| |  | Executive Health Brief | — SKIN SUBSTITUTES This is an area I’ve written about before, simply because there’s so much money involved. In 2019, Medicare spent $256 million for the specialized bandages, which can be made out of dried bits of placenta. Now, CMS is on track this year to spend $15 billion — yes, billion with a B — on them, according to an analysis of federal data from the National Association of ACOs and the Institute for Accountable Care. CMS has proposing several updates, including a payment cap of roughly $800 per square inch, or $125 per square cm, which the agency says would reduce Medicare spending on the products by 90 percent. It would also reclassify them. Right now, they’re biologics covered under Medicare Part B — which includes physician services and medical equipment — but the proposal would regroup them as supplies. “The deliberate misuse of skin substitutes is endangering America’s seniors and pricing schemes are undermining the integrity and the long-term sustainability of Medicare,” Emily Brower, the leader of NAACOS, said in a statement. → The average cost of these products was nearly $6,000 per square inch, according to a review of the data by the New York Times, which found they could cost more than $21,000 per square inch. Some organizations, including Accountable for Health, have been advocating for CMS to finalize the payment cap, arguing that there has been rampant fraud in the system and more expensive products don’t necessarily lead to better patient outcomes. Politically connected skin substitute manufacturers and other provider groups, meanwhile, have been urging the administration to change course — arguing the cuts are too drastic. — TELEHEALTH POLICY FOR TEACHING PHYSICIANS During the pandemic, the federal government relaxed policies around Medicare reimbursements for doctors’ visits, allowing people to see their providers virtually. In the hospital payment rules, CMS addresses some of these policies, but one being watched most closely is a proposal to roll back telehealth flexibilities for certain visits at teaching hospitals. Since the pandemic, teaching physicians have been allowed to virtually supervise telehealth appointments involving medical residents, doctors who’ve finished medical school but are still training in the field, and bill Medicare for them. CMS proposes to roll back the flexibility, except in rural areas. “Does it make logical sense for the physician to be sitting next to the resident, right on the call, with the patient, who is also virtual?” said Gayle Lee, the senior director of policy and regulatory at Association of American Medical Colleges, which represents teaching hospitals. “From a quality and safety perspective, it's probably not really any different.” The flexibility for everyone to be remote, she says, “opens up more training opportunities for residents.” — INPATIENT-ONLY LIST Medicare maintains a list of services that it will only cover in an inpatient setting because they’re more complex procedures — usually surgeries — that typically require close monitoring or a stay in the hospital. These include amputations of legs and arms, appendectomies, certain heart surgeries, and treatment for spine fractures. CMS will often reevaluate the list, adding or removing services as advancements in technology or learning are made, but the agency has proposed in the hospital payment rule to eliminate the list entirely — arguing it would “give beneficiaries more choices on where to obtain care.” The Trump administration moved to do this in his first term, but the Biden administration rolled much of it back. It could further threaten hospital reimbursement and providers worry it would limit the ability to track patient outcomes for more serious services since they’re not staying in the hospital — though clinicians would still likely recommend inpatient care for the most intensive procedures. → The removal would happen over three years, which would allow some services to be treated on an outpatient basis — such as at a surgery center. To kick it off, hundreds of services would be removed in the first year. “CMS’s renewed proposal to eliminate the [inpatient-only] list represents not only a regulatory policy shift but a broader inflection point in the delivery of surgical care,” according to a report from Trilliant Health, an analytics company. → It’s something commercial insurers offering Medicare Advantage plans are also keeping an eye on: Following the release of the proposal, Aetna announced it would be looking more closely at medical claims for inpatient care, and reimbursing providers at a lower rate if certain criteria isn’t met. The hospital industry has urged the company to rescind its new policy. This is something to watch within the insurance industry, especially if CMS finalizes the removal of the inpatient-only list. — SITE-NEUTRAL PAYMENTS The Trump administration has also proposed to expand its rules around site-neutral payments, which ensure that providers are paid by Medicare at the same rate regardless of where a service is provided. The proposal would reimburse physician-administered drugs in certain hospital-owned outpatient clinics at the same rate a physician’s office would receive. (Sole community hospitals in rural areas would be exempted.) CMS estimated the provision would reduce Medicare spending by $280 million next year alone, a direct cut to providers. The industry has weighed in to oppose the changes, arguing the agency has overstepped its authority. “We oppose the proposal to expand ‘site-neutral’ cuts and eliminate the inpatient-only list, as both policies fail to account for the real and crucial differences between hospital outpatient departments and other sites of care,” said Ashley Thompson, the American Hospital Association’s senior vice president of public policy analysis and development, said in a statement. | 
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