Regulatory Scoring Agency: Health and Human Services Rule title: Outpatient Prospective Payment RIN 0938-AP41 RIA No Stage Publication Date Proposed 7/20/2009 Rule summary: This proposed rule would revise the Medicare hospital outpatient prospective payment system (OPPS) to implement applicable statutory requirements and changes arising from our continuing experience with this system. In this proposed rule, we describe the proposed changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. These changes would be applicable to services furnished on or after January 1, 2010. In addition, this proposed rule would update the revised Medicare ambulatory surgical center (ASC) payment system to Topic 1: Transparency Score Comments A. How easily were the RIA, the proposed rule, and any supplementary materials found online? 4 1A B. How verifiable are the data used in the analysis? 4 1B C. How verifiable are the models and assumptions used in the analysis? 3 1C D. Was the Regulatory Impact Analysis comprehensible to an informed layperson? 2 1D Total 1 (Sum of A, B, C, and D) 13 Topic 2: Accountability Score Comments A. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them? 1 2A B. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve? 1 2B C. How well does the analysis assess the effectiveness of alternative approaches? 2 2C D. How well does the analysis assess costs and benefits? 2 2D Total 2 6 Topic 3: Leadership Score Comments A. Does the proposed rule or the RIA present evidence that the agency used the Regulatory Impact Analysis? 3 3A B. Did the agency maximize net benefits or explain why it chose another alternative? 0 3B C. Does the proposed rule establish measures and goals that can be used to track the regulation’s results in the future? 1 3C D. Did the agency indicate what data it will use to assess the regulation’s performance in the future and establish provisions for doing so? 1 3D Total 3 5 Total Score 24 Rule Title RIN Transparency Accountability Agency Pub Date RIA separate? Total (F+G+J) Health0938-AP41 Services 7/20/2009 No and Human Outpatient Prospective Payment 24 13 6 Quality (F+G) Leadership 1A 1B 1C 1D 2A 2A1 2A2 19 5 4 4 3 2 1 1 2 2A3 2A4 2A5 2B 2B1 2B2 2B3 2B4 2C 0 0 1 1 1 1 0 0 2 2C1 2C2 2C3 2C4 2D 2D-1 2D-2 2D-3 2D-4 2 2 2 3 2 3 4 2 1 2D-6 2D-7 2D-8 2D-9 2D-10 3A 3B 3C 3D 1 0 0 4 2 3 0 1 1 Transparency (Accessible, Verifiable, Peer-reviewed, and Comprehensible) Category Score Com. No. Comment 0938-AP41 can be found on regulations.gov using the RIN and a keyword search, as well as on the Department of Health and Human Service's website. A link can be found five clicks from the home page by clicking on regulations, regulations and guidance under medicare, then on Quarterly provider updates- regulations. Here, search under QPU July-August 2009. The Department A. How easily were the RIA , offers a list of proposed rules. The reader has to know what the the proposed rule, and any "quarterly provider update" is in order supplementary materials to find the regulation and RIA on the found online? 4 1A website. The data used to calculate payments to hospitals are available for purchase from HHS: "In addition, below in this section we discuss the file of claims that comprise the data set that is available for purchase under a CMS data use agreement" (p. 24). Links to the HHS website provide additional information about the data. Many other data are reproduced in B. How verifiable are the appendices and available on the HHS data used in the analysis? 4 1B website free of charge. Calculations are explained in detail, and links are provided to some supporting info on the HHS website. Many decisions changing the way services will be coded are justified based on some logic, references to an advisory panel, or HHS's judgment. Some studies by outside C. How verifiable are the contractors that supported these models and assumptions decisions are cited and sometimes used in the analysis? 3 1C linked. The text includes a huge number of acronyms, abbreviations, and jargon. Exposition of the calculations is very turgid, though all the relevant explanations are there. Full D. Was the regulatory understanding requires patience, impact analysis persistence, and some specialized comprehensible to an knowledge of the program, not just informed layperson? 2 1D graduate training in economics. Accountability (Outcomes, Costs, Systemic Problem, and Alternatives) Category Score Com. No. Comment A. Identify the desired outcomes: 1 A perfunctory sentence says the goal of the prospective payment system is to ensure that the government pays appropriately and to encourage efficiency in treatment. "In this proposed rule, we Does the analysis clearly set forth proposed changes to the Medicare identify ultimate outcomes hospital OPPS for CY 2010 to implement statutory that affect citizens’ quality of requirements and changes arising from our life? 1 2A-1 continuing experience with the system." Does the analysis identify The analysis does not measure these outcomes. It how these outcomes are to just calculates payment rates. Payments are be measured? 2 2A-2 measured in dollars. Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes? 0 2A-3 No theory is presented. Does the analysis present The is no emprical support that would justify the credible empirical support claim that these payment rates are appropriate for the theory? 0 2A-4 and lead to efficient care. The closest the analysis comes to dealing with uncertainty is an acknowledgement that it does not try to project behavioral responses or adjust for other factors that might change in the future. For example, ""While we recognize the concerns the APC Panel expressed with regards to cost Does the analysis variability in the system, we already engage in a adequately assess standard review process for all APCs that uncertainty about the experience significant changes in median costs." outcomes? 1 2A-5 (p. 36) B. Assess evidence of market failure or other systemic problem: 1 The analysis offers no explicit discussion of why HHS needs to do this beyond saying it must comply with the law: "We are required under section 1833(t)(3)(C)(ii) of the Act to update annually…" The general problem is ensuring adequate but not excessive payment for quality care when the government is a large purchaser, but HHS does not explicitly analyze this. The Does the analysis identify a "systemic problem" this regulation deals with is market failure or other that Medicare has to figure out how much to pay systemic problem? 1 2B-1 for various procedures. Does the analysis outline a coherent and testable theory that explains why the problem (associated with Problem not clearly explained in the first place. the outcome above) is However, given the size of the payments, then one systemic rather than can infer that they should be updated to reflect anecdotal? 1 2B-2 changing costs. Does the analysis present credible empirical support for the theory? 0 2B-3 No relevant discussion. Does the analysis adequately assess uncertainty about the existence or size of the problem? 0 2B-4 No relevant discussion. C. Assess effectiveness of alternative approaches: 2 Alternative ways of setting payments are Does the analysis considered for several types of procedures. enumerate other Alternatives also considered for dealing with alternatives to address the supervision fo certain provisions by non-physician problem? 2 2C-1 medical professionals. Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information The alternatives are small tweaks on a large system for which no alternatives were considered. disclosure, addressing any Given the statutory guidelines, they honestly didn't government failures that have much flexibility to consider significant caused the original alternatives. (This is an explanation for the low problem)? 2 2C-2 score, not a reason for a higher score.) The analysis does not directly evaluate how the Does the analysis evaluate alternatives would affect the amount of outcome. how alternative approaches Alternatives are rejected after some summary would affect the amount of argument of pros and cons that does not always the outcome achieved? 2 2C-3 implicate outcomes. Does the analysis adequately address the baseline? That is, what the The baseline is based on a past year's data; the analysis does not try to project changes in case state of the world is likely to mix or other factors: "To illustrate the impact of the be in the absence of federal proposed CY 2010 changes, our analysis begins intervention not just now but with a baseline simulation model that uses the final in the future? 3 2C-4 CY 2009 weights" (p. 184). D. Costs and benefits: 2 Does the analysis identify and quantify incremental The cost of the only alternative considered is costs of all alternatives calculated in great detail. A table shows the considered? 3 2D-1 incremental effects of each adjustment. Does the analysis identify all expenditures likely to arise as a result of the regulation? 4 2D-2 Only federal expenditures are identified. The analysis notes that these changes in Does the analysis identify payments will also lead to changes in patients' how the regulation would copayments; some will rise and some will fall. likely affect the prices of These are not presented in depth and are not in goods and services? 2 2D-3 the accounting statement. The analysis acknowledges the possibility of Does the analysis examine behavioral changes but explicitly declines to costs that stem from estimate them: "We use the best data available, but do not attempt to predict behavioral responses changes in human behavior to our proposed policy changes. In addition, we do as consumers and not make adjustments for future changes in producers respond to the variables such as service volume, service-mix, or regulation? 1 2D-4 number of encounters" (p. 183). There are one or two brief acknowledgements of uncertainty, but no attempts to deal with it: "We note that there are a number of factors that cause APC median costs to change from one year to the If costs are uncertain, does next. Some of these are a reflection of hospital the analysis present a range behavior, and some of them are a reflection of of estimates and/or perform fundamental characteristics of the OPPS as a sensitivity analysis? 1 2D-6 defined in the statute" (p 36). Does the analysis identify the alternative that Since benefits are not calculated, this is not maximizes net benefits? 0 2D-7 possible. Does the analysis identify the cost-effectiveness of Since benefits are not calculated, this is not each alternative considered? 0 2D-8 possible. Estimates of hospital-specific payments are Does the analysis identify all available online. A table shows effects on hospitals parties who would bear of various sizes, locations, ownership, and other costs and assess the characteristics. The analysis considered effects on incidence of costs? 4 2D-9 small rural hospitals. Does the analysis identify all Some impacts on beneficiaries via copayments parties who would receive are discussed briefly with a couple examples (p. benefits and assess the 188), but no calculation of how these changes incidence of benefits? 2 2D-10 would affect ultimate beneficiaries. Leadership Category Score Com. No. Comment A. Does the rule or the RIA present evidence that the The analysis was used only in the sense that the agency used the regulatory calculations determine how much the impact analysis? 3 3A government will pay for various procedures. B. Did the agency maximize Benefits are not estimated, so net benefits could net benefits or explain why not be calculated. It is not clear whether net it chose another alternative? 0 3B benefits were even considered. C. Does the proposed rule Providers must report process-oriented (not outcome-oriented) quality measures, which establish measures and could be used to analyze effects of payments on goals that can be used to outcomes. However, HHS articulates no plan to track the regulation's results use them specifically to evaluate the effects of in the future? 1 3C this regulation. D. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for Outcome data could perhaps be used to doing so? 1 3D measure effects of this regulation.
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