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Feb 2, 2015

Washington Healthcare Update

This Week: Upton Releases 21st Century Cures Initiative Legislative Draft... HHS Announces Transition to Alternative Medicare Payment Models... White House Unveils Details of Precision Medicine Initiative in Wake of 2016 Budget... CMS and Indiana Reach Medicaid Expansion Agreement

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Upton Releases 21st Century Cures Initiative Legislative Draft

On Jan. 27, the Energy and Commerce Republicans released an initial discussion document outlining some specific legislative proposals that have been shared throughout the 21st Century Cures initiative. This document seeks to continue the important dialogue of the past year, encouraging more discussion from patients, innovators, researchers, caregivers and other experts on the common goal of accelerating the pace of cures in the United States. The 21st Century Cures Initiative is a multi-year, collaborative project established by House Energy and Commerce Committee Chairman Fred Upton (R-MI) along with committee member Rep. Diana DeGette (D-CO) designed to assist in accelerating the pace of cures and medical breakthroughs in the United States in the 21st Century. However, while the initiative maintained bipartisan support last Congress, the discussion draft “does not reflect true bipartisan collaboration,” according to Ranking Member Pallone (D-NJ). “In its current form, I am concerned that the nearly 400-page draft could create more problems for our health care system than it solves. Further, the draft does not include any real dollars to fund additional basic research at the National Institutes of Health. Increased funding was a common theme during last year’s public engagement, from both sides of the aisle, and is fundamental to truly advancing 21st century cures,” Pallone said. For more information, please visit

Bipartisan Legislation Introduced to Focus on Medically Complex Children

On Jan. 28, Reps. Joe Barton (R-TX), Kathy Castor (D-FL), Anna G. Eshoo (D-CA) and Jaime Herrera Beutler (R-WA) unveiled the Advancing Care for Exceptional Kids Act of 2015 (ACE Kids Act), H.R. 546. A companion bill was introduced in the Senate, led by Sens. Charles Grassley (R-IA) and Michael Bennet (D-CO). The bills will help coordinate care to ensure optimal outcomes for children with complex medical conditions on Medicaid, while helping to contain costs. Other original cosponsors in the House and Senate include Rep. Gene Green (D-TX), Rep. Dave Reichert (R-WA), Sen. Rob Portman (R-OH), Sen. Bill Nelson (D-FL), Sen. Roy Blount (R-MO) and Sen. Sherrod Brown (D-OH). Specifically, the bill would allow for the creation of nationally designated children’s hospital networks to serve children with complicated medical conditions who require a high level of health care, and often cross state lines to access care. These networks would include and coordinate the full range of home, primary, ambulatory, acute and post-acute care/providers. Based on the health needs and family preference, each eligible child will be matched with a network. For more information, please visit

Energy and Commerce Hearing Examines Various Public Health Bills

On Jan. 27, the Energy and Commerce Health Subcommittee held a hearing entitled “Examining Public Health Legislation to Help Patients and Local Communities” to discuss the following pieces of public health legislation:

Veteran Emergency Medical Technician Support Act

The Veteran Emergency Medical Technician Support Act (to be introduced by Rep. Kinzinger) would establish a demonstration program for states with a shortage of Emergency Medical Technicians to streamline their procedures to assist military medics in meeting state requirements for civil licensing and certification. It is based on H.R. 235, which passed the House during the 113th Congress.

National All Schedules Prescription Electronic Reporting Reauthorization Act

The National All Schedules Prescription Electronic Reporting Reauthorization Act (to be introduced by Rep. Whitfield) would establish a grant program for states to administer prescription drug monitoring programs to ensure that appropriate law enforcement, regulatory and state professional licensing authorities have access to prescription drug history information to investigate drug diversion and abuse.

Trauma Systems and Regionalization of Emergency Care Reauthorization Act

The Trauma Systems and Regionalization of Emergency Care Reauthorization Act (to be introduced by Rep. Burgess and Rep. Green) would reauthorize Trauma Care Systems Planning Grants, which support state and rural development of trauma systems. It also would reauthorize pilot projects to implement and assess regionalized emergency care models. The legislation is based on H.R. 4080, which passed the House during the 113th Congress.

Access to Life-Saving Trauma Care for All Americans Act

The Access to Life-Saving Trauma Care for All Americans Act (to be introduced by Rep. Burgess and Rep. Green) would reauthorize Trauma Center Care Grants. These grants aid hospitals in handling their substantial uncompensated care costs from traumatic injuries.

Improving Regulatory Transparency for New Medical Therapies Act

The Improving Regulatory Transparency for New Medical Therapies Act (to be introduced by Chairman Pitts and Rep. Pallone) would amend the Controlled Substances Act (CSA) to require the Drug Enforcement Agency (DEA) to act on a recommendation from the Food and Drug Administration (FDA) to add a drug or substance that has never been marketed in the United States to a schedule of controlled substances within a specified period. Currently, new drugs and substances that previously have not been marketed in the United States and that have abuse potential must be scheduled under the CSA by the DEA prior to being marketed. The CSA currently provides no deadline for the DEA to act after receiving a recommendation. The amount of time the DEA has taken before acting on FDA recommendations has increased significantly in recent years, delaying the availability of these drugs and substances to patients. The legislation is based on H.R. 4299, which passed the Committee during the 113th Congress.

Ensuring Patient Access and Effective Drug Enforcement Act

H.R. 471, the Ensuring Patient Access and Effective Drug Enforcement Act introduced by Rep. Marino, Rep. Blackburn, Rep. Welch and Rep. Chu, would help prevent prescription drug abuse, establish clear and consistent enforcement standards and ensure patients have access to medications, by promoting collaboration among government agencies, patients and industry stakeholders. The bill is based on H.R. 4069, which passed the House in the 113th Congress.


  • Ben D. Chlapek, Deputy Chief, Central Jackson County Fire, Blue Springs, Missouri;
  • John L. Eadie, Director, Prescription Drug Monitoring Program Center of Excellence, Brandeis University;
  • Blaine L. Enderson, MD, Department of Surgery, University of Tennessee Medical Center;
  • Nathan B. Fountain, MD, Professor of Neurology, Director of F.E. Dreifuss Comprehensive Epilepsy Program, on behalf of Epilepsy Foundation; and,
  • D. Linden Barber, Partner and Director, DEA Compliance Operations, Quarles & Brady.

For more information, or to view the hearing, please visit

Bill Would Allow Pharmacists Expanded Scope in Underserved Areas

On Jan. 28, Reps. Guthrie (R-KY), Butterfield (D-NC), Young (R-IN) and Kind (D-WI) together introduced H.R. 592, which will allow Medicare to reimburse pharmacists in medically underserved communities for certain health care services. The bipartisan legislation, the Pharmacy and Medically Underserved Areas Enhancement Act, was supported by 123 bipartisan cosponsors during the 113th Congress. “Whether it’s to inquire about medication, potential side effects, or discussing other ailments and complications, many patients depend on their local pharmacists,” said Congressman Guthrie. “Expanding access to other basic services that pharmacists are already licensed to provide will not only benefit seniors in Kentucky, but across the country.”

Most states already allow pharmacists to provide additional services, such as immunizations, diabetes management, blood pressure screenings and routine checks. Despite the ability to perform such services, there is currently no mechanism for pharmacists to be reimbursed for these by the Medicare program.


HELP Committee Releases “Innovation for Healthier Americans” Report

On Jan. 29, HELP Committee Chairman Alexander (R-TN) and Sen. Burr (R-NC) released a report on the challenges to getting safe treatments, devices and cures to patients more quickly and effectively, examining what is working, and what isn’t, at the Food and Drug Administration and the National Institutes of Health. The senators are soliciting feedback on their report as Chairman Alexander and Ranking Member Murray (D-WA) begin a major initiative in the Senate health committee — including a bipartisan working group and a series of hearings — to examine the time and cost currently involved with the drug and medical device discovery and development process, and how to better align public policies to support medical innovation. In the executive summary, the senators write: “This report aims to examine the current process of drug and device development and identify the inefficiencies that stand in the way of a modern development and review process. We take a close and honest look at what is, and is not, working well at the NIH and FDA. We want to know what successes we can replicate, and what failures must be learned from and fixed.”

Sens. Hatch, Alexander Introduce Bill to Repeal ACA’s Employer Mandate

On Jan. 29, Finance Committee Chairman Hatch (R-UT) and HELP Committee Chairman Alexander (R-TN) introduced the American Job Protection Act, a bill to repeal the ACA’s employer mandate, which took effect in 2014. Under the ACA, businesses with 50 or more equivalent employees are required to offer health insurance of minimum value or pay a penalty between $2,000 and $3,000 for each employee working 30 hours or more a week. The chairmen were joined by 26 senators in cosponsoring the bill. According to Hatch, “By doing away with the mandate, job-creators will be able to grow their businesses without the added concern of reaching an arbitrary and punitive threshold.” A recent Gallup survey of small employers found that 11 times as many small business owners believe that the ACA will increase their health care costs as opposed to those who believe that it will reduce costs.

Senators Introduce Bipartisan Legislation to Safeguard Access to Rural Therapy Services

Senators Jerry Moran (R-KS), Jon Tester (D-MT) and John Thune (R-SD) — members of the Senate Rural Health Caucus — introduced S. 257, the Protecting Access to Rural Therapy Services (PARTS) Act, on Jan. 27. “Rural hospitals need reasonable flexibility to appropriately staff their facilities so they can provide a full range of services to their communities,” Sen. Moran said in a press release. “Many hospitals find the Centers for Medicare and Medicaid Services’ (CMS) direct supervision requirements impossible to meet, which jeopardizes access to this important care.” In 2009 the Centers for Medicare and Medicaid Services (CMS) shifted policy to require that outpatient therapeutic services must be furnished under the “direct supervision” of a physician who is required to be physically present in the department at all times that Medicare beneficiaries receive these services. While CMS subsequently revised its standard to also permit direct supervision by certain qualified non-physician practitioners (NPPs), the agency still requires the physical presence of the supervising professional by mandating the supervisor be “immediately available” at all times these services are provided to beneficiaries.” As written, the PARTS Act would require CMS to allow a default setting of general supervision, rather than direct supervision, for outpatient therapeutic services; create an advisory panel to establish an exceptions process for risky and complex outpatient services; create a special rule for CAHs that recognizes their unique size and Medicare conditions of participation; and hold hospitals and CAHs harmless from civil or criminal action for failing to meet CMS’ current direct supervision policy through 2016. The senators also introduced the PARTS Act last Congress (S. 1143).

2. Administration

HHS Announces Transition to Alternative Medicare Payment Models

On Jan. 26, HHS announced it has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. HHS Secretary Burwell also announced the creation of a Health Care Payment Learning and Action Network. Through the Learning and Action Network, HHS will work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs. HHS will intensify its work with states and private payers to support adoption of alternative payment models through their own aligned work, sometimes even exceeding the goals set for Medicare. The Network will hold its first meeting in March 2015, and more details will be announced in the near future.

White House Unveils Details of Precision Medicine Initiative in Wake of 2016 Budget

On Jan. 30, the White House released a fact sheet and blog post, with details on its new Precision Medicine Infinitive, a program recently announced in President Obama’s State of the Union Address. As it stands, the Precision Medicine Initiative will aim to pioneer a new model of patient-powered research that promises to accelerate biomedical discoveries and provide clinicians with new tools, knowledge and therapies to select which treatments will work best for which patients. Objectives within the initiative include more and better treatments for cancer, the creation of a voluntary national research cohort, a renewed commitment to protecting patient privacy, a regulatory modernization plan and new public-private partnerships forged between patient groups, research institutions and the private sector. “Precision medicine is a game changer” with “incredible promise,” said Jo Handelsman, Assistant Director of the White House Office of Science. “It’s about moving beyond ‘one size fits all’ medicine by taking into account individual differences in peoples’ genes, microbiomes, environments and lifestyles.” The new program will also involve new funding to enable the National Institutes of Health (NIH), the Food and Drug Administration (FDA) and the Office of the National Coordinator for Health IT to build an infrastructure of medical data that flows from medical clinics to genome sequencing labs and back again. The $215 million initiative includes $200 million in new spending for NIH (of which $70 million is dispensed to the National Cancer Institute), and $10 million for the FDA to improve its regulation of precision medicine.

CMS 2016 Exchange Rules Go to OMB for Final Review

The Centers for Medicare and Medicaid Services’ (CMS) proposed CY 2016 Notice of Benefit and Payment Parameters (CMS-9944-P) rule went to the Office of Management and Budget (OMB) on Jan. 29. This proposed rule would set forth payment parameters and provisions related to the risk adjustment, reinsurance and risk corridors programs; cost sharing parameters and cost-sharing reductions; and user fees for federally facilitated exchanges. It would also provide additional standards for the annual open enrollment period for 2016, essential health benefits, network adequacy, essential community providers, quality improvement strategies, the sale of non-qualified health plans through Exchanges, the good faith compliance enforcement safe harbor, a suppression status for qualified health plans, the Small Business Health Options Program, guaranteed availability and guaranteed renewability, minimum essential coverage and the medical loss ratio program. Expected in the rule is an agency decision on whether the agency will revise its automatic plan renewal policy, in which consumers who take no action in future enrollment periods can be defaulted into a health plan with lower premiums. An expected publication date for the Federal Register for the final rule has not been announced.

HHS: Enrollment Reaches 9.5 Million on the Exchanges

In a Jan. 27 monthly update report, the Department of Health and Human Services (HHS) revealed that, nationwide, 9.5 million consumers had selected or were automatically reenrolled in health insurance coverage from the Health Insurance Marketplace through the second month of the 2015 open enrollment period. Of those, more than 7.1 million were in states using the platform and 2.4 million were in the 14 states (including Washington, D.C.) using their own marketplace platforms. “We’re pleased that, nationwide, 9.5 million people are signed up for Marketplace coverage. The vast majority are able to lower their costs even further by getting tax credits, making a difference in the lives of so many families,” HHS Secretary Sylvia M. Burwell said in a press release. Of the beneficiaries on the federal exchange, 87 percent selected a plan with financial assistance; 35 percent, or about 2.5 million individuals were under 35 years of age. Each month HHS will produce a report that provides a detailed summary of plan selection across the federally facilitated marketplace (FFM) and the state-based marketplaces set up under the Affordable Care Act.

Upcoming: President’s 2016 Budget to Include Historic Investment to Combat Antibiotic Resistance

In a Jan. 27 fact sheet foreshadowing the President’s 2016 Budget, expected to be released Feb.2, the White House announced that the President’s FY 2016 Budget builds on previous presidential initiatives by nearly doubling, to more than $1.2 billion, the amount of federal funding for combating and preventing antibiotic resistance. In September 2014, President Obama signed an Executive Order launching federal efforts to combat the rise in antibiotic-resistant bacteria; the Administration also issued its National Strategy on Combating Antibiotic-Resistant Bacteria, which outlines steps the U.S. government will take to improve prevention, detection and control of resistant pathogens. The influx in funding in 2016 will improve antibiotic stewardship; strengthen antibiotic resistance risk assessment, surveillance and reporting capabilities; and drive research innovation in the human health and agricultural sectors. The Budget proposes an almost $1 billion investment in FY 2016 for the Department of Health and Human Services (HHS), including more than $650 million across the National Institutes of Health (NIH) and the Biomedical Advanced Research and Development Authority (BARDA) to significantly expand America’s investments in development of antibacterial and new rapid diagnostics, and to launch a large-scale effort to characterize drug resistance. Moreover, the budget recommends more than $280 million at the CDC to support antibiotic stewardship, outbreak surveillance, antibiotic use and resistance monitoring, and research and development related to combating antibiotic resistance. In addition, $47 million was budgeted for the Food and Drug Administration (FDA) to support evaluation of new antibacterial drugs for patient treatments and antibiotic stewardship in animal agriculture. The Centers for Disease Control and Prevention (CDC) estimates that each year at least two million illnesses and 23,000 deaths are caused by antibiotic-resistant bacteria in the United States alone, and found that antibiotic-resistant infections account for at least $20 billion in excess direct health care costs and up to $35 billion in lost productivity due to hospitalizations and sick days each year.

FDA Releases Agenda of First Pharmacy Compounding Advisory Committee Meeting

On Jan. 23, the Food and Drug Administration (FDA) released an agenda and supporting materials for the first meeting of its new Pharmacy Compounding Advisory Committee on Feb. 23-24. The meeting, which is open to the public, will be held to discuss proposed revisions to the list of drugs that cannot be compounded because they have been found to be unsafe or not effective, as required by the Drug Quality and Security Act, as well as proposed criteria for developing the list of bulk drug substances that may be used to compound drug products in accordance with Section 503A of the Food, Drug, and Cosmetic Act; the Committee will consider six nominated substances for inclusion on the list including cantharidin, diphenylcyclopropenone, piracetam, mild silver protein, squaric acid dibutylester and thymol iodide. This meeting comes after the agency published a proposed rule in July that modified the description of one drug already on the list of drugs not available for compounding and added 25 others, including oxycodone hydrochloride products that do not have abuse-deterrent properties. The list applies to facilities registered as outsourcing facilities and traditional compounders. The advisory committee, formed in December 2014, includes representation from Public Citizen, Pew Charitable Trusts and the National Institutes of Health. A meeting announcement was posted in the Federal Register on Jan. 26. The meeting will be held on Feb. 23, 2015, from 8:30 a.m. to 5 p.m. and Feb. 24, 2015, from 8:15 a.m. to 3 p.m. at FDA’s White Oak Campus, 10903 New Hampshire Ave., Bldg. 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993-0002.

Office of the National Coordinator for Health IT Announces New Chief Medical Officer

On Jan. 28, the Office of the National Coordinator for Health IT (ONC) announced that Thomas Mason will be the office’s new chief medical officer, effective Feb. 23. In this role, Dr. Mason will lead clinical oversight and coordination of ONC programs, as well as engage regularly with physician organizations. A board-certified internist with 14 years of experience in primary care and preventative medicine, he has led the implementation of multiple EHR systems and also has more than 10 years of additional experience and training in the principles of public health and population medicine. Dr. Mason will “lead and champion clinical oversight of ONC programs and clinical coordination within ONC,” National Coordinator for HIT and Acting Assistant Secretary for Health Karen DeSalvo said in an email to staff. Dr. Mason previously served as the Chief Medical Informatics Officer of the Ambulatory and Community Health Network of the Cook County Health and Hospitals System (CCHHS) in Chicago, the third-largest public hospital system in the country. He also previously played a substantial role in the implementation of the Patient Centered Medical Home wellness management and disease prevention model at CCHHS.

3. State Activities

Massachusetts and Pennsylvania Name Incoming Health Officials

Massachusetts Gov. Charlie Baker has announced the appointment of two key health care officials who will be tasked with ensuring that Massachusetts’ Medicaid population is receiving proper coverage and that health care consumers have the tools necessary and readily available to seek out insurance on the private market and Connector website. Baker named Daniel Tsai Assistant Secretary for MassHealth under Health and Human Services Secretary Marylou Sudders. In addition, Louis Gutierrez, an information technology and planning specialist, was named Executive Director for the Massachusetts Health Connector. In Pennsylvania, Gov. Tom Wolf, who is currently working on a plan to expand Medicaid, has tapped Ted Dallas, who’s currently in charge of the Maryland department that runs Medicaid, to be human services secretary; Karen Murphy will be health secretary.

Nevada’s Insurance Exchange COO Resigning

Shawna DeRousse, the Nevada state official who led the exchange through its troubled first year and during its current rebound, said in a Jan. 21 email to several insurance brokers that she is resigning her post as Chief Operation Officer of Nevada’s state health insurance exchange, effective Feb. 3. Ms. DeRousse is one of three key officials to depart from the state’s health insurance exchange, Nevada Health Link, since last year. She has been with the agency since it started three years ago. The exchange’s first executive director, Jon Hager, left in February. C.J. Bawden, the exchange’s first communications director, left in August. Bruce Gilbert, executive director of Nevada Health Link, said the agency has no immediate plan to replace DeRousse. Nevada Health Link is “reevaluating” its structure, given its transition from a state-based exchange to a federally supported state-based marketplace, he said. Ms. DeRousse said she’s shifting her career out of government. “I have spent an amazing three years doing historic work. But I am looking forward to new challenges and experiences in the private sector.”

CMS and Indiana Reach Medicaid Expansion Agreement

CMS Administrator Marilyn Tavenner and HHS Secretary Sylvia Burwell in a joint Jan. 27 press release announced that the agencies have approved Indiana’s Medicaid expansion waiver. “With today’s agreement, Indiana will become the 28th state, plus the District of Columbia, to expand Medicaid under the Affordable Care Act. This agreement will bring much needed access to health care coverage to an estimated 350,000 uninsured low-income Hoosiers over the next three years,” said CMS Administrator Marilyn Tavenner. “HHS and CMS are committed to working with states to design programs uniquely their own, while maintaining essential health benefits guaranteed under the Affordable Care Act and other key consumer protections consistent with the law.” Indiana’s agreement marks the first time a state has been allowed to impose strict requirements on some Medicaid enrollees to pay a portion of their premiums, up to around $26 a month for a single adult, or get locked out of the program. It also introduces a new penalty for participants who overuse the emergency room. “With this decision, our state can begin covering our uninsured working poor the Indiana way, based on personal responsibility,” said Gov. Mike Pence (R-IN) said in a statement. The Affordable Care Act provides matching federal funding to states to expand their Medicaid program to cover residents who earn up to a third more than the federal poverty level, or around $15,500 for a single adult. Under the Indiana waiver, new beneficiaries in the program with incomes under the federal poverty level of around $11,700 for a single adult would be required to pay 2 percent of their monthly income, or lose benefits such as dental and vision care. All enrollees would be required to pay at least $1, and the fees could go up to around $20 for a single adult, or more for a family.

4. Regulations Open for Comment

Medicare and Medicaid Program; Revisions to Certain Patient's Rights Conditions of Participation and Conditions for Coverage Overview

On Dec. 11, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to revise selected conditions of participation (CoPs) for providers, conditions for coverage (CfCs) for suppliers, and requirements for long-term care facilities, by proposing to clarify that where state law or facility policy provides or allows certain rights or privileges to a patient's opposite-sex spouse under certain provisions, a patient's same-sex spouse must be afforded equal treatment if the marriage is valid in the jurisdiction in which it was celebrated. The proposal was made in response to a Supreme Court decision, United States v. Windsor, which held that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional because it violates the Fifth Amendment. Section 3 of DOMA provided that in determining the meaning of any Act of the Congress, or of any ruling, regulation or interpretation of the various administrative bureaus and agencies of the United States, the word "marriage" meant only a legal union between one man and one woman as husband and wife, and the word "spouse" could refer only to a person of the opposite sex who was a husband or a wife. To be assured consideration, comments must be received no later than 5 p.m. on Feb. 10, 2015.

CMS Releases Proposed Rule Aimed to Strengthen ACOs

In a Dec. 1 press release, the Centers for Medicare & Medicaid Services (CMS) announced a new proposed rule looking to improve the Shared Savings Program (SSP) for Accountable Care Organizations (ACOs) through a greater emphasis on primary care services and promoting transitions to performance-based risk arrangements. Through the Affordable Care Act (ACA), ACOs encourage doctors, hospitals and other health care providers to work together to better coordinate care when people are sick and keep people healthy, which helps to reduce growth in health care costs and improve outcomes. CMS Administrator Marilyn Tavenner said, "This proposed rule is part of our continued commitment to rewarding value and care coordination -- rather than volume and care duplication. We look forward to partnering with providers and stakeholders to continuously refine and improve the Medicare Shared Savings program." Other goals of the rule include providing more flexibility for ACOs seeking to renew their participation in the program, encouraging ACOs to take on greater performance-based risk and reward, creating alternative methodologies for benchmarks, and streamlining data sharing and reducing administrative burden. The SSSP now includes more than 330 ACOs in 47 states, providing care to more than 4.9 million beneficiaries in Medicare fee for service. Recently, CMS announced first-year SSP results, finding that 58 SSP ACOs held spending below their benchmarks by a total of $705 million and earned shared savings payments of more than $315 million, and that another 60 ACOs had expenditures below their benchmark, but not by a sufficient amount to earn shared savings. Comments on the proposed rule are due by Feb. 6. A fact sheet accompanying the proposed rule can be found here.

5. Reports

Strategies Used by Adults to Reduce Their Prescription Drug Costs: United States, 2013

According a recent report released by the Centers for Disease Control and Prevention (CDC), approximately one-fifth (18 percent) of the $263 billion spent on retail prescription drugs in the United States in 2012 was paid out of pocket, and in order to save money, almost 8 percent of U.S. adults (7.8 percent) did not take their medication as prescribed, 15.1 percent asked a doctor for a lower-cost medication, 1.6 percent bought prescription drugs from another country and 4.2 percent used alternative therapies. In addition, adults aged 18-64 (8.5 percent) were nearly twice as likely as adults aged 65 and over (4.4 percent) to have not taken their medication as prescribed, to save money. Also, among adults aged 18-64, uninsured adults (14.0 percent) were more likely than those with Medicaid (10.4 percent) or private coverage (6.1 percent) to have not taken their medication as prescribed, to save money. The poorest adults — those with incomes below 139 percent of the federal poverty level — were the most likely to not take medication as prescribed, to save money.

CMS Reports Show Mixed Results for First Year of Primary Care Programs

On Jan. 23, the Centers for Medicare and Medicaid Services (CMS) released two reports outlining the agency’s first results of two major tests of advanced primary care. The Affordable Care Act’s Comprehensive Primary Care initiative lets Medicare pay doctors for care management without requiring patients to make office visits and lets physicians receive a portion of what they save Medicare. It’s a multi-payer partnership between Medicare, Medicaid private health care payers and primary care practices in four states (Arkansas, Colorado, New Jersey and Oregon) and three regions (New York’s Capital District and Hudson Valley, Ohio and Kentucky’s Cincinnati-Dayton region, and Oklahoma’s Greater Tulsa region). Data in the report found that CMS paid $20 per beneficiary to save $14 per beneficiary in the first year of the Comprehensive Primary Care initiative). In the first year, 492 practices participated, serving about 345,000 Medicare beneficiaries and more than 2.5 million patients overall. Data in the report showed that the CPC initiative decreased hospital admissions by 2 percent and emergency department visits by 3 percent, contributing to the reduction of expenditures nearly enough to offset care management fees paid by CMS.

The Multi-Payer Advanced Primary Care Practice Demonstration (MAPCP) is a multi-payer initiative in which Medicare is participating with Medicaid and private health care payers in eight advanced primary care initiatives in Maine, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Rhode Island and Vermont. Unlike CPC, the states, rather than CMS, convene the participants and administer the initiatives. Under this demonstration, participating practices and other auxiliary supports (e.g., community health teams) receive monthly care management fees from the participating payers and additional support (e.g., data feedback, learning collaboratives, practice coaching). More than 3,800 providers, 700 practices and 400,000 Medicare beneficiaries participated in the first year. According to CMS’ report, the MAPCP reduced Medicare expenditures by $4.2 million in the first year but reduced expenditures in only two states (Vermont and Michigan) out of seven states in which it is running. CMS Deputy Administrator for Innovation and Quality and Chief Medical Officer Patrick Conway cautioned against interpreting the results as a failure, saying it will likely take a few years before the initiative breaks even or saves money. CMS noted that first-year results illustrate the potential for steady improvements in the participating practices’ advanced primary care capabilities. CMS anticipates continued improvements as the participating practices deepen and refine their methods of delivering advanced primary care so that patients can continue to receive improved quality and coordination of care.

More information can be found in a blog post that accompanied the reports.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Charlyn Iovino, Vice President
Brian Looser, Assistant Vice President
Amanda Anderson, Research Assistant

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