HHS throwing water on the opioid epidemic fire

As the opioid epidemic in the United States continues, HHS announced a group of new actions to build on the HHS Opioid Initiative–which focuses on (1) improving opioid prescribing practices; (2) expanding access to medication-assisted treatment (MAT) for opioid use disorder; and (3) increasing the use of naloxone to reverse opioid overdoses–and the National Pain Strategy, the federal government’s first coordinated plan to reduce the burden of chronic pain in the U.S.

The new actions include a Final rule expanding access to buprenorphine, a medication to treat opioid use disorder, and other MATs. HHS also launched more than a dozen new scientific studies on opioid misuse and pain treatment and soliciting feedback to improve and expand prescriber education and training programs. The department took other steps on opioids in response to physician concerns about financial incentives to prescribe the drugs.

MAT Final rule

In a Final rule (81 FR 44712, July 8, 2016), the Substance Abuse and Mental Health Services Administration (SAMHSA) took action allowing more patients to receive buprenorphine prescriptions each year. Practitioners must have a waiver to prescribe buprenorphine–to be eligible for the waiver, the practitioner must have additional credentialing in addiction medicine or addiction psychiatry from a specialty medical board and/or professional society, or practice in a qualified setting. Under the waiver, the number of patients to whom they may prescribe the MAT is limited annually; under the Final rule, practitioners who have had a waiver to prescribe buprenorphine for up to 100 patients for one year or more, may now obtain a waiver to treat up to 275 patients. A supplemental notice of proposed rulemaking (81 FR 44576, July 8, 2016) asked for input on increasing the highest patient limit for qualified physicians to treat opioid use disorder under the Controlled Substances Act to 275. The proposal would help assure compliance with the MAT Final rule by adding reporting requirements for MAT prescribers.

Opioid misuse research and training

According to a request for information (81 FR 44640, July 8, 2016), deaths related to opioid analgesic–a class of prescription drugs such as hydrocodone, oxycodone, morphine, and methadone used to treat both acute and chronic pain–overdose have quadrupled since 1999. To fill knowledge gaps and improve the country’s ability to fight the opioid epidemic, HHS is launching more than 12 new scientific studies on opioid misuse and pain treatment. It released a related report and inventory on the opioid misuse and pain treatment research being conducted or funded by its agencies, which will help stakeholders and external funders of research avoid unnecessarily duplicating research. In addition, HHS developed activities that support opioid prescriber education, and seeks comment on current HHS prescriber education and training programs and proposals that would augment ongoing HHS activities.

Elimination of potential financial incentive to prescribe opioids

In an advance release of its Proposed rule for the hospital outpatient prospective payment system (OPPS), CMS suggested eliminating any potential financial incentive for doctors to prescribe opioids based on patient experience survey questions. The Hospital Value-Based Purchasing (VBP) Program ties payments to performance measures, including a pain management dimension. Providers and other stakeholders have told CMS that they are concerned about the pain management dimension putting pressure on staff to prescribe unnecessary opioids; the agency proposed removing the pain management dimension for purposes of the Hospital VBP Program “in an abundance of caution.” For more on the OPPS Proposed rule, see Patient-focused and physician-supporting changes proposed for OPPS and ASCs, Health Law Daily, July 7, 2016.

Senators oppose Part B Drug Payment Model with a letter

CMS should immediately withdraw its Part B Drug Payment Model, according to a letter fourteen Senate Republicans sent to the agency on April 28, 2016. The letter warns CMS that its demonstration—which is designed to test alternative payment models for drugs furnished under Part B—would “severely disrupt care for vulnerable beneficiaries.” The opposing senators’ letter expresses concern that the payment model’s reduction in drug payments could reduce beneficiary access to drugs and decrease the quality of care.

Part B drugs

CMS announced the Part B Drug Payment Model in a March 11, 2016 Proposed rule (81 FR 13230). The demonstration is authorized by the Center for Medicare and Medicaid Innovation (CMMI), created by Section 3021 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Traditionally, Part B pays physicians and hospital outpatient departments the average sales price (ASP) of a drug, plus a 6 percent add-on (ASP+6). Based upon concerns that the ASP+6 model does not adequately incentivize physicians to choose the lowest cost therapy to effectively treat a patient, the Part B Drug Payment Model seeks to test a new model through a two phase demonstration (see Will alternative drug payment models reduce Part B expenditures?, Health Law Daily, March 9, 2016).


The first phase, scheduled to begin within 60 days of the rule’s finalization, would replace the ASP+6 payment with a drug payment of ASP+2.5 percent, plus a flat fee of $16.80. CMS hopes that by reducing the add-on payment, providers will be incentivized to provide less expensive drugs. In the second phase—starting January 1, 2017, at the earliest—CMS would use value-based purchasing (VBP) tools to pay for certain Part B drugs.


The senators’ letter cautions that the ASP payment reduction could harm beneficiaries by creating a reimbursement environment where some providers’ drug acquisition costs exceed the Medicare payment amount. The letter suggests that such burdens would be most significantly experienced by small and rural providers. The senators expressed greater concern over the VBP phase of the demonstration, asserting that the ideas “are numerous, complex, and not sufficiently vetted.” In addition to the senators’ opposition, over 300 physician-, pharmaceutical-, and patient-centered groups sent a letter to Congress asking lawmakers to ask CMS to withdraw the rule. The groups’ letter echoes many of the worries set out by the Republican senators. Calling the initiative “misguided and ill-considered,” the groups warned that the CMS plan could force beneficiaries to switch away from appropriate treatments.

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Value-based purchasing may not be encouraging much improvement

To improve the Value-Based Purchasing (VBP) program CMS should address four concerns, according to a report by David Muhlestein, Ph.D., J.D., of Leavitt Partners. CMS should (1) empirically evaluate whether penalties are large enough to lead providers to make changes across the four domains; (2) structure quality measures so that only meaningful differences in performance lead to meaningful differences in payments; (3) decrease the measurement volatility by increasing the number of cases for each of the metrics and creating an alternative VBP program for low-case volume hospitals; and (4) consider urging Congress to reconsider combining the VBP program with the readmission and hospital-acquired conditions (HAC) reduction to better align measures across programs, the report recommended.


The VBP program was implemented by CMS in 2013 under Section 3001 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-14) as one of three value-based programs for hospitals. The VBP program is different from its counterparts in that it is structured to be revenue neutral, allowing some hospitals to receive bonus payments while others receive penalties for inpatient payments. It also evaluates performance across four weighted domains: clinical process of care (10 percent), patient experience of care (25 percent), clinical outcomes (40 percent), and efficiency (25 percent).

Estimated impact on financial performance

For hospitals involved in the VBP program, an average of 35.4 of discharges are paid for by Medicare, and 46.1 percent of revenue comes from inpatient care. Because the VBP modifier only affects Medicare inpatient care, the modifier can only affect about one-sixth of hospital revenue. The report estimates that, for FY 2016, the VBP modifier will affect a hospital’s income with a maximum 0.35 percent decrease in total revenue or a maximum 0.8 percent increase in total revenue. However, the report estimates that only 4.9 percent of hospitals will see a penalty or bonus payment that exceeds 0.25 percent of net revenue. Of those hospitals, only 8.3 percent will be penalized.

Performance over time

Hospitals may improve their performance each year. The report shows that, between 2015 and 2016, 45 percent of hospitals received bonuses in both 2015 and 2016, while 30 percent were penalized both years. About 25 percent of hospitals made a change between the two categories, with 11 percent moving from bonus to penalty and 14 percent moving from penalty to bonus. The report also classified hospitals into quintiles based on their 2015 and 2016 performance and found a surprising amount of movement between the quintiles, with 40 percent moving up or down one quintile, 13 percent moving two quintiles, 4 percent moving three quintiles, and 1 percent moving four quintiles.

Policy implications

While the VBP program is intended to give incentives for hospitals to improve their quality of care, the relatively small financial incentives may not be sufficient enough to justify the high investment required to implement significant changes for many hospitals, especially considering that the potential for return is unknown. More work needs to be done, the report stated, to determine whether hospitals that had higher penalties improved more than those with smaller penalties or bonuses. To encourage improvement, the report suggested moving toward measures that have clear pathways for improvement, with such measures weighted higher than those with a more nebulous pathway toward improvement. To allow hospitals clearer performance benchmarks, the report also suggested limiting measures used in the program to those where there is a meaningful distribution of performance, limiting the number of potential scores in each category to those that are substantially different.


High levels of volatility in VBP program results may indicate that the program is not adequately measuring true underlying quality and that program measures may be susceptible to random variation, as opposed to a hospital actually alternating between worsening and improving every year. Because smaller facilities tended to be more volatile, the report suggested creating an alternative program for those smaller hospitals to allow better monitoring of changes in quality.

Overlap with other Medicare initiatives

Measures within the VBP program, the Hospital Readmissions Reduction Program (HRRP) and the Hospital Acquired Conditions (HAC) reduction program are not fully coordinated, the report noted. Rather than administering separate programs, the report suggested urging Congress to combine the programs into one to better align all quality and performance measures across programs, allowing hospitals to be better-positioned to prioritize their efforts.