1. Local Coverage Determinations Michael Giuliani Senior Director, Legislation and Political Action October 26,, 2016

2. What I Am Going to Talk About Today The CAP’s LCD reform legislation –Background –Problem –Solution

3. Background: LCDs Medicare Administrative Contractors (MACs) were created by Congress to: –Set payment policy for their jurisdiction –Adjudicate Medicare Parts A and B Claims The process MACs use to set payment policy is called a Local Coverage Determination (LCD) © 2016 College of American Pathologists. All rights reserved.

4. Background: LCDs CMS developed guidelines that outline the LCD process –Chapter 13, Medicare Program Integrity Manual Congress and the Administration recognize the LCD process is flawed and needs reform PAMA provision required MACs to adhered to the CMS LCD guidelines © 2016 College of American Pathologists. All rights reserved.

5. LCD Legislation: What Got Us Here Palmetto Special Stains/IHC LCD: –Purported evidence for the LCD lacks credibility –Lacks clear, specific guidance for pathologists to comply –Impedes diagnostic turnaround time –No discussion or solicitation of input for this LCD occurred at Carrier Advisory Committee (CAC) meetings –The faulty LCD has spread to several other MACs –Review requires new evidence to be presented © 2016 College of American Pathologists. All rights reserved.

6. LCDs: Problems The LCD process lacks: –Sufficient transparency –True accountability –Meaningful exchange with stakeholders –An appeals process for LCD reconsideration decisions © 2016 College of American Pathologists. All rights reserved.

7. LCDs: Problems LCDs should not impede physician medical judgment or deny patient care LCDs should be based on sound medical evidence To improve LCD process, we a need solution that increases transparency and boosts accountability © 2016 College of American Pathologists. All rights reserved.

8. The CAP LCD “Ask” of Congress The CAP’s LCD proposal includes the following reforms: –Upfront disclosure –Open meetings –Meaningful reconsideration/options for appeal –Stop “backdoor” approach to NCDs © 2016 College of American Pathologists. All rights reserved.

9. The CAP LCD “Ask” of Congress The CAP’s LCD proposal includes the following reforms: –Upfront disclosure –Open meetings –Meaningful reconsideration/options for appeal –Stop “backdoor” approach to NCDs © 2016 College of American Pathologists. All rights reserved.

10. Upfront Disclosure: Problem LCDs lack rationale for limiting/denying coverage –Hinders meaningful stakeholder exchange © 2016 College of American Pathologists. All rights reserved.

11. Upfront Disclosure: Legislative Solution Require MACs to disclose evidence considered when drafting LCDs and rationale for denying coverage –CMS guidelines: “LCDs shall be based on the strongest evidence available” –Educates medical community as to rationale and evidence that support coverage polices © 2016 College of American Pathologists. All rights reserved.

12. The CAP LCD “Ask” of Congress The CAP’s LCD proposal includes the following reforms: –Upfront disclosure –Open meetings –Meaningful reconsideration/options for appeal –Stop “backdoor” approach to NCDs © 2016 College of American Pathologists. All rights reserved.

13. Open Meetings: Problem Every state must have a CAC –Formal mechanism for physicians to be informed of and participate in LCD development in an advisory capacity –Discuss/improve administrative policies –Forum for information exchange between MACs and physicians © 2016 College of American Pathologists. All rights reserved.

14. Open Meetings: Legislative Solution Open CAC meetings would hold MACs accountable for: –Meaningful exchange of information required by MACs –Meaningful solicitation of input from subject experts and medical community –Ensure CAC reps have opportunity to participate in advisory capacity as outlined by CMS –Ensure MACs adhere to LCD process © 2016 College of American Pathologists. All rights reserved.

15. The CAP LCD “Ask” of Congress The CAP’s proposal includes the following reforms: Upfront disclosure Open meetings Meaningful reconsideration/options for appeal Stop “backdoor” approach to NCDs © 2016 College of American Pathologists. All rights reserved.

16. Meaningful Reconsideration/Option for Appeal: Problem LCD essentially unreviewable once it becomes final Requests for LCD reconsideration must be supported by “new” evidence Issuing MAC has sole discretion to determine outcomes Reconsideration process is not transparent No appeal if MAC denies request © 2016 College of American Pathologists. All rights reserved.

17. Meaningful Reconsideration/Option for Appeal: Legislative Solution Allows for additional avenues of appeal besides “new” evidence Provides appeals process of qualified secondary review of denials © 2016 College of American Pathologists. All rights reserved.

18. The CAP LCD “Ask” of Congress The CAP’s proposal includes the following reforms: –Upfront disclosure –Open meetings –Meaningful reconsideration/options for appeal –Stop “backdoor” approach to NCDs © 2016 College of American Pathologists. All rights reserved.

19. Stop LCD “Backdoor” Approach to NCDs: Problem “Carbon copy” adoption of LCDs by other MACs “Backdoor” LCDs do not comply with the more rigorous NCD requirements Lacks meaningful solicitation of stakeholder input/concerns Lacks independent assessment of comments from public or medical community LCD process is required of all MACs, per PAMA © 2016 College of American Pathologists. All rights reserved.

20. IHC LCD: Backdoor Approach to NCDs © 2016 College of American Pathologists. All rights reserved.

21. IHC LCD: Backdoor Approach to NCDs © 2016 College of American Pathologists. All rights reserved.

22. IHC LCD: Backdoor Approach to NCDs © 2016 College of American Pathologists. All rights reserved.

23. IHC LCD: Backdoor Approach to NCDs © 2016 College of American Pathologists. All rights reserved.

24. Stop LCD “Backdoor” Approach to NCDs: Legislative Solution Prohibits CMS from appointing a single MAC from making determinations to be used on nationwide basis © 2016 College of American Pathologists. All rights reserved.

25. Goal of the LCD legislation Upfront disclosure: That MACs include – at the outset of the process – a description of the evidence the MAC considered when drafting an LCD, as well as the rationale they are relying on to deny coverage Open meetings: That MACs’ Carrier Advisory Committee (CAC) meetings be open, public, and on the record Meaningful reconsideration and options for appeal: That Congress revise the reconsideration process to create an avenue through which providers and suppliers can appeal a MAC’s decision to CMS Stopping the use of LCDs as a backdoor to NCDs: That Congress prohibit CMS from appointing a single MAC, either expressly or in practice, from making determinations to be used on a nationwide basis in a given specialty © 2016 College of American Pathologists. All rights reserved.

26. Questions? © 2016 College of American Pathologists. All rights reserved.

27. 2017 Political Outlook White House and Congress Michael Giuliani October 26, 2016

28. 2017 Political Outlook White House House of Representatives Senate © 2016 College of American Pathologists. All rights reserved.

29. The race for the White House It is all about the Electoral College –Candidate that gets to 270 wins Democratic Party starts with a lead –216 electoral votes secured Republican Party needs to catch up –163 electoral votes secured Electoral votes in play –162 votes up for grabs –56 lean Democratic and 34 lean Republican © 2016 College of American Pathologists. All rights reserved.

30. A handful of states to decide the next President © 2016 College of American Pathologists. All rights reserved. 56 Votes69 Votes34 Votes

31. What does a Trump presidency mean for health care? Broad statements about the repeal of Obamacare –Wants to keep mandate that everyone has coverage –Would permit insurers to sell plans across state lines –Has expressed conflicting points of view on several issues Price transparency from all health care providers Any change will depend on makeup of Congress ACA will need fixes regardless of who wins © 2016 College of American Pathologists. All rights reserved.

32. What does a Clinton presidency mean for health care? Will not repeal Obamacare –Will work to fix problems that have come to light –Wants to expand the program by pursuing a government run “public option” Allow 55 and older to buy into Medicare 100% federal match for Medicaid expansion for first three years Democratic platform calls for an end to balance billing by physicians © 2016 College of American Pathologists. All rights reserved.

33. House of Representatives Number needed to control the chamber: 218 Current political breakdown (435 Seats): –247 Republicans –188 Democrats Seats needed by Democrats to take control of the chamber: 30 © 2016 College of American Pathologists. All rights reserved.

34. House of Representatives Republican seats: 202 safe, 45 in play – 24 Likely/Lean –21 Toss Up or Worse Democratic seats: 177 safe, 11 in play – 7 Likely/Lean –4 Toss Up or Worse © 2016 College of American Pathologists. All rights reserved.

35. Toss up and lean congressional districts © 2016 College of American Pathologists. All rights reserved.

36. House of Representatives Status quo in leadership (Speaker and Minority Leader) Energy and Commerce Committee: –Chairman Upton is term limited. John Shimkus (R-IL-15), Greg Walden (R-OR-2), and Joe Barton (R-TX-6) are vying to replace him. Congressman Pallone (D-NJ-6) stays as ranking member. –Health subcommittee: Rep. Fred Upton (R-MI-6), Michael Burgess (R-TX-26), and Tim Murphy (R-PA-18) are vying for chairmanship of the subcommittee. Congressman Gene Green (D-TX-29) stays as ranking member. © 2016 College of American Pathologists. All rights reserved.

37. House of Representatives Ways and Means Committee: –Rep. Kevin Brady (R-TX-8) remains as chairman and Rep. Sander Levin (D-MI-9) stays as ranking member. –Health subcommittee: Rep. Pat Tiberi (R-OH-12) stays as chairman. On the Democratic side, ranking member Jim McDermott (D-WA-7) is retiring. Reps. Mike Thompson (D- CA-5) and Ron Kind (D-WI-3) are the likely members to replace him. © 2016 College of American Pathologists. All rights reserved.

38. Senate Number needed to control the chamber: 51 or 50 plus control of the White House (Vice President casts tiebreaking vote) Current political breakdown (100 Seats): o 54 Republicans o 44 Democrats o 2 Independents (caucus with Democratic delegation) Seats needed by Democrats to take control of the chamber: 5 or 4 plus control of the White House © 2016 College of American Pathologists. All rights reserved.

39. Senate Current status of seats in the Senate (only 1/3 of the Senate is up in an election cycle): –Republican seats: 11 safe, 13 seats in play 6 Likely/Lean 7 Toss Up or Worse –Democratic seats: 8 safe, 2 seats in play 1 Likely/Lean 1 Toss Up or Worse © 2016 College of American Pathologists. All rights reserved.

40. Senate © 2016 College of American Pathologists. All rights reserved. Democratic Seats Republican Seats

41. Senate Changes in leadership Senator Harry Reid (D-NV) is retiring from the Senate. Senator Chuck Schumer is expected to succeed him. If Senate Republicans lose the majority, there could be a shakeup in the leadership structure. If the Democrats succeed in taking the Senate, they will take over leadership of the Finance and Health, Education, Labor and Pension (HELP) Committees © 2016 College of American Pathologists. All rights reserved.

42. Senate Finance Committee: –Senator Orin Hatch, the chairman, and Senator Ron Wyden, ranking member, are expected to stay in their leadership roles. HELP Committee: –Senator Lamar Alexander stays as chairman. –Senator Patty Murray, the ranking member, has considered moving to the Appropriations Committee. Senator Bernie Sanders has expressed interest in taking her place on HELP. Currently, we expect Senator Murray to stay with the HELP Committee. © 2016 College of American Pathologists. All rights reserved.

43. Questions? © 2016 College of American Pathologists. All rights reserved.