Pathways' Pick of the Week: Doc Pay Reforms

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CMS dropped its 1,500-page-plus Physician Fee Schedule 2022 proposal July 13. It includes several noteworthy provisions for medtechs.

Three sections of the PFS proposal of interest to medtech: 

  • AI introspection.The agency acknowledges that its current physician pay methodologies do not effectively address integrating AI software into routine clinical practice. CMS is using the proposed rule to seek detailed input to help reform its systems, while in parallel trying to come up with temporary solutions to provide sufficient reimbursement in the short term. Read more in Market Pathways: “CMS Ponders the Path Ahead for AI Payments.”
  • PODs report.CMS proposes multiple tweaks to its Open Payments system, which requires device firms, drug makers, and group purchasing organizations to report “transfers of value” to physicians and other healthcare providers. The change most likely to get (positive) attention from the device industry is CMS’ decision finally to explicitly call out physician-owned distributorships (PODs) as entities that must self-identify and report to the Open Payments database. PODs are groups of physicians that form a business to sell devices typically to the hospitals in which the practice. They are a source of pricing pressures and other market challenges for device manufacturers in orthopedics and other sectors, and the device industry has pushed for scrutiny of the practice for years. The fee schedule proposal is a step toward more required transparency for PODs. “The potential conflict of interest between providers and reporting entities is the heart of the Open Payments program, so quick and clear identification of physician-owned businesses would be beneficial,” the agency writes. 
  • Tapering colorectal coinsurance.A routine colorectal cancer screening test, such as colonoscopy or DNA stool testing, requires no cost sharing for Medicare beneficiaries, but if the test finds something that requires more services like removing polyps, coinsurance mandates kick in. Congress passed a stimulus/appropriations package in December that requires CMS to transition to no coninsurance in these situations. The proposed rule would implement that mandate, gradually reducing coinsurance from 20% in 2022 to zero by 2030. 

IPPS movement.The Medicare agency also apparently completed work on finalizing its FY 2022 hospital inpatient prospective payment system (IPPS) rule this week. In the proposal issued in the spring, CMS wrestled with several issues related to its new technology add-on payment (NTAP) program, including how to address the impact of the pandemic and questions arising from AI technologies. The final rule is now under review by the White House Office of Information and Regulatory Affairs and is likely to be released in August.

Excerpted from “Pathways’ Picks July 14: De Novo Rule, Doc Pay, Guidance Picks, and More,” Market Pathways, July 14, 2021.

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