Healthcare regulations: how will your customers be affected?

Image credit: Lawrence Jackson (whitehouse.gov), public domain via Wikimedia Commons 

Image credit: Lawrence Jackson (whitehouse.gov), public domain via Wikimedia Commons 

Understanding the impact of upcoming regulatory actions on your medical device or life sciences company is important. Of equal importance are the effects pending rules and regulations could have on your customers and potential customers.

Case in point: the Centers for Medicare & Medicaid Services (CMS) is about to issue final rules for its Merit-based Incentive Payment System (MIPS) calculations. But before we dig in, a little background information is in order.

When Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), some of its goals were to improve the quality of patient care, change the way clinicians were reimbursed by Medicare, and fix the seemingly perpetual problem of having to defer the steep, automatic payment cuts mandated under the previous Sustainable Growth Rate (SGR) formula. It also attempted to ease the regulatory reporting burden on smaller practices.

As a result of the passage of MACRA, CMS created a new Quality Payment Program (QPP) and asked practitioners to select one of two tracks, either MIPS or Advanced Alternative Payment Models (APMs). 

Fast forward to 2017. In June of this year, CMS proposed that Medicare Part B drug payments be included in the clinician’s total Medicare-allowable charges when calculating MIPS payments. In contrast, under the current system, only the clinician’s fee schedule services are included. Public comments closed on August 21, 2017. 

A recent study, funded by The Pharmaceutical Research and Manufacturers of America (PhRMA), supports the conclusion that under the proposed rule, specialists who administer a higher proportion of Part B-eligible drugs relative to their peers will be most affected. Immunology/allergy, hematology, medical oncology, ophthalmology and rheumatology are among the fields of specialization identified as having the potential for wider positive and negative payment adjustments.

On the other hand, urologists see a silver lining. According to a recent article in Urology Times, “96% of urologists are projected to receive a neutral or positive adjustment, and 72% of urologists may receive an exceptional payment adjustment in 2020”. 

Companies will need to closely monitor the regulatory environment as this story unfolds, particularly if their customers practice in any the fields of specialization mentioned earlier. Unpredictability with regard to reimbursement will make these customers more cautious and more price conscious. It may change their prescription practices. And many practitioners simply aren’t prepared for MACRA changes and may make critical decisions late in the game.

Disruptive technologies and creative pricing packages that address these concerns will have an advantage, as will solutions that share some of the purchase risk.