Apr 4, 2016
Washington Healthcare Update
The House of Representatives and the Senate were on recess…but it was not quiet on the health care front!
House of Representatives
3. State Activities
4. Regulations Open for Comment
House of Representatives
House, Senate Democrats Want NIH to Bring Down Prostate Cancer Drug Cost
A group of House and Senate Democrats is calling on the National Institutes of Health (NIH) and the U.S. Department of Health and Human Services (HHS) to
bring down the price of the cancer drug Xtandi. In a March 28 letter, lawmakers — including Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) —
asked the NIH and HHS to hold a public hearing that would determine whether they should use “march-in rights” to lower the price of the drug.
NIH has never used its march-in rights to set new prices since their inception in 1980 under the Bayh-Dole Act. The letter states that Astellas, the
company that sells Xtandi, is charging Americans $129,000 for the drug, which sells in Japan and Sweden for $39,000 and in Canada for $30,000. The group
believes that a public hearing on the drug would allow the public to engage in dialogue with NIH and HHS in order to better understand their position on
the use of march-in rights to “address excessive prices.”
This letter comes after a petition was submitted by the Knowledge Ecology International and the Union for Affordable Cancer Treatment to HHS, NIH and the
Department of Defense asking them to exercise march-in rights to address the high price of Xtandi.
Rep. Carter Asks HHS Secretary Sylvia Burwell About “Office-Use” Compounding
On March 22, Rep. Buddy Carter (R-GA)
wrote a letter to HHS Secretary Sylvia Burwell asking her to specify when the U.S. Food and Drug Administration (FDA)
will issue guidance as requested by appropriators to clarify that traditional compounding pharmacies, which are regulated by the State Boards of Pharmacy,
are exempt from federal oversight when participating in “office-use” compounding. The letter followed a hearing held by the House Education and the
Workforce Committee on March 15.
At the hearing, Burwell testified that there is nothing preventing a 503A pharmacy from compounding for office-use purposes. This seemed to contradict
FDA’s stance that traditional compounders must obtain patient-specific prescriptions, Carter said. He also pointed out that Burwell left out the fact that
503A pharmacies are currently being regulated under Good Manufacturing Practices (cGMPs) standards rather than U.S. Pharmacopeia (USP) Convention
Carter asked Burwell the following questions:
When can we expect FDA to release guidance to clarify that 503A pharmacies will be exempt from the Drug Quality and Security Act (DQSA) requirements
when participating in office-use compounding?
What prompted FDA to begin inspecting 503A pharmacies under cGMPs as opposed to USP standards?
What authority does FDA have to inspect 503A pharmacies with cGMPs when federal oversight of the pharmacies was never the intent of Congress?
To see the letter, click here (buddy carter letter.pdf).
House Republican Committee Leaders Subpoena HHS Secretary Burwell Over Basic Health Program
On March 29, House Republican leaders
HHS Secretary Sylvia Mathews Burwell to explain how the administration spent over $1 billion on the Affordable Care Act’s (ACA) Basic Health Program (BHP),
which Republicans argue lacks a congressional appropriation. In a letter to the Secretary, House Ways and Means Committee Chairman Kevin Brady (R-TX) and
House Energy and Commerce Committee Chairman Fred Upton (R-MI) detailed HHS’s obstruction in their investigation and said they would issue the subpoena if
the Department did not produce the requested documents.
Republicans accuse the administration of illegally funding BHP, which gives states flexibility to extend coverage to low-income people who do not qualify
for Medicaid or CHIP. HHS argues that the program is fully funded through the ACA. The subpoena requests documents from HHS by April 12.
Ways and Means ranking member Sander Levin (D-MI) and Energy and Commerce ranking member Frank Pallone (D-NJ) condemned the subpoena as “yet another futile
attempt to weaken the ACA,” according to a
Senate HELP Committee to Hold Markup April 6
The Senate Health, Education, Labor and Pensions (HELP) Committee will hold a markup on April 6 that will be the last markup of its Innovation for
Healthier Americans Initiative. The bills to be considered include legislation to improve FDA’s hiring capabilities, establish a program to approve
antibiotics for limited populations and support the President’s Precision Medicine Initiative. It is possible the markup will also include legislation
related to the NIH and promoting biomedical research. The hope is to have the Senate bills married up to the House-passed “Cures legislation” and have a
final bill passed before the July 4 recess. The Senate legislation however has a hurdle to get through — and that is that there has been no consensus on
how to pay for the bill.
Organizations Urge CMS to Modify Proposed ACO Benchmarking Methodology
Twenty organizations — including the American Medical Association, the National Association of ACOs and Premier — are calling on the Centers for Medicare
and Medicaid Services (CMS) to make significant changes to the methodology used for its ACO benchmarking.
Specifically, the organizations recommend that CMS:
Finalize, with modifications, the proposal to blend ACO historical and regional cost data into ACO benchmarks
Provide ACOs with choices related to transitioning to new benchmarks that incorporate regional cost data
Exclude ACO-assigned beneficiaries (for all ACOs in the region) from the regional beneficiary population
Finalize the use of assignable beneficiaries (as opposed to all beneficiaries) for nationally based updates, regionally based updates and regional cost
Base the counties used to define an ACO’s regional service area on those in which at least 1 percent of the ACO’s assigned beneficiaries reside
Consider a different approach to ensure a statistically valid population for calculating regional end stage renal disease (ESRD) costs rather than
using state averages, at least until CMS releases data to properly evaluate basing regional ESRD costs on state-level averages
Finalize the proposal to adjust for an ACO’s risk relative to its region for the purposes of determining the regional adjustment to the ACO’s reset
Replace the national trend factor with a regional trend factor for ACOs in second and subsequent agreement periods
Honor the current policy that accounts for savings in rebased benchmarks
10. Provide stakeholders with data to model the impact of adjusting benchmarks to account for ACO Participant Taxpayer Identification Numbers (TIN) changes
11. Finalize the optional fourth year in Track 1 for ACOs moving to Track 2 or 3 and allow ACOs to transition to a higher-risk track at the start of any
calendar year rather than solely at the end of their agreement periods
12. Modify and enhance the proposal to reopen ACO determinations by allowing providers to request a redetermination, considering the impact to a specific
ACO in determining materiality and shortening the timeframe from four to two years
To see the letter, click here.
Obama Administration Announces Additional Opioid Efforts
On March 29, the White House announced new
initiatives to combat the opioid epidemic and build on President Obama’s proposal for $1.1 billion in new opioid spending. At the National Rx Drug Abuse
& Heroin Conference that same day, Obama urged the public to pressure Congress to support the White House request for $1.1 billion in new opioid
spending, mostly to expand medication-assisted treatment.
The administration will release a proposed rule to increase the patient limit for doctors who provide medication-assisted treatment for opioid addiction
from 100 to 200. The U.S. Department of Health and Human Services (HHS) is also finalizing a separate rule that requires Medicaid programs to provide coverage of substance abuse and
other mental health services on par with medical and surgical coverage. That builds on earlier efforts to require “mental health parity” in employer-based
coverage and Obamacare plans in the individual and small group markets. About 23 million Medicaid enrollees will be affected by the new final rule,
according to CMS.
The final rule was the last piece of guidance coming from the Mental Health Parity and Addiction Equity Act of 2008. An interagency task force will make
recommendations on how to enforce the parity provisions.
The Substance Abuse and Mental Health Services Administration (SAMHSA) is also releasing an $11 million grant for states to expand their
medication-assisted treatment and $11 million to make naloxone — the opioid overdose reversal drug — more available to first responders. Earlier this
month, HHS released $94 million to expand medication-assisted treatment in community health centers.
Officials said that 75 percent of federal prescribers have been trained already on appropriate prescribing guidelines for opioids. In response to a request
from the administration, more than 60 medical schools have agreed to begin mandatory training of students in opioid prescribing this fall. The training
will be in accordance with the new CDC guidelines finalized in early March.
For more information on the final rule, click here.
Knee and Hip Bundled Payment Program Began April 1
The program to overhaul how Medicare pays for hip and knee surgeries began on April 1. The Comprehensive Care for Joint Replacement (CJR) model tests bundled payment and quality measurement
for an episode of care associated with hip and knee replacements to encourage hospitals, physicians and post-acute care providers to work together to
improve the quality and coordination of care from the initial hospitalization through recovery.
Medicare will pay hospitals a set price for the hip or knee replacement
surgery and up to 90 days of rehabilitation and recovery to encourage them
to better coordinate and streamline the patient’s experience. According to a
recent survey of 100+ orthopedic practices, most
practices say they are “somewhat prepared” or “almost fully prepared” and hospital representatives say the same. Very few providers say they are fully
ready for the program, which is mandatory for around 800 hospitals in 67 different regions.
This program will be the first time Medicare has forced participation in one of its alternative payment models. Up until now, efforts to transition away
from fee-for-service have been voluntary.
The Centers for Medicare and Medicaid Services (CMS) chose to test the payment system on hip and knee replacements because they are the most common
inpatient surgeries for Medicare and yet the quality and costs of care for the surgeries still vary greatly among providers. The penalties will be phased
in over time — for the rest of this year, hospitals will not be penalized if they spend more than the Medicare target amounts. Hospitals are still waiting
for more data from CMS about the quality and cost of care from post-acute care providers in their area, which will be available once the program begins.
House Budget Committee Chairman Tom Price (R-GA) introduced a bill that would delay the model’s April 1 implementation date — under H.R. 4848, CJR would not begin until Jan. 1, 2018.
CMS Adding Functions to HealthCare.gov Aimed at Keeping Consumers Covered
The Centers for Medicare and Medicaid Services (CMS) recently added new functions to HealthCare.gov aimed at helping eligible consumers stay covered. The
changes — outlined in a blog post by HealthCare.gov CEO Kevin Counihan — include those to improve the consumer payment experience and to help consumers
avoid data-matching issues during the enrollment process.
In terms of the consumer payment experience, CMS is making improvements to its marketplace outreach, sending consumers earlier and additional reminders
about payments, and working closely with insurance companies to reinstate consumers who had trouble during the payment process.
Consumers can also lose their coverage when CMS cannot match information on an application with reliable data in the federal system. Counihan said having a
data-matching issue does not mean that an applicant is ineligible for coverage, but only that the information could not be electronically verified.
Consumers with personal data-related issues can still enroll in coverage for 90 or 95 days, but must provide CMS with necessary information in order to
avoid termination or adjustments.
To help consumers avoid data-matching issues, CMS made improvements to the online application that make it clearer when an issue is created. The agency is
encouraging people to provide key information, if they failed to do so in the beginning, such as providing a Social Security number. CMS also added a
function to help ensure consumers do not generate a new data-matching issue if they have previously resolved that same problem in the past. Lastly, the
final 2017 Notice of Benefit Payment and Parameters allows CMS to establish more appropriate income verification thresholds for consumers. In 2015,
coverage was terminated or adjusted due to data-matching issues for around 1.7 million consumers.
To read the blog post, click here.
CMS Finalizes the ACA Federal Upper Limits (FUL)
On March 29, the Centers for Medicare and Medicaid Services (CMS) released the finalized Affordable Care Act (ACA)
Federal Upper Limits (FUL)
calculated in accordance with the Medicaid Covered Outpatient Drug final rule. States will have up to 30 days from the April 1 effective date to implement
the FULs. After that, the FULs will be updated monthly, and will be effective on the first date of the month following the publication of the update.
States will have up to 30 days after the effective date to implement the FULs.
For more information on the FUL program, click here.
Medicare Sends MACRA Rule to White House for Review
The Centers for Medicare and Medicaid Services (CMS) sent its proposed rule on a new payment system for physicians to the White House for review. The rule
will outline the Merit-Based Incentive Payment System (MIPS) and a separate payment track for doctors partaking in alternative payment models — both were
instituted under SGR repeal last year. CMS officials say they hope to release the proposed rule next month.
MIPS folds meaningful use, the value-based modifier and the physician quality-reporting system into one program. Providers will face cuts of up to 9
percent of their Medicare payments by 2022 depending on how well they meet requirements. The Medicare Access and CHIP Reauthorization Act (MACRA) states
final rules around it must be published by Nov. 1.
FDA Wants Biosimilar Labels to Specify Copycat Status
On March 31, the U.S. Food and Drug Administration (FDA) released draft guidance for the labeling of
biosimilar products. The guidance recommends that biosimilar labels include a statement that the product is a near copy of a branded biologic medicine.
FDA recommends that the biosimilar labels specifically name the branded biologic the biosimilar is based on. The statement should be tied to a footnote
that states that a biosimilar is a biological product approved based on data showing that it is highly similar to an FDA-approved biological product, known
as a reference product, and that there are no clinically meaningful differences between the biosimilar product and the reference product.
The drug lobbies PhRMA and BIO urged FDA to require this kind of labeling after it approved the first biosimilar product in 2015 with labeling that does
not include its biosimilar status. The lobbies argue the information is essential for health care providers when making prescribing decisions. Others are
concerned the labeling could cause doctors to be more hesitant in prescribing the cheaper biosimilars.
FDA did not agree with PhRMA and BIO’s request that labeling include the data that supported the biosimilar’s finding of biosimilarity. The agency argued
the studies are most likely irrelevant to a health care provider’s consideration regarding the safety and use of the drug and could cause confusion.
The guidance does not address interchangeable biosimilars, which could be automatically substituted for the reference product at pharmacies. FDA is still
working on the data needed to prove a biosimilar is interchangeable with the reference product.
3. State Activities
Kentucky: June Deadline Set for State Exchange Transition
The Obama administration and Kentucky set June 1 as the deadline to determine whether the state has made enough progress to switch over to HealthCare.gov
for 2017. The deadline was outlined in a
letter on March 25 from the Centers for Medicare and Medicaid Services’ (CMS) Kevin Counihan, who oversees HealthCare.gov, to Kentucky health secretary Vickie Yates Brown Glisson. CMS said that until this decision date is reached, Kentucky
must concurrently implement a contingency plan that ensures that current customers can re-enroll and new customers can enroll into coverage without
U.S. Health and Human Services (HHS) Secretary Sylvia Mathews Burwell sent a
message alongside the letter on the HealthCare.gov
transition. Kentucky plans to use HealthCare.gov for eligibility and enrollment functionality while maintaining responsibility for other aspects of its
Kentucky Gov. Matt Bevin says that decommissioning Kynect — set up under his Democratic predecessor Steve Beshear — will cost the state only $236,000.
Other estimates are higher.
New Hampshire: Senate Passes Medicaid Expansion Bill
On March 31, New Hampshire’s Republican-controlled Senate approved a bill to continue the state’s Medicaid expansion for another two years, keeping nearly
50,000 residents on subsidized health insurance plans. The bill now goes to Democratic Gov. Maggie Hassan’s desk for approval. The state Senate Finance
Committee had endorsed the bill to continue expansion, before it moved the bill to the Senate chamber.
Under the program, people making up to 138 percent of the federal poverty level can use federal dollars to buy private health insurance plans. The bill
makes changes to the program, including adding a requirement that any able-bodied adults must work, volunteer or participate in job training programs for
30 hours a week. However, the bill includes language saying the state’s plan can continue even if this requirement is rejected.
Oklahoma: State Medicaid Agency Proposes 25 Percent Rate Cut
On March 29, the Oklahoma Health Care Authority announced SoonerCare — the state Medicaid agency — will cut provider reimbursement rates by 25 percent
across the board. This announcement comes as the state tries to patch a $1.3 billion budget hole for 2017. A 25 percent rate cut would put SoonerCare
provider rates at 64.9 percent of the Medicare rate. The state also says that additional cuts will be required if the Medicaid agency’s fiscal year 2017
budget appropriation is reduced more.
SoonerCare currently contracts with over 46,000 providers, and the cuts would affect all provider types including hospitals, physicians, pharmacies,
durable medical equipment suppliers and nursing home facilities. The proposed cut rate needs to be approved by the Centers for Medicare and Medicaid
Services (CMS). Oklahoma wants the cut to take effect June 1.
4. Regulations Open for Comment
Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats
FDA issued a final rule June 16
that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from
microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in
processed foods, are not “generally recognized as safe” or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat
content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78
percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in
foods. Comments on the final rule are due by June 18, 2018.
More information on FDA’s decision can be found in the agency’s press release.
HHS Posts Guidance for State Innovation Waivers
On Dec. 11, the Department of Health and Human Services (HHS) posted guidance for states interested in seeking a State Innovation Waiver under Section 1332
of the Affordable Care Act (ACA). State Innovation Waivers allow states to receive federal funding to implement alternative models of health care coverage
that provide affordable coverage to their residents. The notice clarifies that the minimum length of public notice and comment periods for waiver
applications is 30 days.
To see the guidance, click here.
CMS Releases Proposed Rule for Provider Enrollment Process
On Feb. 25, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to implement additional provider enrollment provisions of the
Affordable Care Act (ACA) to help make sure that entities and individuals who pose risks to the Medicare program are kept out of it or removed for extended
periods. This rule is part of CMS’s effort to prevent questionable providers and suppliers from entering the Medicare program.
If finalized, the regulations would allow CMS to remove or prevent enrollment of those who try to circumvent enrollment requirements through name and
identity changes or through inter-provider relationships. It will also address vulnerabilities such as when providers and suppliers avoid paying their
Medicare debts by reenrolling as a different entity.
Major provisions of the proposed rule include:
Disclosure of Affiliations:
Would require health care providers and suppliers to report affiliations with entities and individuals that: (1) currently have uncollected debt to
Medicare, Medicaid or CHIP; (2) have been or are subject to a payment suspension under a federal health care program or subject to an Office of
Inspector General (OIG) exclusion; or (3) have had their Medicare, Medicaid or CHIP enrollment denied or revoked. CMS could deny or revoke the
provider’s or supplier’s Medicare, Medicaid or CHIP enrollment if CMS determines that the affiliation poses an undue risk of fraud, waste or abuse.
Different Name, Numerical Identifier or Business Identity:
CMS could deny or revoke a provider’s or supplier’s Medicare enrollment if CMS determines that the provider or supplier is currently revoked under a
different name, numerical identifier or business identity.
Would allow CMS to revoke a physician’s or eligible professional’s Medicare enrollment if he or she has a pattern or practice of ordering, certifying,
referring or prescribing Medicare Part A or B services, items or drugs that is abusive, represents a threat to the health and safety of Medicare
beneficiaries or otherwise fails to meet Medicare requirements.
Increasing Medicare Program Re-enrollment Bars:
Would improve protection of the Medicare Trust Funds and program beneficiaries by: 1) raising the existing maximum re-enrollment bar from three years
to 10 years; 2) allowing CMS to add three more years to the provider’s or supplier’s re-enrollment bar if the provider attempts to re-enroll in
Medicare under a different name, numerical identifier or business identity; and 3) imposing a maximum 20-year re-enrollment bar if the provider or
supplier is being revoked from Medicare for the second time.
Other Public Program Termination:
Would permit CMS to deny or revoke a provider’s or supplier’s Medicare enrollment if: (1) the provider or supplier is currently terminated from
participation in a particular Medicaid program or any other federal health care program under any of its current or former names, numerical identifiers
or business identities; or (2) the provider’s or supplier’s license is revoked in a state other than that in which the provider or supplier is enrolled
Expansion of Ordering/Certifying Requirements:
Would permit CMS to require that physicians and eligible professionals who order, certify, refer or prescribe any Part A or B service, item or drug
must be enrolled in or validly opted out of Medicare.
Comments on the proposed rule must be submitted no later than 5 p.m. on April 25.
For more information, click here.
ONC Releases Proposed Rule
Expanding Role in Health IT Certification Program
The Office of the National Coordinator for Health Information Technology (ONC) released a proposed rule that would enable the agency to conduct direct
reviews of certified health IT products. Such direct review would also include how certified health IT interacts with other systems. The rule increases
ONC’s oversight of health IT testing bodies to improve alignment and more successfully deal with issues, and seeks to increase transparency associated with
the surveillance — it plans to make results of surveillance of electronic health records (EHRs) publicly available. The reviews would focus on situations
posing health or safety risks. Depending on the findings, the office says it may require corrective action or suspend or terminate certification for an EHR
or health IT module.
ONC hopes this move will enhance public confidence in health IT testing and certification. The U.S. Department of Health and Human Services (HHS) said the
rule will empower consumers by improving availability of certification information. ONC is proposing a “strict process” for health IT recertification or
replacement versions, and a program ban for those that don’t fix problems pointed out by ONC. Comments on the rule will be accepted through May 2.
To see the proposed rule, click here.
CMS Proposes to Test New Medicare Part B Prescription Drug Models
On March 8, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule to test new models to improve how Medicare Part B pays for
prescription drugs and supports physicians and other clinicians in delivering higher-quality care. Medicare Part B covers prescription drugs that are
administered in a physician’s office or hospital outpatient department, such as cancer medications, injectables like antibiotics, or eye care treatments.
The proposed Medicare Part B Model would test new ways to support physicians and other clinicians as they choose the drug that is right for their patients.
The proposed rule is designed to test different physician and patient incentives to do two things: drive the prescribing of the most effective drugs and
test new payment approaches to reward positive patient outcomes. Among the approaches to be tested are the elimination of certain incentives that work
against the selection of high-performing drugs, as well as the creation of positive incentives for the selection of high-performing drugs, including
reducing or eliminating patient cost sharing to improve patients’ access and appropriate use of effective drugs.
Prescription drug spending in the U.S. was around $457 billion in 2015, or 16.7 percent of overall health spending. In 2015, Medicare Part B spent $20
billion on outpatient drugs administered by physicians and hospital outpatient departments. The proposed rule seeks comments on testing six different
alternative approaches for Part B drugs to improve outcomes and align incentives to improve quality of care and spend dollars wisely:
Improving incentives for best clinical care
Discounting or eliminating patient cost sharing
Feedback on prescribing patterns and online decision support tools
Risk-sharing agreements based on outcomes
CMS is accepting comment on the proposed rule through May 9, 2016.
To see the press release, click here.
For a fact sheet on the proposed rule, click here.
HHS Report Shows the Benefits of Medicaid Expansion for Behavioral Health
On March 28, the U.S. Department of Health and Human Services (HHS) released a report entitled “Benefits of Medicaid Expansion for Behavioral Health.” The
report found that nearly 2 million uninsured people with mental illness or substance abuse disorder could gain coverage if their states expanded Medicaid.
Federal expansion funds could also free up money for other behavioral health services in states.
The report analyzes 2014 data from 20 states that have not expanded Medicaid — this includes Louisiana, which is expected to expand its program in July.
To see the full report, click here.
Blue Cross Blue Shield Study Finds Obamacare Enrollees Are More Expensive
According to a new report from the Blue Cross Blue Shield
Association (BCBS), Obamacare enrollees are more expensive than other customers. The report concluded that medical costs associated with caring for new
individual market enrollees were 19 percent higher than employer-based group members in 2014 and 22 percent higher in 2015.
The report also found that ACA exchange customers appeared to: have higher rates of certain diseases, more frequent hospitalizations and more prescriptions
filled than those with BCBS individual plans prior to 2014.
BCBS plans dominate exchange business in many states, but have raised concerns about big losses in the first two years of operations.
Doctors Group Releases Recommendations to Combat High Drug Prices
On March 28, the American College of Physicians (ACP) released policy recommendations to
address the escalating costs of prescription drugs in the U.S. The ACP proposes giving Medicare and other public health programs more flexibility to
negotiate drug discounts — Hillary Clinton, Bernie Sanders and Donald Trump all support this policy, but the drug industry opposes it. The group also
recommends requiring drug companies to disclose research, development and production costs to regulators to support transparency in pricing.
ACP also calls for the reimportation of certain drugs where they are sold at lower prices. It supports elimination of restrictions of using
quality-adjusted life-years (QALYs) in research funded by the Patient-Centered Outcomes Research Institute (PCORI).
The drug industry has also been criticized for “evergreening” its products. ACP calls for increased oversight of the drug industry practice, in which
companies make minor adjustments to a certain drug to extend patent protection and delay generic competition. The recommendations also suggest having
insurers limit cost-sharing for specialty drugs, noting that higher coinsurance or copayments usually result in poorer medication adherence. They also
propose more research on value-based pricing models, such as bundled payments and indication-specific pricing. ACP also recommends greater education about
To see the full list of recommendations, click here.
Avalere Health Finds 60 Percent of Hospitals Could Face Fine in Joint Replacement Model
A new Avalere Health analysis
released March 30 found that 60 percent of hospitals participating in Medicare’s Comprehensive Care for Joint Replacement (CJR) model could face penalties
based on their cost performance. The model, which started April 1, includes roughly 800 hospitals in 67 regions that are at risk for all Medicare spending
associated with hip and knee replacements and any charges within 90 to 95 days of discharge, otherwise known as an episode of care.
CJR is the Center for Medicare and Medicaid Innovation’s (CMMI’s) first mandatory demonstration, and Avalere’s analysis says the Obama administration is
expected to develop more models similar to the CJR in its final year.
Under the model, hospitals’ performances are compared with both historical spending and regional spending levels. Avalere compared average Medicare costs
for participating hospitals’ joint replacement episodes to the regional average for a metropolitan statistical area, and found that episodes at 60 percent
of hospitals in the CJR cost more than episodes at other regional hospitals. These episodes could subject hospitals to penalties if they do not rein in
total episodic costs.
The analysis also found that 39 percent of total spending on hip and knee replacement episodes is tied to post-discharge care, including post-acute care
facilities and hospital readmissions. Therefore, hospitals can achieve savings by making sure patient care is provided in the lowest-cost setting that is
Avalere Health: Only 33 Percent of HealthCare.gov Enrollees Picked the Same Plan
According to a new analysis from Avalere Health, only 33 percent of those who enrolled in HealthCare.gov in 2016 picked the same plan as last year. In
total, 3.2 million of the 9.6 million customers in 2016 kept their previous plan. Another 2.4 million shoppers — 25 percent of all HealthCare.gov shoppers
— switched to a new plan through the enrollment portal, and 4 million enrollees were new to the market.
This is the second year in a row in which only 33 percent of exchange customers kept their plan — some enrollees likely left the market for other sources
of insurance, including Medicaid or employer coverage. The fact that two-thirds of customers picked new plans this year highlights the need for insurers to
offer competitively priced coverage.
Pew Charitable Trusts: The Lack of UDIs in Claims Forms Hurts CMS’s Data-Sharing Plan
In comments submitted to the Centers for Medicare and Medicaid Services (CMS), Pew Charitable Trusts says the lack of unique device identifiers (UDIs) in
Medicare claims forms hurts CMS’s plan to let qualified entities privately share claims data to make informed, data-driven health care decisions. CMS has
argued against including UDIs in claims forms, which are currently being revised, and faces pressure from lawmakers and stakeholders to make sure they are
included in the updated forms.
The proposed data-sharing rule would expand access to Medicare information by permitting certain organizations to buy and share claims data. Currently,
qualified entities can conduct analysis of claims data only for public use.
Pew supports the underlying idea behind the proposed rule to help qualified entities make data-driven decisions that reduce cost while maintaining quality
of care. However, it says these entities will lack quality information on medical device performance if UDIs are not included on the claims forms. Claims
data includes the procedure used on a patient, but not the specific device used on a patient in procedures like joint replacement or implantation of a
cardiac stint. UDIs are specific codes assigned to medical devices that identify the make and model of a given product.
In light of the fact that the most common inpatient procedures in the Medicare program are knee and hip replacement surgeries, the lack of UDIs on claims
forms is very problematic, according to Pew.
Including UDIs in claims data would make it easier to analyze device safety, compare device outcomes and help organizations structure “expected
expenditures based on all factors that influence the cost of care, including device selection, and whether specific products result in more physical
therapy or hospital readmissions, for example,” Pew says.
HHS OIG Report Finds Hospices Inappropriately Billed Medicare for General Inpatient Care
Hospices inappropriately billed 33 percent of their inpatient stays, resulting in $268 million in incorrect Medicare payments, according to an HHS OIG
report released on March 31.
Misuse of general inpatient care (GIP) includes care being billed but not provided and beneficiaries receiving care they do not need. The most misuse
occurred when providers billed for inpatient stays in situations where the beneficiary could have been cared for at home, the report found. The report also
found that most of the inappropriate spending occurred in hospice provided in skilled nursing facilities, and in for-profit hospice facilities. Medicare
also sometimes paid twice for drugs because they were paid under Part D when they should have been provided by the hospice and covered under the hospice
daily payment rate.
OIG gave the Centers for Medicare and Medicaid Services (CMS) six recommendations:
Increase oversight of hospice GIP claims and review Part D payments for drugs for hospice beneficiaries
Ensure that a physician is involved in the decision to use GIP
Conduct prepayment reviews for lengthy GIP stays
Increase surveyor efforts to ensure that hospices meet care planning requirements
Establish additional enforcement remedies for poor hospice performance
Follow up on inappropriate GIP stays, inappropriate Part D payments and hospices that provided poor-quality care
To see the full report, click here.
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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