Center Comments on 2018 Physician Fee Schedule

September 11, 2017

Administrator Seema Verma
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1676-P
P.O. Box 8016, Baltimore, MD 21244-8013.

Re: CMS-1676

Submitted electronically: http://www.regulations.gov

Dear Administrator Verma:

The Center for Medicare Advocacy (Center) is pleased to provide the Centers for Medicare & Medicaid Services (CMS) comments on the 2018 Physician Fee Schedule proposed rule.

The Center is a national, private, non-profit law organization, founded in 1986, that provides education, analysis, advocacy, and legal assistance to assist people nationwide, primarily the elderly and people with disabilities, to obtain necessary health care, therapy, and Medicare.  The Center focuses on the needs of Medicare beneficiaries, people with chronic conditions, and those in need of long-term care and provides training regarding Medicare and health care rights throughout the country.  It advocates on behalf of beneficiaries in administrative and legislative forums, and serves as legal counsel in litigation of importance to Medicare beneficiaries and others seeking health coverage.

Proposed codes GYYY1 and GYYY2 for prolonged preventive services

The Center would like to express our support for the new proposed “G” codes for prolonged preventive services.  We appreciate that the proposed rule would boost physician compensation for longer appointments to provide preventative care for individuals with disabilities. We applaud CMS for working to meaningfully address the serious problem of health care disparities in access and quality experienced by Medicare beneficiaries with disabilities.

In response to the 2017 Physician Fee Schedule proposed rule, the Center expressed concerns regarding similar proposed “G” codes, because those were far more limited in scope and were accompanied by cost-sharing. The “G” code would have allowed physicians to receive accurate payment for the extra clinical time, accessible equipment, and expertise required to provide access and quality care to people with disabilities, particularly Medicare beneficiaries with mobility challenges.  In those comments we stressed that the codes were too limited in scope for only applying to mobility challenges, while excluding extra time spent with individuals with other types of disabilities. Additionally, as with most Medicare Part B services, those codes were accompanied by a 20 percent copayment, imposing a “surcharge” on Medicare beneficiaries with mobility impairments to obtain accessible health care services.

We appreciate that CMS has addressed our previous concerns by developing the 2018 proposed codes, which establish codes for prolonged preventative services beyond the typical service time of the primary procedure in 30 minute increments. The “G” codes in the 2018 proposed rule apply for additional time spent with individuals, and are not limited to specific conditions or needs. The codes proposed in the 2018 PFS would not be accompanied by increased Medicare cost-sharing, as the proposed codes are limited to preventive health care.

We appreciate CMS’ efforts to address health disparities based on disability and hope that this positive step will continue with additional codes that expand access for people with disabilities. We urge CMS to explore its authority to allow for codes for additional time spent with patients outside of preventive services, or, if necessary, to urge Congress to provide such authority.

We applaud CMS for the establishment of the “G” codes in the 2018 proposal and look forward to continuing to work together to find ways to address health care disparities of all kinds, especially disability-based disparities.

Diabetes Prevention Program

We incorporate by reference the extensive comments from National Council on Aging regarding support, with qualifications, for the Diabetes Prevention Program.

Request for Information on CMS Flexibilities and Efficiencies

While we recognize CMS’ stated intention of maintaining benefit flexibility and efficiency throughout the Medicare program, we stress that CMS’ focus should not be on rolling back regulations or reducing oversight. Improving patient access and patient outcomes must be central to any policy proposal under consideration. Below are four areas where additional flexibilities and efficiencies would reduce burdens for patients, improve quality of care and decrease costs: 1) observation status; 2) medically necessary oral health; 3) parity between coverage rules for off-label prescription drugs in Part B and D;  and 4) duals and durable medical equipment access.

1. Observation Status

Increasingly, hospital patients are finding that they have been considered “Observation Outpatients,” although they have been cared for in the hospital for many days and nights.   Observation Status is a designation used by hospitals to bill Medicare. Unfortunately, it can hurt hospital patients who rely on Medicare for their health care coverage.

Observation status is creating enormous financial problems for hospitalized patients who find that their multiple-day stays in the hospital – where they receive medical and nursing care, diagnostic tests, treatments, medications, food, etc. that are indistinguishable from the medical and nursing care, diagnostic tests, treatments, medications, food, etc. that are received by patients during inpatient stays – make them ineligible to receive Medicare coverage of their subsequent stays in skilled nursing facilities (SNFs) solely because their hospital stays were billed to Medicare as outpatient/observation (Part B), rather than as inpatient (Part A).  The costs for hospitalized patients in observation or other outpatient status are significant.  These patients must pay for their SNF stays entirely out-of-pocket; they do not have Part A coverage, as patients in inpatient status have.

CMS has confirmed repeatedly that physicians can order whatever care, tests, treatment, and services their patients need, whether the patients are inpatients or outpatients. 80 Fed. Reg. 70297, 70538 (Nov. 13, 2015).  This confirmation makes clear that observation status is not an issue of hospital care for beneficiaries.  It is solely a Medicare billing issue – whether hospitals bill Part A or Part B for a patient’s stay.

In a 2013 report on observation status, Memorandum Report: Hospitals’ Use of Observation Stays and Short Inpatient Stays for Medicare Beneficiaries, the Inspector General found that observation stays and inpatient stays were often for the same kinds of medical conditions.  Memorandum Report: Hospitals’ Use of Observation Stays and Short Inpatient Stays for Medicare Beneficiaries, OEI-02-12-00040, page 11 (Jul. 29, 2013).  The Inspector General concluded, “CMS should consider how to ensure that beneficiaries with similar post-hospital care needs have the same access to and cost-sharing for SNF services.”

CMS promulgated the two-midnight rule in 2013 and implemented it in 2014, with the expectation that more patients would be formally admitted as inpatients.  That result did not occur.  As the Inspector General found in a 2016 report, Vulnerabilities Remain Under Medicare’s 2-Midnight Hospital Policy, hundreds of thousands of patients continue to be hospitalized for multiple days but the hospitals classify them as outpatients. Vulnerabilities Remain Under Medicare’s 2-Midnight Hospital Policy, OEI-02-15-00020 (Dec. 2016).

CMS could easily correct this problem for beneficiaries through subregulatory guidance that allows all time spent by a patient in an acute care hospital to be counted towards meeting the three-day requirement that is a statutory prerequisite to Medicare Part A-covered care in a SNF.  This subregulatory change would not require changing CMS’s rules for hospital billing.

CMS Has Authority to Count All Time in the Hospital

The following summarizes the legal memorandum that the Center wrote in 2014 (available here: https://www.medicareadvocacy.org/cms-has-authority-under-existing-law-to-define-inpatient-care/) that set out the agency’s current authority under the Medicare statute to count all time in the hospital.

A 2008 decision of the Second Circuit Court of Appeals confirms the Secretary of HHS has authority under the Medicare statute to include a hospital patient’s time in observation as part of inpatient time in the hospital for purposes of determining whether the patient qualifies for Part A coverage of a subsequent stay in a skilled nursing facility (SNF).  Estate of Landers v. Leavitt, 545 F.3d 98 (2^nd Cir. 2008).  The Court recognized that neither the statute nor regulations define the word “inpatient” and that the Secretary defined inpatient in the subregulatory Medicare Benefit Policy Manual as occurring after a formal physician order for admission.  Although the Court upheld the Secretary’s position in litigation – that only time in formal inpatient status may be counted toward satisfying the qualifying three-day inpatient requirement – it acknowledged that the Secretary has authority under the Medicare law to change his interpretation of inpatient to include time spent in observation.  The Court wrote:

[W]e note that the Medicare statute does not unambiguously require the construction we have adopted.  If CMS were to promulgate a different definition of inpatient in the exercise of its authority to make rules carrying the force of law, that definition would be eligible for Chevron deference notwithstanding our holding today. 545 F.3d at 112.

CMS recognized its existing authority to change its definition in 2005 when it asked for public comment on whether time in observation should be counted towards satisfying the three-day inpatient requirement for Medicare Part A SNF coverage.  70 Fed. Reg. 29069, 29098-29100 (May 19, 2005).   In final rules published in August 2005, CMS acknowledged that most commenters “expressed support for the idea that hospital time spent in observation status immediately preceding a formal inpatient admission should count toward satisfying the SNF benefit’s statutory qualifying three-day hospital stay requirement.”  70 Fed. Reg. 45025, 45050 (Aug. 4, 2005).  CMS reported that “some advocated eliminating the statutory requirement altogether.”  Id.

CMS analyzed the two suggestions separately.  With respect to repealing the three-day requirement entirely, CMS wrote, “we note that such an action would require legislation by the Congress to amend the law itself and, thus, is beyond the scope of this final rule.”  Id.  With respect to counting time in observation towards the qualifying inpatient stay, CMS wrote, “we note that we are continuing to review this issue, but are not yet ready to make a final determination at this time.”  Id.

CMS correctly understood that it could not repeal the three-day statutory requirement by regulation but that it could count the time in outpatient status, if it chose.  Its only stated reason for not counting observation time, despite widespread support of such a change from commenters, was that it wanted to continue reviewing the issue.

Several alternative approaches could resolve the problems that observation status creates for patients, which are chiefly nonpayment by Medicare Part A of post-hospital care in a skilled nursing facility (SNF) because the patient did not have a qualifying three-day inpatient hospital stay, high drug bills during hospitalization, and, for patients without Part B, full charges for hospital care.

1. CMS could define inpatient care to mean an overnight stay.  At CMS’s request, as noted above, the Center for Medicare Advocacy prepared a legal memorandum setting out the agency’s authority to promulgate regulations defining inpatient care (summarized and linked to, above).
2. CMS could urge Congress to enact the Improving Access to Medicare Coverage Act of 2017 (H.R. 1421/S. 568), which counts all time in the hospital for purposes of meeting of the three-day inpatient qualifying stay requirement for SNF coverage.
3. CMS could urge Congress to repeal the three-day inpatient requirement. CMS is currently testing waivers of the three-day requirement in a variety of demonstrations; managed care organizations are permitted to waive the three-day inpatient hospital requirement and most do. The vast majority of Medicare beneficiaries, who are in traditional Medicare, should also have this right.

1. Medically Necessary Oral Health

Although the Medicare statute excludes dental services from coverage, the scope of that exclusion does not encompass oral procedures that are absolutely integral to the medical management of Medicare covered diseases.  We thus ask Congress to direct CMS to exercise its existing authority to cover treatment of dental diagnoses that, if unresolved, can delay or seriously complicate essential medical procedures.  Such delays and complications come at a terrible cost to patients’ health, as well as to the healthcare system and Medicare program.

The American College of Physicians believes such treatment is medically necessary, as do more than a dozen national medical specialty organizations representing cardiologists, oncologists, pulmonologists, transplant and orthopedic surgeons, nephrologists, neurologists, gastroenterologists, rheumatologists, endocrinologists, and critical care physicians.  A chart summarizing their input has been provided.  Examples of specific diseases and procedures for which oral / dental health is necessary, and for which medical clearance is frequently required, include: endocarditis, vascular heart disease, heart valve prostheses, persistent uncontrolled diabetes, solid organ and stem cell transplantation, cancers, cellulitis and sepsis, total arthroplasty, placement of vascular stents and grafts.

The dental exclusion in Medicare is limited and should be interpreted narrowly.   In establishing the dental exclusion, Congress intended for it to apply only to routine oral health care, namely, the basic dental services that people typically receive when they are not sick.  The exclusion is included among a list of other excluded items and services generally regarded as routine, cosmetic, supportive, custodial, and comfort-related. The idea was simply that Medicare would not pay for things people need in the normal course of aging and outside of the context of medical illness.

The Senate Report accompanying the legislation repeatedly emphasized that these exclusions did not impose an absolute bar on coverage, but instead were meant to reserve coverage for “medically necessary” situations.  The report clarified that, notwithstanding the exclusions, Medicare would pay for services and items that were essential to the diagnosis or treatment of medical illness and injury, including complex dental surgeries.  This was in alignment with the Medicare program’s fundamental, remedial purpose to allow people to effectively insure themselves against major medical events in their older age.

While 42 U.S.C. § 1395y(a)(12) excludes payment for services “in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth…”, nothing in this statutory language restricts payment for services that are medically essential to diagnose, treat, or manage serious medical problems that extend beyond the teeth and supporting structures.  Consistent with this, CMS policy construes the dental exclusion as limiting payment for the services of dentists “to those procedures which are not primarily provided for the care, treatment, removal, or replacement of teeth or structures directly supporting the teeth.”(Emphasis added). Medicare General Information, Eligibility and Entitlement Manual, Pub. 100-01, Ch. 5, § 70.2.

Based on this interpretation, CMS has authorized payment for an oral or dental examination prior to kidney transplant surgery.  Medicare coverage in this instance does not run afoul of the dental exclusion because the “purpose of the examination is not for the care of the teeth or structures directly supporting the teeth.  Rather, the examination is for the identification, prior to a complex surgical procedure, of existing medical problems where the increased possibility of infection would not only reduce the chances for successful surgery but would also expose the patient to additional risks in undergoing such surgery.” Medicare National Coverage Determination Manual (MNCDM) Pub. 100-03, Ch. 1, Part 4, § 260.6.  By the same regard, CMS could (and should) likewise authorize payment to actually resolve any identified dental infection, just as Medicare would cover treatment to resolve an infection anywhere else on the body, so that the patient may safely undergo transplant surgery.

CMS recognizes an exception to the dental exclusion to the extent that the statute permits payment for services “furnished as an incident to a physician’s professional services” as defined in 42 U.S.C. § 1395x(s)(2)(A).  CMS interprets this to mean that payment could be allowed for an excluded dental procedure that is incident and integral to a primary covered non-dental procedure.  The caveat, however, is that both procedures must be performed at the same time and by the same dentist. MBPM Pub. 100-02, Ch. 15 § 150.  Under the agency’s exacting test, dental coverage is only granted in extremely limited circumstances, usually in conjunction with jaw surgery.

Rather than taking into account clinical standards and protocols and whether a dental procedure is, from a medical perspective, integral to a covered procedure or course of treatment, the “same time/same dentist rule” arbitrarily hinges coverage on the timing of a dental procedure and who administers it.  Recently, a U.S. district court stated that the strict requirements of the rule “stand in tension” with the remedial ends of the Act, which would “permit payment for dental services whose primary purpose is not merely the care or treatment of teeth.” The Court also suggested that the agency’s application of the rule “is not compelled by the language of the Act and could under certain circumstances lead to results at odds with the purpose of the Act…”  Lodge v. Burwell, 227 F.Supp.3d 198, 213, 215 (D. Conn. 2016).

CMS itself saw the need to depart from its same time/same dentist rule when it authorized coverage for tooth extractions to prepare the jaw for radiation treatment of neoplastic disease.  The obvious justification for allowing an exception in this circumstance is that the medically necessary extractions are incident to the covered radiotherapy notwithstanding that they are performed at a different time and by a different type of physician.  Similarly, CMS can and should ensure that coverage is available in other circumstances in which dental/oral health services are medically integral to a covered treatment or procedure.

For more information see: https://www.medicareadvocacy.org/medicare-info/dental-coverage-under-medicare/

We urge CMS to issue a National Coverage Determination (NCD) or otherwise revise CMS policy to clarify that medically necessary oral health care, including essential, non-routine dental procedures, is covered.  In addition, CMS should revise its “same time/same dentist rule” to permit payment for dental services and oral health care that are, by accepted standards of medical care, incident and integral to a covered treatment or procedure. These changes would not expand coverage beyond what the Medicare statute allows. To the contrary, they would uphold the general statutory exclusion for basic, routine dental care while fulfilling Congress’ goal of covering medically necessary health care, including oral health care.

3. Parity Between Coverage Rules for Off-Label Prescription Drugs in Medicare Parts B and D

Medicare Part D promised Medicare beneficiaries that they would have health insurance coverage for necessary prescribed medications.  Yet for those beneficiaries who rely on an off-label drug to treat an illness or condition, including many for which no other treatment is available, obtaining drug coverage under Part D is difficult at best. Unless Medicare or Congress extends to Part D the standards for determining off-label drug usage under Medicare Part B, or improves access to the drug compendia upon which Part D coverage is based, the promise of Part D is not being kept for beneficiaries who require off-label medications.

In order to be covered under Part D, drugs must be prescribed for a “medically accepted indication,” meaning their use for a particular disease must be approved by the FDA, or if prescribed “off-label” (for a use other than that approved by the FDA), such use must be supported by one of three compendia, identified at Section 1927(g)(1)(B)(i) of the Social Security Act.  (The Act was subsequently modified to allow coverage of anti-cancer drugs if their use is supported in peer review journals.) “Compendia” are encyclopedias of drug chemicals, with information on dosage and usage.  42 U.S.C. §§1395w-102(e)(4), 1395x(t)(2)(B).   Under Part B, however, all drugs, not just those used in an anti-cancer regimen, may be supported by peer reviewed literature alone instead of the higher bar set by inclusion in the compendia.  42 U.S.C. §1395x(t)(2)(B)(ii)(II).

Unfortunately, the burden of proving if a prescribed use of a particular Part D-covered drug has been included in the compendia falls to the Medicare beneficiary, and accessing these compendia can be more complicated than might be imagined.  The compendia are not readily available, and, as a result, many people cannot access the information and cannot substantiate their claim for drug coverage.  They are left without the means to pay for what may be the only medication available to treat their condition or illness.

One example of Part D off-label denials about which we hear frequently from Medicare beneficiaries is coverage of the Lidocaine Patch 5%, which is FDA approved for post hepatic neuralgia (shingles pain) and one of the compendia also approves it for diabetic neuropathy.  It is a highly effective pain reliever and its unique non-narcotic and non-addictive properties make it a benign alternative to opioids, without the risks and devastating side effects of opioids.  One out of every five drugs in the US is prescribed off-label; the Patch is often prescribed off-label to treat pain from spinal stenosis, degenerative disc disease, and severe osteoarthritis.  Because the compendia do not include such uses for this drug, many people are cut off from their primary source of pain relief.  For more information, see https://www.medicareadvocacy.org/medicare-part-d-and-off-label-rx-denials/.

We recognize that off-label drug use, while a common medical practice, is not without controversy.  Because of the controversy, Medicare may have legitimate medical reasons for ensuring that a prescribed off-label drug usage is safe and efficacious before paying for the drug under Medicare Part D.  Nevertheless, in establishing standards for proving that a prescription meets the definition of a medically accepted indication, Medicare cannot create such substantial barriers that the standard will almost never be met.  The current standard interferes with a beneficiary’s right to receive Medicare Part D coverage for a drug prescribed by his or her authorized prescriber.  For more information, including the recommendations outlined below, see a 2010 report authored by the Center at.

The following recommended changes could protect the right of beneficiaries to receive Medicare Part D coverage for a drug prescribed to them that meets current standards for a medically accepted indication, including off-label uses.

First, Medicare should establish a process whereby all beneficiaries, their providers and their advocates, have access to the compendia.  Under this process:

• Part D drug plans should be required to inform beneficiaries, when seeking prior authorization or coverage of a prescription, that the requested use is an off-label use which must be supported by the compendia.
• Part D notices should be modified to state that the denial of coverage is based on an off-label use, that support for the usage must be found in one of the compendia, and that describes the process for requesting access to the compendia.
• Part D drugs plans should be required to provide beneficiaries, prescribers and their advocates with copies of all relevant compendia monographs.  Where no such monographs exist, drug plans should be required to provide certified statements that they have reviewed the compendia and the requested off-label drug usage is not included.  Drug plans that fail to comply with these requirements or that are found to misrepresent the content of the compendia should be subject to sanctions.
• Where the prescribed off-label usage is not supported by the compendia, Part D drug plans should be required to provide beneficiaries with information about alternative drug therapies that are available on their formularies.
• Beneficiaries, prescribers, and advocates should be able to access the compendia by calling the Medicare information line, 1-800-MEDICARE.

CMS should urge Congress to revise the appeals process to provide greater protection to beneficiaries.

• The burden of proof should be changed so that a drug plan is required to substantiate that a prescribed usage is not approved by the FDA or included in the compendia.
• Drug plans should be required to certify that they have reviewed the compendia and the requested off-label drug usage is not included.
• Non-compliance by a drug plan should result in the plan being sanctioned by Medicare.

CMS should urge Congress to extend to Medicare Part D the standards for determining off-label drug usage under Medicare Part B.

• A beneficiary who wants a Part D drug plan to cover an off-label prescription should be allowed to submit supportive clinical evidence from peer reviewed medical literature.
• Medicare should provide to Part D plans and others guidance concerning the publications that may be used for this purpose.

4. Duals and Durable Medical Equipment (DME) Access

The Center would like to thank CMS for the State Information Bulletin issued this year encouraging states to adopt strategies to improve dual eligible beneficiaries’ access to DME. The Bulletin addressed a serious and persistent obstacle to obtaining DME faced by people dually eligible for Medicare and Medicaid in many states because of the mismatch of processing rules in the two programs. We applaud CMS for addressing concerns raised by beneficiary advocates and for taking this crucial step. We ask for ongoing CMS attention to this issue, and look forward to continuing to work with CMS to ensure beneficiary access to DME.

Thank you for this opportunity to comment. Please does not hesitate to contact Kata Kertesz, Policy Attorney at the Center for Medicare Advocacy, with questions at kkertesz@medicareadvocacy.org.

Sincerely,

Kata Kertesz