Issue 8, Spring 2020

Impacts of COVID-19 on Orthopaedic Practices: Strategic and Congressional Action

AAOS Letter to House and Senate Leaders
The OrthoForum served as a signatory to an American Academy of Orthopaedic Surgeons (AAOS)-led orthopaedic multi-signatory letter to Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi on April 10, 2020. The letter outlined key requests for ensuring the survival of physician practices and allowing surgeons to most effectively respond to the COVID-19 crisis. To view the letter, please click HERE.

OrthoForum Advocacy Committee Strategic Planning Meeting
The Brownstein Hyatt Farber Schreck (BHFS) team will host a virtual OrthoForum Advocacy Committee Strategic Planning Meeting on June 5, 2020. The BHFS team will work closely with the OrthoForum Advocacy Committee to arrange additional Capitol Hill calls with key congressional offices and provide strategic insight and guidance to leverage opportunities obtained from these meetings and further the OrthoForum’s policy priorities.

Improving Seniors’ Timely Access to Care Act of 2019 (H.R. 3107)
The OrthoForum supports the bipartisan Improving Seniors’ Timely Access to Care Act of 2019 (H.R.3107). The House bill introduced by Reps. Susan DelBene (D-WA), Mike Kelly (R-PA) Roger Marshall (R-KS) and Ami Bera (D-CA) currently has 204 cosponsors (102 Republicans and 102 Democrats) and aims to reduce unnecessary administrative burdens and expedite access to provider care by requesting online prior authorizations for MA plans. Specifically, the bill would establish an electronic prior authorization process that would help ensure timely processing for items and services that require such authorization. The bill would also require HHS to establish a process for “real-time decisions” for items and services that are routinely approved. In addition, the bill would prevent plans from requiring prior authorization on any additional surgical or other invasive procedure if it is furnished during the perioperative period of an already-approved procedure. H.R. 3107 would also ensure accountability and transparency by requiring MA plans to report to CMS on their extent and use of prior authorizations and the rate of approvals and denials.

For situations in which prior authorizations are required, the goal of the OrthoForum is for an electronic prior authorization process to be used in all CMS health programs and in commercial insurance plans. Although H.R. 3107 concerns only Medicare Advantage plans, it is a good first step toward this broader goal.

Initiating New Therapy Services Subcommittee
Physical therapists (PTs) and occupational therapists (OTs) make up an integral part of most OrthoForum member practices and teams. Given the concerns raised by OrthoForum member practices about recent and proposed Medicare changes—which would adversely impact PT and OTs and disrupt our ability to provide the best-coordinated management and care to our patients—the OrthoForum Advocacy Committee is pleased to announce the creation of a new Therapy Services Subcommittee. We welcome Renee Duncan of OrthoTennessee as the Chair. The Therapy Services Subcommittee will focus on PT/OT policy priorities impacting the OrthoForum practices’ integrated team-based care and management approach for patients. In addition, the Therapy Services Subcommittee will seek to collaborate with new and existing partners on a variety of shared interests. Among the top priority issues, this subcommittee is working to address are discussed below.

Seeking Permanent Therapy-Related Changes to Medicare Telehealth Requirements
PTs, occupational therapists (OTs), and physical and occupational therapy assistants (PTAs)/(OTAs) deliver effective services through telehealth technology and are widely utilized within the US healthcare system to address a variety of conditions prevalent in the Medicare patient population, such as post-operative surgical conditions, musculoskeletal conditions, and arthritis, among others. Historically, PTs and OTs have been unable to bill for telehealth services under the Medicare program. The OrthoForum is seeking permanent recognition of PTs and OTs as Medicare telehealth providers to ensure that patients receive timely and appropriate access to care and services and achieve optimal outcomes.

PTs and OTs recently had an important victory. On March 30, 2020, HHS Secretary Alex Azar issued a number of “blanket” waivers under section 1135 of the Social Security Act as part of the federal response to the coronavirus emergency. These are waivers of certain requirements of Medicare and other programs administered by CMS, and it is not necessary to notify CMS before taking action under the waivers (please see the Stark Law Section for additional information). Then, on April 30, 2020, CMS issued additional blanket waivers, which include a waiver on the types of clinical practitioners who can furnish Medicare telehealth services. This new waiver allows telehealth services to be furnished by PTs, OTs, and speech pathologists. Providers and States may begin using the blanket waivers immediately for the duration of the COVID-19 public health emergency declaration. To view the CMS announcement, please click HERE.

Therapy Services Subcommittee
We invite all interested OrthoForum members to engage with this new Therapy Services Subcommittee to help inform and shape these and other PT/OT legislative priorities and to reach out to their local representatives and congressional members to help advance the OrthoForum’s work with Congress and other federal agencies. For more information on PT/OT issues, or to join the OrthoForum Advocacy Committee Subcommittee, please contact Renee Duncan at renee.duncan@orthotennessee.com.

CMS, CMMI and BPCI-A Updates

CMS Proposed Rule for Changes to and Extension of CJR Model
On February 24, 2020, the Centers for Medicare & Medicaid Services (CMS) published in the Federal Register a proposed rule for changes to and an extension of the Comprehensive Care for Joint Replacement (CJR) bundled payment model (which was originally scheduled to end on December 31, 2020). Specifically, the proposed rule aims to change features of the CJR model and allow additional flexibilities provided to hospitals related to certain Medicare program rules that are consistent with the revised episode of care definition. This includes incorporating outpatient hip and knee replacements into that definition. In addition, for proposed performance years 6-8, the proposed rule would eliminate the 50 percent cap on gainsharing payments, distribution payments, and downstream distribution payments for certain recipients. Specific changes to the target price calculation include: A change from three years of claims data to the most recent one year of claims data; removal of the national update factor and twice-yearly update to the target prices that accounts for prospective payment system and fee schedule updates; removal of anchor factors and weights; incorporating additional risk adjustment to the target pricing; and a change in the high episode spending cap calculation methodology. CMS also proposes changes to the reconciliation process, which includes further risk adjusting in the bundle to take into account a beneficiary’s age and their other health conditions. Changes to the beneficiary notice requirements and the appeals process are also outlined in the proposed rule, including a three-year extension to the length of the CJR model for certain participant hospitals through December 31, 2023, in order to allow ample time to test and evaluate the proposed changes. The proposed rule also solicited comments on how CMS may best conceptualize and design a new bundled payment model focused on lower extremity joint replacement (LEJR) procedures performed in an ambulatory surgical center (ASC) setting. On April 24, 2020, the OrthoForum submitted comments to CMS on the development of a new bundled payment model for LEJR episodes in ASCs (please see the ASC update section for additional information). To view the CMS CJR Proposed Rule, To view the CMS CJR Proposed Rule, please click HERE.

BPCI-A Issues
As previously reported, orthopaedic practices participating in the Bundled Payments for Care Improvement-Advanced (BPCI-A) model continue to face revised target pricing issues, which differ significantly from the BPCI Classic model, and is much lower than the preliminary target pricing released by CMMI and CMS. The application of case-mix adjustment parameters in BPCI-A remains one of the biggest issues encountered among physician group practices (PGPs) participating in BPCI-A and has had an impact on the potential to achieve savings for episodes involving LEJRs. The current calculation methodology also does not allow for the complete removal or proper adjustment of a defined subset of patients under the case-mix adjustment process. In addition, PGPs participating in BPCI-A have 10% of their reimbursement held back due to undefined quality component measures. CMMI has yet to release the actual rating methodology and the quality measures that PGPs will be evaluated on and how this may impact a PGP’s potential reimbursement. The OrthoForum has requested and is awaiting further clarification from CMMI on this issue and is currently working with the BHFS team on developing a Congressional and CMS strategy to address these issues.

In light of the CMS ACO/CJR interim final rule invoking COVID-19-related changes, a group of BPCI-A conveners drafted a coalition letter to CMMI Deputy Administrator and Director Brad Smith. The letter called for two changes to BPCI-A by: 1) Requesting that CMMI implement the BPCI Advanced Natural Disaster policy in which any affected clinical episode spending greater than the final target price be excluded, and 2) Urging CMS to pay participants their earned Net payment reconciliation amount (NPRA) as scheduled for all reconciliation beginning with Performance Period 2 anticipated in the Spring of 2020.

CMMI Subcommittee
For more information on CMMI and BPCI-A issues or to join the CMMI Subcommittee, please contact Joel James at jjames@SignatureHealth.net.

CMS Issues Stark Law Waivers During COVID-19 Pandemic
On March 30, 2020, HHS Secretary Alex Azar issued a number of “blanket” waivers under section 1135 of the Social Security Act as part of the federal response to the coronavirus emergency. These are waivers of certain requirements of Medicare and other programs administered by CMS, and it is not necessary to notify CMS before taking action under the waivers. The waivers are intended to complement and augment the work of FEMA and State and local governments to rapidly expand treatment capacity for COVID-19. The waivers include certain blanket waivers of the Stark Law, which permit remuneration and referrals if they are solely related to one or more of six specified “COVID-19 Purposes” and are within one of 18 categories specified by CMS. The waivers have a retroactive effective date of March 1 and will terminate at the end of the coronavirus emergency. To view the CMS waiver announcement, please click HERE. The 18 blanket waivers of the Stark Law (which require a “COVID-19 Purpose”) include the following:

• Referrals by Owners of Physician-Owned Hospitals (POHs): Referrals by a physician owner of a POH that temporarily expands its facility capacity above the [POH’s applicable Stark] number of operating rooms, procedure rooms, and beds without prior application and approval of the expansion of facility capacity.
• Referrals by Owners of Ambulatory Surgery Centers (ASCs) that Temporarily Convert to Hospitals: Referrals by a physician owner of a hospital that (1) converted from a physician-owned ASC to a hospital on or after March 1, 2020, (2) enrolls in Medicare as a hospital during the emergency period, where such enrollment is not inconsistent with the emergency plan of the State involved, and (3) meets Medicare hospital conditions of participation that are not waived during the emergency period.

These waivers are temporary; therefore, caution should be taken as to the amount of investments made toward expanding hospital capacity, particularly any structural changes.

After the issuance of the CMS blanket waivers, various stakeholders had questions about the scope and limitations of the waivers. On April 21, CMS issued “Explanatory Guidance” on the scope and application of the CMS waivers to provide further clarity and address these questions. To view the CMS explanatory guidance, please click HERE.

Efforts Regarding Permanent Stark Law Changes
The decision of CMS to issue blanket Stark waivers for POHs during the coronavirus emergency may eventually present an advocacy opportunity to seek permanent changes. The Advocacy Committee is having discussions on this matter with the American Academy of Orthopaedic Surgeons (AAOS) and the Physician Hospitals of America (PHA).

Stark Law Subcommittee
For more information on Stark Law issues or to join the Stark Law Subcommittee, please contact Dr. Chip Hummer at chummer3@premierortho.com.

Discussions at Phoenix Annual Conference
At the annual OrthoForum conference held in late February in Phoenix, the ASC Subcommittee had informal meetings and discussed two important matters. First, MedPAC has been recommending to Congress that no annual updates to the ASC conversion factor be made because ASCs, unlike hospitals, are not subject to Medicare cost-reporting requirements. The OrthoForum should address this MedPAC concern. Rather than Congress or CMS deciding that ASCs should be subject to the same cost-reporting requirements as hospitals, ASCs should develop a system of collecting cost-related data that is a workable, streamlined alternative to the system hospitals are required to use. Second, hospital outpatient departments (HOPDs) receive a higher Medicare reimbursement rate than ASCs. The OrthoForum should take the position that a higher rate is justified for procedures that are not on the ASC payable list, but there should be no difference between rates for HOPDs and ASCs for procedures on that list (except for an appropriate risk adjustment for the HOPD based on the patient’s level of comorbidities). In other words, the general rule should be site neutrality between ASCs and HOPDs in terms of payments.

CMS Waivers During COVID-19 Pandemic: “Hospitals Without Walls”
On March 30, 2020, HHS Secretary Alex Azar issued a number of “blanket” waivers under section 1135 of the Social Security Act as part of the federal response to the coronavirus emergency. These are waivers of certain requirements of Medicare and other programs administered by CMS, and it is not necessary to notify CMS before taking action under the waivers. The waivers are intended to complement and augment the work of FEMA and State and local governments to rapidly expand treatment capacity for COVID-19. Some of the waivers concern a policy to increase COVID-19 treatment capacity by creating “hospitals without walls”. CMS has said that it “will allow communities to take advantage of local ambulatory surgery centers that have canceled elective surgeries, per federal recommendations. Surgery centers can contract with local healthcare systems to provide hospital services.” In addition, the agency is allowing physician-owned ASCs to temporarily be converted to hospitals (see the Stark Law section for more details).

CMS Expresses Interest in Creating an ASC/LEJR Model
In the CJR proposed rule published on February 24, 2020, CMS requested comments on “how the agency might best conceptualize and design a future bundled payment model focused on lower extremity joint replacements (LEJR) procedures performed in the ambulatory surgical center (ASC) setting.” In response to this request, the OrthoForum submitted a comment letter to CMS on April 27. To view the letter, please click HERE. The OrthoForum comments included the following:

• The payment methodology should take into account that physician group practices (PGPs) must hire patient navigators, and that physical therapists and occupational therapists have a central role. The model should also provide for the use of telehealth technology to create a role for “virtual” physical therapy and occupational therapy.
• PGPs will participate in an ASC-focused model only if CMS uses a payment methodology that—unlike the BPCI-A model—will clearly reward practices for success. The payment methodology must be fair, and it must have national standards, with appropriate risk and geographical adjustments. It should also take into account the level of financial risk. The methodology should not be focused exclusively on the target price. For example, bonus payments could be made to the top-performing practices, and these could come “off the top” (before the general distribution of savings payments). In addition, the payment methodology should also recognize that a point is reached at which it becomes very difficult for a successful practice to “squeeze” any further savings out of the practice. At this point, the payment methodology should focus on the continued provision of quality care—the best outcomes—and not exclusively on the target price.
• If CMS decides to allow hospital outpatient departments (HOPDs) to also be a site for surgery in the program, there should be site neutrality between ASCs and HOPDs in terms of payments (except for an appropriate risk adjustment for the HOPD based on the patient’s level of comorbidities). HOPDs should receive a higher rate when performing outpatient procedures that are not on the ASC payable list. Such procedures are the particular expertise of HOPDs, and they should be reasonably compensated for them. In contrast, providing higher rates for HOPDs for procedures on the ASC payable list incentivizes the development of HOPD facilities with extraneous features that are designed to attract patients who need the procedures. Those same patients could have the same procedures at ASCs and receive the same quality of care at a lower cost to the Medicare program.

ASC Subcommittee
For more information on ASC issues or to join the ASC Subcommittee, please contact Teresa Copeland at teresa.copeland@orthotennessee.

CMS Issues Stark POH Waiver During COVID-19 Pandemic
As noted in the Stark Law section, on March 30, 2020, HHS Secretary Alex Azar issued a number of “blanket” waivers under section 1135 of the Social Security Act as part of the federal response to the coronavirus emergency. These waivers have a retroactive effective date of March 1 and will terminate at the end of the coronavirus emergency. They include a blanket waiver of the Stark POH restrictions:

• Referrals by Owners of Physician-Owned Hospitals (POHs): Referrals by a physician owner of a POH that temporarily expands its facility capacity above the [POH’s applicable Stark] number of operating rooms, procedure rooms, and beds without prior application and approval of the expansion of facility capacity.

Referrals under this waiver must be solely related to one or more of six specified “COVID-19 Purposes”. The waiver is temporary; therefore, caution should be taken as to the number of investments made toward expanding hospital capacity, particularly any structural changes.

Efforts Regarding Permanent Stark Law Changes
The decision of CMS to issue blanket Stark waivers for POHs during the coronavirus emergency may eventually present an advocacy opportunity to seek permanent changes. The Advocacy Committee will build on the work done in 2019, which included meeting with top HHS officials to present the OrthoForum’s argument that HHS currently has the authority under the Stark Law to modify the POH restrictions. The Advocacy Committee is having discussions on this matter with the American Academy of Orthopaedic Surgeons (AAOS) and the Physician Hospitals of America (PHA). The decision of HHS to grant a POH blanket waiver for the COVID-19 emergency demonstrates a certain level of trust in POHs, and we should build on that trust and develop a strategy to convince HHS to use its authority. In addition to our efforts for permanent Stark changes, the POH blanket waiver may also present an opportunity to convince CMS to establish a CMMI demonstration program that is related to the COVID-19 emergency but will continue after the emergency is over.

Republican Study Committee Recommends Suspension of POH Restrictions
On April 26, Republican Study Committee (RSC) Chair Mike Johnson (R-LA), together with RSC Health Care Task Force Chair Roger Marshall, MD (R-KS), sent a letter to House and Senate leaders regarding the RSC’s new health care proposal aimed at strengthening and providing the nation’s healthcare system with the flexibility to better address the COVID-19 pandemic. The proposal seeks to eliminate regulatory burdens and barriers and build on innovative and successful private sector-driven efforts. These proposals include the following:

• A suspension of the POH restrictions to allow for the hospital supply to catch up with the demand in-hospital services.
• State suspension of certificate-of-need (CON) laws, which restrict hospitals and ASCs from adding the needed capacity during a crisis.

To view the RSC letter, please click HERE.

Proposed CMMI POH Model Under Consideration by CMS
The Advocacy Committee has continued to coordinate with AAOS to stay informed on its efforts with the Physicians Hospitals of America (PHA) to advocate for their proposed CMMI demonstration model under which POHs would be permitted to expand their capacity. CMS has expressed interest in this model and AAOS and PHA have continued to engage and meet with CMS officials on the demonstration project. (These discussions with CMS began in 2019 and are not related to the COVID-19 emergency.)

Congress
The OrthoForum continues to support and track the bicameral Patient Access to Higher Quality Health Care Act of 2019 (S. 2860/H.R. 3062) aimed at repealing POH restrictions. The Senate bill, introduced by Senator James Lankford (R-OK), currently has 12 cosponsors (all Republican) and the House bill, introduced by Representative Michael Burgess (R-TX) currently has 41 cosponsors (38 Republicans and three Democrats).

POH Subcommittee
For more information on POH issues or to join the POH Subcommittee, please contact Dr. Blake Curd, M.D. at bcurd@oi.md.

Paths to Victory in the 2020 Presidential Race
With an earlier than expected resolution of the Democratic nominating contest, this year’s presidential race has settled into a one-on-one battle between President Donald Trump and former Vice-President Joe Biden. While we are not prepared to make a prediction, we can tell you what political professionals are highlighting as the keys to the 2020 race.

Trump won in 2016 with 304 electoral votes to Hillary Clinton’s 227. That outcome, and the results of the 2018 midterm elections, highlight three possible scenarios.

The first, of course, is that Trump wins again with the exact same alignment of states. No independent forecaster predicts that Trump will win any states that he lost in 2016, so his path to victory is seen to be very narrow. Note that one Republican candidate has won the popular vote in just one of the last seven presidential elections (George W. Bush in his 2004 re-elect), so there isn’t any partisan disagreement about the narrow path for the Republican standard-bearer.

The second scenario has Biden winning via the Rustbelt Route. Many feel that Trump drew the electoral equivalent of a straight flush in 2016, winning Michigan (16 electoral votes) by 0.23%, Pennsylvania (20 EVs) by 0.72%, and Wisconsin (10 EVs) by 0.77%. The difference-maker in these three states may have been unrelated to Republican or Democratic strategies. In all three, third-party candidates drew vote shares many times greater than Trump’s margin of victory – 5.23% in Michigan, 4.36% in Pennsylvania, and 6.33% in Wisconsin. Democrats feared that Tulsi Gabbard would run as a third-party candidate and become this year’s Jill Stein/Gary Johnson, pulling in disenchanted young supporters of Bernie Sanders, but that threat has passed.

You will note that Biden leads by a greater margin in Arizona than in Wisconsin, which would have been inconceivable for a Democrat before this cycle. The states match nicely in electoral votes (11 for Arizona vs. 10 for Wisconsin), leading some political pros to believe that Dems should be prepared to swap Wisconsin for Arizona – a deal that would make sense in terms of changing demographics.

One major warning about this polling data: almost all survey results in this far from election day are based on the responses of registered voters. As pollsters shift to likely voters, Trump may gain support. Having said that, the 2016 election and the 2018 midterms both demonstrated that the electorate is changing and that the rules we relied on forecast elections are changing as well. It is quite possible that we’ll be rewriting those rules once again after the 2020 elections.