Feb 16, 2015

Washington Healthcare Update

This Week: Energy and Commerce Hearing Examines ICD-10 Preparedness... HHS Announces Oncology Care Model Initiative... Pennsylvania Governor Abandons Alternative Medicaid Expansion Approach for Traditional Plan

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Bipartisan Bill Introduced in House to Repeal Health Insurers Tax

On Feb. 12, Reps. Charles Boustany (R-LA) and Kyrsten Sinema (D-AZ) introduced legislation, Jobs and Premium Protection Act, to repeal the Health Insurance Tax (HIT). The HIT is a provision included within the Affordable Care Act (ACA) that is a direct tax on health insurance providers for the services they provide to individuals, families and other beneficiaries. The Joint Committee on Taxation (JCT) estimates that eliminating this tax by 2016 could save families $350 to $400 in premium costs. The cost of the tax in 2014, the first year of its implementation, was $8 billion — but that number will climb to $14.3 billion by 2018. In a press release, Rep. Sinema said, “I hear every day from individuals, families, and businesses in Arizona about the cost of health care. This common sense fix will help lower out-of-pocket costs for hardworking Arizonans. By working together, we can provide relief for individuals, families, and employers while increasing access to quality affordable health care.” Rep. Boustany introduced similar legislation with former Rep. Jim Matheson (D-UT) in the 112th and 113th Congress, where the bill gained 226 and 231 bipartisan cosponsors, respectively.

Energy and Commerce Hearing Examines ICD-10 Preparedness

On Feb. 11, the Energy and Commerce Subcommittee on Health held a hearing entitled “Examining ICD-10 Implementation.” The International Classification of Diseases (ICD) Procedure Coding System was established by the International Statistical Institute in 1891, in order to begin the process of creating an internationally recognized classification of diseases to help facilitate our understanding of mortality. The United States currently operates under the International Classification of Diseases, 9th Revision (ICD-9) code set, which has about 13,000 diagnostic codes. Under law, ICD-10 is set to become the coding system of the United States on Oct. 1, 2015.


Edwin M. Burke, M.D.
Beyer Medical Group

Rich F. Averill
Director of Public Policy
3M Health Information Systems

Sue Bowman
Senior Director, Coding Policy and Compliance
American Health Information Management Association

Kristi A. Matus
Chief Financial and Administrative Officer
Athena Health

William Jefferson Terry, M.D.
American Urological Association, and Urology and Oncology Specialists, PC

Carmella Bocchino
Executive Vice President of Clinical Affairs and Strategic Planning
America’s Health Insurance Plans

Dr. John Hughes
Professor of Medicine
Yale University.

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

Oversight Subcommittee Explores HHS Activity Related to Mental Health

On Feb. 10, the Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled “Federal Efforts on Mental Health: Why Greater HHS Leadership is Needed.” The hearing was held as part of the Subcommittee’s examination, ongoing since January 2013, of mental health programs and resources with the aim of ensuring that Federal dollars devoted to mental health are reaching the over 11 million American adults with serious mental illness (SMI) and helping them to obtain the most effective care. In particular, this hearing will examine the findings of a recent report of the U.S. Government Accountability Office (GAO), “Mental Health: HHS Leadership Needed to Coordinate Federal Efforts Related to Serious Mental Illness.”


Linda T. Kohn, Ph.D.
Director, Health Care
U.S. Government Accountability Office

Richard G. Frank, Ph.D.
Assistant Secretary for Planning and Evaluation
U.S. Department of Health and Human Services

Pamela S. Hyde, J.D.
Substance Abuse and Mental Health Services Administration
Accompanying Richard G. Frank, Ph.D.

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

Oversight Committee Examines GAO High-Risk Report

On Feb. 11, the House Committee on Oversight and Government Reform held a hearing titled, “GAO’s High Risk Report: 25 Years of Problematic Practices.” Since 1990, generally coinciding with the start of each new Congress, GAO has reported on the status of progress to address high-risk areas and to update the High Risk List. Our most recent high-risk update was in February 2013. This high-risk update is intended to help inform the oversight agenda for the 114th Congress and to guide efforts of the administration and agencies to improve government performance and reduce waste and risks. The report contains GAO’s views on progress made and what remains to be done to bring about lasting solutions for each high-risk area.


Mr. John J. MacWilliams
Senior Advisor to the Secretary
U.S. Department of Energy

The Honorable Gene L. Dodaro
Comptroller General
U.S. Government Accountability Office

Mr. Robert M. Lightfoot, Jr.
Associate Administrator
National Aeronautics and Space Administration

Shantanu Agrawal, M.D.
Deputy Administrator and Director, Center for Program Integrity
Centers for Medicare and Medicaid Services

The Honorable Alan F. Estevez
Principal Deputy Under Secretary of Defense for Acquisition, Technology and Logistics
U.S. Department of Defense

The Honorable John Koskinen
Internal Revenue Service

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

Energy and Commerce Advances Six Bipartisan Bills

On Feb. 12, the House Energy and Commerce Committee advanced six bipartisan bills aimed at helping patients and local communities, increasing efficiency at the FCC and helping protect drinking water from harmful algae blooms known as cyanotoxins.

  • H.R. 734, the Federal Communications Commission Consolidated Reporting Act, authored by Majority Whip Steve Scalise (R-LA), Communications and Technology Subcommittee Chairman Greg Walden (R-OR) and Ranking Member Anna Eshoo (D-CA) will reduce reporting requirements and increase efficiency at the FCC.
  • H.R. 639, the Improving Regulatory Transparency for New Medical Therapies Act, seeks to improve the transparency and consistency of DEA’s scheduling of new FDA-approved drugs under the Controlled Substances Act, and its registration process for manufacturing controlled substances for use in clinical trials.
  • H.R. 471, the Ensuring Patient Access to Effective Drug Enforcement Act, would establish clear and consistent enforcement standards and ensure patients have access to medications by promoting collaboration among government agencies, patients and industry stakeholders.
  • H.R. 647, the Access to Life-Saving Trauma Care for All Americans Act, and H.R. 648, the Trauma Systems and Regionalization of Emergency Care Reauthorization Act, would amend title XII of the Public Health Service Act to reauthorize certain trauma care programs.
  • H.R. 212, the Drinking Water Protection Act, authored by Rep. Bob Latta (R-OH). This bipartisan bill will put forth a strategic plan for assessing and managing risks associated with cyanotoxins and algal toxins in drinking water provided by public water systems.

All six bills were agreed to by voice vote. For more information, please visit


HELP Committee Hearing Examines Vaccine-Preventable Disease

On Feb. 10, the Senate HELP Committee held a hearing entitled “The Reemergence of Vaccine-Preventable Diseases: Exploring the Public Health Successes and Challenges.” Witnesses testified about the importance of vaccinations in combating diseases such as measles and polio, as well as the impact of “micro-communities” of individuals who choose not to administer vaccines, which can make it difficult to control the spread of disease, and the potential for viruses to re-establish themselves among the general population. “From smallpox to polio, we have learned in the United States that vaccines save lives. And yet a troubling number of parents are not vaccinating their children,” Chairman Alexander (R-TN) noted in his opening statement.


Panel I

Anne Schuchat, M.D. (RADM, USPHS)
Director, National Center for Immunization and Respiratory Diseases
Centers for Disease Control and Prevention

Panel II

Mark Sawyer, M.D.
Professor of Clinical Pediatrics, Division of Infectious Diseases
University of California San Diego and Rady Children’s Hospital

Tim Jacks, D.O., F.A.A.P.
Parent, Pediatrician, and Every Child By Two Immunization Champion
Gilbert, AZ

Kelly L. Moore, M.D., M.P.H.
Director, Immunization Program
Tennessee Department of Health

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

Bill Would Extend Children’s Health Insurance Program (CHIP) Through 2019

On Feb. 12, Sen. Brown (D-OH) introduced legislation that would extend CHIP funding through 2019. Introducing the bill with Brown were U.S. Sens. Debbie Stabenow (D-MI); Ron Wyden (D-OR), the ranking member of the Senate Finance Committee; Bob Casey (D-PA); and Minority Leader Harry Reid (D-NV). The Protecting & Retaining Our Children’s Health Insurance Program Act of 2015 (PRO-CHIP) would extend funding for CHIP through 2019, consistent with its current authorization. Federal funding for CHIP, which covers roughly 10 million children and pregnant women nationwide is set to expire in September 2015. In addition to extending CHIP funding for four years, the PRO-CHIP Act would also extend the CHIP contingency fund to protect states that may experience a funding shortfall, and extend and update the Performance Incentive and Pediatric Quality Measures Programs. CHIP, which was created in 1997, is a joint state-federal health insurance program for low- to moderate-income children and pregnant women who are not Medicaid eligible. Within three years of its initial passage, all 50 states opted into the program, providing millions with access to health insurance.

2. Administration

HHS Announces Oncology Care Model Initiative

On Feb. 12, the U.S. Department of Health and Human Services (HHS) announced a new multipayer payment and care delivery model to support better care coordination for cancer care. The initiative will include 24-hour access to practitioners for beneficiaries undergoing treatment and an emphasis on coordinated, person-centered care aimed at rewarding value of care rather than volume. The Oncology Care Model encourages participating practices to improve care and lower costs through episode-based, performance-based payments that financially incentivize high-quality, coordinated care. Participating practices will also receive monthly care management payments for each Medicare fee-for-service beneficiary during an episode to support oncology practice transformation, including the provision of comprehensive, coordinated patient care. The model was created in response to feedback from the oncology community, patient advocates and the private sector that a new way of paying for and delivering oncology care is needed. This model will invest in physician-led practices, allowing the practices to innovate and deliver higher-quality care to their patients. CMS is seeking the participation of other payers in the model to leverage the opportunity to transform care for oncology patients across a broader population.

CMS Releases Final Rule on 2016 Medicare Advantage Plans

On Feb. 6, the Centers for Medicare & Medicaid Services (CMS) published its final rule on 2016 private Medicare plans (Medicare Advantage) and MA’s prescription drug plans. The final rule expands coverage requirements on quality and chronic care improvement, while also looking to simultaneously enhance the way drugs are delivered to beneficiaries in long-term-care facilities. The final rule addresses changes that were initially proposed in January of 2014, and CMS received more than 7,000 comments on that initial proposal. The final rule differs from the previously released proposed rule as it keeps the “protected class” coverage status on antidepressants, antipsychotics and immunosuppressants for transplant rejection. The final rule also cuts previous provisions that would have required Part D plans to adopt the “any willing pharmacy” language, and drops previous language that would limit the number of Part D plans that health insurers can offer. The agency also said in the rule it can require insurers and pharmacy benefit managers to hire independent auditors if they want to challenge Medicare audit findings. The CMS has increased its oversight of Part C and Part D regulation through corrections audits. The final rule was released ahead of much-anticipated guidance from CMS on preliminary 2016 payment rates for Medicare Advantage, which is expected to be released Feb. 20.

CMS Concludes Insurer Survey on QHP Application Process

The Centers for Medicare and Medicaid Services (CMS) is seeking information in a voluntary online survey to issuers regarding their experience with the 2015 Qualified Health Plan (QHP) application process. The agency plans to use the anonymous survey results to inform improvements in future years, it said in a recent Issuer Insights newsletter. Insurer plans were asked to submit comments and feedback by Feb. 13. Specifically, the survey asks plans to offer feedback on their experiences with several aspects of the application process, including overall satisfaction, usefulness of resources and suggestions of ways to improve future application cycles. CMS has proposed setting the next QHP application cycle from March 16 through April 15 in its draft letter to issuers seeking to participate in the FFM. Many issuers, however, say the proposed window is not long enough to sufficiently develop rates and design products and are seeking to get the dates pushed back. The final letter to issuers has not yet been released.

ONC Releases Data Showing High Hospital Participation in Meaningful Use Program Expected to Continue in 2015

According to data released Feb. 9 by the Office of the National Coordinator (ONC) for Health Information Technology, the vast majority of U.S. hospitals participated in the Medicare and Medicaid EHR Incentive program in 2014 and did so using electronic health records (EHRs) certified as meeting the latest federal standards. ONC also found that only 4 percent of the approximately 5,000 hospitals eligible to participate in the meaningful use program did not attest to meeting the requirements of the program in 2014. Additionally, more than 90 percent of the roughly 4,400 hospitals that said they met the requirements of the program were using EHRs certified under the 2014 Edition criteria, the latest federal standards for EHR systems. Worth noting, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule Jan. 29 that if finalized would decrease the meaningful use program’s reporting period in 2015 from a full year to 90 days and change the hospital reporting period from the fiscal year to the calendar year. The forthcoming rule is in response to worries that hospitals and other providers may not be prepared to report on a full year of meaningful use criteria in 2015.

Nursing Home Compare 3.0: Revisions to the Nursing Home Compare 5-Star Quality Rating System

On Feb. 20, the Centers for Medicare & Medicaid Services (CMS) will unveil Nursing Home Compare (NHC) 3.0, an expanded and strengthened NHC 5-Star Quality Rating System for Nursing Homes on the CMS Nursing Home Compare website ( CMS will complete the following actions:

  • Add 2 Quality Measures (QMs): for antipsychotic medication use in nursing homes to the 5-Star calculations. One measure is for short-stay residents when a nursing home begins use of antipsychotics for people without diagnoses of schizophrenia, Huntington’s disease or Tourette syndrome, and a second measure reflects continued use of such medications for long-stay nursing home residents without diagnoses of schizophrenia, Huntington’s disease or Tourette syndrome.
  • Raise Performance Expectations: by raising the standards for nursing homes to achieve a high rating on all publicly reported measures in the Quality Measures category on the website.
  • Adjust Staffing Algorithms: to more accurately reflect staffing levels. Nursing homes must earn 4-stars on either the individual Registered Nurse (RN) only or the staffing categories to receive 4-stars on the Overall staffing rating and can have no less than a 3-star rating on any of those dimensions.
  • Expand Targeted Surveys: a plan for State Survey Agencies to conduct specialized, on-site surveys of a sample of nursing homes across the U.S. that assess adequacy of resident assessments and the accuracy of information reported to CMS that is used in calculating quality measures used in the rating system.

A report on the results of the pilot surveys completed in 2014 in five states will be available after Feb. 23, 2015, at

3. State Activities

Pennsylvania Governor Abandons Alternative Medicaid Expansion Approach for Traditional Plan

In an announcement Feb. 9, Pennsylvania’s Gov. Tom Wolf (D) said the state will be abandoning the alternative expansion negotiated by his predecessor, Gov. Tom Corbett (R), in favor of a traditional Medicaid expansion. He said he has directed the state’s Department of Human Services to write to the federal government and withdraw a less generous coverage package that was offered under the state’s earlier plan. Pennsylvania officials are already making changes to their eligibility systems that will take effect this spring, they said. “Today is the first step toward simplifying a complicated process and ensuring hundreds of thousands of Pennsylvanians have greater access to the health insurance they need,” Gov. Wolf said in a statement. Importantly, the Wolf administration says the decision will not affect any coverage immediately, but ultimately could impact as many as 600,000 people. Thus far, 28 states and the District of Columbia have agreed to expand Medicaid under the Affordable Care Act (ACA) since the U.S. Supreme Court ruled in 2012 that the decision was up to states and not mandatory.

Wyoming Legislature Votes to Thwart Medicaid Expansion in State

On Feb. 11, the Wyoming’s State Senate voted against a bill that would expand Medicaid to Wyoming citizens making up to 133 percent of the federal poverty line. Senators voted 19 to 11 to kill the Senate File 129-Medicaid SHARE Plan. Following the vote, House of Delegates Labor Committee chairwoman Rep. Elaine Harvey (R-Lovell) pulled a separate House bill, HB 245, to expand Medicaid, reasoning that no matter how the House amended its bill, the Senate would reject the measure. Senators voting against the bill cited concerns about adding to the federal debt. “Make no doubt about it, this saddles more debt on your children and your grandchildren,” Sen. Larry Hicks (R-Baggs) said during floor debate. “This just brings us one step closer to economic collapse in this country.” An additional year without Medicaid expansion means that Wyoming will not receive $120 million in federal funds for the fiscal year beginning July 2016. The Wyoming Department of Health projected that money would provide health coverage to 17,600 Wyoming residents and create 800 jobs. Thus far, 28 states and the District of Columbia have agreed to expand Medicaid under the Affordable Care Act (ACA) since the U.S. Supreme Court ruled in 2012 that the decision was up to states and not mandatory.

Alaska Governor Unveils Medicaid Expansion Plan

Alaska Gov. Bill Walker and the state’s Department of Health and Social Services Commissioner Valerie Davidson have released a document entitled The Healthy Alaska Plan: A Catalyst for Reform, which will serve as the path to Medicaid expansion and the reform efforts for the State’s current Medicaid program. Under the plan, Medicaid expansion will increase access to health insurance for an estimated 41,910 low-income Alaskans. Those in the expansion population include individuals who are not currently offered affordable health insurance coverage by their employer, may not be eligible for subsidized plans on the Health Insurance Marketplace and cannot afford to purchase an individual health insurance plan on their own. Expansion will benefit single Alaskans without dependent children earning up to $20,314 a year, and married couples without dependent children earning up to $27,490 per year. Once these Medicaid recipients in the expansion population achieve a higher income they will be able to transition to the Health Insurance Marketplace and receive a subsidy to help afford coverage until their income reaches 400 percent FPL.

4. Regulations Open for Comment

FDA Releases Draft to Streamline Experimental Drug Applications

On Feb. 4, the Food and Drug Administration (FDA) released draft guidance, entitled Individual Patient Expanded Access Applications: Form 3926, for a new, shorter application for patient access to experimental drugs. The draft comes in response to concerns that the existing process for “compassionate use” for experimental drug applications was too arduous. In the guidance, FDA says the newly proposed form would take doctors 45 minutes to complete whereas the existing form is estimated to take 100 minutes. Under the old system, FDA required that a “cover sheet” be included with any IND submission, known as Form 1571. However, that form was originally intended to be used by companies involved in drug development, not physicians, who submit the vast majority of expanded access requests. FDA said it was “concerned” that some physicians might not understand how to complete that cover sheet “and associated documents because it is not tailored to requests for individual patient expanded access.” Peter Laurie, FDA’s associate commissioner for public health strategy and analysis, said the changes would greatly simplify the compassionate use process. The old form “called for 26 separate types of information and seven attachments,” he noted. “The new form calls for a small fraction of that. The new draft form, when finalized, will require only eight elements of information and a single attachment.” The changes announced by the agency are expected to affect a significant number of patients each year; in 2014, FDA processed 1,758 single patient investigational new drug applications and emergency investigational new drug applications—97 percent of all expanded access requests. Comments and suggestions for the draft document should be submitted by April 13, 2015.

FDA Reopens Comment Period for Certain Provisions within Generic Drug User Fee Amendments

On Feb. 6, the Food and Drug Administration (FDA) posted a Federal Register notice reopening the public docket to solicit comments on certain topics related to Generic Drug User Fee Amendments of 2012 (GDUFA) implementation and the GDUFA Commitment Letter that accompanies the legislation. FDA will reopen the comment period to the public docket associated with the Sept. 17, 2014, GDUFA Public Hearing on Policy Development for an additional 30 days. Specifically, the agency has requested public input on the five draft guidance documents that were issued to facilitate implementation of GDUFA and on future policy priorities including recommendations for additional guidance topics to facilitate GDUFA implementation. FDA also requested feedback on issues that may arise in consideration of 180-day exclusivity provided for by paragraph IV patent certifications. Finally, FDA requested feedback on the specific criteria FDA should apply to identify an abbreviated new drug application (ANDA) as a first generic eligible for expedited ANDA review. FDA will take the information presented at the public hearing and in comments to the docket into account when developing the fiscal year 2015 GDUFA priorities.

Interested persons may submit either electronic comments regarding this document to or written comments to the Division of Dockets Management by close of business March 9.

5. Reports

Defense Health Care: Better Tracking and Oversight Needed of Servicemember Separations for Non-Disability Mental Conditions

According to a GAO report released Feb. 13, the Department of Defense (DOD) and three of the four military services—Army, Navy and Marine Corps—cannot identify the number of enlisted servicemembers separated for non-disability mental conditions—mental conditions that are not considered service-related disabilities. For most non-disability mental condition separations, these services use the broad separation code, “condition, not a disability,” which mixes non-disability mental conditions with non-disability physical conditions, such as obesity, making it difficult to distinguish one type of condition from the other. In contrast, the Air Force is able to identify such servicemembers because it uses all five of the separation codes specific to non-disability mental conditions. DOD policy requires the military services to use a separation code so that DOD can track and analyze separations. Moreover, federal standards for internal control state that all transactions need to be clearly and accurately documented and readily available for examination when needed. The three services had varying reasons why they use the broad separation code. For example, Army officials believed that stating in servicemembers’ discharge papers that they were discharged for non-disability mental conditions might stigmatize them with future employers. However, DOD stated that there are ways to protect servicemembers in this regard by providing them with discharge papers that are more general and that do not disclose specific reasons for discharge. By not systematically identifying or periodically evaluating the number of separations for non-disability mental conditions, DOD and the services cannot assess how well the separation policy and process are working or inform key stakeholders, including the Congress, about separation frequency, trends and other data.

MedPAC Report: The Need To Reform Medicare’s Payments to Skilled Nursing Facilities is as Strong as Ever

According to a recent report released by the Medicare Payment Advisory Commission (MedPAC), well-documented shortcomings in the design of Medicare’s payment system for skilled nursing facilities (SNFs) have prompted CMS to make many revisions to it, including shifting payments from therapy care toward nursing care. MedPAC found that between 2006 and 2014, payment accuracy for these services has steadily eroded. Payments are less able to explain differences in costs across both stays and facilities and payments are less proportional to costs. When more therapy is furnished, facility costs increase but program payments increase more quickly, to an even greater extent now than in the past. Payments for NTA services are unrelated to their costs and, as result, current policies continue to advantage facilities that predominantly admit patients with rehabilitation care needs and poorly target payments for NTA services. The study also compares current policy to an alternative design that would base payments for these services on patient characteristics and establish a separate payment component for NTA services. Compared with current policy, an alternative design would increase the accuracy of payments and dampen the incentive to furnish therapy for financial gain. We conclude that CMS’s changes have not improved payment accuracy and more fundamental reforms are required. CMS should adopt an alternative design as quickly as possible.

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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