CMA Federal Update: Health Care Reform and MACRA February 3, 2017 Advocacy, CMA, MACRA ACA, CMA, Health Care Reform, MACRA 0 I. HEALTH CARE REFORM With the election of Donald Trump to the U.S. Presidency and Republicans in control of both the U.S. House of Representatives and Senate, Republican leaders are moving swiftly to fulfill a cornerstone campaign promise to repeal the Affordable Care Act (ACA). A. ACA Repeal Senate and House Pass a 2017 Budget Resolution Laying the Groundwork for ACA Repeal On Friday, January 13, the House followed the Senate in passing a non-binding budget resolution (S Con Res 3) that sets 2017 spending targets and provides instructions to the Congressional Policy Committees to: 1) Develop a majority-vote Budget Reconciliation bill that repeals the ACA by late February; 2) Achieve savings from the ACA repeal legislation; and 3) Develop an ACA replacement plan. The budget reconciliation bill would repeal the ACA, but it would not take effect for 2-3 years while Congress works on a replacement plan. Under House and Senate rules, Budget Reconciliation bills can only include budgetary items and be adopted by a simple majority vote (rather than the usual 60 votes required for passage in the Senate), thereby circumventing a Senate Democratic-led filibuster. B. ACA Replacement Plan Previous bills introduced by House Speaker Paul Ryan, U.S. Department of Health and Human Services (HHS) Secretary nominee Tom Price, MD and Senate Finance Committee Chairman Orrin Hatch provide insight into the potential health care reform legislation that will replace the ACA. As previously written, none of these proposals provide as much coverage as the ACA. Instead, the proposals only repeal the ACA insurance provisions, individual mandate and Medicaid expansion for low-income adults. They replace the ACA with a private, voluntary health insurance marketplace where insurers may sell insurance across state lines. It is unclear how the individual market would successfully operate. Some bills allow states to establish high-risk pools and expand Health Savings Accounts. Most provide tax credits, and some provide subsidies to help low-income families afford coverage. Several bills allow individuals to deduct the cost of health insurance premiums while eliminating such deductions for employer-sponsored coverage. Most bills repeal the ACA insurance reforms, such as the requirements for insurers to dedicate 85 percent of revenues to patient care and to provide coverage to those with pre-existing conditions. All of the bills eliminate the Medicaid expansion and cap federal funding for Medicaid either through block grants or per capita cap funding in exchange for greater state flexibility. Speaker Ryan’s bill replaces the Medicare defined benefit program with Medicare premium support that provides vouchers to seniors to purchase private health insurance coverage. And finally, several proposals include MICRA-like medical liability reform. Regardless of previous health care reform proposals, the Republican leadership recognizes that a more comprehensive approach is warranted, and they plan to take more time to develop a replacement plan. They have also reached out to state governors and insurance commissioners for their input on the ACA, Medicaid Expansion and Exchanges. Sixteen Republican governors and fourteen Democratic governors expanded their Medicaid programs, and the majority of these governors are asking Congress to maintain the Medicaid funding. Finally, the ACA replacement legislation will require 60 votes in the Senate. Therefore, Republican leaders will need to compromise with at least a handful of Democrats to gain final passage. C. CMA Advocacy CMA is actively involved in shaping the future of health care reform at the national level and has extensive policy on health care reform issues. Based on that policy, CMA’s overriding goal will be to ensure that Californians who have coverage today do not lose coverage or access to care. CMA will also work to protect current state and federal health care funding including the Proposition 55 and Prop 56 tobacco taxes. Current CMA policy opposes Medicaid block grants. Moreover, CMA will continue to work to ensure that low and moderate-income families can afford coverage. We have promoted responsible health care financing, including the use of the tax code to help Californians purchase insurance and subsidies to help low-income families afford coverage. An underfunded health care system places unsustainable burdens and unfunded mandates on physicians. It also creates access to care problems, health care delays and economic hardship for patients. CMA will be a voice for patient choice in the new health care system. CMA physicians are committed to the health and well being of our patients. And finally, CMA will fight to maintain the hard-fought insurance reforms that require insurers to dedicate 85 percent of their revenues to direct medical care, community rate and submit premium increases to regulators, as well as prohibit insurers from placing lifetime or annual limits on benefits, blocking coverage for pre-existing conditions or rescinding coverage when a patient becomes ill. CMA has fought health plan mergers over the years to promote an open, competitive health care marketplace in California. CMA also recognizes that the ACA has serious shortcomings that need to be addressed. More than 1 in 3 Californians are now enrolled in the state’s Medi-Cal program yet few have true access to a doctor. Because the Medi-Cal reimbursement rates are among the lowest in the nation, most physicians cannot afford to participate. Moreover, the payment rates and physician networks in the Covered California Exchange are inadequate, and many families continue to express concerns about the affordability of insurance in the Exchanges. The individual market needs more stability, and while the ACA significantly expanded coverage, it did not expand access to care for many Californians. Based on CMA policy, we have developed overarching health care reform principles to guide CMA’s advocacy through the debate. CMA’s overriding goal is to ensure that Californians maintain access to quality, meaningful, affordable coverage. CMA’s core priorities for the future of federal health care reform: 1. Ensure Californians do not lose coverage or access to care. 2. Improve access to care. 3. Protect state and federal health care funding for Californians. Support appropriate and broad-based health care financing. 4. Continue tax policies and subsidies that help low-moderate income patients afford coverage. 5. Advocate for broad patient choice of physicians, plans and coverage through Health Savings Accounts, private contracting, private insurers and health plans, as well as government programs. 6. Maintain the important insurance reforms that protect physicians and their patients, such as coverage for pre-existing conditions. 7. Stabilize the individual insurance market. 8. Provide access to affordable prescription drugs. 9. Medical liability reform that does not undermine California’s MICRA law. II. MEDICARE MACRA UPDATE Background In 2015, Congress passed the Medicare Access and Children’s Health Reauthorization Act (MACRA), which eliminated the Medicare SGR formula and established two Medicare payment tracks from which physicians can choose to participate. The first track allows physicians to participate in Alternative Payment Models (APMs) with a 5 percent bonus for meeting certain EHR and quality standards. APMs must also assume some downside financial risk, except Primary Care Medical Homes. The legislation also allows innovative, alternative Physician-Focused Payment Models to be approved through another regulatory process. The second track is the traditional Medicare fee-for-service payment track with four performance-reporting programs: 1. Quality (formerly known as the Physician Quality Reporting System-PQRS); 2. EHR Advancing Care Information (ACI) (formerly known as the Meaningful Use program); 3. Cost (formerly known as the Value Modifier Program); 4. New category called Improvement Activities (comprised of activities most physicians are already doing). These fee-for-service reporting programs have been consolidated and simplified under a new program: the Merit-Based Incentive Payment System (MIPS). For the MIPS reporting categories, Congress reinstated substantial bonuses and reduced the penalties from current law. The Centers for Medicare and Medicaid Services (CMS) issued the final MACRA implementing rule in October 2016. The new MACRA law and the final rule represent a significant improvement over the previous system. Moreover, CMS is providing a longer transition path for practices to get ready for MACRA. CMA and AMA successfully advocated for a Medicare program that is less burdensome than existing law. Improvements include: • Exempts 30 percent of Medicare physicians. • Longer transition path: Physicians can start reporting on Jan 1 or October 1, 2017. • No penalties in 2017 if physicians report on one quality measure. • Reduces penalties after 2017. • Reinstates bonus payments. • Eliminates all duplicative quality measures. • Reduces the number of measures by HALF. • Report on six quality measures, five EHR measures, and 2-4 improvement activities. • Fewer requirements for small/rural practices and provides a transition path. • Only need to report on 50 percent of patients for quality. • Eliminates Pass/Fail: Proportional credit given for measures that are met. • More ways to report (claims, EHR, web, QCDR). • Greater selection of applicable national specialty society measure sets. • Funding to help small and rural practices transition. • Allows Alternative Models with reduced financial risk. • Greater enforcement on EHR vendors who are not interoperable. CMA will continue advocacy efforts to relieve physicians from Medicare reporting burdens and for greater accountability and penalties on the EHR vendors that do not meet MACRA requirements. Congress is not likely to take major action on the bipartisan MACRA law in 2017 because CMS delayed MACRA in 2017 and made significant improvements. However, CMA and AMA will continue to be actively engaged with Congress and the Administration to reduce the regulatory burdens on physicians. CMA will also continue to offer programs to educate and assist our members so they can successfully participate. Please visit the CMA MACRA Resource Center. Comments are closed.
