WASHINGTON WIRE

In this issue, you'll find:

• CMS Quality Measures For Physician Reporting And Prospects For Legislative Action In The Lame-Duck
• Changes to Medicare Mobility Device Benefit Raise Access Concerns
• OIG Clarifies Guidance for Physician Investment in Medical Device Companies
• CMS Announces Staff Changes
• Congress in Recess Until November 9, 2006

Top Story

CMS Quality Measures For Physician Reporting And Prospects For Legislative Action In The Lame-Duck

The Centers for Medicare & Medicaid Services published a list of measures for its Physician Voluntary Reporting Program (PVRP). The intent is to furnish doctors with confidential feedback on their data accuracy, reporting rates, and quality of care.CMS said it plans to select a subset of the 86 quality measures covering 32 of 39 specialties for use in the reporting program for 2007 "in order to achieve an appropriate balance in measures to be reported by different specialties."

CMS announced its pilot PVRP program in October 2005 as a way to measure quality of services provided and furnish doctors with confidential feedback. The program began this year with an initial set of 16 measures to determine quality of service provided in primary care, surgery, nephrology, and emergency medicine. Measures will be expanded to cover as many medical specialties as feasible, using evidence-based, valid measures, with preference given to measures that are adopted by the Ambulatory Quality Care Alliance. Preference also will be given to those measures endorsed by the National Quality Forum. CMS will consider input from relevant professional associations and stakeholders for any measures not then endorsed by either group.

On Capitol Hill, it remains to be seen whether action pushing further implementation of quality measures is possible in the coming Congressional "lame duck session," i.e. post-federal-election day. Prior to when Congress left town for electioneering in late September, the American Medical Association (AMA) and physician specialty groups had pushed for Congress to address the continuing problems with the Sustainable Growth Rate portion of the physician fee schedule payment system. However, budget gimmickry delaying the impact (of fixing the projected cuts) to future years was cause for the AMA to reject the proposals made at the time. Further legislation addressing quality reporting measures would have been tied to such legislation. This legislation would also provide the opportunity for Congress to address other Medicare issues as well, including a therapy caps extension, the imaging cuts from earlier this year, etc.

Political developments since then, that have tightened federal election races, have also narrowed the possibility of many issues being addressed in the lame duck session. If the November elections yield a change in leadership or very narrow majorities in either or both chambers, it is expected that Congress will only be able to pass legislation necessary to keep the Federal government running until next Congress starts in January, thereby leaving further legislative action of any kind on Medicare to some time next year.

Health Care News

Changes to Medicare Mobility Device Benefit Raise Access Concerns

Medicare is scheduled to implement significant changes to its mobility device benefit while stakeholders contend these changes will significantly reduce access to mobility devices for people with disabilities.

In August, the Centers for Medicare and Medicaid Services (CMS) released a final local coverage determination (LCD) for power mobility devices (PMDs) that would implement a series of new payment codes for power wheelchairs and scooters. The LCD would provide Medicare coverage for those devices with functional capabilities that place them into either Groups 1 (low- functioning), Group 2, or Group 3 (high-functioning) PMDs. Stakeholders state that the new coverage standards fail to take into account the functional needs of many beneficiaries with mobility impairments.

Additionally, CMS recently released new reimbursement levels for power wheelchairs that industry sources estimate will reduce payments up to 40% for some high-end wheelchairs.

Although a follow-up clarification to the LCD alleviate some initial access concerns, consumers, clinicians, providers and manufacturers are charging that the coverage changes, combined with the reimbursement cuts, will prevent access to the high-end devices that many individuals with disabilities require for daily activities.

Several members of Congress have also expressed concern with these changes, asking for a delay in the implementation of these policies and encouraging reconsideration of the new LCD and reimbursement levels based on the expected impact on beneficiary access. However, it appears CMS intends to move forward with implementation of these policies on November 15, 2006.

OIG Clarifies Guidance for Physician Investment in Medical Device Companies

In an October 6, 2006 letter to the Advanced Medical Technology Association (AdvaMed), the Department of Health and Human Services (HHS) Office of Inspector General (OIG) clarifies the current anti-kickback guidance applies to physician investment in medical device manufacturers and distributors.

The HHS OIG's letter was a response to a September 6, 2006 letter from AdvaMed which addressed the increasing frequency of physicians having equity investments in medical device companies while also generating revenue for the companies. In the letter AdvaMed sought guidance on the applicability of the anti-kickback statute as well as a 1989 Special Fraud Alert that specifically addressed certain joint venture arrangements where both investors are in a position to refer to the joint venture. AdvaMed also requested publication of additional factors the OIG considers relevant to physician investment in medical device companies.

The OIG response to AdvaMed confirmed that the OIG guidance is current and applicable to physician investment in medical device manufacturing and distributing companies and advised stakeholders involved in joint ventures to pay close attention to this guidance. The OIG noted that because the statute is intent-based, each arrangement is scrutinized on a case-by-case basis. The OIG also confirmed that the amount of revenues generated by a physician investor, whether directly or indirectly, is "a relevant factor" when it comes to evaluating a joint venture under the anti-kickback statute.

CMS Announces Staff Changes

On Monday, October 16, 2006, Leslie Norwalk assumed the position of Acting Administrator at the Centers for Medicare and Medicaid Services (CMS), replacing Dr. Mark McClellan. Shortly after taking office, Norwalk released a statement outlining the new staff.

Herb Kuhn will serve as the Acting Deputy Administrator as well as remain the Director of the Center for Medicare Management. Marty Corry will act as special assistant to the Acting Deputy Administrator.

Jennifer Stolbach, Stephanie Hough, and Molly Schild will serve as special assistants on various issues.

At this time, it is remains unclear if President Bush will nominate Norwalk to be permanent Administrator of CMS.

Upcoming Events

Congress in Recess Until November 9, 2006

For More Information

For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call (202) 466-6550 and ask for the Legislative Practice Group.

Powers Pyles Sutter & Verville P.C. is a full service law firm specializing in health care and education law and located at 1875 Eye St., NW 12^th Floor, Washington DC 20006

© Copyright 2005, Powers Pyles Sutter & Verville P.C.

All rights reserved.