May 8, 2017
Washington Healthcare Update
This Week: House passes Repeal/Replace bill…Senate says it will do its own bill…Congress passes spending bill to fund the rest of the fiscal year.
4. State Activities
5. Regulations Open for Comment
House, Senate Pass $1 Trillion Spending Bill to Avoid Government Shutdown
Last week, the House and Senate passed a $1 trillion omnibus spending bill
that would keep the government running until September. The bill passed the
House in a 309-118 vote, with four members abstaining and passed the Senate
with a vote of 79-18. It will now head to President Trump’s desk. Congress
was supposed to have finished its spending work for the fiscal year seven
Lawmakers on both sides of the aisle are celebrating the deal, which would
achieve a more sweeping update of federal funding levels than they had
previously anticipated possible. The compromise struck over the weekend
provides $2 billion in new spending for the National Institutes of Health
and permanently extends expiring health insurance benefits to retired coal
A majority of Republicans ultimately agreed to support the bill and look
ahead to the fiscal 2018 appropriations process, which the White House has
said would be more GOP-driven.
What ACA Provisions Are Inside Congress’ $1 Trillion Spending Bill
The fiscal 2017 spending deal contains several provisions related to the
Affordable Care Act. First, it continues to block Congress from using CMS’s
program money to fund the Affordable Care Act’s risk corridor program.
Several insurers have sued over the situation, and plans that are still
owed money from HHS have until May 12 to join Health Republic’s class
action against the government.
The funding agreement also does not provide money for the ACA’s
cost-sharing reductions (CSRs) despite urging from wide-ranging
stakeholders. The White House has said the administration will continue
making the CSR payments on a monthly basis, indefinitely.
The spending bill also includes several other oversight demands related to
the ACA. For example the bill requires CMS notify Congress two business
days before it releases grants opportunities; requires the administration
detail all ACA-related spending; and requires publication of the number of
employees and contractors related to administering the ACA.
Lawmakers released explanatory language weighing in on several CMS issues,
including calling for a full audit of air emergency transport, mitigation
of the reduced rates for critical access hospitals and a loosening of
agency policy on hospitals that did not get their fair share of incentive
payments through the Medicare Electronic Health Records Incentive Program.
The following concerns were highlighted over CMS policies:
GAO audit of air ambulance systems:
The bill mandates detailed analysis by the GAO on all emergency air
transport services and costs and payment systems. Lawmakers say the audit
should cover reimbursements and reimbursement rates for private insurers,
Medicare, Medicaid and other government-sponsored programs. GAO, which is
already working on a report on air ambulance services and payments, should
merge both reports and work with the appropriations committees in House and
Senate to decide on the methods and scope of the required analysis,
Mitigate new payment reductions to critical access hospitals:
Congressional appropriators address industry worries about the proposed
revocation of “critical access hospital” classification from any hospital
located less than 10 miles from another hospital and the reduced
reimbursement rate for CAHs from 101 percent to 100 percent. Lawmakers
instruct CMS to mitigate losses from the proposed rate cut.
Meaningful use and Medicare incentive payments:
CMS should reconsider letting hospitals appeal federal decisions not to pay
Medicare incentive payments if these hospitals were eligible for the
incentive payments. The legislation notes that CMS blocked or adjusted the
payments due to eligible hospitals—after the hospitals proved they had met
CMS requirements—through administrative errors and said hospitals should be
allowed to appeal the decisions.
Build out telehealth options for diabetic Medicare beneficiaries:
CMS should expand the Medicare Diabetes Prevention Program beginning in
January 2018, and needs to encourage use of telehealth services for the
program in future rules.
CMS needs to backdate the implementation of the “severe wounds” provision
of the Consolidated Appropriations Act of 2016 to an effective date of Dec.
340B drug program:
The Health Resources and Services Administration must update its website
for the 340B drug program and notify the House and Senate appropriations
committees on its status within 90 days.
New grants for rural health:
The spending deal would appropriate $65.6 million in grants for the Rural
Health Outreach Program, and $2 million for HRSA to develop a pilot program
with the Delta Regional Authority to support small rural hospitals. HRSA
also would get $2 million to disburse in grants to critical access
hospitals in rural communities with high poverty, unemployment and drug
Lawmakers earmark $1.5 million for telehealth, and instruct HHS to set up a
test site for telehealth—preferably a public medical university that is
successful, provides a high volume of telehealth services every year and
reaches out through telehealth to medically underserved areas with high
rates of chronic illness and poverty. HHS should make sure the medical
center chosen has a financially self-sustaining telehealth system as well.
The bill also sets up “not less than” $7.3 million for the Telehealth
Network Grant Program, with HRSA instructed to give preference to small
hospitals in poor communities with high rates of unemployment and drug use.
For more information, click
Omnibus Spending Bill Guarantees Medicare Cuts Left to Administration If IPAB Triggered
The fiscal 2017 spending bill guarantees the Trump administration would be
in control of Medicare cuts if the Independent Payment Advisory Board
(IPAB) is triggered this year, because it defunds IPAB. Drugmakers and drug
plans would be especially exposed to IPAB-driven pay cuts, but lobbyists
and analysts say they do not know what the administration would do if given
the power to make major changes to Medicare drug reimbursement policy.
As in past spending legislation, the 2017 omnibus spending bill eliminates
funding for IPAB. The difference this year is that there is a chance the
board will be triggered in 2017. The CMS actuary was supposed to determine
by April 30 whether IPAB is triggered, but that determination is not
expected until this summer. The actuaries’ determination coincides with the
Medicare Trustees’ annual report on the state of the program, which has
been released over the summer for the past three years.
Under the law, IPAB recommendations, which would be unusually difficult for
Congress to block, may not ration care, raise premiums, increase cost
sharing for beneficiaries or restrict benefits or eligibility. Also,
hospitals and hospices are exempted from cost-cutting proposals until 2020.
That leaves a big target on Medicare Advantage and Part D, and the law even
singles out those programs.
Senate Finance Committee Delays CHIP Hearing
The Senate Finance Committee is going to delay this week’s
on reauthorizing the Children’s Health Insurance Program (CHIP) in light of
the chamber’s work on Obamacare repeal. The hearing was set for Tuesday
The Finance Committee will also push back its work on legislation changing
the way Medicare handles chronic disease (S. 870).
Sens. Grassley, Casey Introduce Bill to Expand Off-Label Coverage of Part D Drugs
On May 3, Sens. Charles Grassley (R-IA) and Bob Casey (D-PA) introduced
legislation to expand off-label coverage of drugs in Medicare Part D.
Off-label is an FDA term that Medicare law does not use. Instead, Medicare
covers “medically accepted indications” according to Medicare Rights Center
Senior Counsel for Education & Federal Policy Casey Schwarz.
Medicare defines medically accepted indications more narrowly in Part D
than in Part B. Medicare considers FDA-approved indications to be medically
accepted across all its programs. In addition to the FDA label, Part D
relies on three compendia for determining which drugs the federal
government will cover and reimburse. In contrast, the federal government
uses more than three compendia for off-label drug indications for Part B.
However, their bill does not deal with peer-reviewed medical literature.
Part B lets beneficiaries cite medical journals as evidence of medically
accepted indications for all drugs, while journals are available for
evidence in Part D only for chemotherapies.
“The body of knowledge available to prescribers currently is limited by
law,” Grassley said. “Our bill updates the available information for the
benefit of doctors and patients who should have access to the most complete
medical literature available.”
Although the senators do not mention broader coverage, the goal of the bill
seems to be to make it easier for patients to get insurance companies to
cover drugs taken for conditions for which they have not been approved.
For more information,
Senate HELP Committee to Mark Up FDA User Fee Bill
The Senate HELP committee plans to mark up the FDA user fee reauthorization
on May 10. The date is tentative because an official markup has not been
Congress must reauthorize FDA’s user fee programs for brand and generic
drugs, biosimilars and medical devices by the end of September. FDA gets
nearly half of its annual funding from these programs, which help it review
and approve drugs and medical devices faster.
HHS Task Force Finds FDA Cybersecurity Oversight Is Limited
Health care providers complain that device manufacturers treat
cybersecurity as an “afterthought,” according to a draft report sent to
Capitol Hill on May 3. The report also says that FDA’s device cybersecurity
oversight continues to be limited to patient safety and does not extend to
privacy and security issues.
The HHS Health Care Industry Cybersecurity Task Force report lays out how
federal agencies, including FDA, and device manufacturers can monitor and
make improvements to device cybersecurity risk management. The report
pushes for more transparency between manufacturers and device users,
recommends manufacturers consider cyber risks throughout a product’s
lifecycle and proposes establishing a device-specific Medical Computer
Emergency Readiness Team (MedCERT).
The report—a result of discussions between industry and government
representatives—cites research company KLAS’s February survey in which
health care providers reported that “many device manufacturers treat
security as either an afterthought or that the attention is woefully
The task force said while FDA took steps to address device cybersecurity by
publishing a December 2016 final guidance on postmarket management of
medical device cybersecurity, the agency’s oversight remains limited to
One solution to varying regulations and oversight would be harmonization of
cybersecurity frameworks, which the task force says would help industry
The task force calls for manufacturers and developers to create what it
calls a bill of materials, which would describe a device’s equipment,
software, open source and materials along with known risks associated with
those components. It also insists industry actively participate in
information-sharing programs, and adopt and engage in coordinated
vulnerability disclosure that is consistent with recognized standards.
The challenge of ensuring the security of medical devices and health care
data will only grow as the health care industry’s reliance on the Internet
of Things (IoT)—which includes nonregulated devices such as wearables—as
well as precision medicine increases, the report states.
HHS Secretary Price Meets With Groups on Drug Pricing
On May 1, HHS Secretary Tom Price met with patient and disease advocacy
groups in the first of a series of meetings on drug prices.
Price is expected to meet with additional groups focused on drug
prices. He is soon expected to hold a meeting with PhRMA on patient
assistance programs that help consumers afford medicines not fully covered
by their insurer.
Groups attending the meeting included the National Health Council, whose
CEO, Marc Boutin, presented the group’s recently released
on how to reduce health care costs. Other groups in attendance included
Friends of Cancer Research, the Multiple Sclerosis Coalition, the National
Alliance on Mental Illness, the Cystic Fibrosis Foundation, JDRF, the
American Diabetes Association and the Alzheimer’s Association.
OMB Reviews Proposed Rule for Long-Term Care Facilities
The White House Office of Management and Budget is reviewing a CMS proposed
rule to revise a highly contentious provision on arbitration contracts that
was included in updated requirements for long-term care facilities—mainly
nursing homes—to participate in Medicare. It is unclear how CMS’s proposal,
sent to OMB for review on April 26, would revamp the requirements, which
banned predispute arbitration contracts.
The ban on predispute arbitration contracts, finalized in late September,
was backed by consumers but opposed by nursing homes. The final rule on the
updated requirements for long-term care facilities stated that, as of Nov.
28, 2016, long-term care facilities could not require residents to sign
predispute arbitration agreements as a condition of admission to the
facility. CMS officials at the time said the change was important to
strengthen the rights of residents and their families. But the nursing home
lobby said CMS stepped beyond its authority.
The American Health Care Association sued CMS over the provision last
October, and asked for an injunction to keep the agency from enforcing the
ban when the rule went into effect on Nov. 28. The court granted that
request. The case was put on hold earlier this year.
FDA May Need to Weigh In to Solve Biosimilar Dispute, Supreme Court Justices Say
Aetna shed more than 70 percent of its individual market customers in the
first quarter of this year after largely abandoning Obamacare exchanges,
but the company still expects to lose money on the remaining members.
The insurer had 255,000 individual market customers at the end of the first
quarter, down from nearly 1 million at the close of last year. However,
Aetna officials said the remaining members are more expensive than
anticipated, and the company is setting aside $110 million to guard against
anticipated losses on that business this year.
Aetna pulled out of all but four state exchanges this year. The insurer
already said it will pull out of Iowa for 2018, but has yet to announce
plans for other markets. Aetna CEO Mark Bertolini said the decision to cut
back has been ratified by market developments.
While Aetna has turned on the Obamacare markets, its other lines of
government business continue to boom. The first quarter of this year marked
the first time that government premiums—primarily Medicare and
Medicaid—exceeded commercial revenues. The government share of premiums is
up from 38 percent prior to full enactment of the Affordable Care Act in
Eli Lilly Investigated by State Attorneys General Over Insulin Pricing
Attorneys general in Washington state and New Mexico are investigating Eli
Lilly over the pricing of its insulin products, the company disclosed in an
The Washington state investigation is also focused on the company’s
relationships with pharmacy benefits managers.
The disclosure follows news in January of a class-action lawsuit that
accuses Lilly, along with Sanofi and Novo Nordisk, of conspiring to drive
up the cost of insulin. The suit said the companies raised the list prices
of their products by more than 150 percent in lockstep in order to offer
larger rebates to PBMs as a quid pro quo for patient business. As a result
neither drugmakers nor PBMs have to lower the net cost of the product.
Three additional class action lawsuits have since been filed against the
drug companies and PBMs making similar accusations. Lilly said it believes
the lawsuits and claims are without merit and will defend them vigorously.
4. State Activities
Arkansas: Arkansas Legislature Signs Off on Medicaid Expansion Changes
The Arkansas legislature has approved a bill paving the way for the state
to institute several changes to its Medicaid expansion, including adding a
Lawmakers in the state House and Senate took final votes May 3 to pass the
legislation, which also seeks to cap expansion eligibility at the federal poverty line
instead of 138 percent FPL, and change how the state determines whether
someone is eligible for the program.
The revisions are expected to move roughly 60,000 people off expanded
Medicaid rolls. More than 300,000 state residents were covered through the
program as of March.
Gov. Asa Hutchinson’s administration still needs to receive permission from
CMS to make the revisions. Several other states are seeking to impose work
requirements, including Arizona, Kentucky and Wisconsin.
Indiana: Indiana Medicaid Expansion Blocks Out Thousands
Tens of thousands of low-income adults in Indiana who tried to sign up for
the state’s Medicaid expansion program were never enrolled or were kicked
off benefits for failing to make a monthly payment, according to a new
independent study commissioned by state officials.
Between February 2015 and November 2016, more than 46,000 applicants
earning above the poverty line were never enrolled because they did
not make their first payment. Another 13,000 Indiana beneficiaries were
disenrolled from the Indiana program after failing to pay.
report from the Lewin Group specifically
examines the HSA-like accounts that are a central component of the
expansion program Vice President Mike Pence implemented as Indiana governor
that could become a national model.
The Indiana program sets different rules for people above and below the
poverty line. People earning above that threshold are refused coverage or
disenrolled from the program for failing to contribute toward their HSA
accounts each month. People below the poverty line who fail to pay premiums
are moved into a less generous benefits package.
Monthly payment amounts range from $1 to $100 per person depending on
income and household size. Once enrolled, benefits could be cut off for
failing to pay after a 60-day grace period.
The HSA idea has been eyed by other Republican governors who are trying to
incorporate more conservative elements into their Medicaid expansion
programs. But Democrats have criticized the model as unnecessarily
complicated for low-income people that ultimately makes it harder to access
The Indiana report found 22 percent of individuals who never enrolled in
expansion because they did not make the first month’s payment cited
affordability concerns, and 22 percent said they were confused about the
payment process. Of those beneficiaries who were disenrolled after failing
to make a monthly payment, 44 percent said they could not afford it.
More than 590,000 expansion enrollees were eligible to make monthly
payments during the two-year study period. Of those, 55 percent did not
make a contribution at some point during their enrollment.
5. Regulations Open for Comment
FDA Considers Establishing New Office of Patient Affairs
The FDA is considering establishing a new Office of Patient Affairs that
would centralize its work on patient involvement in the review and approval
of drugs and medical devices, according to a
March 14 notice
in the Federal Register.
Comments on the new office are due by June 12, 2017.
FDA Proposes 1,000 Medical Devices to Exempt From Premarket
On March 14, FDA took one of its first actions to begin implementing the
21st Century Cures Act, by
more than 1,000 medical devices it will exempt or partially exempt from the
premarket review process. The devices on the list are sufficiently well
understood and do not present risks that require premarket notification to
provide a reasonable assurance of safety and effectiveness, FDA said. The
agency will finalize the list after a 60-day public comment period.
Comments are due by May 15, 2017.
FDA Extends Comment Period on Biosimilar Interchangeability Guidance
FDA is extending the public comment period for its
outlining how biosimilar sponsors can demonstrate that their products are
interchangeable with other biologics, following extension requests from top
The agency laid out in a January 2017 draft guidance its first attempt at
codifying the requirements that sponsors must satisfy to demonstrate
interchangeability. The agency said it would make case-by-case
determinations of interchangeability, but indicated it would require
studies measuring the impact of switching on clinical pharmacokinetics and
The Biotechnology Innovation Organization (BIO), Pharmaceutical Research
and Manufacturers of America and Covington & Burling all requested
comment period extensions, according to documents posted on
The comment period, which was set to close on March 20, will be extended 60
days until May 19.
FDA Submits Interim Final Rule on Long-Delayed Menu Labeling Rule
On April 27, FDA submitted an
interim final rule
to the White House Office of Management and Budget concerning a
long-delayed menu labeling rule. By submitting an interim final rule to OMB
they are delaying its existing final rule, slated to take effect May 5. The
apparent change in course follows a
by the National Association of Convenience Stores and the National Grocers
Association asking FDA to push back the final rule’s effective date.
The move to submit the interim final rule follows years of controversy and
debate about the menu labeling requirements, which stem from a
little-noticed provision in the Affordable Care Act that calls for
mandatory calorie disclosure on menus at chains that have 20 or more
The agency’s notice to OMB offers no detail about whether it is seeking
other changes to the rule, but says FDA will be taking comments.
CMS Releases Proposed Hospital Pay Rule
In a new proposed
2018 Medicare payment rule, CMS
says it will look to cut hospital industry regulations and streamline
oversight, and it’s asking hospitals themselves for help. The agency is
soliciting ideas for changes to rules and procedures governing acute-care
and long-term care hospitals. The initiative aims to “relieve regulatory
burdens for providers,” as well as promote flexibility and innovation, CMS
said in a statement.
The new proposed rule would suspend for one year a provision penalizing
long-term care hospitals that receive more than 25 percent of patients from
a single acute-care hospital. It would also reduce certain quality
reporting requirements for hospitals that have implemented electronic
CMS projects the rule would increase Medicare spending on inpatient
hospital services by $3.1 billion in 2018, with operating payments to
hospitals increasing 2.9 percent. Long-term care hospitals’ Medicare
payments are projected to decrease by $173 million, or 3.75 percent, over
the same period.
Comments on the rule must be submitted no later than 5 p.m. EDT on June 13,
CMS Proposes 2018 Payment and Policy Updates for Medicare Hospital
CMS is offering hospitals a 90-day meaningful use reporting period in 2018,
according to a
proposed payment rule
released April 14.
The first major payment regulation released under HHS Secretary Tom Price
marks a change from the back-and-forth over electronic health records
meaningful use requirements seen under the Obama White House. The previous
administration would typically propose a yearlong reporting period, then
scale it back at the last minute after intense lobbying pressure. As a
Republican congressman from Georgia, Price often pushed the Obama
administration hard for 90-day meaningful use reporting periods.
In connection with the 21st Century Cures Act, CMS also is
to remove from meaningful use clinicians who see most of their patients at
ambulatory surgery centers.
Price and CMS are also changing previously finalized requirements from
electronic clinical quality measures. Under the proposed rule, hospitals
can select six measures and report on them for the first three quarters of
For more information,
CMS is Accepting Measure Submissions for the Advancing Care Information
Performance Category until June 30
CMS is still accepting measures for the Advancing Care Information
performance category of the Merit-based Incentive Payment System (MIPS).
The Annual Call for Measures and Activities ends June 30, 2017.
CMS encourages providers to identify and submit measures for the MIPS
Advancing Care Information performance category. To be considered,
proposals must include specific criteria including, but not limited to,
measure description, measure type and numerator and denominator
CMS requests that stakeholders consider outcome-based measures, patient
safety measures and cross-cutting measures that use certified EHR
technology to support the improvement activities and quality performance
categories of MIPS.
Advancing Care Information Submission Form
to propose measures for inclusion, and send the form to
To learn more about the process for submitting measures, please visit the
Call for Measures
webpage, and review the
Call for Measures and Activities fact sheet.
CMS Looks to Boost Medicare Payments to Rehab Hospitals, Nursing
Facilities and Hospices
CMS could boost Medicare payments to a swath of rehabilitation hospitals,
nursing facilities and hospices under a trio of new proposed rules.
On April 27, the agency floated a
$390 million bump
in federal payments to skilled nursing facilities in 2018—or roughly 1
percent higher than this year. Hospices, meanwhile,
a 1 percent increase worth $180 million.
to increase reimbursement to rehab hospitals by $80 million for 2018, in
addition to eliminating a penalty on facilities that don’t submit certain
data to the federal government on time.
proposed payment rules for other
providers, CMS is asking the industries for input on regulations it should
overhaul or eliminate. CMS Administrator Seema Verma and HHS Secretary Tom
Price have pledged to review all of the agency’s rules in a bid to cut
unnecessary or burdensome regulations.
Comments on the trio of rules must be received no later than 5 p.m. on June
CMS Seeking Comments on Data Elements in IMPACT Act
CMS has contracted with the RAND Corporation to develop standardized
patient/resident assessment data elements in alignment with the Improving
Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act).
CMS seeks comments from stakeholders on data elements that meet the IMPACT
Act domains of cognitive function and mental status; medical conditions and
co-morbidities; impairments; medication reconciliation; and care
preferences. The public comment period opens on April 26, 2017, and closes
on June 26, 2017.
For more information, view the
CMS Issues 2018 IPPS Proposed Rule
CMS issued the FY 2018 Inpatient Prospective Payment System (IPPS) and Long
Term Acute Care Hospital (LTCH) rule on April 14, which proposes a number
of changes to the Medicare and Medicaid Electronic Health Record (EHR)
The proposals include:
For CY 2018, modifying the EHR reporting period from the full calendar
year to a minimum of any continuous 90-day period for new and returning
participants in the Medicare and Medicaid EHR Incentive programs.
Adding a new exception from the Medicare payment adjustments for
Eligible Professionals (EPs), Eligible Hospitals and Critical Access
Hospitals (CAHs) that demonstrate through an application process that
complying with the requirement for being a meaningful EHR user is not
possible because their certified EHR technology has been decertified
under ONC’s Health IT Certification Program.
Implementing a policy in which no payment adjustments will be made for
EPs who furnish “substantially all” of their covered professional
services in an ambulatory surgical center (ASC); applicable for the
2017 and 2018 Medicare payment adjustments.
Using Place of Service (POS) code 24 to identify services furnished in
an ASC as well as requesting public comment on whether other POS codes
or mechanisms should be used to identify sites of service in addition
to or in lieu of POS code 24.
Comments must be submitted by 5 p.m. on June 13, 2017.
To learn more, review the
KFF Poll Shows Drug Pricing Is Top Priority, Regardless of Party
A new Kaiser Family Foundation poll shows drug pricing is a top priority
regardless of political party, with Medicare negotiation being the most
popular drug pricing proposal.
Drug prices were a higher priority for both Republicans and Democrats than
solving the opioid epidemic, and were nearly on par for Republicans with
repealing the Affordable Care Act.
Sixty-four percent of Democrats, 60 percent of Republicans and 58 percent
of Independents said in the poll conducted April 17-23 that “lowering the
cost of prescription drugs” should be a top priority for the
Medicare price negotiation was the most popular drug pricing proposal,
regardless of party line. Ninety-six percent of Democrats, and 92 percent
of both Republicans and Independents surveyed said they favor “allowing the
federal government to negotiate with drug companies to get a lower price on
medications for people on Medicare.”
Rep. Elijah Cummings (D-MD), who has been working alongside Sen. Bernie
Sanders (I-VT) on a proposal to let Medicare negotiate drug prices,
recently said President Donald Trump pledged to work with lawmakers to move
that proposal along. Trump has repeatedly called for such negotiation.
The second most popular pricing proposal was “[m]aking it easier for
generic drugs to come to market in order to increase competition and reduce
costs,” which more Republicans and Independents (91 percent each) supported
than Democrats (84 percent in support).
Requiring transparency of how drug companies set their prices was also
supported by over 80 percent of respondents regardless of party. While
federal transparency legislation has been introduced this session, numerous
state legislatures have also pursued the issue—with Vermont enacting in
2016 the nation’s first drug price transparency law.
Even the idea of price controls for certain drugs was supported by nearly
80 percent of respondents, regardless of party. Seventy-eight percent of
Democrats and 79 percent of both Republicans and Independents said they
support “limiting the amount drug companies can charge for high-cost drugs
for illnesses like hepatitis or cancer.”
To see the polling results,
JAMA Study Shows Types, Distribution of Payments From Industry to
Limiting drug sales representatives’ access to doctors can lead to a modest
but significant reduction in certain prescriptions. That finding, according
first-of-its-kind study, is a key message of a special issue of the Journal of the American Medical Association that focuses on
financial conflicts of interest which health experts say can wreak havoc on
patients’ pocketbooks and skew the sector’s economics.
A review of prescribing patterns from over 2,000 physicians at academic
medical centers between 2006 and 2012 found that doctors prescribed less of
certain types of drugs when their hospitals clamped down on pharmaceutical
sales reps’ visits, or detailing. The study also found a slight uptick in
nonpromoted medicines when sales reps’ access to doctors was curtailed.
Lead author Ian Larkin, assistant professor of strategy at UCLA Anderson
School of Management, partnered with 10 other researchers, including
experts from Carnegie Mellon, NYU and Cornell, along with experts from the
NIH and CVS. Their findings were drawn from over 16 million prescriptions
written in California, Illinois, Massachusetts and New York.
The authors looked at eight prescribing categories and found reductions in
six of them when sales reps’ access to physicians was limited: cholesterol,
acid reflux, hypertension, difficulty sleeping,
attention-deficit/hyperactivity disorder and antidepressants. They did not
find significant evidence for change in prescribing patterns for diabetes
or antipsychotic drugs. Those eight classes were chosen because they
contained a mix of drugs promoted by at least 2,000 salespeople. Each class
also contained at least one widely prescribed medication not advocated for
by sales representatives. Those were mostly generics.
The authors write that by looking at hospitals in a variety of states, they
were able to observe a number of policy changes for managing potential
conflicts of interest. At 19 medical centers where they particularly
focused, policies included limits or bans on industry salespeople’s
providing meals, branded items and educational gifts. Some went further
than PhRMA’s code of conduct. Eleven had penalties for salespeople, doctors
or both for noncompliance.
The researchers cautioned that the reduction of prescriptions in promoted
drugs was not found at every hospital they reviewed—and that other factors
may have played a role.
GAO Finds Action Needed to Improve Oversight of Spending in Medicaid
GAO recently found that, over the last decade, Medicaid has spent
increasing amounts on demonstrations. There are also inconsistencies on how
CMS monitors those funds.
Many states conduct Medicaid demonstrations, which allow them to test new
approaches for delivering Medicaid services. CMS monitors spending under
these demonstrations to ensure that the federal government does not pay
more for them than it would have paid for the state’s traditional Medicaid
GAO recommended that CMS develop standard operating procedures to ensure
that Medicaid’s demonstration funds are consistently monitored.
To see the report,
GAO Recommends Harmonized Program Requirements, Better Data for
Medicaid Personal Care Services
In new testimony, GAO stated that federal and state rules for protecting
Medicaid beneficiaries have varied across personal care service programs,
and that Medicaid needs better data to oversee these programs.
A growing number of people rely on Medicaid personal care services for help
with daily tasks like bathing and eating. However, these types of services
are at high risk for fraud and abuse—e.g., services that were paid for but
reports on the topic, GAO recommended that the program rules be harmonized and that better
guidance be issued to states for reporting the required data.
To see the testimony,
GAO Reviews Compensation of Medicaid Directors and MCO Executives for
On May 1, GAO released a report on compensation of Medicaid directors and
managed care organization (MCO) executives in selected states for 2015.
Medicaid is estimated to cover 74 million people in 2017 at a cost of $596
billion. State Medicaid directors have broad responsibilities for managing
their programs. Responsibilities of top paid executives at MCOs that
contract with Medicaid can be similar, but generally are not as broad.
In 2015, state Medicaid directors earned less than most top paid executives
at MCOs that were reviewed. Medicaid directors’ salaries in 10 states
averaged $152,439, while the total compensation for top paid executives in
15 MCOs averaged $314,278.
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
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