Saturday, June 17, 2017

Of PAMA, MACRA, and the Affordable Care Act: The State of Healthcare Policy 2017

So, I'm back. 

As y'all know, I usually opine about Maryland state political matters on this blog. But during several past career intervals, I worked on Capitol Hill in different capacities, and had some recent experience working on federal healthcare policy for a small nonprofit in Columbia, Maryland. So, topics wise, I figured I’d switch things up with this one.

So, wonk Richard is giving politico Richard a week off, in other words. But I digress. Anyway, let's get to it. 

Before the Comey/Mueller/Russia stuff broke, the emerging Obamacare versus Trumpcare knife fight seemed poised to be the driving issue facing Washington in 2017. As the U. S. Senate mulls its own replacement to the Affordable Care Act (ACA), indications are that the healthcare debate is set to resume soon.

The outcome of that debate will change healthcare policy for the next generation and beyond. Everybody knows that.

Less known outside of the clannish network of providers, payers, administrators, practice managers, manufacturers, legislators, Hill staffers, lobbyists, accreditors, and activists is that change has already arrived.

And none of it has anything to do with the ultimate fate of the ACA or its GOP alternatives.

Two sweeping federal regulations finalized during the waning days of the Obama Administration have already transformed longstanding rules governing how healthcare practitioners in Maryland and elsewhere are reimbursed by Medicare.

One replaces the elaborate formula used to compute payments for clinical laboratory services.

The Protecting Access to Medicare Act of 2014 (PAMA) requires certain laboratories to periodically report to the Centers for Medicare and Medicaid Services (CMS) what they charge for certain laboratory tests. This data will be crunched to establish new, market-based rates starting January 2018.

The other moves healthcare past traditional fee for service medicine towards a model where Medicare payments are calculated using enumerated, quality-based performance targets.

By way of background, the “sustainable growth rate” (SGR) enacted during the 1997 bipartisan budget deal set caps on Medicare compensation for physicians. Unpopular and unsuccessful, it triggered a series of temporary annual congressional fixes.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) replaces SGR in favor of a new, complex “Quality Payment Program" requiring doctors to choose between two different compliance tracks. 

Success is measured by meeting specific quality metrics outlined in the 2,400 page final MACRA rule. Doctors who have done so successfully qualify for rewards. Those that fail are penalized.

Providers across Maryland are now coping with a new set of regulatory complexities and deadlines. 

As for PAMA, confusion exists as to how exactly data should be collected and reported to CMS.

Further, according to CMS, only five percent of clinical laboratories are subject to PAMA requirements. Most hospital laboratory work is excluded, as are laboratories earning less than $12,500 in Medicare reimbursements annually.

Because larger laboratory conglomerates dominate the data reporting pool, many fear they will benefit to the detriment, and perhaps the ultimate extinction, of smaller, physician-operated laboratories (POLs).

In December, the Congressional Freedom Caucus made PAMA #80 on its hit list of 200 Obama-era regulations. A day later, a bipartisan group of 44 members of Congress sent a letter to the Obama Administration seeking revisions to the final rule.  

HHS Secretary Tom Price – who signed the aforementioned letter before he left Congress – extended the initial reporting deadline by 60 days, but based on current evidence, chances that Congress will engage in a meaningful attempt to rewrite the law are negligible.

As for MACRA, CMS initially estimated that smaller practices would be disproportionately most likely to receive penalties rather than bonuses. This sparked concern the law was biased in favor of large practices.

CMS adjusted the final role to ensure maximum compliance flexibility for physicians in 2017. But many healthcare advocates believe the MACRA final rule should be revised as well. 

Thanks to Hopkins Medicine, the University of Maryland Medical System, the National Institutes of Health, and many outstanding community-based hospitals and providers, Maryland is nationally regarded as a healthcare Mecca. The fundamental impacts these changes will have on these signature institutions is already being felt.

As the patients and families they serve, few know they even exist. But the specter of reduced patient choice seems likely if these two experiments fail.

Many patients prefer the convenience of testing performed during their regular visit with their family practitioner, as opposed to trekking to a remote reference laboratory, dealing with strangers, and longer wait times for results. This concern is especially evident in underserved rural communities.

The obvious benefits close-to-patient testing yield will become less and less available as the number of POLs shrinks.

Similarly, should MACRA breed a culture where smaller practices fail under the new regulatory rubric, patients will ultimately suffer due to the constriction of provider options.

Members of the House and Senate blinded by the politics of the moment must not shirk their responsibility to educate patients and practitioners about these changes to the healthcare system. In the wake of sweeping healthcare change, the rewards of success, and the responsibility of failure, rests with those who enacted them.

But patients always bear the ultimate consequences.