House Passes Opioid Bill

Surprise, the House actually passed a bipartisan healthcare bill on June 22 that had support from almost all members of both parties. H.R. 6, Support for Patients and Communities Act, is a comprehensive opioid bill that combines more than 58 individual bills intended to address the national opioid epidemic. The bipartisan bill passed 396-14 with only one Democrat voting against it. The impetus was political pressure in an election year to address a problem that results in the death of 115 Americans each day. A recent CBS poll showed 71 percent of all Americans and 78 percent of Republicans support a government response to the crisis.

The bill also passed because it avoided controversy by not including large amounts of new funding. Members from both parties want to show progress on an issue that affects virtually every state before the November elections. Earlier this year, Congress approved $4 billion in new funding, which advocates argue is a drop in the bucket given the scope of the crisis. The House bill does not include any significant new funding, which is a disappointment to Democrats and advocates, however, they supported the bill to show some accomplishment in an election year on an issue important to voters. They are also hopeful there will be other opportunities for additional funding, e.g., in the Senate bill or through the appropriations process. Just before passage, the House bill included a provision to delay Medicare eligibility for end-stage renal disease (ESRD) patients for three months, saving the government $290 million over a decade. The Medicare savings will result in shifting costs to insurers and health plans. The impact on Medicare Advantage (MA) plans should be small since new ESRD beneficiaries are not eligible to enroll in an MA plan except for a small number of members who are already enrolled and age into Medicare.

So what does the bill do? It expands access to treatment, e.g., by allowing nurse practitioners and physician assistants to administer drugs that will avert death from an overdose, it encourages the development of non-opioid treatments following surgery and for pain relief, and it includes steps to stem the flow of illicit drugs through the mail from other countries. There are a number of Medicare and Medicaid provisions on substance use disorders (SUD) in HR 6.


  • Conduct a demonstration project to increase provider capacity for substance use treatment and recovery services
  • Mandate a beneficiary assignment program that identifies at-risk beneficiaries and assigns them to a pharmaceutical home program
  • Require state Medicaid programs to have safety edits in place for opioid refills, monitor concurrent drug prescribing, and monitor antipsychotic prescribing for children
  • Continue Medicaid coverage for incarcerated juveniles
  • Continue Medicaid coverage for youth in foster care until the age of 26 if they move out of state
  • Require the Centers for Medicare & Medicaid Services (CMS) to issue guidance on Neonatal Abstinence Syndrome (NAS) treatment options and require a Government Accountability Office (GAO) study on coverage gaps for pregnant women with SUD
  • Provide additional incentives for Medicaid health homes for patients with SUD


  • Require Part D plans to establish drug management programs for at-risk beneficiaries
  • Require e-prescribing for coverage of prescription drugs that are controlled substances under the Medicare Part D program
  • Create a pass-through payment extension to encourage the development of clinically superior non-opioid drugs
  • Add a review of current opioid prescriptions and, as appropriate, a screening for opioid use disorder (OUD) as part of the Welcome to Medicare initial examination
  • Incentivize post-surgical injections as a pain treatment alternative to opioids by reversing a reimbursement cut for these treatments in the Ambulatory Service Center setting
  • Provide access to Medication-Assisted Treatment (MAT)
  • Evaluate the utilization of telehealth services in treating SUD

On June 20, the House passed a controversial separate bill that would allow Medicaid payment for 30 days during a year for a five-year period for substance abuse treatment at inpatient hospitals with more than 16 beds. Medicaid payment for inpatient substance abuse treatment is currently not allowed under the Institution for Mental Disease (IMD) exclusion policy. The cost of this expansion is estimated at $1 billion.

Next, both of these House-passed opioid bills will go to the Senate where three committees have been developing their own legislative package to deal with the opioid crisis. Many of the Senate provisions are similar to the provisions in the House bill. Expect to see congressional passage of a major opioid legislative package by the fall.




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Changes for How Biosimilars are Reimbursed

Biosimilars have finally been accepted by the popular crowd. Coverage year 2019 (CY2019) is going to see some changes for how biosimilars are being reimbursed. In 2015, the first biosimilar product, Zarxio (filgrastim), was approved in the U.S. An approved biosimilar is a medication that has been shown to be highly similar to a Food and Drug Administration (FDA)-approved biologic, the reference product. Only minor differences in clinically inactive components between the biosimilar and reference product are allowed, and there must be no meaningful clinical differences. However, a biosimilar is not considered a generic drug, which is approved through a different pathway. Due to the inherent complexities of biologics, it is not possible to make an identical copy of a biologic. Traditional, small-molecule drugs are made through a predictable set of chemical reactions, but biologics are made using manufacturing processes (e.g., cell production, purification processes) and living organisms (e.g., cell lines) that are unique to each manufacturer. Although not a generic from a molecular or manufacturing perspective, biosimilars do function as a generic in intent. Meaning, biosimilars help increase access to biologic medications and potentially lower healthcare costs through competition. There have been several company announcements touting the cost savings potential of biosimilars. A recent example is Mylan’s approval of it’s biosimilar Fulphila, which has promised that it will come to market with “double-digits reduction” in price compared to the reference product Neulasta.

The topic of drug pricing transparency and reform has been addressed by the current administration. At the recent Pharmacy Quality Alliance Annual Meeting, the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma spoke about “The American Patients First Blueprint” and the four-pillared strategy. The four pillars are as follows:


1. Reducing Americans’ out-of-pocket spending
2. Increasing competition in the drug market
3. Improving negotiation to get a better deal for patients and taxpayers
4. Creating incentives for manufacturers to lower list prices


As part of this initiative, the access to biosimilar agents was addressed. Biologic products are among the most expensive medications on the market today and include treatments for cancer, diabetes, rheumatoid arthritis, and multiple sclerosis. The Biologics Price Competition and Innovation Act (BPCI Act) created an abbreviated licensure pathway for biological products that are demonstrated to be biosimilar to or interchangeable with an FDA-approved biological product. Within the Medicare Part D program, biosimilar uptake has been dependent on a number of factors, with formulary inclusion/placement being significant. In general, plans encourage use of lower-priced products, but current coverage gap discounts have provided financial advantages to the reference biologic products. This approach incentivized inclusion of the biologic reference products and resulted in beneficiaries potentially having higher cost sharing.


Essentially, when the beneficiary is in the “donut hole,” his/her resulting scenario is higher out-of-pocket costs for lower-cost medicines. Passage of  the Bipartisan Budget Act of 2018 (BBA)  has provided forward momentum for biosimilar uptake. The BBA, enacted on February 9, 2018, amended the definition of “applicable drug” for purposes of the coverage gap discount program to include biological products (finally). Effective CY2019, biosimilar and interchangeable products will be “applicable drugs” for purposes of the coverage gap discount program. This policy change ensures patients in the “donut hole” won’t get stuck with a bigger bill for the biosimilar than the reference product. It is important to note that while biosimilars are considered applicable drugs for manufacturer GAP discount purposes, they are still considered to be generic entities for Low Income Cost-Sharing Subsidy (LICS) purposes.


Part D Sponsors should make sure measures are in place to ensure biosimilar claims are adjudicating and being reimbursed as expected for the 2019 changes. GHG’s Pharmacy Solutions experts can assist you with operationalizing the new regulations. Contact us today!




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President Trump unveils a Blueprint to Lower Drug Prices

On May 11, 2018, President Trump unveiled his Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs entitled “American Patients First”. The President emphasized lowering drug prices as one of his greatest priorities during the campaign and promised to use the federal government’s purchasing power to negotiate lower drug prices to protect consumers, in particular Medicare beneficiaries, from being ripped off by greedy drug companies.

While the administration has continued to discuss the problem of unaffordable drugs since the election, the Blueprint is the first concrete plan to improve affordability of drugs for Medicare beneficiaries. But is it merely a laundry list of ideas on how to reduce the list price of drugs or a concrete, step-by-step process of addressing a complex drug pricing system that has grown out of control for patients and payers? The Blueprint clearly does not call for direct government to drug manufacturer negotiations as a way to lower drug prices as discussed during the campaign, but does it provide a better way of using Medicare’s purchasing power by empowering private plans combined with changes to government-administered drug pricing formulas to accomplish the same goal as claimed by the Department of Health and Human Services (HHS) Secretary Azar after the President’s speech?

An analysis of the Medicare proposals in the Blueprint reveals there are a number of very specific proposals that could strengthen the ability of Medicare to tighten its purchasing power over many prescription drugs Medicare covers, however, there is a lack of a legislative authority to negotiate the costs of many of the more expensive Part B drugs used by a population with high drug chronic care needs and a lack of authority to implement a number of more aggressive purchasing strategies that would lower Part D costs. As background, Medicare covers outpatient prescription drugs under the Part D benefit, which uses private health and drug plans to negotiate discounts on behalf of their respective enrollees. Medicare also covers drugs under Part B that are administered by a physician in an office or outpatient setting and are paid with prices set through an administrative formula based on average sales prices and are not negotiated. Medicare also covers a smaller number of drugs under Part A in an inpatient setting.

There are a number of proposals included in the Blueprint the Administration could implement through its regulatory and administrative authority to lower the costs of the Part D program, although it should be pointed out that even changing regulations often involves a multi-year process of proposing regulatory changes, seeking comments, and finalizing the new policies. Subject to legal review, these could include the following:

  • Updating Medicare’s drug pricing dashboard to make price increases and generic competition more transparent. It should be noted CMS has already updated the dashboard since the Blueprint was announced, and further updates would be expected.
  • Giving plan sponsors more power when negotiating with manufacturers similar to the provision in the 2019 regulation that would allow mid-year substitution of generic drugs on formularies in response to a price increase. This could include prices for high-cost drugs that lack competition or drugs that do not provide rebates.
  • Implement more measures to inform Medicare beneficiaries about lower-cost alternatives, e.g., improving the usefulness of the Part D Explanation of Benefits.
  • Prohibiting Part D contracts from pharmacist gag clauses, e.g., preventing pharmacists from telling patients when they can pay less out-of-pocket by not using insurance.
  • Permit Part D plans to pay a different price for a high-cost drugs based on the indication.
  • Develop demonstrations to test innovative ways of encouraging value-based purchasing that would hold manufacturers responsible for outcomes and offer value over volume.

Additional proposals were included in the Blueprint to improve Part D that are more controversial and will most likely need Congressional action include the following:

  • Reducing the minimum number of drugs per class or category in Part D formularies from two to one
  • Excluding manufacturer discounts from out-of-pocket costs in the coverage gap and establishing an out-of-pocket maximum in the catastrophic phase of the Part D benefit
  • Eliminating or further restricting drugs in the protective classes
  • Eliminating cost sharing for generic drugs for low-income beneficiaries
  • Requiring Part D plans to apply a substantial portion of rebates at the point of sale

A number of proposals in the Blueprint could improve the purchasing power of Part B. These include the following:

  • Leveraging the Competitive Acquisition Program in Part B, e.g., allow physicians to obtain drugs from vendors approved through a competitive bidding process or directly purchasing drugs through the current average sales price method
  • Finalizing a policy in which each biosimilar for a given biologic gets its own billing and payment code under Medicare Part B to incentivize development of additional lower-cost biosimilars
  • Modifying the Wholesale Acquisition-cost based payment for Part B

More controversial proposals to improve Part B drug pricing that were included in the Blueprint will need new authorities:

  • Leveraging Part D plans’ negotiating power for certain drugs covered under Part B by moving them to Part D
  • Modifying site-neutral payment policy for physician-administered drugs under Part B or between inpatient and outpatient settings

Other proposals not specific to Medicare included in the Blueprint that could also reduce Medicare drug prices include the following:

  • Using specific incentives that are yet to be defined to discourage manufacturer price increases
  • Including list prices in advertising
  • Speeding up Food and Drug Administration (FDA) approval of generic drugs
  • Reviewing and modifying the role of patent exclusivity
  • Considering the role and fiduciary status of Pharmacy Benefit Managers
  • Measures to restrict the use of rebates and discounts and create incentives for manufacturers to lower list prices



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Rising Drug Costs Continue to be a Concern

During the presidential campaign, Donald Trump highlighted the need to address rising drug costs, stating the drug industry was “getting away with murder.” Several recent high-price drug increases for HIV/AIDS drugs, hepatitis C drugs, and the EpiPen®, among others, have also raised Congressional, state, and public concern about the issue. During the campaign, Trump discussed allowing re-importation of cheaper drugs or allowing the government to negotiate drug prices as ways to lower prices.

The Trump administration has now established a working group, led by the Office of Management and Budget (OMB), which includes top officials from the U.S. Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS), the Food and Drug Administration (FDA), the Health Resources & Services Administration (HRSA), the National Economic Council, and the Office of the Trade Representative, and work has begun on development of an Executive Order on the subject. According to press reports, the Executive Order is expected to include more modest proposals than discussed during the campaign such as speeding up approval of generic drugs as well as proposals that are supported by the drug industry. There is no announced schedule for release of the Executive Order, however, working group members have discussed a July release as well as continued work throughout the summer.

Politico has obtained a copy of a draft Executive Order and is reporting the policy changes provide broad authority for federal agencies including FDA, CMS, the U.S. Trade Representative, and other health agencies to develop measures to deal with drug prices. For example, CMS could design Medicare and Medicaid benefits that would reduce out-of-pocket costs for beneficiaries or modify the Part D protected classes. The Executive Order could also include a focus on value-based drug pricing, which would allow agreements between insurers (including Medicare and Medicaid) and manufacturers that tie payment to drug efficacy. This proposal is supported by the pharmaceutical industry. The order is also expected to roll back a federal 340B drug discount program, which was expanded during the Obama administration, and provides discounts to hospitals and clinics that serve a large number of low-income patients. Not all of these proposals would actually reduce total health system drug prices. In some cases, they would merely shift who is paying. House and Senate Democrats have written a letter to the administration requesting a more comprehensive approach in the Executive Order such as measures to increase transparency in drug pricing and increase price competition.

The FDA has already moved to implement a proposal that is focused on speeding up drug approvals. On June 19, the FDA issued draft guidance for comments which is intended to assist companies in getting shorter reviews of generic drug applications. Initially, this policy will focus on older drugs that have limited competition On June 27, the FDA published a list of off-patent, off-exclusivity branded drugs without approved generics as part of a new policy to speed up generic reviews. Previously, the FDA Commissioner announced the FDA will develop a “drug competition action plan” to facilitate competition among expensive drugs after holding a public hearing on ways to accomplish this goal and will move to clear the backlog of FDA reviews of generic drugs.

Initially, curbing excessive drug prices had bipartisan support in Congress, and Congress started to move on drug prices. However, it appears partisan gridlock over the Affordable Care Act (ACA) repeal and replace legislation will thwart any real congressional action this year. The Senate Health, Education, Labor, and Pension (HELP) Committee held a hearing in early June which focused on patient costs for drugs. The HELP hearing demonstrated a lack of bipartisan consensus on the problem and potential solutions, with Republicans focusing on bringing more drugs to the market faster to promote competition and the Democrats focusing on more active policies like government negotiation of Part D prices. A second HELP hearing scheduled for July has been canceled, and it is unlikely a third hearing planned for the fall will be held. The House Energy and Commerce Committee said they are planning a hearing on the issue, but there is no scheduled date.

States have also moved to address drug prices. In June, Nevada enacted legislation to require increased transparency of drug prices for treatment of diabetes. Companies that have raised a drug’s list price over a certain amount must disclose information about the costs of making and marketing the drug and any rebates provided to Pharmacy Benefit Managers (PBMs). The legislation also includes provisions for more PBM transparency. Vermont already has a drug price transparency statute on the books and has produced a report on egregious drug price spikes. Maryland recently passed legislation that provides authority for the Attorney General to target generic drug makers who increase the acquisition cost of a generic drug more than 50 percent in one year and to impose civil penalties or lower the price, though this has recently been challenged in court.



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Highlights from 2017 CMS Audit and Enforcement Conference

The Centers for Medicare & Medicaid Services (CMS) hosted their annual Audit and Enforcement Conference on Thursday, May 11, and addressed the following topics:

  • 2017 Program Audits
  • Audit Protocol Updates: Compliance Program and Medicare Medicaid Plan
  • Medication Therapy Management (MTM) Panel
  • 2016 Program Audit and Enforcement Report
  • Timeliness Monitoring
  • Civil Money Penalty (CMP) Methodology

The presentations and recordings of the morning and afternoon sessions are posted here. All sessions merit a review by Compliance and operational teams at sponsors and delegated entities alike. Apart from the communicated clarifications and content provided on the slides, CMS allowed for numerous question and answer periods, both after each session as well as at the end of the day. Here I capture highlights of those Q&As.

Can an Independent Auditor (IA) follow the same CMS process of providing samples 1 hour before webinar sessions? In regards to the IA process, most sponsors do follow CMS protocol when doing validation, but it does not really matter to us how soon samples are delivered. It’s ok if you get them a little sooner. Most IAs do use the same protocol and timing, but it is not prescriptive, which is why there is not a lot of guidance around how IAs should audit.

If we had a CAR for CDAG clinical appropriateness, would the validation audit focus on that CAR, or would the validation audit need to be a full-scale CDAG audit? When it comes to that, the sponsor simply needs to validate the condition. A full CDAG audit is not required; just that particular condition.

To what extent are Invalid Data Submission (IDS) conditions a problem in 2016? They were not terribly problematic. Last year there may have been eight across seven sponsors, but CMS would like to see those at zero.

Now that you have covered 94% of enrollment with Cycle 2 audits, when do you plan to start a third cycle? CMS is not sure and is still looking at that.

Can or will CMS share overall observations in Timeliness Monitoring regarding performance? CMS believes they will be able to this summer.

How does CMS come up with the common conditions in calculating CMPs? CMS takes this from the annual audit report.

When are CMP notices posted on the CMP website? CMS posts CMPs as a result of program audits before end of February. For CMPs not related to audits, the agency posts those immediately after they are imposed.

In regards to call log universe, do we include calls placed to other vendors as a part of normal business (such as calls to transportation vendor) which do not pertain to main customer service? No, CMS wants only calls going to the main customer service line.

Is it appropriate to report date request received as AOR receipt date, or should sponsor report initial receipt date as request received? For ODAG tables with these two fields, sponsor should populate as each column specifies. CMS does consider both fields when doing timeliness calculations.

Will CMS release a revised Compliance Chapter 9/21 to reflect change in Elements from 7 to 3, or is this just a change in methodology? CMS is actively revising manual guidance. Compliance program requirements are still the same, but audit approach has changed. Do not confuse the three audit elements (Prevention Controls and Activities, Detection Controls and Activities, and Correction Controls and Activities) with the seven core elements outlined in chapter guidance.

Is there a timeline when CMS is expecting MTM audit activities to migrate from pilot to standard? At this point, it is not determined.

From a long-term perspective, considering validation is 150 days and MTM is a calendar year, how would this area be handled from a validation perspective? At this time, MTM not subject to validation. It is still to be determined if it will be subject to validation in the future.

How will appeals timeliness monitoring affect future audits? To the extent that the timeliness monitoring effort becomes annual, it would make absolutely no sense to review timeliness audit, but that change remains to be seen. However, there is a difference in that timeliness monitoring is a review of a snapshot of the year before. CMS may want to phase timeliness review out of program audits. CMS also answered the question from the perspective of the agency using results to target for audits. CMS noted they always like to compare data to audit scores and results to see if there is anything meaningful but confirmed there are no plans for that in the future.

"While CMS indicated they would not use results from the timeliness monitoring for referrals for audit, CMS did indicate they would study the results to see if there is a correlation to audit results," says a colleague on the Operational Performance team.  "Knowing what is in your data and using it for process improvement should be on every plan’s radar." Since CMS staff indicated that the timeliness monitoring could one day potentially replace the timeliness review on program audits, sponsors should get ahead of that curve by using their timeliness monitoring data for their own internal review.

As always, we love to hear your thoughts and perspectives on agency activities as well as your experiences in the government programs space. Keep an eye on this blog for more updates from my colleagues on this week's conferences.


The Gorman Health Group 2017 Forum concluded recently in New Orleans with over 200 of our closest clients and partners. John Gorman provides key takeaways from the event here. Make sure to join us next year!

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Opportunities for Growth in the New Administration

"Opportunities are like sunrises. If you wait too long, you miss them." ―William Arthur Ward 

With the new administration coming into power this month, there is a lot of conjecture over what might happen. Overall consensus is the one business segment that is the most stable is Medicare Advantage.  Trump is a supporter of Medicare Advantage, and so are Republicans, although long-term there is an opportunity to change the financing of premiums. The Marketplace (Obamacare) and Medicaid are in “limbo” until we get a better idea of what and when there will be changes and how drastic they will be for these programs. So if you are looking for growth in revenue and/or enrollment, Medicare Advantage can provide a good opportunity. The other good news is that in the past several years, the Medicare Advantage market has been stable, based on the metrics available, with few changes in average premiums, plan offerings, and insurer participation.

If you are looking at the opportunity to grow or expand, there are many parameters to consider.  Whether you are a Medicare Advantage plan considering expanding either your service area or products, Medicaid plans looking to add either Medi-Medi plans or Special Needs Plans, or an Accountable Care Organization or Integrated Health System looking to jump into Medicare Advantage, now is the time to explore this opportunity. Many of our clients are finding the most prudent way to expand and grow is a strong, solid strategy and an implementation plan that begins with a feasibility study.

A feasibility study looks at the market, and that analysis helps to build a strategy going forward for three to five years. This analysis looks at the competitive, financial, and demographic factors of a market(s) to see what is the most viable. This leads to a feasibility model based on detailed financial projections, and Gorman Health Group’s feasibility study process utilizes an onsite strategy exploration to walk through the entire process of entering Medicare Advantage or expanding current products and service areas with an emphasis on risks and rewards. The next step is the development of product/network/benefit design and implementation phases to build a competitive and compliant organization with the proper financial and operational controls in place. Even existing plans need a new perspective to manage member retention, risk adjustment, and overall analytics to support an integrated care organization.

No matter what your situation, this opportunity could be your sunrise, so don’t wait and join us for our webinar on January 31, 2017 at 1:00 PM EST for an informative session on how to conduct a feasibility study and taking it to the next step. Register now >>


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CMS Provides Reminders on Key Dates in the MA-PD Application Process

Open Enrollment for the Affordable Care Act Marketplaces and the Annual Election Period for Medicare is underway. But this month also marks the start of required Centers for Medicare & Medicaid Services (CMS)-facing activities necessary for the application process.

Regan Pennypacker, Senior Vice President of Compliance Solutions at Gorman Health Group, points out “for many MA-PD applicants, activities are already underway. Oftentimes, Sponsors do not realize that the application requires all hands on deck until it is too late. It is a multi-disciplinary effort that requires attention to detail and collaboration at all levels of the organization.”

CMS recently released the following memos, providing reminders on key dates in the application process.

Release of Notice of Intent to Apply for Contract Year 2018 Medicare Advantage (Part C) and Prescription Drug Benefit (Part D) and Related CY 2018 Application Deadlines

CMS released information and key dates about the Contract Year (CY) 2018 Notice of Intent to Apply (NOIA) web tool and key dates for the CY 2018 Medicare Advantage (Part C) and Prescription Drug Benefit (Part D) application cycle.

2018 Application Activity Key Dates

NOI deadline to ensure access to CMS’ HPMS..............................................................November 14, 2016
CMS sends NOIA confirmation e-mails…………………………........................................November 30, 2016
CMS User ID connectivity form submissions must be received.....................................December 2, 2016
CY 2018 applications posted on CMS websites..................................................................January 10, 2017
Final day to submit NOIA for 2018……………………….....................................................January 27, 2017
CY 2018 applications submission deadline.......................................................................February 15, 2017

Medicare-Medicaid Plan (MMP) Notice of Intent to Apply for CY 2018   

CMS released information and key dates about the CY 2018 NOIA web tool and key dates for the CY 2018 MMP application cycle.

CY 2018 Application Key Dates

NOIA deadline to ensure access to CMS’ HPMS..............................................................November 14, 2016
CMS sends NOIA confirmation e-mails……………………...............................................November 30, 2016
CMS User ID connectivity form submissions must be received by...................................December 2, 2016
CY 2018 applications posted on CMS websites................................................................January 10, 2017
Final day to submit NOIA for 2018……………………….....................................................January 27, 2017
CY 2018 applications submission deadline........................................................................February 15, 2017

Value-Based Insurance Design (VBID): Year 2 (CY 2018) Request for Applications 

The Center for Medicare and Medicaid Innovation also announced the release of the Medicare Advantage (MA) VBID model test’s Request for Applications (RFA) for CY 2018. MA-VBID is an opportunity for plans to offer supplemental benefits or reduced cost sharing to enrollees with certain chronic conditions. Organizations that wish to participate in the model test in 2018, including those participating in 2017, must respond to the CY 2018 RFA by January 20, 2017, at 4:00 p.m. Eastern Time.

The application process is an arduous one. Completing the application requires cooperation from your entire organization. The actual submission leaves no room for error, and the review process requires quick thinking and prompt responses to CMS follow-up questions. As always, Gorman Health Group is here to assist your organization with the application process.



Don’t let the application process get in the way of your day-to-day operations.  Contact us today to ensure a smooth, compliant process.

New Webinar: During this webinar on November 9 at 1:30 pm ET, Regan Pennypacker, GHG’s Senior Vice President of Compliance Solutions, and Cynthia Pawley-Martin, our Senior Clinical Consultant, join Melissa Smith and Jordan Luke, the Director of Program Alignment and Partner Engagement Group at the CMS Office of Minority Health, to provide perspectives on how to implement CMS-recommended best practices in the real world within a health plan in support of Quality Improvement and Star Ratings activities as we continue focusing on providing person-centered, holistic care coordination to our members. Register now >>

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MACRA Final Rule: CMS Announces Flexible Approach

No doubt sighs of relief could be heard from across the industry when the Centers for Medicare & Medicaid Services (CMS) announced its flexible approach to next year’s reporting requirements under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS took these flexibilities even further in its final rule released last Friday. Below I dive into some of the changes CMS made for the 2017 “transition year” and beyond.

  • Relief for Small Providers – The final rule steps back even further from its requirements that providers billing more than $10,000 under Medicare are required to comply with reporting requirements. CMS finalized that Merit-Based Incentive Payment System (MIPS)-eligible clinicians who do not exceed $30,000 of billed Part B allowed charges or 100 Part B enrolled beneficiaries are excluded from MIPS. According to CMS, this is about one-third of Medicare clinicians but only represents about 5% of Part B spending.
  • CMS also previously announced it will allow for virtual groups where up to ten clinicians could combine into one group, however, virtual groups will not be implemented during 2017
  • Pick Your Pace” – CMS also codifies its prior announcement that it will allow for a “pick your pace” approach for the first reporting year, 2017. The first year essentially now contains five options:
    1. Report a full 90-day or one-year period to maximize chances to qualify for a positive payment adjustment.
    2. Report for less than one year but more than 90 days: more than one quality measure, more than one improvement activity, or more than the required advancing care information performance category in order to avoid a negative adjustment and possibly receive a positive adjustment.
    3. Report one measure in the quality performance category, one activity in the improvement categories, or the required measures of the advancing care information performance category and avoid a negative adjustment.
    4. Participate through an Advanced Alternative Payment Model (APM) and qualify for a 5% bonus incentive payment in 2019.
    5. Don’t report anything for a hefty 4% negative adjustment.
  • Basics of MIPS and Changes for 2017 – Eligible clinicians will see either a negative, neutral, or positive payment adjustment of up to 4% under the MIPS program. CMS will also pay out bonus payments for exceptional performers between 2019 and 2024 (beginning with the 2017 reporting year). The payments are based on four categories, and CMS made some significant changes from its proposal:
    1. Quality – Full participation requires reporting on six quality measures or one specialty-specific or sub-specialty-specific measure set, five required advancing care information measures, and engage in up to four improvement activities for the highest score. For 2017, full participation is met by submitting at least one out of the six quality measures. However, higher points may be awarded for higher performance in the measure.
    2. Improvement Activity – CMS reduced the number of activities from six to up to four medium-weighted or two high-weighted improvement activities. Attesting to at least one improvement activity will be sufficient in 2017.
    3. Advancing Care – CMS reduced the number of total required measures from 11 to five. Reporting on all five would earn 50%, and reporting on the optional measures would allow for a possible higher score. CMS will also award a bonus score for improvement activities that utilize Certified Electronic Health Record Technology (CEHRT) and for reporting to public health or clinical data registries.
    4. Performance Category – Although CMS will raise the weight of this category, it will be weighted at 0% for the 2017 reporting year.
  • Advanced APMs – Clinicians who are eligible to participate through an Advanced APM are exempt from the above MIPS requirements. Additionally, the Advanced APM track is eligible for a 5% bonus payment. In order to qualify as an Advanced APM, CMS finalized that a provider must bear a risk of a potential downside of 8% of all Medicare reimbursements or 3% of the expected expenditures for which the provider is responsible under the APM. Notably, CMS retracted its proposals relating to marginal risk and medical loss ratio (MLR) for now.
  • “MIPS APMs” – CMS noted the significant criticism that many APMs will not meet the requirements to participate in Advanced APMs in 2017. For example, participants of Track 1 Medicare Shared Savings Program (MSSP) are not eligible as an Advanced APM. CMS moved forward with their proposal that these “MIPS APMs” are subject to MIPS reporting requirements, however, they will be scored using an APM scoring standard in 2017. CMS did announce it is developing an MSSP Track 1+ Model under which Accountable Care Organizations (ACOs) participating in Track 1 and new ACO participants could take more limited downside risk than Tracks 2 and 3 and still be eligible as an Advanced APM. CMS also announced it plans to reopen applications for some current APMs, such as the Medicare All-Payer Model and the Comprehensive Care for Joint Replacement (CJR) Model.

While CMS took the job of responding to industry feedback and “simplifying” the jump into the Quality Payment Program (QPP) for 2017 while moving forward with the move to QPP to an art form, the gargantuan 2,400-page final regulation is a hint of what’s to come. Reinventing the Medicare payment wheel is no simple task and will undoubtedly come with a slew of interim proposed rules as well as fixes to encountered problems during the first transitional years. This payment overhaul is only going to get more complicated, and the time to roll up those sleeves and get to work is now.



The 2017 Star Ratings are out! Join John Gorman, Gorman Health Group’s Founder & Executive Chairman, and colleagues Melissa Smith, our Vice President of Star Ratings, Lisa Erwin, our Senior Consultant of Pharmacy Solutions, and Daniel Weinrieb, our Senior Vice President of Healthcare Analytics & Risk Adjustment Solutions, on Thursday, October 27, from 1-2 pm ET, for a cross-functional review of the 2017 Star Ratings. Register now >>

Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 to 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG’s weekly newsletter. Subscribe >>

Directory & Provider Data: How Small Inaccuracies Could Lead to Big Risks

For the past year, the Centers for Medicare & Medicaid Services (CMS) has been publishing information and proposing new regulations regarding the criticality of ensuring beneficiaries not only have access to care, but access to accurate information with which to make informed decisions about their healthcare coverage. Data Integrity is at the forefront of the initiatives enforced by government mandates, and provider data has topped the list of areas that not only need the most improvement, but the most oversight, correction, and potentially sanction. As we saw last year with the CMS network requirement changes, many plans were unprepared to submit their entire network footprint in their service area expansion applications. By moving the online directory guidance in the Medicare Managed Care Manual from Chapter 3 (Marketing) to Chapter 4 (Beneficiary Protections), CMS has solidified the fact it is no longer acceptable to have inaccuracies in an area key for members to evaluate their health plan choices and find access to care. Now is the time to set new ongoing network monitoring processes in place that ensure your CMS network submissions and Health Service Delivery (HSD) tables mirror your online provider directories, guaranteeing you are prepared to address provider and member complaints stemming from directory inaccuracies.

A recent investigation by the Government Accountability Office (GAO)[1] identified serious deficiencies in CMS’ oversight and enforcement of Medicare Advantage (MA) network requirements and recommended greater scrutiny of the plans’ networks. The GAO found CMS reviews less than 1% of all networks and does little to assess the accuracy of the network data submitted by plans. It was found CMS relies primarily upon complaints from beneficiaries to identify problems with networks and does not assess whether plans are renewing their current contracts to continue to meet network requirements.

For MA plans who currently have the least stringent directory requirements of all government-sponsored health plans, this means plans are only required to outreach to the providers on a quarterly basis to validate the following information is correct:

  • Provider’s ability to accept new patients,
  • Provider’s street address,
  • Provider phone number, and
  • Any other changes that affect availability to patients.

Although seemingly straightforward, when coupled with several other nuances, the task becomes daunting and, in some cases, an operational impossibility. Real-time updates to provider demographics, grievance resolution, reconciliation of provider location, and notation of individual providers accepting new patients are a few examples of where a simple requirement can reveal so many gaps and pose so much risk. Inefficiencies capturing, storing, and governing provider data at the onset of the contracting and credentialing processes is a place to start, but what about the historic legacy information that needs to be sanitized? Add the individual specifications and data requested by and delivered from industry vendors and delegated entities, risk adjustment, the Healthcare Effectiveness Data and Information Set (HEDIS®), behavioral health, and the large, delegated provider and academic groups that should be providing the plan with a current roster each month – this is no small task.

At this point, you might be asking yourself:

  • How do we bridge the gap between understanding our compliance risk and deploying a successful change in operations to ensure the loop is closed and successfully maintained at every point in the contract life cycle?
  • How do we ensure vendor partners are supporting us and aligning their business practices with both the regulatory requirements and our key performance indicators for Star Ratings, risk adjustment, care management, and member experience?
  • Is it possible to fix my content management system as it exists today, or do I need to rip and replace?

Gorman Health Group (GHG) can answer these questions, and we encourage you to follow along with us as we explore these questions and how they relate to the results from the first CMS pilot audit. Next week, we will provide in-depth detail on the operational and cross-functional elements of how this regulatory change will impact the entire industry. We’ll have commentary from several leading vendors in the industry and dig deeper into the downstream implications provider data inefficiencies can have on your plan as a whole. In the meantime, please contact us directly if you have questions or would like to schedule a time to meet with one of our industry experts to discuss how GHG can support your efforts to avoid risk and improve results.




GHG can assess the alignment of your products, your current network, your market, and your network requirements.  We’ll help you track results – both positive and negative – back to related network components.  From there, we assist in developing and executing a networking strategy, from contracting targets to model contract terms, to payment terms that match your budgets and the capabilities of your claim payment systems. Visit our website to learn more about how we can help you address your needs >>

The 2017 Star Ratings are out! Join John Gorman, Gorman Health Group’s Founder & Executive Chairman, and colleagues Melissa Smith, our Vice President of Star Ratings, Lisa Erwin, our Senior Consultant of Pharmacy Solutions, and Daniel Weinrieb, our Senior Vice President of Healthcare Analytics & Risk Adjustment Solutions, on Thursday, October 27, from 1-2 pm ET, for a cross-functional review of the 2017 Star Ratings. Register now >>

Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 to 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG’s weekly newsletter. Subscribe >>