September 3, 2010

Revisions to Payment Policies Under the Physician Fee Schedule For CY 2010

Proposed Rule
Summary

Score: 23 / 60

Additional details
Agency
Department of Health and Human Services
Regulatory Identification Number
0938-AP40
Agency Name
Department of Health and Human Services
Rule Publication Date
07/13/2009
Comment Closing Date
08/31/2009

RULE SUMMARY

This proposed rule would address proposed changes to Medicare Part B payment policy. We are proposing these changes to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. This proposed rule discusses: refinements to resource-based work, practice expense and malpractice relative value units (RVUs); geographic practice cost indices (GPCIs); telehealth services; several coding issues; physician fee schedule update for CY 2010; payment for covered part B outpatient drugs and biologicals; the competitive acquisition program (CAP); payment for renal dialysis services; the chiropractic services demonstration; comprehensive outpatient rehabilitation facilities; physician self-referral; the ambulance fee schedule; the clinical laboratory fee schedule; durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS); and certain provisions of the Medicare Improvements for Patients and Providers Act of 2008. (See the table of contents for a listing of the specific issues.)

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?
0938-AP40 can be found on regulations.gov using the RIN and a keyword search, as well as on the Department of Health and Human Service's website. It can be found by clicking on regulations, regulations and guidance under medicare, then on quarterly provider updates-regulations. Here, search under QPU July-August 2009. The department offers a list of proposed rules. This requires the reader to know what the "quarterly provider update" is, which is unlikely for non-insiders.
4/5
2. How verifiable are the data used in the analysis?
Most data sources are provided but some data sources are not mentioned. A table shows how "relative value units" are calculated and lists data sources. Several pages describe how data were gathered from AMA members, including a link to a website with the contractor's final report. Malpractice cost data were collected from companies and joint underwriting associations, but no link to source data is given; the notice says HHS will post the contractor's report on its web site. A link is provided to data used in calculating the wage index.
3/5
3. How verifiable are the models and assumptions used in the analysis?
A table shows formulas for calculating "relative value units." HHS proposes to change the equipment utilization rate based on survey data; a source and link to the survey is given. A Brandeis University study evaluated whether a pilot program for chiropractic services was budget neutral, and a link is provided. Many decisions cite a bit of logic or references to points made by commenters, rather than models and data analysis.
2/5
4. Was the analysis comprehensible to an informed layperson?
Calculations are not that difficult and are explained. The analysis is hard for non-insiders to understand due to use of acronyms and specialized terms. Full understanding requires the reader to skim about 700 pages of text that precede the RIA section. Many explanations for alternatives are described in the proposed rule rather than in the RIA itself. The analysis could be improved if alternatives were organized differently and easier to locate.
2/5

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?
A section of the RIA asserts that many of the proposed regulatory changes will "improve the quality and value of care provided to Medicare beneficiaries." The background section in the premble essentially states, "This is the way it is done," without explaining what outcomes HHS is trying to promote.
2/5
Does the analysis identify how these outcomes are to be measured?
Only if cost reduction is assumed to be an intended outcome, but HHS does not explicitly propose this. Under the MPPA Provisions section, the analysis quantifies the positive impact on Medicare patients by the amount their coinurance payments will decrease.
2/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The analysis lacks a coherent narrative explaining how all the proposed changes work together to produce a set of achievable outcomes. The section on development of the value-based purchasing plan reflects a belief that the current system of paying for procedures does not optimize quality of care. No extensive theory is elaborated to explain why.
1/5
Does the analysis present credible empirical support for the theory?
Since outcomes are not well defined and theory is not articulated, there is little opportunity to provide empirical support.
0/5
Does the analysis adequately assess uncertainty about the outcomes?
The analysis mentions two sources of uncertainty about estimating effects of acredication on suppliers who provide technical components of advanced diagnostic imaging services. No further analysis is provided, and this is the only time the word "uncertainty" even occurs.
1/5
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?
The analysis does not give much explicit explanation why this year's changes to payments for physicians' services are necessary other than the citing acts and rules that established them.
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?
No relevant discussion.
0/5
Does the analysis present credible empirical support for the theory?
One study from Brandeis University cited in support of the point that a pilot program on chiropractic services is not budget-neutral.
1/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
No relevant discussion.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
2/5
Does the analysis enumerate other alternatives to address the problem?
Alternative ways of changing geographical areas for calculation of geographical cost index are considered. HHS commissioned a report to discuss options and received comments on it, but opted not to change at this time. An alternative payment system, based on fee cuts in previous legislation that lawmakers keep suspending, is mentioned briefly. Marginal alternatives are sometimes considered for some particular tweaks.
4/5
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)?
The only major alternative to this payment system considered is mentioned in a brief section that calculates total payments if lawmakers had not continually suspended payment cuts. Some other marginal changes in various provisions are considered.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
Rarely; the calculation of total costs under an alternative payment system could count if "cost reduction" is considered an outcome.
1/5
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 baseline is based on 2008 utilization data and does not incorporate any change in utilization or case mix. One exception is drugs used in end-stage renal treatment, where HHS uses three years of data to estimate a trend in growth of per patient spending.
2/5
8. How well does the analysis assess costs and benefits?
2/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
A table shows the incremental percentage effect on costs of each proposed adjustment. A section in the preamble reports how total expenditures would have differed if lawmakers did not continually suspend cuts in Medicare payments. Some parts of the RIA discuss net cost effects of some specific changes in the regulations; these are usually small.
4/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
The analysis appears to identify federal and patient expenditures, but no others. Will providers' or others' expenditures not change as a result fo this regualtion?
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Only to the extent that these calculations affect the prices the federal government and beneficiaries will pay.
2/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
No relevant discussion.
0/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Sensitivity analyses are not preformed but the analysis admits to using estimates and assumptions when processing a lot of the cost figures for each propose change.
1/5
Does the analysis identify the alternative that maximizes net benefits?
Since outcomes are not well defined or measured, net benefits could not be calculated.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Since outcomes are not well defined or measures, cost-effectiveness could not be calculated.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The analysis recognizes that federal decisions also affect patient copayments for services. One table shows how proposed policy changes will affect copayments for mental health services, which currently require patients to pay 50 percent out of pocket instead of 20 percent. The table showing cumulative effects of each spending adjustment shows the total effect on each specialty. A table breaks down payment impacts on end stage renal facilities by location, size, ownership type, etc.
4/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Since outcomes are not well-defined or measured, incidence could not be calculated.
0/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
The extensive analyses outlined throughout the RIA provides evidence that the RIA affected at least some decisions. HHS commissioned a review of alternative methods for calculating geographical cost indexes, but opted not to make any changes at this time and said any change in the future would allow ample opportunities for public comment. This is mentioned in the preamble but not in the RIA section and does not seem to be part of the RIA. The proposed rule used the analysis in the sense that it determined what prices the government will pay.
3/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Since outcomes are not well-defined or measured, net benefits could not be calculated or considered. The analysis of alternatives is sparse, which means that there is little material to use in calculating net benefits of alternatives. HHS made these changes because the law prescribes them.
1/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
Various quality reporting initiatives could be used to develop goals and measures of the regulation's effects, but HHS does not propose to do this.
1/5
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?
Physicians can earn a 2 percent premium by reporting on process-oriented quality of care measures. The quality data could perhaps be used to evaluate the effects of changes in payments, but HHS does not propose to do this. Similarly, HHS will have data on electronic prescribers that might be used to assess the effect of electronic prescribing, but does not propose to do this with the data. HHS requires patient outcome assessment as a condition of payment for several new services but does not offer a plan to use the data to assess the effects of this regulation.
1/5
 
Total 23 / 60