period, assuming enactment this spring. Nearly all of the estimated increase in spending would stem from the specified updates to rates for services paid on the physician fee schedule.

CMS Seeking Input on Reform Models for Radiation Therapy Services

On February 11, the Centers for Medicare & Medicaid Services (CMS) released a Request for Information (RFI) relating to "Specialty Practitioner Payment Model Opportunities."

CMS notes it issued the RFI "to obtain input on policy considerations for the development of innovative payment and service delivery models for specialty practitioner services furnished mainly as outpatient care for patients with specific medical conditions and/or specific patient populations." CMS further notes that the term 'specialty practitioners' is used to differentiate these practitioners from primary care practitioners and that the models considered in the RFI would complement CMS' existing portfolio, which already includes models focusing on

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both primary care and inpatient hospitalizations (such as the Bundled Payments for Care Improvement Initiative) as well as care in other settings. The models discussed in the RFI broadly relate to the following:

1. A procedural episode-based payment model

2. A complex and chronic disease management episode-based payment model

It is within the "procedural episode-based payment model" that CMS specifically considers radiation therapy, stating:

This model could target specific procedures where significant opportunities exist for specialty practitioner engagement in care redesign. Examples of episodes could include surgical procedures furnished in the outpatient setting (such as colonoscopy or cataract surgery), as well as nonsurgical treatments (such as radiation therapy), that would be conducive to an episode-based payment model.

Also of importance, CMS notes the RFI "seeks information in relation to the development of models for care managed by specialist practitioners other than medical oncologists, as a potential oncology model is on a separate development track."

Although the original Request for Information asked for responses by March 13, 2014, CMS subsequently extended the comment deadline to April 10, 2014.

CMMI Examines New Payment Models for Oncology Services

It is unclear based on the RFI for Specialty Practitioner Payment Model Opportunities, what the "separate development track" model may be for medical oncology. However, the RFI does reference a Technical Expert Panel (TEP), which convened on November 20, 2013 to solicit input on how best to design an alternative payment approach for oncology specialty care. The oncology TEP was phase one of the Specialty Physician Payment Model Opportunities Assessment and Design (SPPMOAD) project, a Center for Medicare & Medicaid Innovation (CMMI) effort intending to identify opportunities for better alignment of high quality care delivery and supporting payments in oncology and additional specialties. According to the Brookings Institution, oncology care was selected as the first specialty for analysis in this project because cancer represents a high disease burden in the United States, consequently incurring high healthcare costs.

The primary purpose of the oncology TEP was to solicit feedback on the trajectory of oncology payment reform and provide an opportunity for a range of stakeholders to offer perspectives on types of reforms and their potential impacts. The goal was not to achieve consensus or produce a formal recommendation, but rather to begin to consider how different model components can fit together in an alternative payment model. TEP members were asked to use four illustrative models as a starting point for discussion:

Clinical pathways

Patient-centered oncology medical homes

Bundled payments

Oncology accountable care organizations

CMS Opens Enrollment for Bundled Pay Demonstrations

The Centers for Medicare and Medicaid Services (CMS) announced on February 13 it will be accepting additional organizations for participation in Models 2 – 4 of the Bundled Payments for Care Improvement Initiative. Under the Bundled Payments for Care Improvement Initiative, organizations enter into payment arrangements that

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include financial and performance accountability for episodes of care. CMS began testing Model 1 of the initiative in April 2013. Models are described as follows:

Model 1: Retrospective payment model for the acute inpatient hospital stay.

Model 2: Retrospective bundled payment models for hospitals, physicians, and post-acute providers for an episode of care consisting of an inpatient hospital stay followed by post-acute care.

Model 3: Retrospective bundled payment models for post-acute care where the episode does not include the acute inpatient hospital stay.

Model 4: Prospectively administered bundled payment models for the acute inpatient hospital stay and related readmissions.

Organizations must apply by April 18, 2014.

Congress Extends Sequester One Year to 2024

Congress has passed a bill extending sequestration by one year to 2024. The additional year of 2 percent across the board cuts was passed to pay for the reversal of a cost-of-living adjustment cut for veterans' benefits equaling $6 billion.

The sequester extension is expected to generate more savings than needed to pay for the restored veterans' benefits; therefore offers a transitional fund for extra savings to be used as part of a comprehensive overhaul of the Medicare Sustainable Growth Rate (SGR) formula or for an extension of current physician payment rates.

CBO Reports Slower Medicare Spending Growth

The Congressional Budget Office (CBO) released its Budget and Economic Outlook: 2014-2024 on February 4, which reports that Medicare spending is slowing while Medicaid spending is increasing as a result of the healthcare reform law.

CBO finds that Medicare spending increased by only 2 percent in 2013 — the slowest rate of growth recorded since 1999. The office estimates that gross Medicare spending will total $603 billion in 2014 and nearly $1.1 trillion in 2024.

CBO also estimates that the Medicare beneficiary population will grow from 51 million in 2013 to 71 million in 2024, which CBO reports will accelerate Medicare spending by 6 percent per year over the next decade. Per-beneficiary spending is also expected to grow at an average rate of 3 percent by 2024.

CBO also found that federal Medicaid spending grew by 6 percent in 2013 compared to 2012 levels, and that growth is expected to continue to accelerate as states expand their Medicaid-eligible populations under the healthcare law. As more states expand their Medicaid programs, federal spending on the program will increase by approximately 9 percent each year for the next 5 years. To date, 25 states have chosen to expand their Medicaid populations under the law, which is projected to increase enrollment in the program by 5 percent this year.

PCORI Announces $90 Million in Funding for Pragmatic Studies in Specialty Areas

The Patient-Centered Outcomes Research Institute (PCORI) issued a series of PCORI Funding Announcements (PFAs) in February as part of its new Pragmatic Clinical Studies Initiative. The first of which will provide up to $10 million in direct costs each to support six to nine studies for a total of up to $90 million for large, patient-centered

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pragmatic studies. PCORI seeks to evaluate patient interventions in real-world settings to better reflect actual care situations, making the results more applicable to patients' and healthcare providers' experiences.

The Pragmatic Clinical Studies PFA calls for proposals for projects to take place within typical clinical care and community settings. Among other criteria, proposals must demonstrate strong endorsement and participation by relevant groups, such as professional and patient organizations. Priority topics are listed in the funding announcement and include those identified as of priority concerns to patients, clinicians, and other healthcare stakeholders.

Research topics of priority interest include proton beam therapy for certain cancers.

Applicants must submit letters of intent (LOIs) by 5 p.m. ET Friday, March 7.

World Health Organization Predicts Increase in Cancer Cases

According to the World Cancer Report 2014 – released by the International Agency for Research on Cancer, the specialized cancer agency of the World Health Organization (WHO) – global cancer cases are on the rise.

The report estimates new cases of cancer reached 14.4 million in 2012, which led to 8.2 million cancer related deaths. Researchers predict these numbers will climb to 22 million cases of cancer and 13 million cancer deaths annually within 20 years.

The report estimates the global cost of cancer care totaled $1.16 trillion in 2010.

The most common cancer diagnoses globally are cancers of the lung, breast and large bowel. The most common causes of cancer-related death are cancers of the lung, liver and stomach.

Researchers also predict that one in five men and one in six women will develop cancer before the age of 75.

The World Cancer Report 2014 is developed collaboratively by more than 250 leading scientists representing more than 40 nations..

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