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Key Legislative and Regulatory Developments MedPAC June Report Analyzes Equalization of Outpatient Department and ASC Payment Rates for Certain Eye Care Procedures On June 14, the Medicare Payment Advisory Commission (MedPAC) released its June report to Congress. MedPAC releases these reports to Congress in March and June of each year, which typically include a number of recommendations regarding delivery of services covered by Medicare and financing of the program. One of MedPACs analyses included in the June report estimated the financial effects of equalizing payment rates across settings for certain procedures which are commonly performed in both the outpatient department and ambulatory surgical center (ASC) setting. The analysis identified 12 ambulatory surgical procedures, specified by their ambulatory payment classification (APC), for equalization based on criteria discussed in the report. These APCs included nine eye procedure groups, including laser eye procedures and cataract procedures, all of which are reimbursed at a higher level in the hospital outpatient setting than in the ASC setting. The Commission did not vote on a recommendation for this policy, but the analysis estimated that equalizing these payment rates at the lower ASC reimbursement level could reduce program spending and beneficiary cost sharing by $590 billion in one year. The June report also included other topics of interest related to Medicare payment policies. MedPAC reiterated the sense of urgency for Congress to repeal the sustainable growth rate (SGR), emphasizing that the price of repeal will only become more costly in future years. MedPAC recommended that Medicare set target readmission rates for hospitals each year, and exempt hospitals with low readmissions from certain penalties. Additional analyses in the report examined competitively determined plan contributions (CPCs) or premium support models, Medicare hospice payments, bundled payments for post-acute care, and care needs for dualeligible beneficiaries. The full report also included Congressionally-mandated updates on Medicare ambulance add-on payments, geographic adjustments of payments to physicians, and Medicare payment for outpatient therapy services. The full report is available HERE.

FDA Releases Long-Awaited Regulation on Medical Laser Products On June 21, the Food and Drug Administration (FDA) released a proposed rule on standards for the performance of medical laser products and other laser products with request for comment. Issuance of this proposed regulation has been stalled for several years; it was first released and withdrawn in 1999, and resurrected in 2006. The current version has been stalled through the regulatory inspection process within the Administrations Office of Management and Budget (OMB) since May 24, 2011, when it was submitted for clearance by OMB. 1008 Upper Gulph Road Wayne, PA 19087

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The proposal is meant to harmonize requirements with the standards proposed by the International Electrotechnical Commission (IEC), an international standards organization for all forms of electrotechnology. FDA explained that when its performance standard was updated over ten years ago, many of todays medical laser products had not been invented. In the interim, IEC has continued to update its standards while FDA standards are antiquated. To that end, FDAs proposed guidance adopts many of IECs standards to aid in compliance, and offers some modifications of IEC standards that FDA believes are more precise. The provisions are meant to minimize exposure to laser radiation during use, through measures such as regulating laser output, safety, and calibration procedures requirements. The provisions also address requirements about warning labels, component parts, and engineering specifications. Comments on the rule are due by September 23. The full text of the proposed regulation is available HERE.

CMS and Lawmakers Engage in Efforts to Achieve Hospital Pricing Transparency The Centers for Medicare and Medicaid Services (CMS) has taken action on its spoken commitment to improve the free flow of health data and increase transparency in the health care system, with the publicly available release of hospital pricing data. On June 3, CMS released hospital outpatient provider charge data for 30 Ambulatory Payment Classification (APC) groups paid under the Outpatient Prospective Payment System (OPPS) for calendar year 2011. This reporting follows CMS release of provider inpatient charges earlier this month. This public disclosure has shown that pricing for services varies widely among both outpatient and inpatient procedures. The data is available HERE. Senator Chuck Grassley (R-IA) and Senator Ron Wyden (D-OR) have initiated efforts to statutorily require public reporting of Medicare pricing data, with the introduction of S. 1180, the Medicare Data Access for Transparency and Accountability Act (Medicare DATA Act), on June 18. The bill would require the Secretary of Health and Human Services (HHS) to establish a publicly searchable database of Medicare payments that consumers could access at no cost. The bill also would ensure that Medicare payments to physicians and suppliers do not fall under a Freedom of Information Act (FOIA) exemption. The bills sponsors say taxpayers have the right to access this information, and more transparency is needed to curb wastefulness in the Medicare program. The full text of the bill is available HERE.

1008 Upper Gulph Road Wayne, PA 19087

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E&C Health Subcommittee Holds Hearing on SGR Reform Draft; Releases Updated Draft with Support from W&M Committee On June 5, the House Energy and Commerce (E&C) Health Subcommittee held a hearing entitled Reforming SGR: Prioritizing Quality in a Modernized Physician Payment System. The hearing focused on a legislative draft released by the Committee last month setting forth the various approaches that Sustainable Growth Rate (SGR) reform could take and featured testimony from one panel of physician payment stakeholders. During the hearing, there was bipartisan support of replacing the SGR with a system that rewards quality through creation of a quality-based fee-for service (FFS) payment system that financially incents the development of quality measures. Members at the hearing were mainly concerned about the process for developing quality measures which could then be tied to physician payment based on performance. On June 28, the E&C Committee released updated draft SGR repeal legislation outlining two methods for incorporating the value-based payment update to the FFS model. Each method evaluates a providers performance with regards to the quality measures set by their selfselected Peer Cohort. Performance is reflected by a composite score, which is reached through one of the two methods: 1. The threshold or benchmark update incentive payment model would enable all providers to achieve the maximum incentive payment or update. Provider-determined benchmarks would be set for each Peer Cohort to determine the update that providers would receive. 2. The percentile update incentive payment model would competitively rank providers within a Peer Cohort, and payment updates would correspond to the providers percentile ranking compared to peers. The updated E&C draft is available HERE. The Committee is seeking feedback from stakeholders, and has issued specific questions of interest, which can be found HERE. E&C Chairman Fred Upton (R-MI) has indicated he plans to markup this legislation before the August recess. Also on June 28, House Ways and Means Committee Chairman Dave Camp (R-MI) released a statement expressing his support for the E&C draft legislative framework and said that this is an important step in gaining stakeholder feedback on the failed Medicare physician payment system. These two House committees have been working together to craft a new physician payment model; the Senate Finance Committee is conducting its own review of physician payment, but has not issued legislative language or any specific recommendations for how the SGR formula would be replaced.

1008 Upper Gulph Road Wayne, PA 19087

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Appropriations Committees Pass Bills Funding FDA for FY 2014; Budget Battles Loom During the week of June 17, the Senate Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies (Ag-FDA) Appropriations Subcommittee and the Full Senate Appropriations Committee passed its FY 2014 Ag-FDA Appropriations bill. The bill provides $2.552 billion for FDA in FY 2014, a $96 million increase from FY 2013 including an additional $19 million for FDAs medical product review centers. The report also included language encouraging the Administration to reconsider the inclusion of user fees when calculating sequester. This amount is $65 million more than the FDA funding in the House FY 2014 Ag-FDA Appropriations bill, which was passed by the House Appropriations Committee on June 13. Furthermore, the Senate Appropriations Committee has chosen to fund all federal discretionary programs at a level of $1.058 trillion for FY 2014, which is above the Budget Control Act (BCA) spending caps and would trigger a sequester. House Appropriators set the federal discretionary budget at a total of $967 billion, which is equal to the overall BCA cap for FY 2014; however, because these funds are not distributed more evenly between defense and non-defense programs, as prescribed under the rules of the BCA, the House bill would also trigger a sequester. As of today, any future sequestration order would impact FDA user fees paid by industry. It remains unclear if the House and Senate will conference to work out any differences between their appropriations bills before negotiations to raise the debt-limit, avert a government shutdown, and possibly turn off the sequester for FY 2014 begin. Ophthalmic Interest Group Activity World Glaucoma Congress The World Glaucoma Congress is the largest glaucoma meeting held anywhere in the world to date. Following the successful Congresses in Vienna, Singapore, Boston and Paris, WGC-2013 will be open to all glaucoma care providers including glaucoma specialists, other ophthalmologists, optometrists, nurses, technicians, and others with an interest in glaucoma. A technical exhibit area will be available to learn about the latest diagnostic and therapeutic technologies and possibilities. Dates: July 17 20, 2013 Location: Vancouver, Canada For more Information: http://www.worldglaucoma.org/WGC/WGC2013/index.php

1008 Upper Gulph Road Wayne, PA 19087

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American-European Congress of Ophthalmic Surgery (ACOS) ACOS will hold its annual summer symposium. Dates: August 1 - 4, 2013 Location: St. Regis Deer Valley, Utah For more Information: http://acosurgery.org/meetings_events.asp?id=summer2013#symposium

1008 Upper Gulph Road Wayne, PA 19087