CONSISTENTLY DELIVERS

Oct 15, 2012

Weekly Washington Healthcare Update

This Week:

1. Congress

House of Representatives

Senate

2. Administration

Centers for Medicare and Medicaid Services (CMS)

3. State Activities

4. Regulations Open for Comment

5. Reports

Government Accountability Office (GAO)

Urban Institute

Health Affairs

American Action Forum

Altarum Institute

Physicians for a National Health Program/America's Health Insurance Plans (AHIP)

6. Medicare Payment Advisory Commission (MedPAC)


1. Congress

House of Representatives

Bipartisan Congressional Concern Over Meningitis Outbreak

In response to a recent outbreak of fungal meningitis, several Members of Congress have taken steps to both further understand what went wrong in the Massachusetts compounding pharmacy and prevent future occurrences. On Tuesday, Energy and Commerce Chair Upton (R-MI) and Ranking Member Waxman (D-CA) sent a letter to New England Compounding Center (NECC) owner Barry J. Cadden seeking a briefing on the details surrounding NECC's operations leading up to the contamination of a steroid drug that has led to more than 100 individuals being diagnosed with the disease, and has left 14 dead. Asimilar letter was sent on Friday to James D. Coffey, Director of the Massachusetts Board of Registration in Pharmacy seeking information related to facility inspection records and reports.

In addition, Rep. DeLauro (D-CT) announced on Tuesday that she would be introducing legislation to heighten the authority of the Food and Drug Administration (FDA) to regulate compounding pharmacies, such as NECC. According to a statement from DeLauro, "The legislation will strengthen the current system of federal and state oversight of these pharmacies and address the fact that we currently cannot be proactive in protecting public health. My legislative staff is drafting the legislation now and I plan to introduce the bill when Congress returns after the election." Rep. Markey (D-MA) also said he would be introducing a bill in response to the recent meningitis outbreak.

Senate

Pharmacy Benefit Managers (PBMs) Make Offering on Debt Reduction

On Monday, the Pharmaceutical Care Management Association (PCMA) sent a letter to Senate Majority Leader Reid (D-NV) and House Speaker Boehner (R-OH) suggesting policies related to federal health programs the organization, which represents the nation's pharmacy benefit managers (PBMS), claims could save more than $100 billion. Among the suggestions are increased utilization of generic drugs paid for by Medicare and Medicaid, and an expedited approval process for biologic drugs. "As administrators of Part D, PBMs have helped the program beat budget projections and lower expected premiums for seniors,"PCMA President and CEO Mark Merritt wrote. "PCMA and its member companies stand ready to provide our insights and solutions to help lower costs while maintaining high access to prescription drug benefits."

2. Administration

CMS

Hospitals Seek Clarification of Uncompensated Care

On Wednesday, the American Hospital Associationsent a letter to CMS Acting Administrator Marilyn Tavenner offering suggestions and seeking clarification on issues related to the most recent version of Form CMS 2552-10 Worksheet S-10, which is used by hospitals for reporting uncompensated care. Data being reported on the form will be used to determine a variety of other payments to hospitals including meaningful use of electronic health records and disproportionate share hospital (DSH) payments.

3. State Activities

Arkansas Testing Episodic Care Payment Reform

Arkansas has launched a new payment reform model emerging from a partnership between the state's Medicaid program and the state's two largest insurers, Arkansas Blue Cross Blue Shield and QualChoice. The plan centers on paying groups of doctors for "episodes"of care, like congestive heart failure. Doctors who perform the highest-quality work for the lowest cost would be eligible for bonus payments, while those at the other end could have to pay back the state. According to a representative of the Arkansas Medical Association, while its physician members have not outright endorsed the change, it's being viewed as a more positive reform than other options such as cuts to Medicaid.

4. Regulations Open for Comment

Inpatient Prospective Payment Systems (IPPS) and Graduate Medical Education (GME) Rule/Corrections

This week, CMS announced technical corrections to errors in the regulations text of the final rule that appeared in the August 31, 2012 Federal Register entitled "Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2013 Rates; Hospitals' Resident Caps for Graduate Medical Education Payment Purposes; Quality Reporting Requirements for Specific Providers and for Ambulatory Surgical Centers."Because undertaking further notice and comment procedures to incorporate the corrections into the final rule would delay the effective date of the rule, and would be contrary to the public interest, CMS has waived both the notice and comment and delayed effective date requirements. To view the corrections

FDA Proposes Unique Device Identifier (UDI) Rule

The FDA will accept comments on theproposed rule to implement a Unique Device Identifier system for medical devices distributed in the United States. Comments on the proposed rule will be accepted either electronically or written until Nov. 7, 2012.

5. Reports

Government Accountability Office (GAO)

Types of Providers Involved in Medicare, Medicaid, and the Children's Health Insurance Program Fraud Cases

According to a report recently issued by GAO based on data from the Department of Health and Human Services' Office of the Inspector General (HHS-OIG) and the Department of Justice (DOJ), 10,187 subjects -- individuals and entities involved in fraud cases -- were investigated for health care fraud, including fraud in Medicare, Medicaid and the Children's Health Insurance Program (CHIP), in 2010. The most frequent criminal targets were medical facilities like clinics and practices, while hospitals ranked at the top of civil investigations. The report also noted, among many other findings, that of the 2,200 individuals and entities barred from program participation due to fraudulent operations, more than half were in the nursing field. In terms of identifying potential fraud, the report stated that the FBI and state and local law enforcement agencies were responsible for referring 38 percent of fraud cases to the HHS inspector general.

Urban Institute

Health Care Law's Impact on Businesses

The Urban Institute recently published the results of a study exploring the impact of the ACA on employers, and more specifically how employers will be impacted by the requirement to offer qualifying health benefits to employees, or face a penalty. The study states that if the law were fully in effect this year, large businesses with 100 employees or more would be paying about the same insurance costs per person, while small businesses with 50 employees or fewer would pay an average of 7.3 percent less in insurance costs per person.

Health Affairs

Seniors Leaving Rx Dollars on the Table

According to a recent study conducted by University of Pittsburgh researchers Chao Zhou and Yuting Zhang appearing in Health Affairs, seniors could save $368 a year if they chose the least costly plans that met their needs. The researchers attributed this phenomenon to seniors' tendency to select benefit plans with more overly generous benefits such as low deductibles in an attempt to mitigate exposure to unexpected out-of-pocket costs. The study found that only 5.2 percent of beneficiaries chose the cheapest plan, and more than a fifth of beneficiaries spent at least $500 a year more than they needed to. The findings suggest that beneficiaries need more targeted assistance from the government to help them choose plans.The full study is available online (subscription required).

American Action Forum

Regulatory Costs Associated with Affordable Care Act (ACA)

According to a report released by the right-leaning American Action Forum, to date, the ACA has imposed a total of $27.6 billion in new regulatory costs, with $20.4 billion being incurred by private entities, and state budgets bearing the remaining $7.2 billion. The study also identified the five states bearing the largest regulatory burden. California has the single-highest burden, with $3.4 billion in total compliance costs. Texas has absorbed $1.8 billion, followed by New York ($1.7 billion), Florida ($1.6 billion) and Illinois ($1 billion). The analysis is based on what the American Action Forum has identified as 85 new federal rulemakings as a result of the health reform law.

Altarum Institute

Health Spending Remains Low

According to Altarum Institute's Center for Sustainable Health Spending in its Health Sector Economic Indicators brief, national health expenditures in August 2012 grew by 3.8 percent relative to August 2011, equaling the July rate and representing the fourth consecutive month of below 4 percent growth. The 2012 average rate of growth in spending at 4.1 percent is down sharply from the estimated 2011 average of 5.2 percent and helps alleviate fears of a new acceleration in overall health spending. Conversely, a spike in hospital prices drove overall health care prices in August 2012 to 2.4 percent above their August 2011 level, the highest reading in almost two years. Health spending as a share of the nation's GDP fell to 17.9 percent in August, according to the report, down from 18.3 percent in June 2011 but still ahead of the 16.4 percent it had reached before the recession began in December 2007. Additional data show that the health sector added 44,000 jobs in September, the second-highest monthly gain since 2002 and nearly twice the average of the previous two years.

Physicians for a National Health Program/America's Health Insurance Plans (AHIP)

Groups Argue Over Merits of Medicare Advantage (MA) Program

In a paper recently released by Harvard Medical School professors Steffie Woolhandler and David Himmelstein, with help from Ida Hellander of Physicians for a National Health Program, single-payer health plan advocates claim privately sponsored health plans for Medicare beneficiaries available under Part C, also known as Medicare Advantage (MA), have received $282.6 billion in "excess payments"since 1985. That number equates to about 24.4 percent of all payments made during that time.

In response, America's Health Insurance Plans (AHIP), representing MA plan sponsors, produced data showing that the 13 million Americans enrolled in the program "value the improved quality of care, additional benefits and innovative services these plans provide."The health plans also point to studies suggesting MA members had fewer unnecessary hospital readmissions, were more likely to visit a primary care doctor and evidenced higher-quality care as a result of the enhanced benefits available under MA as opposed to traditional fee-for-service Medicare.

6. Medicare Payment Advisory Commission (MedPAC)

October 2012 Meeting

On Oct. 4 and 5, the Medicare Payment Advisory Commission (MedPAC) met to discuss progress on its March 2013 report to Congress. During the two-day discussion, which was divided into six sessions, MedPAC continued to work on three reports that the Congress has requested be provided before the end of the year: physician geographic adjustment, Medicare payment for ambulance service and the outpatient therapy benefit. The Commission reviewed and discussed draft recommendations from the Chairman for its March 2013 report. MedPAC also discussed reauthorization of Medicare Advantage (MA) Special Needs Plans (SNPs).A summary of each session has been made available by McGuireWoods Consulting.


If you have any questions, please contact Stephanie Kennan, Senior Vice President, or Brian Looser, Assistant Vice President, at McGuireWoods Consulting.

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering state and federal government relations, national/multistate strategies, infrastructure and economic development, strategic communications and grassroots issue management services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and in 2010 was ranked in the Top 20 of The National Law Journal's "The Influence 50," an annual report of the top public affairs firms in Washington, D.C.

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