Ways and Means Committee Urges CMS to Delay CLFS Implementation

On March 29, 26 members of the House Ways and Means Committee sent a letter to CMS urging the agency to delay its implementation of the new Clinical Laboratory Fee Schedule (“CLFS”), which changes the way that clinical laboratory tests are paid for under Medicare. The lawmakers expressed concern that the move to a market-based payment methodology will be improperly rushed to meet the January 1, 2017 deadline set by the Protecting Access to Medicare Act of 2014.

CMS has not yet issued a final rule or guidance on CLFS and has missed several regulatory milestones as it works towards implementing the reform. In a comment letter released in November 2015, the American Hospital Association asked the agency to delay the effective date of the rule until 2018 to allow laboratories adequate time to make changes to their finance information systems to permit correct and complete data collection and to test CMS’s reporting system.

OMB Reviews Proposed Rule on Medicare Physician Reimbursement 

The White House Office of Management and Budget (“OMB”) began its review of a CMS proposed rule that would make changes to the way that physicians are paid for services they provide to Medicare recipients. The proposal, which would create a new value-based payment system for Medicare reimbursement, was released by CMS on March 25.

The rule would establish a new system that would utilize a two-track payment method for physicians. The first track, the Merit-Based Incentive Payment System (“MIPS”), would rate health care providers based on performance. Under MIPS, which folds meaningful use, the Value-Based Modifier and the Physician Quality Reporting System into a single program, Part B providers would receive a performance score that would result in increases or cuts to Medicare payments of up to four percent in 2019, five percent in 2020, seven percent in 2021 and nine percent in 2022.

The second track would develop criteria for alternative payment models to exempt providers from the MIPS scoring system and receive a five percent bonus if they become part of an eligible health care entity, including accountable care organizations, bundled payments and advanced primary care medical homes.

CMS Releases Final Rule on Medicaid and CHIP Benefits for Mental Health Services

On March 29, CMS published a final rule to improve access to mental health and substance abuse services for Medicaid or Children’s Health Insurance Program (“CHIP”) beneficiaries. Under the Mental Health Parity and Addiction Equity Act (“MHPAEA”) of 2008, health insurance plans are generally required to provide coverage for mental health and substance use disorders on the same level as coverage provided for medical and surgical services. The rule would apply MHPAEA provisions to Medicaid managed care organizations, Medicaid alternative benefit plans and CHIP.

The final rule applies the MHPAEA parity standards to Medicaid and CHIP plans so that financial requirements and treatment limitations on mental health and substance abuse services, including long-term care services, are no more restrictive than those on medical and surgical procedures. All plans will be required to provide information on benefits for mental health and substance use disorders, such as criteria for how medical necessity is determined, upon request. States will also be required to disclose to enrollees the reason for a denial of payment or reimbursement for mental health and substance use disorder services.

The CMS rule follows the release of a memorandum by the Obama Administration announcing the establishment of a Mental Health and Substance Use Disorder Parity Task Force. The interagency group will be responsible for identifying and promoting best practices to ensure that states and health plans comply with parity requirements.

Health-Related Bills Introduced This Week

No legislation was introduced this week as Congress was out of session.

Next Week in Washington

While the House remains out of session until April 12, the Senate returns Monday, April 4, to begin its spring work session. On April 6, the Senate HELP Committee is expected to mark up the remaining pieces of the House-passed 21st Century Cures legislation. The measures are expected to be combined with bills that the panel approved in two previous markups. No timeline has emerged as to when the measure could reach the Senate floor.