CMS Proposal Would Expand Medicare/Private Claims Data Available for Care Improvement

CMS has issued a proposed rule that would allow organizations approved as “qualified entities” to confidentially share or sell analyses of Medicare and private-sector claims data to providers, employers, and other groups who can use the data to support improved care.  Qualified entities would be required to combine the Medicare data with other claims data (such as private payer data) to produce reports on provider and supplier performance across multiple payers.  This proposal, which is authorized by the Medicare Access and CHIP Reauthorization Act (MACRA), would build on a current program established under the Affordable Care Act (ACA) that enables qualified entities to use Medicare claims data in combination with other non-Medicare claims data to evaluate the performance of providers and suppliers.  Thirteen organizations have received approval to be a qualified entity under the ACA program.  The proposed rule includes annual reporting requirements, along with privacy and security rules to protect beneficiary information.  Comments on the proposed rule will be accepted until March 29, 2016.

House Fails to Override President’s Veto of ACA Repeal Bill

On February 2, 2016, the House failed to muster the votes needed to override President Obama’s veto of H.R. 3762, the “Restoring Americans’ Healthcare Freedom Reconciliation Act.”  As previously reported, the bill would have repealed key provisions of the Affordable Care Act (ACA), including insurance subsidy and mandate provisions, Medicaid expansion, tax provisions, and the transitional reinsurance program.  President Obama vetoed the legislation on January 8, 2016, and the House fell short of the two-thirds vote needed to override the veto (the vote was 241 to 186).

CMS Issues Guide on Avoiding Readmissions in Diverse Medicare Populations

The CMS Office of Minority Health has released a “Guide to Preventing Readmissions among Racially and Ethnically Diverse Medicare Beneficiaries.”   The guide highlights data indicating that racial and ethnic minority populations have higher rates of potentially avoidable readmissions for certain chronic conditions, such as heart failure, heart attack, and pneumonia, and identifies social, cultural, and linguistic barriers that contribute to these higher readmission rates.  The document discusses action that hospital leaders can take to address readmissions in the racial and ethnic minority population and includes examples of strategies and initiatives aimed at reducing readmissions in diverse populations.

Government Reports Compile Medicaid, Dual Eligible Beneficiary Spending, Enrollment Data

The Government Accountability Office (GAO) has issued a report on trends in Medicaid managed care spending, enrollment, and oversight.  Notably, the GAO reports that over 10 years (FY 2004 through 2014), federal Medicaid managed care spending grew from $27 billion to $107 billion, representing 38% of total federal Medicaid spending in 2014.  The report also examines selected states’ medical loss ratio standards and methods for automatically assigning Medicaid beneficiaries to managed care organizations.

Separately, the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC) have jointly released a data book on “Beneficiaries Dually Eligible for Medicare and Medicaid.”  The data book includes updated information on Medicare-Medicaid dual eligible beneficiary demographic characteristics, expenditures, and use of health care services.

Committees to Examine Administration’s HHS Budget Proposal, Other Health Policy Issues Next Week

On February 9, 2016, President Obama is scheduled to submit his proposed fiscal year 2017 budget to Congress.  Two Congressional committees have planned hearings to examine provisions of the proposed budget involving the Department of Health and Human Services (HHS), with HHS Secretary Sylvia Mathews Burwell testifying.  Specifically, the House Ways and Means Committee has scheduled a February 10 hearing on the HHS budget proposal, followed by a Senate Finance Committee hearing on this topic on February 11.

Also next week, the House Energy and Commerce Health Subcommittee is holding a February 10 hearing on the Medicaid and CHIP Federal Medical Assistance Percentage (FMAP) formula, including a discussion of the “incentives and disincentives the FMAP creates for states, and how modifications to the FMAP could improve Medicaid spending predictability, accountability, sustainability, equity, or efficiency.”  In addition, on February 11, the Senate Judiciary Committee has scheduled a markup of S. 483, the Ensuring Patient Access and Effective Drug Enforcement Act of 2015, and S. 524, the Comprehensive Addiction and Recovery Act of 2015.

President Obama Establishes “White House Cancer Moonshot Task Force” Led by VP Biden, Calls for $1 Billion Investment in Cancer Research

President Obama recently signed a memorandum formally establishing a White House Cancer Moonshot Task Force to coordinate and strengthen federal and private efforts to support cancer research and treatment.  The Task Force, which is chaired by Vice President Biden, is charged with developing recommendations to:

  • accelerate understanding of cancer and its prevention, early detection, treatment, and cure;
  • improve patient access and care;
  • support greater access to new research, data, and computational capabilities;
    encourage development of cancer treatments;
  • identify and address any unnecessary regulatory barriers and consider ways to expedite administrative reforms;
  • ensure optimal investment of federal resources; and
  • identify opportunities to develop public-private partnerships and increase coordination of the federal government’s efforts with the private sector, as appropriate.

The first meeting of the Task Force was held on February 1, 2016.  Also on February 1, the White House called for a $1 billion investment in the Cancer Moonshot initiative, including $195 million in new cancer activities at the National Institutes of Health (NIH) in fiscal year (FY) 2016, new Department of Defense and Veterans Affairs research initiatives, and additional proposals to be included in the President’s proposed FY 2017 budget.

CMS Announces Extension of Moratoria on Enrollment of HHAs, Ambulance Suppliers in Designated Areas

CMS published a notice February 2, 2016 announcing an additional 6-month extension of its current temporary Medicare enrollment moratoria for new ground ambulance suppliers and home health agencies (HHAs), subunits, and branch locations in designated metropolitan areas.  The moratoria, which also apply to enrollment in Medicaid and the Children’s Health Insurance Program, apply to:

  • New ground ambulances in the Houston and Philadelphia metropolitan areas, and
  • New HHAs in the Fort Lauderdale, Miami, Chicago, Detroit, Dallas, and Houston metropolitan areas.

The extension is effective January 29, 2016. CMS may lift the moratoria before the end of the 6-month period or announce additional extensions.

FDA Issues Postmarket Cybersecurity Recommendations for Medical Devices

On January 22, 2016, the federal Food and Drug Administration (“FDA”) issued a draft guidance outlining postmarket recommendations for medical device manufacturers to address cybersecurity risks.  The draft guidance details the agency’s specific recommendations, which address monitoring, identifying and managing cybersecurity vulnerabilities in medical devices that are software, or contain software (including firmware) or programmable logic once they have entered the market.

The draft guidance represents a part of the agency’s ongoing efforts to ensure the safety and effectiveness of medical devices in the face of potential cyber threats at all stages in their lifecycles.  Specifically, the draft guidance follows multiple public workshops on the issue and previous FDA guidance titled “Content of Premarket Submissions for Management of Cybersecurity in Medical Devices,” which contains premarket recommendations for managing cybersecurity risks during the design stage of device development.  We previously blogged about this here.

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CMS Call: IMPACT Act Measure Alignment and Outcomes (Feb. 2)

On February 2, 2016, CMS is hosting a Special Open Door Forum call to discuss implementation of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act).  The call will cover standardized quality measures and data items in conformance with the IMPACT Act and the Skilled Nursing Facility Quality Reporting Program.

Congressional Health Policy Hearings

The Senate HELP Committee is holding a January 28, 2016 hearing on “Generic Drug User Fee Amendments: Accelerating Patient Access to Generic Drugs.”  Separately, on February 4, the House Committee on Oversight and Government Reform has scheduled a hearing on “Developments in the Prescription Drug Market: Oversight.”  Other recent Congressional health policy hearings have included a Senate HELP Committee hearing on “Improving the Federal Response to Challenges in Mental Health Care in America” and a Senate Finance Committee hearing on ACA Consumer Operated and Oriented Plan financial and oversight controls.

Senate HELP Committee Outlines Plans for Action on Biomedical Innovation Bills

The Senate Health, Education, Labor and Pensions (HELP) Committee has announced its plans to consider companion legislation to the House-approved “21st Century Cures Act,” which is intended to improve the drug and device development processes and expedite patient access to medical treatments.  The Senate currently plans three sessions to consider components of its biomedical innovation package.

On February 9, 2016, the Committee will consider a number of bipartisan bills, including proposals addressing such issues as electronic health records, the Food and Drug Administration (FDA) device approval process, therapies for rare diseases, neurological disease and medical rehabilitation research, and duodenoscope regulation.  A March 9 session will focus on legislation to modernize the FDA and the National Institutes of Health and support for the president’s Precision Medicine Initiative.  A third final markup is scheduled for April 6 to complete committee action on the innovation package.

CMS Explanation of FY 2004 Outlier Fixed-Loss Threshold as Required by Court Rulings

On January 22, 2016, CMS published a rule providing additional explanation of certain methodological choices CMS made in establishing the fiscal year 2004 Medicare Inpatient Prospective Payment System fixed-loss threshold determination, in accordance with court rulings in cases that challenge this methodology.

CMS Releases Long-Awaited Final Medicaid Covered Outpatient Drug Rule

After months of speculation and waiting, CMS yesterday released its final rule to revise Medicaid reimbursement for covered outpatient drugs and reform Medicaid drug rebate requirements.  While we are still digesting what the rule means for drug manufacturers and other health care providers, we promise a full analysis of the final rule, as well as a Medicaid Rebate Program Final Rule Evaluation Checklist for manufacturers. Reed Smith partner Joe Metro will also participate with Huron Consulting in an upcoming CBI webinar to discuss the final rule and implications for drug companies. In the meantime, you can access the advance version of the final rule here. The official version of the rule will be published on February 1, 2016; comments on selected provisions of the rule related to the definition of line extension will be accepted until 60 days after publication. The final rule is effective on April 1, 2016; state Medicaid agencies are required to submit State Plan Amendments by June 30, 2017 to be effective no later than April 1, 2017.

FDA Public Workshop on Patient, Medical Professional Perspectives on Receiving Genetic Test Results (March 2)

On March 2, 2016, the FDA is hosting a public workshop on “Patient and Medical Professional Perspectives on the Return of Genetic Test Results.”  FDA is convening the workshop to discuss the specific information patients and providers prefer to receive, how those results should be returned, and the information needed to understand such results so they may effectively aid in medical decision making.  The registration deadline is February 24.



First Meeting of MACRA Physician-Focused Payment Model Technical Advisory Committee Set for Feb. 1, 2016

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) includes payment incentives to encourage providers to participate in alternative payment models (APMs) that focus on coordinating care, improving quality, and reducing costs. MACRA established the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to provide recommendations to the Secretary of Health and Human Services on the criteria for physician-focused APMs, and to submit comments regarding whether specific proposals meet the criteria to be established by the Secretary. The first meeting of the PTAC is scheduled for February 1, 2016. The public may attend the meeting in-person or listen via audio teleconference; registration is required.

CMS Launches New “Accountable Health Communities” Innovation Model

CMS’s latest innovation model, the Accountable Health Communities model, will test whether screening for health-related social needs, providing community service referral and navigation, and encouraging partner alignment impacts total cost of care, emergency department visits, inpatient hospital admissions, and quality of care for high-risk Medicare and Medicaid beneficiaries. The five-year program will provide up to $157 million to participating organizations (e.g., community-based organizations, health care practices, hospitals and health systems, and local government entities) for screening, referral, and navigation services; funds for this model cannot be used to pay for any community services received by beneficiaries as a result of their participation in the model.

GAO Calls for Improvements to HHS Oversight of Health Care Workforce Programs

The GAO has reviewed HHS management of the 72 health care workforce programs administered by HHS and its agencies. The GAO concludes that HHS “lacks comprehensive planning and oversight to ensure that its many workforce efforts address identified national needs.” The GAO recommends that HHS establish a comprehensive and coordinated workplace development program planning approach that covers HHS education, training, and payment programs. More specifically, the GAO states that HHS should: Continue Reading

GAO Recommends Equalizing Payment for Evaluation & Management Visits

The Government Accountability Office (GAO) has issued a report examining trends in “vertical consolidation” — hospital acquisition of physician practices or hiring of physicians as salaried employees – and the impact on Medicare spending. According to the GAO, the number of vertically consolidated hospitals increased from about 1,400 to 1,700 from 2007 through 2013, while the number of vertically consolidated physicians increased from about 96,000 to 182,000. The GAO observed that vertically consolidated hospitals tend to have more evaluation and management (E/M) visits performed in higher-paid hospital outpatient department (HOPDs) rather than lower-paid physician offices. Based on 2013 data, the GAO contends that beneficiaries from counties with higher levels of vertical consolidation and more E/M office visits performed in HOPDs were not sicker on average than beneficiaries who lived in counties with lower levels of consolidation, where fewer E/M office visits were performed in HOPDs. The GAO argues that while “vertical consolidation has potential benefits,” this trend “exacerbates a financial vulnerability in Medicare’s payment policy,” since Medicare pays different rates for the same service depending on the site of service. To prevent this shifting of service settings from increasing Medicare costs, the GAO recommends that Congress consider directing the HHS Secretary to equalize payment rates between settings for E/M office visits and other services that the Secretary deems appropriate and return associated savings to the Medicare program (the GAO points out that CMS currently lacks the statutory authority to equalize total payment rates between HOPDs and physician offices and achieve Medicare savings).  For additional information, see the full report, “Medicare: Increasing Hospital-Physician Consolidation Highlights Need for Payment Reform.”