May 11, 2015

Washington Healthcare Update

This Week: Congress Agrees on Budget Framework... FDA Launches Global Unique Device Identification Database (GUDID)... POTUS Nominates DeSalvo to Serve as Assistant Secretary for Health

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Bipartisan IPAB Bill Has Enough Votes to Pass

On May 5, Reps. Phil Roe, M.D. (R-TN), and Linda Sánchez (D-CA) announced that their legislation to repeal the Independent Payment Advisory Board (IPAB), introduced March 2, has surpassed 218 cosponsors, a critical milestone necessary to ensure House passage should the legislation receive a floor vote. The 15-member Presidential-nominated panel, which was empowered by the Patient Protection and Affordable Care Act (ACA) but has not yet been appointed, is charged with cutting Medicare payments to providers if Medicare spending targets aren’t contained to certain thresholds. Under previous and current law, changes to Medicare payment rates and program rules are recommended by MedPAC but require an act of Congress to take effect. As it stands, the bill, H.R. 1190, the Protecting Seniors’ Access to Medicare Act of 2015, has 222 cosponsors, including nineteen Democrats. “I am proud of the support behind this bill, not just in this Congress but in previous years. The thought of entrusting a bureaucrat with sweeping powers over Medicare costs should be alarming to both Republicans and Democrats alike, and I am glad to lead this effort,” Rep. Roe said in a statement. The bill was originally introduced in the 113th Congress in January 2013 by Reps. Roe and Allyson Schwartz (D-PA).


Congress Agrees on Budget Framework

On May 5, the budget framework developed by Republican leaders in Congress cleared a final hurdle when the Senate agreed by a 51-48 vote to approve its first 10-year balanced budget since 2001. While the chances of the Republican-controlled Congress being able to adhere to the strict spending outlined in the budget package are slim, passage of the budget resolution paves the way for Congress to pass controversial legislation, including ACA repeal using “reconciliation” — a maneuver that requires just a simple majority to pass legislation without the threat of a filibuster in the Senate. The budget adheres to domestic spending caps included in the 2011 Budget Control Act, also known as the sequester, and uses nearly $40 billion in off-budget funds to boost defense spending to over $563 billion. For more information, please visit

HELP Committee Examines Precision Medicine Initiatives

On May 5, the Senate HELP Committee held a hearing entitled “Continuing America’s Leadership: Realizing the Promise of Precision Medicine for Patients” in which the committee explored existing and potential approaches to medicine that take into account individual differences in patients, such as genetic makeup, environment and lifestyles when evaluating patients and determining treatments. While the concept is not new, the development of powerful and affordable methods for characterizing personal biological attributes (such as genomics and metabolomics), the widespread adoption of electronic health records, the emergence of mobile health technologies and computational tools for analyzing large biomedical data sets have broadened the potential applications of precision medicine. In addition, in January of this year, the President announced a new Precision Medicine Initiative — a bold, new research effort to revolutionize how we diagnose and treat disease, including a $215 million investment in the President’s Fiscal Year (FY) 2016 Budget.


Panel I
Francis Collins, M.D., Ph.D.
National Institutes of Health

Karen DeSalvo, M.D., M.P.H., M.Sc.
National Coordinator for Health Information Technology

Jeff Shuren, M.D., J.D.
Director, Center for Devices and Radiological Health
Food and Drug Administration

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

Appropriations Subcommittee Explores Rural Health Programs

On May 7, the Labor, Health and Human Services, and Education Appropriations Subcommittee held a hearing to explore issues related to rural health. Witnesses provided testimony and discussed not only the challenges and difficulties of rural health delivery but also the accomplishments of federal programs designed to improve rural access to health services. HRSA is the primary Federal agency charged with improving access to health care services for people who are medically underserved because of their economic circumstances, geographic isolation or serious chronic disease. In addition, through programs like the Rural Health Open Door Forum, CMS engages with stakeholders to provide current information on CMS programs, answer questions and learn about emerging rural health issues.


Panel I

Mr. Sean Cavanaugh
Deputy Administrator and Director of the Center for Medicare
Centers for Medicare and Medicaid Services

Mr. Tom Morris
Associate Administrator
Federal Office of Rural Health Policy
Health Resources and Services Administration

Panel II

Mr. Tim Wolters
Director of Reimbursement
Citizens Memorial Hospital
Bolivar, Mo., and Reimbursement Specialist Lake Regional Health System

Dr. Kristi Henderson
Chief Telehealth & Innovation Officer
University of Mississippi Medical Center

Ms. Julie Petersen
Chief Executive Officer
PMH Medical Center

Mr. George Stover
Chief Executive Officer
Rice County Hospital District 1

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

Upcoming: Senate Finance Committee to Hold Panel on Medicare Beneficiaries with Chronic Conditions

The Senate Finance Committee will hold a hearing May 14 to hear from the Centers for Medicare and Medicaid Services and the Medicare Advisory Commission on suggestions for effective ways the federal government can better coordinate care for chronically ill Medicare beneficiaries. The hearing, entitled “A Pathway to Improving Care for Medicare Patients with Chronic Conditions,” will be held at 10:00 a.m. EST in 215 Dirksen Senate Office Building.

Witness List

Dr. Patrick Conway
Acting Principal Deputy Administrator, Deputy Administrator for Innovation and Quality, and Chief Medical Officer
Centers for Medicare & Medicaid Services
Department of Health and Human Services

Mark E. Miller, Ph.D.
Executive Director
Medicare Payment Advisory Commission

For more information or to view the hearing, visit

2. Administration

Final Rule: Organ Procurement and Transplantation: Implementation of the HIV Organ Policy Equity Act

On May 8, HHS issued a final rule to amend the regulations implementing the National Organ Transplant Act of 1984, as amended, (NOTA), pursuant to statutory requirements of the HIV Organ Policy Equity Act (HOPE Act), enacted in 2013. In accordance with the mandates of the HOPE Act, this regulation removes the current regulatory provision that requires the Organ Procurement Transplantation Network (OPTN) to adopt and use standards for preventing the acquisition of organs from individuals known to be infected with human immunodeficiency virus (HIV). In its place, this regulation includes new requirements that organs from individuals infected with HIV may be transplanted only into individuals who are infected with HIV before receiving such organs and who are participating in clinical research approved by an institutional review board, as provided by regulation. The only exception to this requirement of participation in such clinical research is if the Secretary publishes a determination in the future that participation in such clinical research, as a requirement for transplants of organs from individuals infected with HIV, is no longer warranted.

FDA Launches Global Unique Device Identification Database (GUDID)

On May 4, FDA, in partnership with the National Institutes of Health’s (NIH) National Library of Medicine (NLM), released a new open access data website known as AccessGUDID. The AccessGUDID website is designed to allow researchers, members of industry and the public to search and download information that labelers — typically manufacturers — have submitted about their medical devices to the FDA’s Global Unique Device Identification Database (GUDID). In 2013, the Food and Drug Administration (FDA) released a final rule establishing a unique device identification system designed to adequately identify devices through distribution and use. According to FDA, the unique device identification system offers a number of benefits that will be more fully realized with the adoption and integration of UDIs into the health care delivery system. UDI implementation is intended to improve patient safety, modernize device postmarket surveillance and facilitate medical device innovation. For more information, please visit

HHS to Provide $101 Million in ACA Funding to New Community Health Centers

On May 5, Department of Health and Human Services (HHS) Secretary Sylvia Burwell announced the agencies will invest approximately $101 million in Affordable Care Act (ACA) grant funding to 164 new health center sites in 33 states and two U.S. Territories. HHS estimates that the new health centers will increase access to health care services for nearly 650,000 patients. “Health centers are keystones of the communities they serve. Today’s awards will enable more individuals and families to have access to the affordable, quality health care that health centers provide. That includes the preventive and primary care services that will keep them healthy,” said Secretary Burwell in a statement. The agency’s announcement will add to the more than 550 new health center sites that have opened in the last four years as a result of the ACA. Nearly 1,300 health centers operate more than 9,000 service delivery sites that provide care to nearly 22 million patients — nearly 5 million more patients than at the beginning of 2009. The recently enacted bipartisan Medicare Access and CHIP Reauthorization Act builds on this progress by extending mandatory funding for health centers in fiscal years 2016 and 2017.

The list of newly awarded grant recipients can be found at

HHS Expands Pioneer ACO Model After Report Finds Substantial Savings

In a May 4 announcement, the Department of Health and Human Services (HHS) released an evaluation report showing that the Pioneer Accountable Care Organization (ACO) Model, created as a pilot project by the Affordable Care Act (ACA), generated $384 million in savings ($279.7 million in 2012 and $104.5 million in 2013) to Medicare in just two years; this equates to an average savings of approximately $300 per participating beneficiary per year. Additionally, the independent Office of the Actuary in the Centers for Medicare & Medicaid Services (CMS) has certified that this patient care model is the first to meet the stringent criteria for expansion to a larger population of Medicare beneficiaries. The Actuary’s certification that expansion of Pioneer ACOs would reduce net Medicare spending, coupled with HHS Secretary Burwell’s determination that expansion would maintain or improve patient care without limiting coverage or benefits, means that HHS will consider ways to scale the Pioneer ACO Model into other Medicare programs,” a CMS release states. The announcement combines two major ACA initiatives: demonstration authority and ACOs. As it stands, most ACOs currently participate in a separate ACO program called the Medicare Shared Savings program. To date, actuarial analyses show that ACOs in the Pioneer ACO Model and the Medicare Shared Savings Program have generated over $417 million in total program savings for Medicare.

POTUS Nominates DeSalvo to Serve as Assistant Secretary for Health

President Obama on May 6 nominated Karen DeSalvo, National Coordinator for Health Information Technology, to serve as assistant secretary for health. Dr. DeSalvo will serve as acting assistant secretary for health during her pending confirmation while simultaneously remaining as head of the Office of the National Coordinator for Health Technology (ONC) until she is confirmed by the Senate. Previously tapped by the Administration to serve as head of the Department of Health and Human Services’ (HHS) Ebola response, Dr. DeSalvo joined ONC in January 2014 after serving as the Health Commissioner for the City of New Orleans and Senior Health Policy Advisor to Mayor Mitch Landrieu.

3. State Activities

Lawmakers Concerned Over Funding for Medicare Advantage in Puerto Rico

A group of 10 Senators and Representatives have written to officials at the U.S. Department of Health and Human Services (HHS) to express their “acute disappointment” in a Medicare Advantage formula announcement released on April 6 that is poised to reduce funding to the U.S. territory by 11 percent while the rest of the country receives a 3 percent increase. The letter, dated April 30, goes on to say that these cuts will not only threaten the ability of Puerto Rico’s Medicare Advantage program to meet the needs of the 540,000 people it serves, but that there will also be further consequences. In March 2015, a similar group of Senators and Congressional Representatives wrote a strongly worded letter to HHS officials expressing “deep concern regarding the future of the Medicare Advantage program in Puerto Rico” and urging officials to take concrete action in the April 6, 2015, Final Rate Announcement and Call Letter to preserve the stability of the Medicare Advantage program in Puerto Rico. For more information, please visit

Minnesota Exchange CEO Resigns, Paving Way for Third Leadership Change in Two Years

On May 4, Minnesota’s state exchange chief executive officer, Scott Leitz, announced his resignation after serving just 18 months, becoming the third CEO to resign in less than two years. His last day on May 22, Scott Leitz will step down to take a position as Chief Transformation Officer at Washington, D.C.-based think tank Health Care Cost Institute. Mr. Leitz was named permanent CEO of MNsure in April 2014 after serving as interim CEO of the exchange since late 2013. He replaced its original executive director April Todd-Malmlov, who left amid the exchange’s rocky rollout during the first open enrollment period. Worth noting, the MNsure Board of Directors announced on the same day the appointment of Allison O’Toole as Interim Chief Executive Officer of the exchange. Previously, Ms. O’Toole served as the deputy director for external affairs and oversaw MNsure’s public-facing departments including Marketing and Communications, State and Federal Government Affairs and Navigator and Broker Relations, and was MNsure’s staff liaison to the Board of Directors. As of May 2014, 95 percent of Minnesotans have health coverage — the highest percentage in state history. The 2016 open enrollment period is scheduled to begin Nov. 1, 2015, and end on Jan. 31, 2016.

Florida: HHS Secretary Meets with Gov. Scott Over Non-renewed LIP Funding

Gov. Rick Scott (R-FL) met with Department of Health and Human Services (HHS) Secretary Sylvia Burwell on May 6 in Washington to attain an immediate answer from HHS on how much money, if any, the administration might provide with regard to the state’s LIP waiver, so that he and Florida’s legislature can complete their overdue budget deliberations. LIP provides supplemental Medicaid dollars for uncompensated care to states, which directs them to fund hospitals, federally qualified health centers, graduate medical education and health maintenance organizations (HMOs). Counties contribute the majority of dollars. According to notes from the meeting, Secretary Burwell rebuked Gov. Scott’s most recent proposal for being ill-advised and soliciting too much money, approximately $2.2 billion annually through June 2017. “HHS heard the Governor’s request for a timely response to help the state meet its budget timeline,” HHS Secretary Burwell’s office said in the written remarks. “HHS believes completion of the public comment period, on-going discussions with the state, and the state’s submission of its proposal to CMS are the next steps in the process.” But after meeting with Scott, Burwell insisted that “whether a state receives federal funding for an uncompensated care pool is not dependent on whether it expands Medicaid, and that the decision to expand Medicaid, or not, is a state decision.” That seemed to leave open the question of whether some funding might still be available for the program, albeit at a lower level, if a state does not expand. In the past, CMS has essentially said it does not want to pay separately for uncompensated care costs that would be covered if the state expanded Medicaid. Worth noting, CMS told Florida last April that it would not extend the Low Income Pool program beyond June 2015. As for the state Republican-controlled House, its budget proposal includes neither expansion nor funding under the low-income pool; the result is a $5 billion budget gap.

4. Regulations Open for Comment

CMS Updates Wage Index and Payment Rates for the Medicare Hospice Benefit

On April 30, 2015, CMS issued a proposed rule (CMS-1629-P) that would update fiscal year (FY) 2016 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. The proposed hospice payment rule reflects the ongoing efforts of CMS to support beneficiary access to hospice care. As proposed, hospices would see an estimated 1.3 percent ($200 million) increase in their payments for FY 2016. The $200 million increase in estimated payments for FY 2016 reflects the distributional effects of the 1.8 percent proposed FY 2016 hospice payment update percentage ($290 million increase); the use of updated wage index data and the phaseout of the wage index budget neutrality adjustment factor (-0.7 percent/$120 million decrease); and the proposed implementation of the new Office of Management and Budget (OMB) Core Based Statistical Areas (CBSA) delineations for the FY 2016 hospice wage index with a one-year transition (0.2 percent/$30 million increase). The elimination of the wage index budget neutrality adjustment factor (BNAF) was part of a seven-year phaseout that was finalized in the “Medicare Program; Hospice Wage Index for Fiscal Year 2010” final rule (74 FR 39384, Aug. 6, 2009) and is not a policy change.

Proposed FY 2016 Medicare Payment and Policy Changes for Inpatient Psychiatric Facilities

On April 24, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining proposed fiscal year (FY) 2016 Medicare payment policies and rates for the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS). The proposed rule also updates the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program, which requires participating facilities to report on quality measures or incur a reduction in their annual payment update. This proposed rule would expand the measure sets in future fiscal years and change certain data reporting requirements for these measures. CMS is proposing to update the estimated payments to IPFs in FY 2016 relative to estimated payments in FY 2015 by 1.6 percent (or $80 million). This amount reflects 2.7 percent IPF-specific market basket estimate less the productivity adjustment of 0.6 percentage point and less the 0.2 percentage point reduction required by law, for a net update of 1.9 percent. Estimated payments to IPFs are reduced by 0.3 percent due to updating the outlier fixed-dollar loss threshold amount. CMS will accept comments on the proposed rule until June 23, 2015.

CMS Releases Proposed Rule on FY 2016 Medicare Payments for Inpatient Rehab Facilities

On April 23, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining proposed FY 2016 Medicare payment policies and rates for the Inpatient Rehabilitation Facility (IRF) Prospective Payment System and the IRF Quality Reporting Program. Specifically, CMS is proposing to increase payments to inpatient rehabilitation hospitals in 2016 by approximately $130 million, or 1.7 percent when compared to 2015. This agency also proposes new quality reporting requirements to adopt measures that satisfy three of the quality domains required by the IMPACT Act in FY 2016: skin integrity and changes in skin integrity; functional status, cognitive function and changes in function and cognitive function; and incidence of major falls; IRFs that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to their applicable FY annual increase factor, and the expected cost of the implementation of these new quality reporting requirements is approximately $24 million to hospitals. Worth noting, the payment increase is significantly smaller than the 2.4 percent raise they received in fiscal 2015. The agency proposes to begin collecting IRF quality reporting data by fall 2016. The proposed rule will be published in the Federal Register on April 27, and the agency will accept comments from stakeholders until June 22, 2015.

USPSTF Upholds Recommendations on Mammography for Women Under 50

In a draft recommendation released April 20, the U.S. Preventive Services Task Force (USPSTF) upheld its 2009 recommendation that women under 50 wait to start getting mammograms. Specifically, the task force downgraded mammography coverage for women ages 40-49 from “B” to “C” status, meaning insurers would no longer have to cover screenings without a co-pay. The decision comes after more evidence has shown the negative effects associated with mammograms, including false positives and overdiagnosis. In a letter to the Department of Health and Human Services opposed to the decision, Sen. Barbara Mikulski said, “Should the draft recommendation be finalized, I will actively and aggressively pursue all legislative options available to ensure that women aged 40 and older are able to continue receiving free annual mammogram.” The task force reports that women aged 60-69 are most likely to avoid a breast cancer death due to a mammography. “Screening mammography in women ages 40 to 49 years may reduce the risk of dying of breast cancer, but the number of deaths averted is much smaller than in older women and the number of false-positive tests and unnecessary biopsies are larger. All women undergoing regular screening mammography are at risk for the diagnosis and treatment of noninvasive and invasive breast cancer that would otherwise not have become a threat to her health, or even apparent, during her lifetime. Public comment on the draft recommendations must be submitted by May 18, 2015, at 8:00 PM EST.

Fiscal Year 2016 Proposed Inpatient and Long-term Care Hospital Policy and Payment Changes

On April 17, 2015, CMS issued a proposed rule to update fiscal year (FY) 2016 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The proposed rule, which would apply to approximately 3,400 acute care hospitals and approximately 435 LTCHs, would affect discharges occurring on or after Oct. 1, 2015. The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and market conditions in the hospital’s geographic area.

The rule proposes policies that continue a commitment to increasingly shift Medicare payments from volume to value. CMS pays acute care hospitals (with a few exceptions specified in the law) for inpatient stays under the IPPS and long-term care hospitals under the LTCH PPS. Under these two payment systems, CMS generally sets payment rates prospectively for inpatient stays based on the patient’s diagnosis and severity of illness. A hospital receives a single payment for the case based on the payment classification — MS-DRGs under the IPPS and MS-LTC-DRGs under the LTCH PPS — assigned at discharge.

By law, CMS is required to update payment rates for IPPS hospitals annually, and to account for changes in the costs of goods and services used by these hospitals in treating Medicare patients, as well as for other factors. This is known as the hospital “market basket.” LTCHs are paid according to a separate market basket based on LTCH-specific goods and services. CMS will accept comments on the proposed rule until June 16, 2015.

Proposed FY 2016 Payment and Policy Changes for Medicare Skilled Nursing Facilities (SNF)

On April 15, 2015, CMS issued a proposed rule [CMS-1622-P] outlining proposed Fiscal Year (FY) 2016 Medicare payment rates for skilled nursing facilities (SNFs). This proposed rule would update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2016. In addition, it includes a proposal to specify a SNF all-cause all-condition hospital readmission measure, as well as a proposal to adopt that measure for a new SNF Value-Based Purchasing (VBP) Program and a discussion of SNF VBP Program policies being considered for future rulemaking to promote higher quality and more efficient health care for Medicare beneficiaries. Additionally, this proposed rule would implement a new quality reporting program for SNFs as specified in the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). It also would amend the requirements that a long-term care (LTC) facility must meet to qualify to participate as a skilled nursing facility (SNF) in the Medicare program, or a nursing facility (NF) in the Medicaid program. These requirements implement the provision in the Affordable Care Act regarding the submission of staffing information based on payroll data. To be assured consideration, comments must be received no later than 5 p.m. on June 19, 2015.

CMS Proposes Mental Health Parity for Medicaid and CHIP in New Rule

The Centers for Medicare & Medicaid Services (CMS) announced April 6 a new proposed rule to align mental health and substance use disorder benefits for low-income Americans with benefits required of private health plans and insurance. Specifically, the proposal applies certain provisions of the Mental Health Parity and Addiction Equity Act of 2008 to Medicaid and the Children’s Health Insurance Program (CHIP) by mandating that mental health and substance use disorder benefits are no more restrictive than medical and surgical services. As it is currently written, the proposed rule ensures that all beneficiaries who receive services through managed care organizations or under alternative benefit plans have access to mental health and substance use disorder benefits regardless of whether services are provided through the managed care organization or another service delivery system, and the full scope of the proposed rule applies to CHIP, regardless of whether care is provided through fee-for-service or managed care. Currently, states have flexibility to provide services through a managed care delivery mechanism using entities other than Medicaid managed care organizations, such as prepaid inpatient health plans or prepaid ambulatory health plans; in the new rule, states will be required to include contract provisions requiring compliance with parity requirements in all applicable contracts for these Medicaid managed care arrangements. The proposed rule was published in the Federal Register on April 10 with comments due to the agency by June 9, 2015.

FDA Assessing the Center of Drug Evaluation and Research’s Safety-Related Regulatory Science Needs and Identifying Priorities

On March 19, the Food and Drug Administration (FDA) announced the availability of a report entitled "Assessing CDER’s Drug Safety-Related Regulatory Science Needs and Identifying Priorities." This report identifies drug safety-related regulatory science needs and priorities related to the mission of FDA’s Center for Drug Evaluation and Research (CDER) that would benefit from external collaborations and resources. FDA hopes to foster collaborations with external partners and stakeholders to help address these needs and priorities. This notice asks stakeholders conducting research related to these needs to describe that research and indicate their interest in collaborating with FDA to address safety-related research priorities. Since publication of the 2011 "Identifying CDER’s Science and Research Needs" report, FDA has been engaged in efforts to further assess and prioritize the needs articulated therein. As part of these efforts, CDER’s Safety Research Interest Group (SRIG), a subcommittee of the Science Prioritization and Review Committee, assessed CDER’s overall drug safety-related regulatory science needs in view of FDA’s ongoing research efforts and highlighted areas that would benefit from additional resources and collaboration. Public comments will be accepted at any time. However, the public is encouraged to submit comments by May 18, 2015, to ensure FDA consideration.

HHS Releases Proposed Rules on EHR Incentive Programs and Health IT Certification Criteria

The U.S. Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC) announced March 20 the release of the Stage 3 notice of proposed rulemaking for the Medicare and Medicaid Electronic Health Records (EHRs) Incentive Programs and 2015 Edition Health IT Certification Criteria to improve the way electronic health information is shared and ultimately improve the way care is delivered and experienced. The proposed rules aim to give providers additional flexibility, make the program simpler, drive interoperability among electronic health records and increase the focus on patient outcomes to improve care.

Specifically, the Meaningful Use Stage 3 proposed rule issued by CMS specifies new criteria that eligible professionals, eligible hospitals and critical access hospitals must meet to qualify for Medicaid EHR incentive payments; the rule also proposes criteria that providers must meet to avoid Medicare payment adjustments (Medicaid has no payment adjustments) based on program performance beginning in payment year 2018. Moreover, the 2015 Edition Health IT Certification Criteria proposed rule aligns with the path toward interoperability — the secure, efficient and effective sharing and use of health information — identified in ONC’s draft shared Nationwide Interoperability Roadmap. The proposed rule also builds on past editions of adopted health IT certification criteria, and includes new and updated IT functionality and provisions that support the EHR Incentive Programs’ care improvement, cost reduction and patient safety across the health system.

Under the Health Information Technology for Economic and Clinical Health Act, doctors, health care professionals and hospitals, including critical access hospitals, can qualify for Medicare and Medicaid incentive payments when they adopt and meaningfully use health IT technology certified by ONC. The Stage 3 proposed rule may be viewed here, and the comment period ends on May 29, 2015. The 2015 Edition proposed rule may be viewed here and the comment period ends on May 29, 2015. The Draft 2015 Edition Certification Test Procedures may be viewed at, and the comment period ends on June 30, 2015.

5. Reports

Medicaid: A Small Share of Enrollees Consistently Accounted for a Large Share of Expenditures

According to a GAO study released May 8, a small percentage of Medicaid-only enrollees — that is, those who were not also eligible for Medicare — consistently accounted for a large percentage of total Medicaid expenditures for Medicaid-only enrollees. In each fiscal year from 2009 through 2011, the most expensive 5 percent of Medicaid-only enrollees accounted for almost half of the expenditures for all Medicaid-only enrollees. In contrast, the least expensive 50 percent of Medicaid-only enrollees accounted for less than 8 percent of the expenditures for these enrollees. GAO analyzed data from the Medicaid Statistical Information System Annual Person Summary File for fiscal years 2009, 2010 and 2011, the most recent years for which data from almost all states were available. Medicaid expenditures for fiscal year 2013 totaled about $460 billion, covering about 72 million enrollees, some of whom were also eligible for Medicare. More information about Medicaid enrollees who are not also eligible for Medicare (i.e., Medicaid-only enrollees) and who account for a high proportion of expenditures could enhance efforts to manage expenditures and facilitate improvements to care.

HHS OIG Report Finds FDA Is Improving on Generic Drug Oversight

According to a report released May 5, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) found that the Food and Drug Administration (FDA) is improving its oversight process over generic pharmaceuticals by increasing the number of agency inspections of manufacturing facilities in foreign countries, the manufacturers who currently make many of the lower-priced generics on the U.S. market. OIG received a Congressional request expressing concerns about the safety and quality of generic drugs produced by foreign manufacturers and proceeded to evaluate whether FDA is achieving parity in inspections of foreign and domestic manufacturers. By analyzing FDA data for inspections and registered manufacturers of generic drugs (both domestically and abroad) for 2011-2013 to determine the number and types of inspections, the oversight agency found that FDA increased its preapproval inspections of manufacturers of generic drugs by 60 percent between 2011 and 2013. To further improve its generic drug oversight process, OIG recommends FDA conduct outstanding preapproval inspections of manufacturers of generic drugs and ensure a complete and up-to-date registration database with the hope that these measures would lead to a more timely approval of new generic drugs. In 2012, nearly 80 percent of prescriptions filled in the United States were for generic drugs, and in recent years several recalls of generic drugs have raised concerns about FDA’s oversight of manufacturers.

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

Stephanie Kennan, Senior Vice President
Charlyn Iovino, Vice President
Brian Looser, 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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