CONSISTENTLY DELIVERS

Oct 20, 2014

Washington Healthcare Update

This Week: Energy and Commerce Committee holds hearing on Ebola... CMS publishes 2015 Star Ratings for Medicare Advantage and Medicare Rx drug plans... CMS releases proposal on home health agency conditions of participation

1. Congress

House of Representatives

  • House E&C Oversight and Investigations Subcommittee Holds Hearing on U.S. Response to Ebola Outbreak
  • House E&C Committee to Release 21s Century Cures Bill; Intends Mid-2015 Passage

Senate

  • Bipartisan Group Concerned About Rural Hospital Access
  • Finance Committee to Issue Report on Physician-Owned Device Distributors in 2015

2. Administration

  • CMS & OIG Extend Fraud Abuse Waivers for ACO Shared Saving Program Due to Delayed Rule on ACOs' Second Round
  • CMS Announces New $114 Million Initiative to Support Medicare ACO Growth
  • FDA Publishes FY 2015 Generic Drug Regulatory Priorities
  • Medicare Secondary Payer Proposed Rule Withdrawn by CMS
  • CMS Announces Two New Initiatives to Improve Post-Acute Care
  • HHS Secretary Announces $283 Million in Funding for National Health Service Corps in FY 2014
  • CMS Publishes the 2015 Star Ratings for Medicare Advantage and Prescription Drug Plans

3. State Activities

  • Minnesota Commerce Commissioner Announces State Exchange's 2015 Rates
  • Idaho Health Exchange Releases 2015 Plan Options
  • Louisiana Health Insurance Filings for Individual and Small Group Markets

4. Regulations Open for Comment

  • CMS Releases Proposed Rule on Revised Conditions of Participation for Home Health Agencies
  • CMS Seeks Stakeholder Input on Innovative Health Plan Designs
  • OIG Proposed Rule Would Expand Medicare Anti-Kickback Statute Safe Harbors

5. Reports

  • OIG: Massachusetts Did Not Always Make Correct Medicaid Claim Adjustments
  • Medicare Beneficiaries Paid Nearly Half of Costs for Outpatient Services at Critical Access Hospitals
  • TRICARE's Payment Practices Should Be More Consistent with Regulations

1. Congress

House

House E&C Oversight and Investigations Subcommittee Holds Hearing on U.S. Response to Ebola Outbreak

The Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled "Examining the U.S. Public Health Response to the Ebola Outbreak" on Thursday, Oct. 16, 2014, at 12:00 p.m. in 2123 Rayburn House Office Building. The hearing gave members the opportunity to ask questions regarding the role of U.S. public health agencies and their efforts to prevent the spread of Ebola within the U.S. Other issues discussed at the hearing included the preparedness of United States ports, points of entry, health care facilities and other institutions to identify, diagnose, isolate and treat Ebola patients in a safe and appropriate manner. During the member question and answer session, Republicans demanded travel restrictions to/from Liberia, Sierra Leone and Guinea to prevent new Ebola cases from coming to U.S. shores, while Democrats provided backup for the Obama Administration and gave health officials a chance to explain why a ban would not be effective and could make the situation worse. Also in the hearing, a top executive for Texas Health Presbyterian told Congress that he is "deeply sorry" for the mistakes the facility has made in confronting the disease and that it is trying to figure out what went wrong.

Witness List:

Dr. Thomas R. Frieden
Director, Centers for Disease Control and Prevention

Dr. Anthony Fauci
Director, National Institute of Allergy and Infectious Diseases, National Institutes of Health

Dr. Luciana Borio
Assistant Commissioner, Counterterrorism Policy, U.S. Food and Drug Administration

Dr. Robin Robinson
Director, Biomedical Advanced Research and Development Authority, Office of the Assistant Secretary for Preparedness and Response, U.S. Department of Health and Human Services

Mr. John P. Wagner
Acting Assistant Commissioner, Office of Field Operations, Customs and Border Protection

U.S. Department of Homeland Security
Dr. Daniel Varga
Chief Clinical Officer and Senior Vice President, Texas Health Resources

For more information, or to view the hearing, please visit energycommerce.house.gov.

House E&C Committee to Release 21st Century Cures Bill; Intends Mid-2015 Passage

At an Oct. 14 Biotechnology Industry Organization conference, House Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA) announced that the committee plans to release a discussion draft by January 2015 of legislation intended to accelerate medical breakthroughs. The legislation comes as a result the committee's 21st Century Cures initiative, a roundtable and hearing series launched in May to discuss opportunities to accelerate the discovery, development and delivery of new drugs and devices. The initiative aims to identify barriers to new treatments that can be overcome, augment existing health care research, provide opportunities for enabling the drug development process, and improve and further develop health mobile apps and other technologies used in the health care delivery process. "We want to identify barriers that Congress can do something about ...  new technologies are going to create massive amounts of data, so we have to start thinking big," he said to conference attendees. As it stands, the committee is currently in the works of developing the legislation and has given it an intended passage date of mid-2015.

Senate

Bipartisan Group Concerned About Rural Hospital Access

On Oct. 9, Sens. Heitkamp (D-ND) and Thune (R-SD) led a bipartisan group of 33 senators in sending a letter to CMS Administrator Tavenner to express concern that federal regulations for health care facilities do not adequately consider the impact on rural health care providers and rural patients. The senators' letter calls on CMS Director Tavenner to share details about how the agency is incorporating rural health care experts earlier in rule-drafting, and called for comprehensive information on the rulemaking process. Noting that recent policy decisions have not adequately reflected the reality of health delivery in rural areas, the senators called on CMS to work toward practices and standards that take rural health facilities into account during its initial rulemaking process. Such efforts would help ensure seniors, families, veterans and others can access services they need in their communities, rather than forcing them to travel long distances for care.

Finance Committee to Issue Report on Physician-Owned Device Distributors in 2015

Kimberly Brandt, investigative counsel for health care for minority members on the Senate Finance Committee, announced Oct. 7 at a conference in Baltimore that the committee will investigate physician-owned distributors (POD) of medical devices in an updated report to be issued in 2015. Ms. Brandt told medical device industry representatives at the conference that committee Ranking Member Sen. Orrin Hatch (R-UT) and other committee members hope to better understand whether PODs subvert patient safety and add to growing device utilization. Ranking Member Hatch "wants us to take a fresh look at where things are, what is the current state of play, what kinds of discussions are happening in hospitals and really do a much more robust look at the activity," Ms. Brandt said. "That will drive what will be the next wave of policy discussions." In light of the Senate committee's oversight duties concerning federal health care programs, she said the committee is also interested in the degree to which PODs contribute to instances of Medicare fraud and violations of federal anti-kickback statutes. Worth noting, the Department of Health and Human Services Office of the Inspector General (OIG) released a special fraud alert on PODs in March 2013, revealing that PODs pose a high risk of fraud and abuse and could possibly lead to the delivery of unsafe medical services.

2. Administration

CMS & OIG Extend Fraud Abuse Waivers for ACO Shared Saving Program Due to Delayed Rule on ACOs' Second Round

According to a notice released in the Federal Register on Oct. 17 by the Centers for Medicare & Medicaid Services (CMS), the Department of Health and Human Services Office of Inspector General (OIG) extended fraud and abuse waivers for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program until Nov. 2, 2015, when a final rule is expected to be implemented. The interim final rule, implemented in 2011, waived provisions of several fraud and abuse laws, including the Stark law (physician self-referral law), the anti-kickback statute and the civil monetary penalty law. ACOs participating in the Shared Savings Program include groups of doctors, hospitals or other institutions that provide coordinated care to patients under the premise that they share in the savings from reducing costs and improving quality. The agencies said the waiver extension and final rule delay are intended to prevent any legal disruptions within ACOs participating in the Shared Savings Program. Also included in the notice was a request by CMS and OIG for stakeholder feedback on whether the waivers offer ample protection for beneficiaries pertaining to the safety or financial concerns associated with referral payments or payments to limit or reduce services; they ask whether the ACO situation in this area has changed since 2011 and should lead to the promulgation of additional rules on this topic. The Shared Savings Program is an initiative implemented under the Affordable Care Act (ACA) aimed at lowering total expenditures for both individual Medicare beneficiaries and the Medicare program.

CMS Announces New $114 Million Initiative to Support Medicare ACO Growth

On Oct. 15, the Center for Medicare and Medicaid Services (CMS) announced that the agency will be allocating $114 million for investments in infrastructure and other improvements to bring higher-quality coordinated care to more beneficiaries. The funding will be available to 75 Medicare accountable care organizations (ACOs) to spur development in areas with fewer care models, such as rural and underserved communities. The ACO Investment Model was developed "in response to stakeholder concerns and research suggesting that some Medicare Shared Savings Program ACOs lack adequate access to the capital needed toinvest in infrastructure necessary to implement population care management successfully." In a press release, CMS said the program will provide "up front investments in infrastructure and redesigned care process to help eligible ACOs continue to provide higher quality care. This will help increase the number of beneficiaries--regardless of geographic location--that can benefit from lower costs and improved health care through Medicare ACOs." The agency intends to recoup payments through an offset of an ACO's earned shared savings. As it stands, more than 360 Medicare ACOs have been established in 47 states, serving more than 5.6 million Medicare beneficiaries. Created under the Affordable Care Act (ACA), Medicare ACOs are groups of providers and suppliers of services that work together to coordinate care for Medicare fee-for-service beneficiaries.

FDA Publishes FY 2015 Generic Drug Regulatory Priorities

On Oct. 6, the U.S. Food and Drug Administration (FDA) published the fiscal year (FY) 2015 regulatory science priorities for generic drugs. The FY 2015 research priorities list was prepared based on comments received at the May 16, 2014, public meeting, comments submitted to the public docket, scientific issues raised in citizen petitions, meeting request and controlled correspondence topics, tracked safety issues and discussions within the FDA's Center for Drug Evaluation and Research. To comply with Generic Drug User Fee Amendments of 2012 (GDUFA) requirements, the FDA Office of Generic Drugs developed the following FY 2015 regulatory science priorities for generic drugs:

  • Post-market evaluation of generic drugs
  • Equivalence of complex products
  • Equivalence of locally acting products
  • Therapeutic equivalence evaluation and standards
  • Computational and analytical tools

For more information on GDUFA regulatory science programs and initiatives, please visit www.fda.gov.

Medicare Secondary Payer Proposed Rule Withdrawn by CMS

On Oct. 8, the Centers for Medicare and Medicaid Services (CMS) withdrew the Notice of Proposed Rulemaking (NPRM) it submitted to the Office of Management and Budget (OMB) on Aug. 1, 2013, relating to CMS' intent in addressing future medical costs in workers' compensation, automobile, liability insurance(including self-insurance) and no-fault claims. The Medicare Secondary Payer and "Future Medicals" proposed rule (CMS-6047-P) "would announce CMS' intention regarding means beneficiaries or their representatives may use to protect Medicare's interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers' compensation where future medical care is claimed or the settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care," the abstract on the proposed rule said. While CMS has guidelines in place for the handling of future medical expenses in workers' compensation cases, until final rules are released in the liability context, there are no similar standards for claims involving self-insureds and automobile, liability and no-fault coverage. CMS began the process of issuing these regulations in June 2012 when it issued an advance notice of proposed rulemaking under which Medicare would not pursue reimbursements from beneficiaries who receive awards from liability insurance under the conditions it outlined.

CMS Announces Two New Initiatives to Improve Post-Acute Care

On Oct. 6, the Centers for Medicare & Medicaid Services (CMS) revealed two new initiatives intended to improve the quality of post-acute care for patients enrolled in Medicaid. The announcement comes after President Obama signed the Improving Medicare Post-Acute Care Transformation Act (IMPACT Act) into law on Oct. 6, which paves the way to enable CMS to compare the quality of post-acute care provided in different settings through the collection of standardized data. The first initiative named by the agency will expand the Nursing Home Five-Star Rating System, a program that allows beneficiaries to easily compare nursing homes, to include data from facilities' payrolls, revealing staffing ratios and retention rates. The revised program, facilitated through the newly updated and more user-friendly website, Nursing Home Compare, will also include added quality measures, such as rates of use for antipsychotic drugs, as well as administer a national audit system to validate collected data within the rating system. The second agency initiative announced involves modernizing home health regulations to focus on patient-centered, coordinated care and to require that agencies collect quality data and use it to inform improvements. For more detailed informationon the home health participation initiative, please see another summary detailing the proposed rule, which followed the announcement.

HHS Secretary Announces $283 Million in Funding for National Health Service Corps in FY 2014

Health and Human Services (HHS) Secretary Sylvia M. Burwell announced Oct. 9 that because of the Affordable Care Act (ACA), $283 million has been invested in the National Health Service Corps (NHSC) in fiscal year 2014 to increase access to primary care services to the underserved community. The NHSC provides financial, professional and educational resources to medical, dental, and mental and behavioral health care providers who bring their skills to areas of the United States with limited access to health care. In 2014, more than 9,200 Corps clinicians are providing care to approximately 9.7 million patients across the country. Since 2008, the number of primary care providers in NHSC has more than doubled through the Recovery Act and the ACA, and grants to states through the NHSC State Loan Repayment Program have grown by nearly 50 percent. As it stands, doctors in the first class of the National Health Service Corps Student to Service (S2S) Loan Repayment Program are completing their residency training in 2015; their entry into service will double the number of new physicians entering the workforce from the Corps pipeline.

CMS Publishes the 2015 Star Ratings for Medicare Advantage and Prescription Drug Plans

On Oct. 10, CMS released the 2015 Star Ratings for Medicare Advantage (MA) and Prescription Drug Plans and has published plan ratings on Medicare Plan Finder. This year there continues to be increases in the number of Medicare beneficiaries in high-performing Medicare Advantage and Prescription Drug Plans. Each year CMS publishes the Star Ratings to measure quality in the Medicare Advantage and Prescription Drug Plans, to assist beneficiaries in finding plans with high-quality ratings and to determine the MA Quality Bonus Payments. According to CMS, quality in Medicare Advantage and the Part D Prescription Drug Plans continues to improve as more people with Medicare will have access to higher-quality Medicare Advantage and Prescription Drug Plans. About 60 percent of Medicare Advantage enrollees are currently enrolled in plans with four or more stars for 2015, in contrast to an estimated 17 percent back in 2009. And Medicare Advantage enrollment is projected to be at an all-time high in 2015 with more than 16 million beneficiaries. In the Part D program, prescription drug plans have made great strides in improving their quality ratings. About 53 percent of Part D enrollees are currently enrolled in stand-alone prescription drug plans with four or more stars for 2015, as compared to 16 percent in 2009.

3. State Activities

Minnesota Commerce Commissioner Announces State Exchange's 2015 Rates

On Oct. 1, Minnesota's Commerce Commissioner, Mike Rothman, released the health insurance rates for the individual policies sold through MNsure, the state's health insurance exchange. Commissioner Rothman noted that the rates "again lead the nation in the lowest average health insurance rates in the country"; however it is difficult to compare them to 2014, as PreferredOne, last year's most popular carrier, will no longer be participating in the exchange in 2015. Overall, the highest insurance rates continue to be in southeast Minnesota and lowest rates in the Twin Cities for nearly all types of policies; however the gap between the two regions closed a bit since last year. Currently, the exchange has 84 different plans available for individuals. " The average rate increase for the four companies that participated in MNsure last year and this year is 4.5%, ranging from a decrease of -9.07 percent to increases of 1.8%, 8.12%, and 17.15%. Blue Plus filed rates this year as a newcomer to the MNsure marketplace," the announcement said. Worth noting, those figures were not weighted to reflect the market shares of the four insurance companies participating in the exchange. A weighted adjustment would take the average premium increase to about 12 percent.

Idaho Health Exchange Releases 2015 Plan Options

In a press release issued Oct. 8, Idaho's health insurance exchange, Your Health Idaho, released its 2015 plan options. Idaho residents will have the opportunity to choose from 198 health plans on the individual market, 52 plans more than were available in 2014. "We are really proud to offer Idahoans so many different choices when it comes to their healthcare," said Pat Kelly, Your Health Idaho's Executive Director. "We've been able to create an online marketplace in Idaho where nine different health and dental insurance carriers are competing for your business. We are confident Idahoans will be able to find a plan that meets their needs and fits their budget." During the 2014 open enrollment period, 72 percent of Your Health Idaho customers selected silver-level health insurance plans; a table included in the release shows county by county premium price changes for the state's silver-level plan options and indicates that premiums for a few counties have decreased (in some cases as much as 12 percent), and that the highest plan price increase rose by approximately 9 percent. Also worth noting, two new carriers are offering plans through the exchange, Mountain Health Co-Op and Willamette Dental, and seven 2014 carriers will continue to sell plans through the exchange. Open enrollment for the state health insurance begins on Nov. 15 and runs through Feb. 15, 2015.

Louisiana Health Insurance Filings for Individual and Small Group Markets

The Louisiana Department of Insurance has published a list of insurance plans to show consumers if a health insurance issuer has submitted a rate filing of 10 percent or more that will impact an individual or small group health insurance plan. An individual health plan is for someone who is buying insurance directly from an insurance company, rather than enrolling in coverage through an employer plan. In small group health plans, individuals receive insurance through an employer with 50 or fewer eligible employees. The Louisiana Department of Insurance reviews proposed health insurance rate filings for two purposes. All rate filings are subject to review to determine if the filings are in compliance with the laws governing rates for health insurance. In addition, if a proposed rate filing includes a rate increase of 10 percent or more, the filing is reviewed to determine whether the increase is reasonable and actuarially justified.

4. Regulations Open for Comment

CMS Releases Proposed Rule on Revised Conditions of Participation for Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule on Oct. 6 revising and modernizing the current conditions of participation for home health care agencies that want to take part in the Medicare and Medicaid programs. The CMS rule, published in the Federal Register on Oct. 7, "reflects the most current home health agency practices by focusing on the care provided to patients and the impact of that care on patient outcomes. This proposed regulation focuses on assuring the protection and promotion of patient rights; enhances the process for care planning, delivery, and coordination of services; streamlines regulatory requirements; and builds a foundation for ongoing, data-driven, agency-wide quality improvement." Specific new provisions in the proposed rule include patients' rights measures, coordination of services and quality of care measures utilizing an interdisciplinary team approach, quality assessment and performance improvement (QAPI) measures, and infection prevention and control measures, among others. Comments on the proposed rule are due to CMS by Dec. 8, 2014.

CMS Seeks Stakeholder Input on Innovative Health Plan Designs

On Oct. 2, the Centers for Medicare and Medicaid Services issued a request for information (RFI) for input from health plans and other stakeholders to explore innovative ways to improve Medicare. The CMS specifically would like information about stand-alone Medicare prescription drug plans (PDPs), Medigap and retiree supplemental health plans, Medicare Advantage and Medicare Advantage prescription drug plans, and Medicaid managed care plans. The request is intended to help CMS improve Medicare plan design, care delivery, beneficiary and provided engagement, and network design. CMS would like to receive the information by Nov. 3.

OIG Proposed Rule Would Expand Medicare Anti-Kickback Statute Safe Harbors

The Department of Health and Human Services Office of the Inspector General (OIG) released a proposed rule(RIN 0936-AA06) on Oct. 2 that would add new safe harbors to the anti-kickback statute covering some Medicare Part D activities and expand the list of conduct exempted from civil monetary penalties (CMPs). The proposed rule would cover a variety of behaviors, including: pharmacy cost-sharing waivers for impoverished Medicare Part D beneficiaries; cost-sharing waivers for emergency ambulance services offered by state or municipal-owned organizations; manufacturer discounts for drugs provided through the Medicare Coverage Gap Discount Program; and certain interactions between Medicare Advantage plans and federally qualified health centers (FQHCs). Lewis Morris, former chief counsel to the OIG, said the rule illustrates that the "inspector general is really working hard to find ways to promote quality of care in an integrated delivery system while still protecting the integrity of the program and its beneficiaries." Comments on the proposed rule are due Dec. 2.

5. Reports

OIG: Massachusetts Did Not Always Make Correct Medicaid Claim Adjustments

According to a report recently issued by the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Massachusetts Executive Office of Health and Human Services, Office of Medicaid (State agency), did not always use the correct Federal medical assistance percentages (FMAPs) when processing claim adjustments reported on the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (Form CMS-64). As a result, the State agency received approximately $106 million (Federal share) more than it was entitled to. The State agency used incorrect FMAPs because it processed adjusted claims as current expenditures for both public and private providers. OIG recommended that the State agency refund approximately $106 million to the Federal Government and ensure that it processes future adjustments in accordance with Federal requirements. The State agency partiallyconcurred with OIG's recommendations.

Medicare Beneficiaries Paid Nearly Half of Costs for Outpatient Services at Critical Access Hospitals

Using 2009 and 2012 claims data to calculate the percentages and amounts of coinsurance that Medicare beneficiaries paid toward the costs for outpatient services at Critical Access Hospitals (CAHs), a report issued by OIG on Oct. 7 found that Medicare beneficiaries paid nearly half the costs for outpatient services at CAHs. In 2012, beneficiaries paid approximately $1.5 billion of the estimated $3.2 billion cost for CAH outpatient services. Additionally, the average percentage of costs that beneficiaries paid in coinsurance for these services increased 2 percentage points between 2009 and 2012. Finally, for 10 frequently provided outpatient services at CAHs, beneficiaries paid between two and six times the amount in coinsurance that they would have for the same services at acute-care hospitals. To reduce the percentage of costs that Medicare beneficiaries pay in coinsurance, OIG recommends that the Centers for Medicare & Medicaid Services (CMS) seek legislative authority to modify how coinsurance is calculated for outpatient services received at CAHs. CMSresponded to the report, but neither concurred nor nonconcurred with the recommendation.

TRICARE's Payment Practices Should Be More Consistent with Regulations

According to a GAO report released Oct. 10, compounded drug prescriptions paid for by TRICARE's pharmacy benefit cost $259 million in fiscal year 2013 -- accounting for about 3 percent of the total cost of all prescription drugs paid for through TRICARE's pharmacy benefit -- up from $5 million in fiscal year 2004, and were largely driven by compounded drug prescriptions containing bulk drug substances. Bulk drug substances are typically raw powders that are generally not approved by the Food and Drug Administration (FDA) -- the agency within the Department of Health and Human Services (HHS) responsible for assuring the safety and effectiveness of drugs and approving them for marketing in the United States. TRICARE could not identify compounded drug prescriptions paid for through its medical benefit, which pays for drugs administered to patients in outpatient or inpatient settings, because claim forms for outpatient and inpatient drugs lack specific billing codes. The Department of Defense's (DOD) TRICARE program paid for about 465,000 compounded drug prescriptions through its pharmacy benefit in fiscal year 2013; these prescriptions represented 0.3 percent of all prescription drugs paid for through TRICARE's pharmacy benefit in that year. Most of these compounded drug prescriptions were dispensed in retail pharmacies and to retirees and their family members.


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

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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