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May 25, 2010

Medicare Program: Revisions to Physician Fee

Proposed Rule

Score: 17 / 60

RULE SUMMARY

Alters Medicare Part B payments.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion	Score
Openness
1. How easily were the RIA , the proposed rule, and any supplementary materials found online? A link to the proposed rule containing the RIA is five clicks from the home page. Click on "regulations" (intuitive). The rest is unintuitive: click on "other regulations," expand the "detail" list, click on "CMS regulations," and then click on "quarterly provider updates—regulations" and select the update list from the period covering the date of the regulation. It can also be found on regulations.gov using the RIN. The RIN found the proposed rule (which contained the RIA) in the regulations.gov Advanced Docket Search. Searching for the string "Revisions to Payment Policies Under the Physician Fee Schedule" in the Advanced Document Search brought up several results. The researcher clicked on the entry with "2009" in title. This is the correct RIN number. A Google search of CMS.gov for the title (and several shortened variants thereof), the RIN of the proposed rule did not provide useful results. A visit to CMS.gov led the researcher to a page that said that all CMS rules had been moved to the Federal Dockets Management System.	4/5
2. How verifiable are the data used in the analysis? Most numbers reported are actually results of calculations, with original sources of data only occasionally reported. Cost data are based on surveys by the AMA and associations representing specialties. There doesn't appear to be any cost-benefit analysis in the RIA, mostly just refusals to quantify the cost/benefits of rule changes, or simply statements about possible costs reported by regulators.	1/5
3. How verifiable are the models and assumptions used in the analysis? The rule changes billing fees for doctors, as well as several other rather technical regulations of the health care industry.	1/5
4. Was the analysis comprehensible to an informed layperson? The analysis is loaded with acronyms and is short on descriptions. It includes a three-column page of about 150 acronyms—surely too may for the reader to remember. It is hard to understand unless the reader is already very familiar with these programs. The RIA says that a discussion of alternatives and other required features are in the preamble to the rule, so the reader has to read the entire preamble to find out whether HHS did any other regulatory analysis that is not in the RIA section. The document is poorly organized (perhaps because it contains so many different changes). It is not clear how long the RIA actually is, and while the RIA refers back to the preamble for additional explanation, it is not clear to the reader that the preamble actually contains this explanation.	0/5
Analysis
5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?	1/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life? The document does not propose a rationale for the broad regulations. However, in the course of answering public comments, it does address deficiencies in the proposed regulation, although it does not tie these in any way to a public purpose or a decision principle. A discussion of the Physician Quality Reporting Initiative says that the goal is to ensure that every patient receives the appropriate treatment every time. For the broader provisions that focus on setting payment rates, outcomes are not explicitly defined.	2/5
Does the analysis identify how these outcomes are to be measured? Data generated by the Physician Quality Reporting Initiative might assist in developing measures, but this is not done in the analysis.	1/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes? Even if we assume that the goal of the reimbursements is quality medical care, no link between the reimbursement decisions and quality of care is discussed. The principal place where the proposed rule discusses HHS decisions and outcomes is the discussion of exceptions to anti-kickback rules when doctors have gain-sharing or similar incentive contracts with other health care providers.	1/5
Does the analysis present credible empirical support for the theory? Only in the gain-sharing discussion in the preamble to the rule is discussed.	1/5
Does the analysis adequately assess uncertainty about the outcomes? The analysis does not address this topic.	0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?	1/5
Does the analysis identify a market failure or other systemic problem? No, the document is a series of revisions to existing code. In so far as the current Medicare system has systemic problems, one might argue that altering it is addressing systemic problems. But the document pretty much just says that is implementing the law, with ad hoc explanation of the problems it is trying to solve (such as demographic-driven changes in cost structures in California).	1/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal? In a few cases, the rule attempts to correct for problems created by pre-existing rules.	2/5
Does the analysis present credible empirical support for the theory? It cites a few studies cited here and there in support of small points.	2/5
Does the analysis adequately assess uncertainty about the existence or size of the problem? The analysis does not address this topic.	0/5
7. How well does the analysis assess the effectiveness of alternative approaches?	1/5
Does the analysis enumerate other alternatives to address the problem? The RIA says that the preamble discusses alternatives, but this discussion is very limited and does not draw on the RIA.	1/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)? It considers very narrow tweaks, e.g., should a specific telemedicine service be reimbursed or not?	1/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved? Since the analysis never really defined the ultimate outcomes, this could not be done.	0/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future? The RIA estimates a decrease in expenditures compared to the baseline. It deals with the baseline by assuming providers would have the same mix of cases, treatments, etc. as in the past. There are descriptions of the motivations for changing the policy, including updating fees to reflect current value, changing standards to catch up with current practice and so forth, but nothing that presents a comprehensive look at the economic impacts of the current structure.	1/5
8. How well does the analysis assess costs and benefits?	1/5
Does the analysis identify and quantify incremental costs of all alternatives considered? The RIA calculates change in federal expenditures compared to baseline but does not do this for the limited alternatives considered.	3/5
Does the analysis identify all expenditures likely to arise as a result of the regulation? The RIA assesses changes in federal expenditures and also calculates some changes in patient payment responsibility that would occur because the total amount the provider could charge would fall. For the "Proposed Amendment to the exemption for computer-generated facsimile transmission from the NCDPD SCRIPT" section, some costs (as reported by major pharmacy chains) are given, but they are not evaluated by the agency.	3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services? Only in the sense that the regulation establishes the prices that Medicare will pay for goods and services. It does not consider how these or other decisions in the regulation might alter incentives or other prices.	1/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation? Almost never. An exception is the discussion of gain-sharing agreements.	1/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis? The analysis does not address this topic.	0/5
Does the analysis identify the alternative that maximizes net benefits? Since the analysis does not define or measure benefits, this could not be done.	0/5
Does the analysis identify the cost-effectiveness of each alternative considered? Since the analysis does not define or measure benefits, this could not be done.	0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs? The analysis calculates changes in federal costs and also some changes in costs payable by patients. It breaks down changes in reimbursements by type of provider, type of procedure, and (for hospitals) type of location and type of ownership.	3/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits? The analysis does not address this topic.	0/5
Use
9. Does the proposed rule or the RIA present evidence that the agency used the analysis? The RIA calculates the budget impact of the proposed rule. It does not appear to have guided the decisions, except perhaps when the calculations indicated that adjustments had to be made to preserve budget neutrality when required by law.	3/5
10. Did the agency maximize net benefits or explain why it chose another alternative? Net benefits are not calculated and not an issue.	1/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future? The regulation establishes a large number of quality of care measures that might be used to evaluate the effects of the regulation or other policies. These only deal with quality and are part of a broader quality measurement initiative, not explicitly presented as measures to evaluate the effects of this regulation.	2/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so? Few explicit provisions are made for evaluating the regulation's performance in the future, though occasionally plans are mentioned to study a topic that might affect decisions in the future.	1/5

Total	17 / 60

Additional details

Agency: Department of Health and Human Services
Regulatory Identification Number: 0938-AP18
Agency Name: Department of Health and Human Services
Rule Publication Date: 07/07/2008