Summary of H.R. 2810, 'Medicare Patient Access and Quality Improvement Act of 2013'

As Approved by House Committee on Energy & Commerce

On July 30, 2013, the House Committee on Energy and Commerce approved H.R. 2810, the “Medicare Patient Access and Quality Improvement Act of 2013,” with several amendments.  H.R. 2810 would repeal the Sustainable Growth Rate (SGR), effective 2014, and set annual updates at 0.5 percent for 2014 and beyond.  Medicare spending for physician services would be reduced by up to one percent in 2016 to 2018 to account for “misvalued services,” identified by a new entity.  The bill creates a new quality reporting program resulting in payment penalties or incentive payments, starting in 2019, without altering current Medicare penalty programs.  The bill establishes procedures and authority to evaluate and implement new alternative payment models.  It requires new procedure codes and payment for complex chronic care coordination services by physicians, physician assistants (PAs), and nurse practitioners (NPs), and alters Medicare payment in some metropolitan areas of California.

Stabilizing Medicare Fee Updates (Phase I):  The SGR would end after 2013. 

• From 2014 to 2018, the update would be 0.5 percent per year.  In the years from 2019 and beyond, the 0.5 percent annual update would continue, but there would be incentives and potential penalties under the new Quality Update Incentive Program.
• Scheduled penalties under current law would remain, i.e., Value-Based Modifier (VBM), Physician Quality Reporting System (PQRS), and Electronic Records Meaningful Use (MU).

Physician Reporting System to Improve Accuracy of Relative Values:The bill creates a new “physician reporting system” to “improve the accuracy of relative values.”  This would incorporate existing data, patient scheduling systems, cost accounting systems, etc.  A “reporting group” of physicians across specialties and settings would engage in, and could receive payments for, periodic reporting on the accuracy of relative values, including service volume and time.  $1 million would go from the Federal Supplemental Medical Insurance Trust Fund (“Medicare Trust Fund,” for Parts B and D) to the Centers for Medicare and Medicaid Services (CMS) Program Management Account, per fiscal year, for this purpose.

Adjustments for Misvalued Physicians’ Services:  For fee schedules established for 2016, 2017, and 2018, the Secretary would have to identify misvalued services based upon data from the “physician reporting system” and other sources.

• The identified services would need to result in relative value adjustments resulting in a reduction in spending of “up to 1 percent.”
• This spending reduction would not be subject to budget neutrality.  These funds would be removed from the pool of spending for Medicare physician services.

Quality Update Incentive Program (Phase II):  The bill creates a new Quality Update Incentive Program (QUIP) reporting system.  The QUIP would trigger incentives and penalties, beginning 2019, unless a physician or other eligible professional (EP) is in an alternative payment model. 

• Quality Comparison by Peer Cohort:EPs would select their “peer cohort” (by specialty, certification, practice area, or disease). Peer cohorts would include provider specialties defined by nationally recognized multispecialty boards of certification.  Multispecialty groups could select more than one peer cohort.  Each cohort would have a “quality measure set” of quality measures and clinical quality improvement activities addressing, to the extent practicable, five “quality domains” (clinical care, safety, care coordination, patient & caregiver experience, and population health & prevention).  Outcome, process, and patient experience measures are encouraged.  Core measure sets would be published in proposed and final rules.
• Clinical Practice Improvement Activities:  The Secretary would approve activities that are likely to result in improved outcomes, from those identified by “eligible professional organizations” (as defined by nationally recognized multispecialty boards of certification or equivalent certification boards) to improve clinical practice or care delivery.
• Relationship to Other Programs:  Starting in 2019, QUIP final quality measure sets would replace PQRS quality measures.  However, the PQRS reporting and penalty program would remain in force.  Several provisions require alignment of various aspects (including group reporting) with existing programs—PQRS, MU, Physician Compare, and quality resource use reports (QRURs) under the Physician Feedback program.
• Quality Adjustments:  Would be determined according to composite scores, as compared with those for the selected Peer Cohort:  one percent incentive payment for scores of 67 percent or higher; no adjustment for scores from 34 to below 67 percent; and a one percent penalty for scores below 34 percent.
• Failure to Report:  Would cut reimbursement to 95 percent of the fee schedule amount, starting in 2019, unless the annual “caseload” is below a minimum threshold.
• Timely quarterly feedback reporting:  Would be required at the individual level, via an electronic interactive mechanism.
• $100 million:  From the Medicare Trust Fund would go to administer the QUIP.

Advancing Alternative Payment Models (APMs):  The bill establishes a detailed new program for the evaluation, approval, and implementation of APMs.  $2 billion from the Medicare Trust Fund would go to the APM program, including payments to APMs.

• APM Contracting Entity:  The Secretary of HHS must contract with an independent entity that has appropriate expertise to receive and evaluate APM proposals.  The APM contracting entity would begin accepting proposals within 90 days of its first contract. The first contract is slated to begin January 1, 2019, but other provisions in the bill indicate this should be 2015.  The APM contracting entity could receive up to $45 million to carry out its functions.
• Recommendations & General Criteria:  The APM contracting entity would be required, at least quarterly, to issue recommendations, data, and analyses on APM models to move forward, with or without a demonstration program.  If no models are recommended in any year starting in 2015, the entity would have to provide a public explanation.  The Chief Actuary would report on whether the APM is likely to increase spending.  To be recommended, an APM proposal must:
  • Have the ability to maintain or improve overall quality of patient care;
  • Specify covered items and services and rules of coordination of payments;
  • Be supported by meaningful clinical and non-clinical data, with respect to a sufficient population sample;
  • Reach a sufficient number of Medicare beneficiaries; and
  • Not deny or limit Medicare coverage or provision of benefits.
• Demonstration Program:To be recommended for a demonstration program, a proposal would also have to show the model has a “significant likelihood” of successfully managing the costs of items and services, so as not to result in increased expenditures for the Medicare program.  Demonstrations of APMs would last three years.
• Without Demonstration:  To be recommended without a demonstration program, a model must already have been tested and evaluated “for a sufficient period” to show, in addition to the previous criteria, that it reduced spending without reducing quality of care or improved quality without increasing spending.
• Rules of Coordination for Application of Payment Arrangements:  APMs must have rules that: clarify the circumstances for treating an eligible professional as having a payment arrangement under a particular model; indicate how payments are treated in calculating the Conversion Factor; and ensure coordination and non-duplication of payment of services.
• Waivers:  Waivers could be requested with respect to these requirements.  The Secretary would have 180 days to respond to such requests.
• Assessment of APM Demonstrations:CMS would have 180 days to decide whether to approve an APM for demonstration.  Approval would require a determination that an APM is “significantly likely” to reduce spending but not quality or improve quality without increasing spending, taking into account the Chief Actuary’s report.  APMs in demonstrations would be terminated or modified if not meeting spending and quality requirements.
• Modifications:  The APM contracting entity and CMS could modify an APM to ensure that it would reduce spending without reducing quality of care, or improve quality of care without increasing spending.  Modifications could be made in the APM’s payment arrangement criteria for participation by eligible professionals, rules of coordination, a withhold mechanism, or “Such other change as the Secretary may specify.”
• Final Approval & Publication:CMS would consult the Chief Actuary in determining whether an APM is “significantly likely” to meet the quality and cost criteria.  If so, it would include plans to implement the model in the proposed physician fee schedule (PFS) rule.  The Medicare Payment Advisory Commission (MedPAC) would be required to submit comments, within 90 days, evaluating the model’s “impact on expenditures and quality of care under this title.”  A final decision would appear in the final PFS rule.  To implement a model, CMS must determine that the model: reduces spending without reducing quality of care, or improves quality of care without increasing spending; would not deny or limit coverage or provision of benefits; would result in sufficient participation; and applies rules of coordination.  The Chief Actuary must also certify that the model “would reduce (or would not result in any increase in) spending “under this title,” meaning costs would be assessed across all of Medicare.
• APM Participation & Effect for Other Programs:  Participation in APMs will be open to eligible professionals.  CMS will establish further criteria for participation.  Participation in an APM would constitute satisfactory quality reporting for the QUIP and PQRS.  However, payment adjustments for MU and quality reporting would apply to APM payments.

Section 2:  California Geographic Adjustment:  The bill amends the Medicare payment localities for California so urban areas such as San Diego would no longer be considered “rural” for geographic payment adjustments.  For some areas of the state, the change would occur over a six-year transitional period, with a “hold harmless” provision for transition localities, with no expiration date.  It is unclear if this would be budget neutral within California, and how CMS would calculate this.  This could affect reimbursement in other localities within California, and could also result in an increase in the budget score for the bill.

Section 3: Expanding Availability of Medicare Data:  The bill increases access and use of Medicare claims data.  Amendments reflecting AMA input clarify that “qualified entities” (QEs) can sell claims data or analyses to authorized users for non-public purposes, and allow qualified clinical data registries (QCDRs) access to claims data. 

• QEs could sell claims data or analyses to subscribers or authorized users for non-public purposes.  For these internal reports, QEs would be exempt from safeguards under current law requiring submission of reports and methodologies to the Secretary, and to mix Medicare data with other payer sources.  QEs would still need to describe their measures and risk adjustment methodologies.
• QCDRs would be allowed to publicly report Medicare claims data but would be required to link this with clinical outcomes data, use risk-adjusted methodologies, and gain prior consent from providers before publicly reporting any information.

Medical Liability/Standards of Care:  The bill incorporates language from the Standard of Care Protection Act, which AMA has supported to limit medical liability claims.  This language prevents provisions from the Affordable Care Act from establishing health care provider standards or duties of care in medical liability or medical product liability cases.

Section 4: Encouraging Care Coordination and Medical Homes:  CMS must develop HCPCS codes, and begin paying in 2015, for "complex chronic care management services" for patients with complex chronic care needs.  In past versions of this bill, only physicians (MDs, DOs) could use these codes.  This was amended to allow physician assistants (PAs) and nurse practitioners (NPs) to bill the codes if they meet the same criteria as billing physicians:  certification as a medical home or recognition as a "patient-centered specialty practice" by NCQA (National Committee for Quality Assurance); "equivalent certification" as determined by CMS; or meeting "such other comparable qualifications as the Secretary determines to be appropriate."  Current and proposed CMS policy would allow PAs, NPs, clinical nurse specialists, and certified nurse-midwives to bill for this service, as well as transitional care management, if they coordinate all aspects of a patient’s care and meet other criteria.

Additional Reports and Evaluations:  MedPAC and the Government Accountability Office would be required to evaluate and report on the QUIP and APMs. 

• MedPAC must report on payment system alternatives, including accountable care organization (ACO) models, primary care medical home models, bundled or episodic payments for certain conditions and services, and gainsharing arrangements.
• The Chief Actuary must prepare annual reports, for posting on the CMS web site, tracking expenditure growth and beneficiary access under the Physician Fee Schedule.
• One year after enactment, the Secretary of HHS must submit to Congress a report “on the extent to which clinical decision support mechanisms and other provider support tools could support mechanisms and other provider support tools could be used to further program objectives under Section 1848 [Medicare].”

Source: American Medical Association