Oct 24, 2016
Washington Healthcare Update
This Week: Generic medicines saved $227 billion in 2015…Medicare advocates worry about the impact of the COLA on Medicare premiums…Nursing homes sue to block
regulations on mandatory arbitration…Congress continues to be on recess…The presidential debates are over—and the election is almost here!
4. State Activities
5. Regulations Open for Comment
Sen. Sanders, Rep. Cummings Request Answers Regarding Leukemia Drug Price Hike
Sen. Bernie Sanders (D-VT) and Rep. Elijah Cummings (D-MD) are requesting answers from ARIAD Pharmaceuticals over repeated price increases for the drug
Iclusig (ponatinib). Four price increases this year alone have added more than $80,000 to the drug’s already-high annual price tag, according to the
members of Congress in an
Oct. 20 letter.
The members of Congress expressed concern that the drug company raised the price of the drug Iclusig despite new evidence showing it posed far greater
safety risks to patients. They also accuse ARIAD of insulating company profits by discontinuing sales of a two-monthly supply of its 15 mg dose and then
selling a one-month supply at the same price. Furthermore, ARIAD stopped selling 30 mg tablets of the drug, a common dose, to push patients to the more
costly 15 mg tablets.
Iclusig was priced at $115,000 per year when it was first approved by FDA in December 2012, but it was pulled from the market less than a year later due to
severe side effects. FDA let the company reintroduce the drug in December 2013 for a smaller subset of chronic myeloid leukemia patients, after which ARIAD
started increasing the drug’s price. It now sells for $199,000.
The members of Congress asked the company to provide sales and profit figures by Nov. 4 as well as expenses related to development and sales broken down by
spending on clinical trials, manufacturing and advertising. They also asked about the drug’s price in other countries and for information on patient coupon
programs, including any tax deduction the company has taken for patient assistance.
CMS Will Reduce RAC Audits for Doctors in a Pilot
CMS says doctors participating in pay models that include penalties will be low priorities for reviews by Recovery Auditors and other contractors in a
pilot scheduled to start in January. The pilot is part of a long-term initiative to reduce medical record reviews and to review regulations and
policies to minimize administrative tasks.
CMS says the first aspect of the initiative will be an 18-month pilot that aims to reduce medical reviews by directing some contractors to consider
physicians a low priority for audits if they are participating in certain advanced alternative payment models (APMs), including Next Generation ACOs,
track 2 and 3 ACOs in the Medicare Shared Savings Program, and the two-sided track of the Oncology Care Model. Ashby Wolfe, the Region IX chief medical
officer for CMS, said this is a first step for the initiative.
The pilot will start in January with post-pay reviews by Recovery Auditors, Supplemental Medical Review Contractors and Medicare Administrative
In April, the MACs will consider physicians participating in these advanced APMs as low-priority for pre-payment reviews as well.
CMS says these advanced APMs are a first opportunity for this pilot because the providers share financial risk with Medicare, which discourages
providing unneeded services.
HHS Predicts 13.8 Million Obamacare Enrollees in 2017
The Obama administration predicts 13.8 million people will enroll in the Obamacare exchanges during the upcoming open enrollment period. This is about 1
million more than this year’s 12.7 million sign-up total. HHS Secretary Sylvia Mathews Burwell announced the enrollment target less than two weeks before
the start of the law’s fourth sign-up window, which is expected to be the most challenging yet. Premiums are rising much faster, several national insurers
are pulling back from the exchanges and the pool of uninsured customers has shrunk to historic lows.
Enrollment is expected to dip throughout 2017 because some will not pay their initial premium and others may drop coverage for a variety of reasons. HHS
said it expects 11.4 million paying exchange customers on average throughout 2017, up slightly from the 10.5 million average enrollment in 2016.
HHS this year issued estimates based on average paid enrollment throughout the year, rather than an end-of-year enrollment goal as it previously has.
Officials said they believed this is a more meaningful metric.
from S&P Global Ratings earlier this month also projected weak enrollment growth in 2017. The firm predicted enrollment could possibly drop by as much
as 8 percent next year or grow by up to just 4 percent.
The fourth open enrollment period begins Nov. 1 and ends Jan. 31, less than two weeks after the next presidential administration takes office.
COLA Could Mean Large Medicare Premium Increases for Some
On Oct. 18, the Social Security Administration announced a 0.3 percent Cost of Living Adjustment (COLA) increase in
2017, which could mean large premium increases for many Medicare beneficiaries. It is not yet clear how much Part B premiums will go up, but Medicare
trustees projected this summer that a third of beneficiaries could see premium increases of 22 percent. The premium hikes for those beneficiaries are
determined by a complex interaction between Social Security and Medicare rules.
Medicare has not announced the final 2017 premium increases yet. Last year, Congress reduced a huge spike in Part B premiums, affecting about a third of
Medicare enrollees when there was no COLA adjustment for Social Security benefits. However, that was a short-term patch. Those affected include high-income
beneficiaries, seniors new to the program and enrollees whose premiums are paid by Medicaid. However, the majority of Medicare beneficiaries will likely
see much smaller premium increases.
Senator Ron Wyden (D-OR), the ranking Democrat on the Senate Finance Committee has already said that he will be working to make premiums affordable.
Medicare’s Investment in Primary Care Shows Progress
On Oct. 17, CMS announced the Comprehensive Primary Care (CPC) initiative’s second round of
shared savings results, with nearly all practices (95 percent) meeting quality of care requirements and four out of seven regions sharing in savings with
CMS. These results reflect the work of 481 practices that served over 376,000 Medicare beneficiaries and more than 2.7 million patients overall in 2015.
As the largest test of advanced primary care in U.S. history, CPC demonstrates the potential of primary care clinicians’ redesigning their practices to
deliver better care to their patients, and provides clinicians support to innovate and deliver care in ways that better meet their patients’ needs and
During 2015, its second shared savings performance year, CPC generated a total of $57.7 million gross savings in Part A and Part B expenditures. These
savings are essentially equivalent to the $58 million paid in care management fees to the practices. Four of the seven regions participating in CPC—the
states of Arkansas, Colorado and Oregon, and the Greater Tulsa region in Oklahoma—realized net savings (after accounting for the care management fees paid)
and will share in those savings with CMS. Although three of the CPC regions had net losses, the savings generated in the other four regions covered those
losses, so that care management fees across CPC were offset by reduced spending on Medicare Part A and Part B services. Further, more than half of
participating CPC practices will receive a share of over $13 million in earned shared savings.
In addition to the gross Medicare savings, CPC practices showed positive quality, with lower-than-expected hospital admission and readmission rates, and
favorable performance on patient experience measures. CPC practices’ performance on electronic Clinical Quality Measures (eCQMs) also exceeded national
benchmarks, particularly on preventive health measures.
This is the first year CMS has included eCQM performance in Medicare shared savings determinations for CPC. eCQM reporting covering the entire practice
population at the practice site level is critical to using health information technology as a tool to support care delivery transformation. eCQM data are
recorded in the electronic health record in the routine course of clinical care, allowing practices to engage in real-time quality improvement efforts that
drive population health. As we move to a health care system that rewards value over volume, CPC practices are at the forefront of using eCQMs for quality
improvement, measurement and reporting.
Quality highlights from the 2015 shared savings performance year include:
97 percent of CPC practices successfully reported 9 eCQMs. For 10 out of the 11 eCQMs in the CPC measure set, the majority of CPC practices who
reported surpassed the median national performance.
Nearly all (99 percent) practices reported higher levels of colorectal cancer screening and influenza immunization compared to national benchmarks.
Additionally, 100 percent of practices who reported on screening for clinical depression surpassed national benchmarks.
Compared to 2014, most regions maintained or improved their scores on hospital readmissions and admissions for chronic obstructive pulmonary disorder
and congestive heart failure.
Patients rated the care they receive from their CPC practitioners highly, particularly on how well practitioners supported them in taking care of their
own health and the attention they paid to care from other providers.
White House Rolls Out New Initiatives, Report for Cancer Moonshot
On Oct. 17, the White House announced new public and private sector initiatives to advance the goals laid out by the Cancer Moonshot. The new efforts were
released with the Cancer Moonshot Task Force report that
aims to drive policy to accelerate progress against the disease.
The National Cancer Institute, Amazon Web Services and Microsoft will form a partnership to build a sustainable model for maintaining cancer genomic data
in the cloud and to make it available to cancer researchers through the NCI’s data-sharing programs.
The Department of Defense (DoD) is establishing a new study to “transform our understanding of the biological basis of cancer.” Lyft and Uber are expanding
their support of transportation for cancer patients in coming years. These are just a few examples of more than 70 commitments made this year as a result
of the Cancer Moonshot, the White House said.
A new Blood Profiling Atlas pilot project will get drug and
diagnostic companies, government and academia to create an open database of liquid biopsies, with the goal of developing better technologies for detecting
cancers from blood samples.
Bristol-Myers Squibb is committing $25 million over two years to target disparities in cancer care and announced five new partnerships to launch the
effort. The Leukemia & Lymphoma Society committed $50 million to target acute myeloid leukemia and announced a new clinical trial, called Beat AML.
The White House fact sheet on new Moonshot initiatives is available here.
Pennsylvania Asks to Join Highmark Risk Corridor Lawsuit
The Pennsylvania Insurance Department said it has asked the U.S. Court of Federal Claims for permission to join Highmark Blue Cross Blue Shield’s lawsuit
over ACA risk-corridor payments. Highmark sued the federal government in May to recover nearly $200 million it is owed from the program, which was designed
to protect insurers from big exchange losses.
State regulators announced the decision to join the Highmark lawsuit as it approved a 32.5 percent average rate increase for individual plans in
Pennsylvania next year. “These rate increases make it clear that Washington needs to move swiftly to address consumer needs under the Affordable Care Act,”
said insurance commissioner Teresa Miller.
For more information on 2017 rates in Pennsylvania,
Nursing Home Groups Sue HHS Over New Rule Prohibiting Mandatory Arbitration
The top lobbying group for nursing homes is
suing HHS over a new rule that blocks mandatory arbitration in facilities receiving
federal funds. The American Health Care Association and four other plaintiffs filed the lawsuit in a Mississippi federal court on Oct. 17, arguing that HHS
overstepped its legal authority. The new rule, going into effect Nov. 28, will make it easier for nursing home residents and their families to sue when
they think they have been mistreated. Consumer advocates have argued that facilities use mandatory arbitration to hide misconduct.
The other plaintiffs are the Community Care Center of Vicksburg, Great Oaks Rehabilitation and Healthcare Center, Mansfield Long Term Care and Mississippi
Health Care Association.
4. State Activities
Arizona: State Regulators Detail Rate Hikes for 2017
On Oct. 14, Arizona regulators released information detailing steep insurance rate hikes for 2017. Significantly, the only two insurers in the
exchange—Blue Cross Blue Shield and Health Net—will increase average rates by 51 percent and 75 percent, respectively. Eight other companies will sell
individual plans only outside the exchange.
See the increases
here, as well as
Hawaii: State Regulators Approve Individual Market Premium Increases
Hawaii regulators have approved individual market premium increases ranging from 26 percent to 30 percent on average for next year. The rate increases in
the state are roughly in line with national trends. The rates are expected to affect 41,000 people who purchase individual ACA coverage, according to the
Hawaii Department of Commerce and Consumer Affairs.
Maine: Medicaid Expansion Supporters Launch Effort to Get Initiative on 2018 Ballot
Medicaid expansion supporters in Maine have launched a citizen initiative campaign to get an initiative on the 2018 ballot. The Maine Legislature has
previously approved Medicaid expansion but Gov. Paul LePage has vetoed several bills in past years. Organizers would need to collect more than 61,000
signatures. Expansion would cover about 70,000 people in the state.
Minnesota: House Dems Propose One-Time Premium Rebates to Those Not Eligible for ACA Subsidies
Minnesota House Democrats are proposing to provide one-time premium rebates to people not eligible for ACA subsidies in an effort to insulate individual
market customers from large rate hikes for next year. The rebate amount would be the difference between the annual premium for a region’s
second-lowest-cost silver plan and 10 percent of the individual’s household income. The legislation, if enacted, would pay for the rebates by eliminating a
proposed $31 million tax cut for tobacco companies and using surplus funding from Minnesota’s previous high-risk pool.
South Dakota: State Legislators Recommend More Participation in Prescription Drug Monitoring Program
The state legislature’s study committee on substance abuse prevention is recommending requiring more participation in South Dakota’s prescription drug
monitoring program. All providers prescribing controlled substances would be required to participate in the program. The committee also recommended that
pharmacists be required to submit prescription information within 24 hours, up from the current weekly reporting requirement.
Virginia: JLARC Releases 2016 State Spending Update
The Joint Legislative Audit and Review Commission (JLARC) recently submitted its 2016 spending update to the Virginia legislature. The report shows Medicaid spending has
increased by $2 billion over the past 10 years—a 96 percent increase. The report comes as Gov. Terry McAuliffe is calling on the state legislature to
reconsider Medicaid expansion. However, state Republicans used the report’s findings to argue expansion would be too costly.
5. Regulations Open for Comment
IRS, Treasury Release Proposed Rule on QHP Benchmarks
The IRS and Treasury Department, in a proposed rule released July 6, proposed to
alter how qualified health plan (QHP) benchmarks are determined so that they
account for the costs of pediatric dental benefits. If finalized, the rule would
go into effect for the 2019 plan year.
Although pediatric dental care is one of the 10 “essential health benefits” that
plans are required to cover under the Affordable Care Act (ACA), several plans
do not include such coverage, and consumers instead buy stand-alone dental
products. Meanwhile, the marketplace determines the amount of tax credits a
family can receive to cover the cost of coverage based on the second-cheapest
However, as the proposed rule said, “because qualified health plans that do not
offer pediatric dental benefits tend to be cheaper than qualified health plans
that cover all ten essential health benefits, the second lowest-cost silver plan
(and therefore the premium tax credit) for taxpayers purchasing coverage through
a Marketplace in which stand-alone dental plans are offered is likely to not
account for the cost of obtaining pediatric dental coverage.”
Treasury and IRS added that the existing rules “frustrate” the goal of making
all essential health benefits affordable to those receiving premium tax credits,
so the administration wants to update its interpretation to ensure all 10
services are addressed.
“Consistent with this interpretation, the proposed regulations provide that for
taxable years beginning after December 31, 2018, if an Exchange offers one or
more silver-level qualified health plans that do not cover pediatric dental
benefits, the applicable benchmark plan is determined by ranking (1) the
premiums for the silver-level qualified health plans that include pediatric
dental benefits offered by the Exchange and (2) the aggregate of the premiums
for the silver-level qualified health plans offered by the Exchange that do not
include pediatric dental benefits plus the portion of the premium allocable to
pediatric dental benefits for stand-alone dental plans offered by the Exchange,”
the proposal said.
The rule aims to create the ranking by adding the premium for the lowest-cost
silver plan that does not include a pediatric dental benefit to the premium for
the cheapest stand-alone dental plan, and the premium for the second-cheapest
silver plan without pediatric dental benefits to that of the second-lowest
stand-alone dental plan. The second-cheapest amount from this combined ranking
would be the taxpayer’s applicable benchmark plan premium, the rule said.
HHS Proposes Updates to Title X Rules
On Sept. 2, HHS
proposed to preclude Title X grant recipients from using criteria in
their selection of family planning providers that are unrelated to the
ability to deliver services effectively.
Since 2011, 13 states have attempted to restrict participation by family
planning providers in Title X based on factors unrelated to their ability to
provide services. The Title X program provides funding for certain family
planning services, including STD screening and treatment, but funding is not
used to pay for abortions. Although Planned Parenthood is not mentioned by
name in the proposed rule, it has often been the subject of defunding
actions by states and Congress.
In the proposed rule, HHS said the effects already felt by the restrictions
in many states justify the department’s rulemaking. HHS said grant
recipients that do not provide services directly would also be required to
follow the updated standards when choosing subrecipients.
HHS also proposed that a tiered structure governing how funds are
distributed would not be allowed unless it can be proven that a
provider in a top tier delivers Title X services more effectively than a
lower-tier provider. According to the Guttmacher Institute, a research
organization that supports reproductive rights, four states have a priority
system for distributing family planning funds, which often disadvantages
family planning centers.
GAO Report Looks at HHS Breast Cancer Education Initiatives for Young Women
In a new report, GAO looked at HHS’s efforts to provide or support breast cancer education for young women and whether these efforts duplicate other
federal breast cancer education efforts. While most breast cancer is detected in older women, it also affects young women—defined as women under 45 years
old. Young women account for 11 percent of all new cases of breast cancer in the U.S., tend to have worse outcomes than older women and face unique issues
in managing the disease.
GAO determined that HHS’s targeted breast cancer education campaign for young women leverages existing resources, but does not duplicate other federal
breast cancer education efforts, which are more general in nature. Additionally, a breast cancer expert noted that breast cancer education for young women
is new and evolving, thus, further limiting the possibility that recent efforts are duplicative.
Among its activities, HHS used social media to launch the following campaigns targeted to young women:
– an interactive tool that helps women assess their risk of developing cancer, and
Bring Your Brave
– an online resource that includes testimonials from young breast cancer survivors.
To see the full report, click here.
GAO: Report on Durable Medical Equipment in Competitive Bidding Programs
GAO recently released a report looking at the effects of Medicare changes to payments for durable medical equipment items on beneficiaries’ access to and
use of those items.
Medicare is changing how it determines how much to pay for certain durable medical equipment (DME) items, such as oxygen, wheelchairs and walkers. These
changes help Medicare and its beneficiaries pay less for these items – saving Medicare about $3.6 billion between mid-2013 and 2015. Under the competitive
bidding program (CBP), only competitively selected contract suppliers can furnish certain DME items at competitively determined prices to beneficiaries in
designated competitive bidding areas.
In its report, GAO examined the extent to which phase 2 of the CBP has affected utilization of CBP-covered DME items, and beneficiaries’ access to DME
items. GAO found that after implementation of the two CBP phases in 2013, the number of beneficiaries receiving DME items generally decreased. From the
year before (2012) to the year after (2014) implementation, the number of beneficiaries receiving covered items in phase 2 areas decreased 17 percent.
To see the report, click here.
Report Finds Generic Drug Savings Reached $227 Billion in 2015
In 2015, generic drug savings reached $227 billion, up from $207 billion in 2014 and just $53 billion 10 years ago, according to a new Quintile IMS Health
report produced for the generic drug lobby, GPhA. The increased savings is largely due to an increase in the number of drugs that have generic options.
Medicare saved $67.6 billion, or just over $1,700 per enrollee. Medicaid saved $32.7 billion, about $450 per enrollee. Overall, generics made up 89 percent
of prescriptions dispensed last year, up one percent from the year prior, but generics accounted for only 27 percent of the U.S. medication spending.
To see the full report, click here.
Kaiser Family Foundation Gives First Look into 2017 Medicare Part D Drug Plans
According to a joint Kaiser Family Foundation-Georgetown University analysis, seniors enrolled in standalone
Part D plans would face an average 9 percent increase in premiums unless they switch to a different plan for 2017. For enrollees who stay in the same plan
for next year, average monthly premiums are projected to go from $38.57 to $42.17. The lowest premiums are in New Mexico, with New Jersey having the
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Charlie Iovino, Vice
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