Jan 17, 2017
Washington Healthcare Update
This Week: Congress wraps up the first step to the unraveling of the Affordable Care Act…HHS continues to release regulations that may or may not stay when the Trump administration takes over.
Health Care Reform Takeaway From the Week of January 3
- The Senate and House finished consideration of the Budget Resolution. The
Budget Resolution paves the way for the unraveling of the Affordable Care
Act. In the Senate, Democrats offered a number of amendments—mostly
“message amendments” designed to make Republicans take votes against
popular parts of the Affordable Care Act.
- Of significance was an amendment offered and then withdrawn by Sen. Bob
Corker (R-TN) to extend the resolution’s timeline to March 3 from Jan. 27
for committees of jurisdiction to respond to the resolution’s instructions
to repeal the ACA. This was part of the concern on part of some members
that there needed to be a replacement bill ready after the ACA was
repealed. Corker withdrew the amendment after being assured that Jan. 27
was “only a placeholder” date.
- While there are many moving parts to repeal and replace, more members are
becoming concerned about how long it might take to get a replacement bill
- Next step will be “reconciliation”—legislation that will repeal parts of
the Affordable Care Act. What is not known is if a replacement plan will be
ready to go after repeal.
4. State Activities
5. Regulations Open for Comment
House Passes Budget Resolution
On Jan. 13, the House of Representatives passed the Budget Resolution 227
to 198 paving the way for the next step—Budget Reconciliation. The Senate
had passed the resolution earlier in the week. The resolution contains
instructions to the four House and Senate health-related committees that
allow them to repeal the Affordable Care Act. While the instructions
include Jan. 27 as the date to report back to the House and Senate Budget
Committees with legislation, that date is expected to slip.
House Members Introduce Bipartisan Bill on Health Insurance Tax
The insurance industry and business stakeholders praised the recent
reintroduction of legislation that would fully repeal the ACA’s tax on
health insurance plans. Reps. Kristi Noem (R-SD) and Kyrsten Sinema (D-AZ)
introduced the insurance tax repeal bill (HR 246), which has 81 original
cosponsors. A full repeal of the tax was also included in last year’s
reconciliation bill (HR 3762), which is seen as the baseline for lawmakers’
upcoming ACA repeal package.
The fee on insurance plans, which is based on market share, went into
effect in 2014, but is currently on hold until 2018 due to a provision in
last year’s omnibus spending bill.
The U.S. Chamber of Commerce recently launched a campaign urging Congress
to end the HIT, as well as the ACA’s medical device tax and 40 percent
excise tax on high-cost health plans. The campaign kicked off with a focus
on the HIT since members will be impacted as early as February when
businesses begin renewing health plans.
OMB Analysis Shows Senate Budget Resolution Increases Debt, Deficit
The Senate budget resolution paving the way for Obamacare repeal will drive
up the public debt and national deficit over the next decade, the White
House budget office wrote in a
Jan. 9 letter.
The budget resolution would increase the public debt from $14.2 trillion in
2016 to $23.7 trillion in 2026, according to the Office of Management and
Budget analysis. The annual on-budget deficit would increase to more than
$1 trillion by 2026, OMB also found.
Court Blocks North Carolina Medicaid Expansion
A federal court has temporarily blocked an effort by North Carolina Gov.
Roy Cooper to expand Medicaid under Obamacare.
temporary restraining order Jan. 15
from U.S. District Court Judge Louise Wood Flanagan came soon after
Republicans in the North Carolina Legislature sued to halt the new
Democratic governor’s plan, which aimed to make North Carolina the 32nd
state to expand under the ACA.
North Carolina GOP say Cooper’s plan to submit a Medicaid state plan
amendment to the Obama administration to expand runs afoul of a 2013 state
law that blocks him from acting on his own. Cooper, a former state attorney
general, has argued that the state law does not apply to his plan.
The federal court order is in effect for two weeks and was issued before
North Carolina officially submitted its plan to federal officials. The
state was expected to do so early this week after a 10-day public comment
period. Under the plan, expansion would take effect at the start of 2018.
Texas Judge Approves Delay of Final Rule for Dialysis Facilities
On Jan. 12, a Texas judge approved a request by dialysis companies to delay
a new regulation, issued by the Department of Health and Human Services and
expected to take effect Jan. 13, that would have required them to disclose
to health plans when premium assistance was being offered to patients who
sign up for private health insurance. The suit claims the rule, issued in
the final weeks of the Obama administration, violates the Administrative
Providers said if the rule was finalized as planned, insurers would use
such information to refuse coverage to dialysis patients. HHS has said
dialysis companies and other health care providers have steered patients
away from Medicare and Medicaid health plans and into these private plans,
offered through the Affordable Care Act health exchange programs, to boost
U.S. District Judge Amos Mazzant granted the temporary restraining order,
filed by dialysis providers Fresenius Medical Care, DaVita Inc. and U.S.
Renal Care, along with Dialysis Patient Citizens, saying the group did show
that HHS “likely violated the procedures of the Administrative Procedures
Act” in pushing the final rule through without adequate time for feedback
and review. The judge also said the providers showed evidence that patients
would “suffer irreparable injury if the injunction is denied.” The rule, if
approved, could force patients to shift to public insurance options,
potentially disrupting insurance for themselves and members of their family
now covered under private plans. Mazzant said HHS “will suffer no
comparable harm if the Rule’s implementation is delayed while the Court
addresses the merits of Plaintiffs’ challenges to the Rule.”
CMS issued the rule in December after requesting information from
stakeholders on the potential impact of Medicare- or Medicaid-eligible
patients’ being steered into commercial plans. The agency sought input
after issuers complained about skyrocketing costs for ESRD and other
services that they attributed to third parties helping patients pay
premiums for exchange plans, which have higher provider reimbursement
Addressing third-party payments has consistently topped the list of policy
changes that the health insurance industry says would help stabilize the
President-elect Trump Picks VA Health Chief Shulkin for VA Secretary
On Jan. 11, President-elect Donald Trump named David Shulkin, the top
health official in the Department of Veterans Affairs, to be VA secretary.
A physician, Shulkin serves as VA’s undersecretary of health, a position he
has held in the Obama administration since 2015. Trump announced the
surprise pick during a long-awaited press conference at Trump Tower in New
Shulkin is also one of the few, if only, holdovers from the Obama
administration so far tapped by the Republican president-elect. Trump’s
transition team is also weighing keeping Bob Work as the Pentagon’s deputy
secretary for several months in the new administration, while a search goes
on for a permanent appointee.
As undersecretary of health, Shulkin oversees the largest integrated health
care system in the country. Before joining VA, Shulkin was president of the
Morristown Medical Center in New Jersey and, earlier, president and chief
executive of the Beth Israel Medical Center in New York City.
CMS Provides More Information on Calculations for Patient Action Objectives and Measures
CMS recently updated an FAQ to provide information about calculations for
EHR Incentive Programs’ objectives and measures requiring patient action. More specifically, CMS
provides an answer to the question: In calculating the meaningful use
objectives requiring patient action, if a patient sends a message or
accesses his/her health information made available by their eligible
professional (EP), can the other EPs in the practice get credit for the
patient’s action in meeting the objectives?
To see the FAQ,
CMS Finalizes New Medicare and Medicaid Home Health Care Rules and Beneficiary Protections
On Jan. 9, CMS finalized rules governing home health agencies that will
improve the quality of health care services for Medicare and Medicaid
patients and strengthen patients’ rights. The Medicare and Medicaid
Conditions of Participation are the minimum health and safety standards a
home health agency must meet in order to participate in the Medicare and
Home health care allows patients to receive needed health care services
within their own homes. Patients receive coordinated services ranging from
skilled nursing to physical therapy to medical social services, all under
the direction of their physician. Currently, there are more than 5 million
Medicare and Medicaid beneficiaries receiving home health care from nearly
12,600 Medicare- and Medicaid-participating home health agencies
The final rule includes:
A comprehensive patient rights condition of participation that clearly
enumerates the rights of home health agency patients and the steps that
must be taken to assure those rights.
An expanded comprehensive patient assessment requirement that focuses
on all aspects of patient well-being.
A requirement that assures that patients and caregivers have written
information about upcoming visits, medication instructions, treatments
administered, instructions for care that the patient and caregivers
perform, and the name and contact information of a home health agency
A requirement for an integrated communication system that ensures that
patient needs are identified and addressed, care is coordinated among
all disciplines, and there is active communication between the home
health agency and the patient’s physician(s).
A requirement for a data-driven, agency-wide quality assessment and
performance improvement (QAPI) program that continually evaluates and
improves agency care for all patients at all times.
A new infection prevention and control requirement that focuses on the
use of standard infection control practices, and patient/caregiver
education and teaching.
A streamlined skilled professional services requirement that focuses on
appropriate patient care activities and supervision across all
An expanded patient care coordination requirement that makes a licensed
clinician responsible for all patient care services, such as
coordinating referrals and assuring that plans of care meet each
patient’s needs at all times.
Revisions to simplify the organizational structure of home health
agencies while continuing to allow parent agencies and their branches.
New personnel qualifications for home health agency administrators and
The final rule can be viewed
SAMHSA Issues Rule on Sharing of Substance Abuse Treatment Records
The Substance Abuse and Mental Health Service Administration (SAMHSA) on
Jan. 13, issued a
that eases sharing of substance abuse treatment records among providers and
restores researchers’ access to CMS data on the disorders. The rule lifts
an old restriction that prevented certain data on substance abuse in
Medicare and Medicaid from being accessed for research purposes. The rule
also allows easier sharing of substance abuse treatment records among
providers, while maintaining protections required under HIPAA for other
Under current law, providers have to get approval from patients each time
substance abuse-related information is shared. Under the final rule,
patients sign one consent form that establishes which information they are
disclosing. Patients still have the right to know who sees that data.
Doctors have been pushing SAMHSA for years to change the restrictive
regulation to make it easier to share information with different providers,
saying it is difficult to practice medicine holistically when vital mental
health information is lacking.
Privacy and patient advocates have been leery of changes that could put
sensitive information in places where patients don’t want it seen.
a supplemental notice of proposed rulemaking to make additional changes to
the final rule. These would deal with restrictions on use and disclosure of
Part 2-covered data for the purpose of payment and health care operations
for contractors and subcontractors.
4. State Activities
California: Health Affairs Studies Find Consumers Missing out on Potential Benefits of Covered California
Consumers can find cheaper health plans in the California’s exchange if
they shop around, but many are still missing out on the chance to get
financial help to pay for their premiums, two studies released by the
journal Health Affairs found. The
average price that consumers actually paid for plans in Covered California
was less than the average premium increase, and that gap has widened over
time, the findings showed. Consumers paid 11.6 percent less on health plan
premiums than the average offered price in 2014, 13.2 percent less in 2015
and 15.2 percent less than last year. The study’s authors attributed the
discrepancy to enrollees switching to lower cost plans within the bronze
and silver tiers, and steering away from gold and platinum plans. While
plan prices in Covered California increased by four percent on average in
both 2015 and 2016, this year’s increase averaged 13.2 percent, a
three-fold spike but far lower than the average 22 percent rate hike
reported nationwide. A separate Health Affairs study
estimated that 31 percent of individual market consumers in California who
were likely eligible for financial assistance missed out on potential
savings, either because they purchased plans that were not silver tier, or
they purchased their insurance outside Covered California.
New Jersey: Gov. Christie Lays Out Health Care Plans in State of State Speech
New Jersey Gov. Chris Christie devoted the majority of his annual State of
the State speech to laying out a comprehensive plan to fight drug
addiction. Christie, who has previously opposed insurance mandates, came
out in support of requiring health insurers to cover six months of
inpatient and outpatient rehab. Once drafted, the bill will most likely
face opposition from the insurance industry. Christie also irked the
state’s doctors by directing the state attorney general to use emergency
rulemaking to limit initiation opioid prescriptions for acute pain to a
five-day supply. In the speech, he talked about how his decision to expand
Medicaid has allowed for a change in the availability of drug treatment for
low-income New Jerseyans, but has yet to comment publicly on the ACA repeal
process and the future of the half a million residents who gained coverage.
Pennsylvania: State Closing Two Mental Health Facilities
Pennsylvania Gov. Tom Wolf’s administration announced it will be closing as
many as two residential mental health facilities and shifting patients into
the community as the state grapples with a $1.7 billion budget deficit.
Pennsylvania has decreased its state hospital population by 70 percent over
the past 20 years. “The closures are part of the Wolf administration’s
commitment to serve more people in the community, reduce reliance on
institutional care, and improve access to home and community-based services
for Pennsylvanians,” Department of Human Services Secretary Ted Dallas said
in a statement. Once these centers close only four will remain, leaving
some patient advocacy groups concerned that it will further exasperate the
state’s psychiatric bed shortage.
Pennsylvania:CMS Announces Pennsylvania Rural Health Model
On Jan. 10, CMS and Pennsylvania announced the Pennsylvania Rural Health
Model, a new initiative of the CMS Center for Medicare and Medicaid
Innovation (Innovation Center). The model is designed to improve health and
health care in rural Pennsylvania under an agreement signed by Governor Tom
Wolf and Pennsylvania Secretary of Health Karen Murphy.
Specifically, the model seeks to increase rural Pennsylvanians’ access to
high-quality care and improve their health, while also reducing the growth
of hospital expenditures across payers, including Medicare, and increasing
the financial viability of the state’s rural hospitals to ensure continued
access to care facilities. Pennsylvania, through its Department of Health,
will be a key partner in jointly administering this model with CMS.
Under this model, participating rural hospitals will receive all-payer
global budgets—or a fixed amount of money that is set in advance and funded
by all participating payers—to cover the inpatient and outpatient services
they provide. Rural hospitals will use this predictable funding to
deliberately redesign the care they deliver to improve quality and meet the
health needs of their local communities.
The model is open to critical access hospitals and acute care hospitals in
rural Pennsylvania. In addition, other payers covering individuals in the
commonwealth, including Medicaid and commercial health plans, are eligible
to participate in the model by paying participating rural hospitals through
CMS intends to provide Pennsylvania with $25 million, which is a portion of
the funding to begin implementing the Pennsylvania Rural Health Model.
Pennsylvania will use this funding to operate the model, including data
analytics, quality assurance and technical assistance to help rural
hospital participants create and implement plans to improve quality of care
and address the most prevalent health needs in the communities they serve.
For more information,
Utah: 1115 Waiver Proposal Will Fall to Trump Administration
A decision on the Utah’s 1115 waiver proposal to enact a limited Medicaid
expansion will fall to the Trump administration. The smaller scale
expansion is expected to cover roughly 10,000 state residents who are in
need of substance abuse and mental health treatment, are chronically
homeless or involved in the criminal justice system. The plan was agreed to
by Utah legislative leaders and Gov. Gary Herbert after ACA Medicaid
expansion repeatedly failed in the state Legislature.
5. Regulations Open for Comment
CMS Releases Proposed Notice With Changes to Medicaid National Drug Rebate Agreement
On Nov. 7, CMS issued a proposed notice announcing changes that would be made to the Medicaid National Drug Rebate Agreement (NDRA) for use by the
Secretary of the Department of Health and Human Services and manufacturers under the Medicaid Drug Rebate Program. The NDRA is being updated to incorporate
legislative and regulatory changes that have occurred since the agreement was published in February 1991, as well as to make editorial and structural
revisions, such as references to the updated Office of Management and Budget (OMB)-approved data collection forms and electronic data reporting. There is a
90-day comment period for this proposed notice that will end on Feb. 7, 2017.
For more information, click here.
Comments Due on IMPACT Act Cross-Setting Quality Measure
On Nov. 4, CMS announced that public comments are due Nov. 17 on a cross-setting post-acute care measure under the Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT Act) to further develop and refine
the percentage of residents or patients with pressure ulcers that are new or worsened and language modifications being explored with the term “Pressure
Injury.” CMS seeks feedback on potential updates to measure specifications and items used to calculate the quality measure. Visit the Public Comment webpage
for more information.
CMS Issues Interim Final Rule to Delay Inclusion of U.S. Territories in
Definitions of States and United States
CMS published the Covered Outpatient Drug Final Rule with Comment Period in
the Federal Register on Feb. 1, 2016. As part of
that final rule with comment, CMS amended the regulatory definitions of
“States” and “United States” to include the U.S. territories (American
Samoa, the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico
and the U.S. Virgin Islands) beginning April 1, 2017. However, the agency
said those territories could not be ready to implement the program by this
Therefore, CMS issued an Interim Final Rule with comment period that delays
the inclusion of the territories in the definitions of “States” and “United
States” from April 1, 2017, until April 1, 2020, which is effective on Nov.
15, 2016. There is a 60-day comment period that will end on Jan. 17, 2017.
For more information visit the
Covered Outpatient Drugs Policy
CMS Issues Proposed Rule for Medicaid Managed Care Plans
CMS has issued a new proposed rule detailing regulations for pass-through
payments to providers from Medicaid managed care plans. The guidance builds
on the Medicaid managed care rule finalized by the Obama administration in
Read the proposed rule
CMS Announces PACE Innovation Act Request for Information
On Jan. 4, CMS released a
Request for Information (RFI)
seeking public input on potential adaptations of the model of care employed
by the Program of All-Inclusive Care for the Elderly (PACE) for new
populations, including individuals with physical disabilities, under the
authority provided by the PACE Innovation Act. The PACE Innovation Act of
2015 (PIA) provides authority to test application of PACE-like models for
additional populations, including populations under the age of 55 and those
who do not qualify for a nursing home level of care, under Section 1115A of
the Social Security Act.
The RFI includes two parts:
- In the first part, CMS seeks comment on potential elements of a
five-year PACE-like model test for individuals dually eligible for
Medicare and Medicaid, age 21 and older, with disabilities that impair
their mobility and who are assessed as requiring a nursing home level
of care, among other eligibility criteria. We have provisionally named
this model “Person Centered Community Care” or P3C. This potential
model is designed to meet the requirements of a model test under
Section 1115A of the Social Security Act and to adapt the PACE model of
care for one population of focus. In addition to feedback on the
potential elements of the P3C model described in the RFI, CMS seeks
comment on the types of technical assistance that potential P3C
organizations and states would require to participate in the model
- In the second part of the RFI, CMS seeks information on additional
specific populations whose health outcomes could benefit from
enrollment in PACE-like models, and how the PACE model of care could be
adapted to better serve the needs of these populations and the
currently eligible population.
CMS is accepting feedback on this RFI until 5 p.m. EST on Feb. 10, 2017.
Comments should be submitted electronically in PDF form to
with the organization or individual submitting comments on the title of the
CMS Proposes Rule for Prosthetics and Orthotics Suppliers
On Jan. 11, CMS issued a proposed rule that would implement statutory
requirements and specify: the qualifications needed for practitioners to
furnish and fabricate prosthetics and custom-fabricated orthotics, and for
qualified suppliers to fabricate prosthetics and custom-fabricated
orthotics; accreditation requirements that qualified suppliers must meet in
order to bill for prosthetics and custom‑fabricated orthotics; requirements
that an organization must meet in order to accredit qualified suppliers to
bill for prosthetics and custom-fabricated orthotics; and a timeframe by
which qualified practitioners and qualified suppliers must meet the
applicable licensure, certification and accreditation requirements. This
rule would also remove the exemption from quality standards and
accreditation that is currently in place in accordance with Section
1834(a)(20) of the Act for certain practitioners and suppliers who furnish
or fabricate prosthetics and custom‑fabricated orthotics. In addition, this
rule also includes authority for the Centers for Medicare & Medicaid
Services (CMS) to revoke the Medicare enrollment of Durable Medical
Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) suppliers that submit claims for items that do
not meet the requirements of the statute and this proposed rule.
Only qualified practitioners who furnish or fabricate prosthetics and
custom‑fabricated orthotics and qualified suppliers that fabricate or bill
for prosthetics and custom‑fabricated orthotics would be subject to these
CMS will accept comments on the proposed rule until March 13, 2017, and
will respond to comments in a final rule.
To see the proposed rule,
CDC Report Shows Rural Americans at Higher Risk of Preventable Death
According to a new CDC report, Americans living in rural areas have higher
death rates and suffer more preventable deaths from the leading causes of
mortality compared to people in urban areas.
Mortality rates for the leading causes of death—heart disease, stroke,
cancer, unintentional injury and chronic lower respiratory disease—were all
higher among people living in rural areas compared to people living in
metropolitan areas between 1999 and 2014, the CDC’s latest Morbidity and
Mortality Weekly Report
Figures from 2010 to 2014 also show that a higher percentage of those
deaths were potentially preventable among people who lived in rural areas.
For example, 42.6 percent of heart disease deaths among people in rural
areas in 2014 were potentially preventable, compared to just 27.8 percent
in metropolitan areas. Likewise, roughly 50 percent of deaths from
unintentional injuries among people in rural areas were potentially
preventable, compared to 30.9 percent in metropolitan areas.
The report authors said people in rural areas are more likely to report
less access to health care and lower quality of care, compared to those in
metropolitan areas where there are more health providers and more
GAO Report Finds Indian Health Service Has Limited Oversight of Quality of Care
In a new report, GAO found that the Indian Health Service (IHS) has
limited, inconsistent oversight over the quality of care at its facilities.
Among other things, a lack of agency-wide performance standards and
significant leadership turnover have affected its oversight of quality. GAO
recommended that IHS develop agency-wide standards for quality care,
monitor facility performance in meeting these standards and develop
succession plans for the replacement of key personnel.
American Indians and Alaska Natives die at higher rates than other
Americans from preventable causes—such as diabetes and influenza.
To see the report,
GAO Report Finds HHS Needs to Improve Communication and Revise Plans for Public Health Emergencies
In a new report, GAO found that staff at state and local health departments
may need extra help responding to public health emergencies such as a flu
pandemic or natural disaster. In such cases, personnel funded by certain
Health and Human Services programs may be reassigned from their regular
duties to help with emergency response. While no state has needed to
request this help yet, GAO looked at how HHS plans to approve reassignment
requests and to analyze whether reassignment was helpful during the
emergency. GAO found that HHS has no plans to analyze the impact of
reassignments on emergency response and recommended it develop such a plan.
To see the report,
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
Founded in 1998, McGuireWoods Consulting LLC
(MWC) is a full-service public affairs firm offering infrastructure and
economic development, strategic communications & grassroots, and government
relations services. McGuireWoods Consulting is a subsidiary of the
law firm and has been named in The National Law Journal's special annual
report, "The Influence 50," for the past several years. In the most recent
report, McGuireWoods Consulting was ranked 15th of the 1,900 government
relations firms in Washington, D.C.
To sign up for the Weekly Washington Healthcare Update, use our online
McGuireWoods Consulting LLC
2001 K Street
Washington, DC 20006-1040