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Jul 31, 2017

Washington Healthcare Update

This Week: All eyes on the Senate as efforts to repeal the ACA fail.

1. Congress



2. States

3. Administration

4. Regulations Open for Comment

5. Reports

1. Congress


House Budget Resolution Vote Likely in September

On July 27, House Republicans announced a deal has been struck between Republican Study Committee Chairman Mark Walker (R-AL) and House Speaker Paul Ryan (R-WI) for a vote on the House budget resolution in exchange for an omnibus package prior to the August recess. The budget resolution, an integral part of tax reform, will be voted on the first week in September, when Congress returns from its recess, based on a commitment Walker received from the Speaker.

Walker, in return, withdrew his minibus amendment, which would have required votes on all 12 spending bills. Further, Walker stated he would not push the trillion-dollar FY 2018 budget, rather than the Speaker’s plan to move the four-bill package. The budget resolution passed the House Budget Committee last week by a vote 22-14 along party lines.

To view the House budget resolution, click here.

To view the four-bill package, click here.

House Passes Medicare Part B Improvement Act

On July 25, the House passed the Medicare Part B Improvement Act, H.R. 3178, by voice vote. The bill was introduced by House Ways and Means Chairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA) and would:

  • Create a transitional home infusion payment system until a new payment for services associated with home infusion is implemented in 2021;
  • Extend the Medicare Patient IVIG Access Demonstration;
  • Include orthotists’ and prosthetists’ clinical notes in the medical record of beneficiaries to make it easier to show medical necessity for prosthetics and orthotics;
  • Allow for independent accreditation for dialysis facilities;
  • Expand access to home dialysis by allowing for more use of telehealth; and
  • Make changes to the Stark Rule that are meant to modernize that policy.

The Congressional Budget Office said the legislation would reduce direct spending by $4 million between 2018 and 2027.

To view the bill, click here.

Menu Labeling Bill Moves to Floor

On July 27, the House Energy and Commerce Committee passed the Menu Labeling bill by a vote of 39-14. The bill is sponsored by House Republican Conference Chairwoman Cathy McMorris Rodgers (R-WA) and attempts to modify a mandate that requires menu labeling on a federal level. The mandate requires that grocery stores, chain restaurants and other prepared food distributors with 20 or more locations post calorie content. Last Congress, the bill passed the floor, however the Senate companion bill has not made as much movement.

In May, the FDA said it would not implement the rule for a year in an attempt to come off as more business friendly. While health advocates criticized the delay, many small business groups praised time to acclimate.

To view the bill, click here.


Repeal and Replace Efforts Fail

Early in the morning of July 28, Senate Republicans had to declare defeat as their latest reiteration of repealing the Affordable Care Act failed to pass. Three Republican senators voted against what was known as the “skinny” repeal bill: Sens. Collins (ME), Murkowski (AK) and McCain (AZ).

The skinny bill came after a string of stumbling blocks and failed votes on other proposals. Before the debate began on Tues., July 25, the Senate parliamentarian ruled that a number of crucial provisions in the Senate Republican bill did not pass the Byrd Rule, a rule that requires the provision impact federal spending. The Senate considered straight repeal, repeal in two years, single payer, an amendment by Sen. Cruz (R-TX) to permit plans that did not meet ACA requirements, various amendments related to Medicaid and multiple motions to recommit the bill to committees of jurisdiction for further consideration. At one point, Senate Minority Leader Charles Schumer (D-NY) announced that Democrats would no longer offer amendments because they did not know the underlying bill that was to be amended.

The skinny bill was developed somewhat hastily and evolved over Thurs., July 27, as the hours of debate began to dwindle down. The skinny repeal bill would have eliminated the ACA’s requirement for individuals to have insurance and repealed the employer mandate for eight years. It also defunded Planned Parenthood for one year, temporarily eliminated the medical device tax, and expanded Section 1332 waivers so states could develop their own health systems and increase contribution limits to health savings accounts for three years. The Congressional Budget Office has estimated that scrapping the individual mandate would lead to a 20 percent increase in premiums and 15 million more uninsured Americans.

The controversy over the skinny bill among Republicans was a concern that the House would take that bill, if passed by the Senate and pass it instead of having a House-Senate conference to work out a proposal between the two bodies.

In the end, the skinny version collapsed. Most likely, the House and Senate will pivot to tax reform. Concerns have been raised about whether the Administration will continue the cost-sharing reduction payments. Ending those payments would create havoc in the exchanges.

Whether efforts will be made to make changes to the ACA on other health care legislation that has to pass this year is not known. Stay tuned.

To view the failed “skinny” repeal bill, click here.

Sen. McCaskill Continues Investigation into Causes of the Opioid Epidemic

On July 26, Sen. Claire McCaskill (D-MO) sent letters to several opioid manufacturers and distributors in an effort to gather information on their efforts to oversee the distribution of opioids for illicit purposes. This request follows an appeal the Missouri senator made to the Justice Department for their investigation into DEA’s ability to hold drug distributors accountable for opioid diversion. The chairwoman of the Senate’s Homeland Security and Governmental Affairs Committee has begun this investigation into business practices of the country’s five largest manufacturers.

The letters released this week specifically ask manufacturers for suspicious order notifications that stem out of her home state of Missouri. Further, the chairwoman is seeking details of efforts to audit pharmacies and details of opioid shipments to pharmacies.

To read the letters and learn more on the opioid investigation, click here.

2. States

Nevada: Aetna Will Not Sell Plans on the Exchange in 2018

Aetna originally intended to sell individual plans in two counties in Nevada, but only because it was required to participate in the exchange there under terms of its Medicaid contract. However, Aetna attracted just 1,600 Medicaid beneficiaries this year, and an agreement has been reached to terminate the contract at the end of August, according to a company spokesman.

This means Aetna will not compete in any Obamacare marketplaces next year.

Nevada currently has 14 counties where no insurer has agreed to sell individual plans for next year, but Aetna’s decision to drop out will not add to the count of “bare” counties. Centene has announced that it’s entering the Nevada market for 2018, but hasn’t provided details on exactly where it will compete.

3. Administration

HHS Issues Revised Web Tool on Data Breaches

The Department for Health and Human Services (HHS) Office for Civil Rights (OCR) has released a newly renovated tool to help identify breaches, known as the HHS OCR breach portal or HIPAA Breach Reporting Tool (HBRT). The tool empowers the health care industry to find information on breaches and gives companies the ability to report breaches more easily. The tool was originally released in 2009, mandated by the Health Information Technology for Economic and Clinical Health Act (HITECH Act). The tool provides information on the name of the entity covered, the state, the covered entity type, the amount of individuals affected, the breach submissions date, the type of breach and the location of the breach. Overall, the portal is designed to provide individuals with information to better identify health information breaches.

To view the newly revamped breach portal, click here.

4. Regulations Open for Comment 

CMS Issues Proposed Revision Requirements for Long-Term Care Facilities’ Arbitration Agreements

On June 5, CMS issued proposed revisions to arbitration agreement requirements for long-term care facilities. The proposed revisions would help strengthen transparency in the arbitration process, reduce unnecessary provider burden and support residents’ rights to make informed decisions about important aspects of their health care.

The Reform of Requirements for Long-Term Care Facilities Final Rule, published on Oct. 4, 2016, listed the requirements facilities need to follow if they choose to ask residents to sign agreements for binding arbitration. The final rule also prohibited predispute agreements for binding arbitration. The American Health Care Association and a group of nursing homes sued for preliminary and permanent injunction to stop CMS from enforcing that requirement. The court granted a preliminary injunction on Nov. 7, 2016. After that decision, CMS reviewed and reconsidered the arbitration requirements in the 2016 Final Rule.

The proposed rule focuses on the transparency surrounding the arbitration process and includes the following proposals:

  • The prohibition on predispute binding arbitration agreements is removed.
  • All agreements for binding arbitration must be in plain language.
  • If signing the agreement for binding arbitration is a condition of admission into the facility, the language of the agreement must be in plain writing and in the admissions contract.
  • The agreement must be explained to the resident and his or her representative in a form and manner they understand, including that it must be in a language they understand.
  • The resident must acknowledge that he or she understands the agreement.
  • The agreement must not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state or local officials, including federal and state surveyors, other federal or state health department employees, or representatives of the State Long-Term Care Ombudsman.
  • If a facility resolves a dispute with a resident through arbitration, it must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.
  • The facility must post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors.

This proposed rule is scheduled to be published in the Federal Register on June 8, 2017, and comments are due by Aug. 7, 2017. For more information, click here.

CMS Proposes MACRA Rule

On June 19, CMS issued a proposed rule that would make changes in the second year of the Quality Payment Program as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

The 1,058-page rule continues the “pick-your-pace” option in year two of the program, letting doctors report a limited amount of quality data to be exempted from Medicare’s penalties.

CMS creates a “virtual group” reporting option, allowing doctors to pool the information on how they care for patients and be subjected to Medicare’s quality payment scheme.

CMS is also increasing the minimum number of patients doctors can treat before being subject to the program’s Merit-based Incentive Payment System. It establishes more flexibility for doctors who see limited numbers of patients face to face or in a hospital. For 2017, roughly 800,000 clinicians were exempt from the MIPS program.

CMS will not require doctors to use 2015 certified EHRs next year, as it had ordered during the Obama administration. However, clinicians are offered bonuses for using new versions of the software. Medicare also will delay for another year judging doctors for how much they spend for treating patients.

Comments on the rule are due no later than 5 p.m. on Aug. 21, 2017. For a fact sheet on the proposed rule, click here.

CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage Renal Disease Facilities

On June 29, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update payment policies for the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS). The rule covers payment rates for renal dialysis services, including updates to acute kidney injury (AKI), furnished to beneficiaries on or after Jan. 1, 2018.

The ESRD Quality Incentive Program (QIP) proposed changes are for payment years 2019, 2020 and 2021, and a number of key dialysis data methodologies and quality measures. The proposed rule also requests comment on how to include individuals with acute kidney injury in the ESRD Quality Improvement Program.

In addition to the proposed rule, CMS is releasing a request for information to welcome continued feedback on the Medicare program. CMS is committed to maintaining flexibility and efficiency throughout Medicare. Through transparency, flexibility, program simplification and innovation, CMS aims to transform the Medicare program and promote the availability of high-value and efficiently provided care for its beneficiaries.

Comments are due no later than 5 p.m. on Aug. 28, 2017.

For a fact sheet on the proposed rule, please click here.

For the ESRD proposed rule (CMS 1674-P), please click here.

CMS Proposes 2018 Policy and Rate Changes for Hospital Outpatient, Ambulatory Surgical Center Payment Systems

The Centers for Medicare & Medicaid Services (CMS) on July 13, issued a proposed rule that updates payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System.

Among the provisions in this rule, CMS is proposing to change the payment rate for certain Medicare Part B drugs purchased by hospitals through the 340B program. The proposed rule also requests comment on how CMS can best implement the proposal to pass savings on to beneficiaries and providers, and to allow seniors to save money on their drug costs. The 340B Drug Pricing Program allows certain hospitals and other health care providers to purchase drugs and biologicals (other than vaccines) that are administered in a hospital outpatient department from drug manufacturers at discounted prices.

The proposed rule also includes a provision to address rural hospitals recruiting physicians by placing a two-year moratorium on the direct supervision requirement currently in place at rural hospitals and critical access hospitals.

In addition, CMS is releasing within the proposed rule a request for information to welcome continued feedback on flexibilities and efficiencies in the Medicare program.

Comments are due 5 p.m. Sept. 11, 2017.

To view a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 Payment and Policy Updates for the Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) on July 13 issued a proposed rule that would update Medicare payment and policies for doctors and other clinicians who treat Medicare patients in calendar year (CY) 2018. This proposed rule seeks public comment on reducing administrative burdens for providing patient care, including visits, care management and telehealth services. The rule takes steps to better align incentives and provide clinicians with a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program (QPP). The rule also attempts to encourage fairer competition between hospitals and physician practices by promoting greater payment alignment, and it would improve the payment for office-based behavioral health services that are often the therapy and counseling services used to treat opioid addiction and other substance use disorders. In addition, the proposed rule makes additional proposals to implement the Center for Medicare & Medicaid Innovation’s Medicare Diabetes Prevention Program expanded model starting in 2018.

In addition to the proposed rule, CMS is releasing a request for information to welcome continued feedback on the Medicare program. CMS is committed to maintaining flexibility and efficiency throughout Medicare. Through transparency, flexibility, program simplification and innovation, CMS aims to transform the Medicare program and promote the availability of high-value and efficiently provided care for its beneficiaries. This will inform the discussion on future regulatory action related to the Physician Fee Schedule. Comments are due by 5 p.m. on Sept. 11, 2017.

For a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 and 2019 Payment Changes for Medicare Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) on July 25 issued a proposed rule that would update payment rates and the wage index for home health agencies (HHAs) serving Medicare beneficiaries in 2018; it also proposes a redesign of the payment system in 2019. Comments are due Sept. 25, 2017.

CMS is planning a slight pay cut for home health agencies in 2018, by reducing Medicare payments to the agencies by 0.4 percent next year, saving the federal government an estimated $80 million. That change is driven in part by CMS’s planned phase out of a provision boosting pay rates for certain home health services delivered to rural patients. The agency is also floating a series of changes to the payment methodology beginning in 2019, which could result in a pay cut of up to 4.3 percent. That would translate to as much as $950 million in reduced Medicare payments to home health agencies.

Under the proposed rule, the home health payment update percentage for HHAs that submit the required quality data for the Home Health Quality Reporting Program would be 1 percent in 2018. The proposed rule also includes proposals to refine the HH PPS case-mix adjustment methodology, including a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented for periods of care beginning on or after Jan. 1, 2019. Additionally, the proposed rule includes proposals for the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program.

To view the proposed rule, click here.

For more information on the Home Health Prospective Payment System, click here.

5. Reports

Air Ambulance: Data Collection and Transparency Needed to Enhance DOT Oversight

The GAO released a report on July 27 on Air Ambulance: Data Collection and Transparency Needed to Enhance DOTS Oversight. The report found that between 2010 and 2014 the median prices providers charged for helicopter air ambulance service approximately doubled, from around $15,000 to about $30,000 per transport, according to Medicare data from the Centers for Medicare & Medicaid Services (CMS) and private health insurance data. Air ambulance providers do not turn away patients based on their ability to pay and receive payments from many sources, depending on the patient’s coverage, often at rates lower than the price charged. For example, the Medicare median payment was $6,502 per transport in 2014. Air ambulance providers might bill a privately insured patient for the difference between the price charged and the insurance payment—a practice called balance billing—when the provider lacks an in-network contract with the insurer. However, due to a lack of information it is unclear to what extent patients are balance billed.

Actions proposed by stakeholders included (1) raising Medicare rates, (2) allowing state-level regulation of air ambulance prices and (3) improving data collection for the purposes of investigations and transparency regarding prices. Stakeholders expressed mixed views on the first two proposals but none disagreed with the third. Federal internal control standards state that management should identify and communicate information needed to achieve objectives and address risks. The Department of Transportation (DOT) has discretionary authority to investigate potentially unfair practices in air transportation or the sale of air transportation, but has not exercised this authority in regard to helicopter air ambulances. Although DOT recently modified its online form to include air ambulance complaints, it has not communicated how to file complaints. Without doing so and obtaining more industry data, DOT is missing important information needed to put complaints into the context of the overall industry that could affect its assessment on whether to pursue investigations. Further, stakeholders such as hospital staff could benefit from greater transparency, as they currently have limited ability to make air ambulance decisions that serve both the financial interests and medical needs of the patient.

To view the report, click here.

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

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

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 McGuireWoods LLP 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.

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