Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

Today, the Obama Administration released its proposed federal budget for fiscal year 2014. As widely reported, the budget incorporates an offer the President made to Congress in December 2012 to achieve nearly $1.8 trillion in additional deficit reduction over the next 10 years, including $401 billion in health savings (the Administration observes that this level of cuts would “provide more than enough deficit reduction to replace the damaging cuts required by the Joint Committee sequestration”).

Virtually all provider types – and drug manufacturers – would be impacted by the budget provisions, if adopted as proposed. The budget proposal is certainly subject to change during the legislative process, particularly as the House and Senate leadership pursue alternative budget frameworks, and indeed, gridlock could prevent significant action on entitlement reform this year. Nevertheless, the proposals bear careful monitoring because they could eventually be included in any long-elusive “grand bargain” to reform the Medicare program and reduce the federal debt.

Highlights of the Administration’s Medicare and Medicaid proposals include the following:

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MedPAC has released its annual report to Congress on Medicare Payment Policy, including payment update recommendations for all the major Medicare FFS payment systems and limited Medicare Advantage (MA) recommendations. The report also includes data on the status of the MA and Medicare Part D programs, including information about enrollment, plan options, and beneficiary cost-sharing. Note that while MedPAC’s recommendations are not binding, Congress and CMS often take into account MedPAC’s assessments when updating Medicare payment policies. Major recommendations include the following (many of which were included in previous reports):

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The Medicaid and CHIP Payment and Access Commission (MACPAC) has released its “March 2013 Report to the Congress on Medicaid and CHIP,” including both policy recommendations and data updates. The policy recommendations address implementation of ACA provisions designed to expand health insurance coverage. First, MACPAC recommends that Congress create a statutory option for states to implement 12-month continuous eligibility for children enrolled in CHIP and adults enrolled in Medicaid, in conformance with policies in effect for children in Medicaid (the report notes that the option will otherwise be removed under new income-counting eligibility standards). Second, MACPAC recommends that Congress permanently fund Transitional Medical Assistance (TMA), while allowing states to opt out of the program if they expand to the new adult group added by the ACA. The report also includes a discussion of various policy issues involving the dually eligible Medicare and Medicaid population, and it provides an update to its MACStats data supplement.

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In case you missed them, Reed Smith attorneys have recently prepared the following Client Alerts on major regulatory issues:

• “CMS Physician Payment "Sunshine" Final Rule -- Overview and Analysis”;
• “ACA Affordable Insurance Exchanges and Qualified Health Plans”; and  
• “The HITECH Final Rule: New Privacy/Security Rules of the Road Finally Here.” 

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The HHS Office for Civil Rights recently announced its first settlement and corrective action plan following a HIPAA breach affecting fewer than 500 individuals. Additional information about the settlement is available on Reed Smith’s Life Sciences Legal Update blog.

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On November 21, 2012, the Massachusetts Public Health Council finalized amendments to the State’s Marketing Code of Conduct, which restricts certain payments by pharmaceutical and medical device manufacturers to Massachusetts health care practitioners and imposes other disclosure requirements regarding such payments. The rules, which are effective December 7, 2012, are summarized on the Reed Smith’s Life Sciences Legal Update blog.
 

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On the Reed Smith Life Sciences Legal Update blog, Health Care team members Thomas Greeson and Paul Pitts have written about post-election implications for the radiology industry.  The report describes their assessments of the short and mid-term time horizon for a number of health policy developments such as integration (e.g., accountable care organizations), government enforcement, antitrust, and self-referrals.  For additional details, see our full post.

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On the Reed Smith Life Sciences Legal Update blog, there is a recent post regarding the Massachusetts Public Health Council’s approval of emergency amendments to the State’s Marketing Code of Conduct regulations. The underlying regulations restrict certain gifts and payments by pharmaceutical and medical device manufacturers to Massachusetts health care practitioners (HCPs) and require disclosure of payments and transfers of value to HCPs. The emergency amendments, which follow state legislative amendments, now allow manufacturers to provide modest meals and refreshments to HCPs at non-CME educational presentations and modify applicable reporting requirements. The amendments also address the interaction of state requirements and federal law, including the ACA’s Physician Payment Sunshine Act provisions. For additional details, see our full post.

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This post was written by Katie C. Pawlitz.

Today the Office of the Vermont Attorney General announced that the Vermont Attorney General is offering limited amnesty to medical device and biologic manufacturers who have failed to report pursuant to Vermont’s Prescribed Products Gift Ban and Disclosure Law. The offer will remain open until October 1, 2012. In order to take advantage of the offer, manufacturers must email prescribedproducts@atg.state.vt.us with the following information: (1) manufacturer name; (2) reporting periods not reported; and (3) name, address, email, and phone number of the representative with whom Vermont should communicate.

The reporting obligation under the Vermont Law became effective July 1, 2009 and, to date, manufacturers have been required to report to Vermont with respect to three reporting periods. The amnesty offer is limited to financial penalties authorized under the Law and does not apply to back-payment of registration fees or penalties for violations of other aspects of the Law, such as gift ban violations. The Office of the Attorney General has indicated that it does not anticipate seeking full disclosure for unreported activity, but that it does anticipate requiring at a later date, disclosure of aggregate information regarding the activity.

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The Senate Health, Education, Labor and Pensions Committee held a field hearing in Connecticut on “Lyme Disease: A Comprehensive Approach to an Evolving Threat.”  On September 11, 2012, the House Ways and Means Oversight Subcommittee is holding a hearing on the Internal Revenue Service’s implementation of various ACA tax provisions. Also on September 11, the House Small Business Healthcare Subcommittee is holding a hearing on "Medicare's Durable Medical Equipment Competitive Bidding Program: How Are Small Suppliers Faring?"

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Reed Smith’s Life Sciences Legal Update blog discusses a recent decision by the United States District Court for the Southern District of Ohio that may make it much harder for qui tam relators to rely upon stolen medical records or patient information in False Claims Act ("FCA") whistleblower actions. In the decision, Cabotage v. Ohio Hospital for Psychiatry, No. 11-cv-50 (S.D. Ohio July 27, 2012), the district court held that a registered nurse was not permitted to support her allegations of FCA violations by relying on confidential protected health information that she surreptitiously removed from the hospital where she was employed.

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Reed Smith's Global Regulatory Enforcement Law Blog recently featured a post on the Fifth Circuit’s ruling in United States ex rel. Little v. Shell Exploration & Production Co., in which the Court held that government employees are entitled to bring qui tam actions under the False Claims Act (FCA) – even if their federal job function is to investigate fraud on behalf of the government.

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The Patient-Centered Outcomes Research Institute (PCORI) is seeking comments on its draft Methodology Report, proposing standards for the conduct of patient-centered outcomes research.  The report covers, among other things, the rationale for standards for patient-centeredness, prioritizing topics for research; choosing a study design; and for designing, conducting, and reporting research (including standards for adaptive and Bayesian trial designs, registries, and diagnostic tests).  The report also highlights what PCORI characterizes as gaps in evidence that should be addressed by PCORI’s program of methodological research.  Comments will be accepted until September 14, 2012. 

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On July 26, 2012, the Justice Department announced that U.S. Attorney’s offices across the nation are teaming with the Civil Rights Division to target enforcement efforts on ensuring that people with disabilities, especially those who are deaf or hard of hearing, have access to medical information provided to them in a manner that is understandable to them.  The “Barrier-free Health Care Initiative” also will target physical access to medical buildings for individuals with disabilities. 

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MedPAC has released its 2012 Data Book on “Health Care Spending and the Medicare Program.” The publication provides information on national health care and Medicare spending, Medicare and dual-eligible beneficiary demographics, Medicare quality, and Medicare beneficiary and other payer liability. It also includes data regarding various provider types, such as data on Medicare spending, beneficiary utilization of the service, number of providers, volume, length of stay, and Medicare profit margins. The Data Book also covers the Medicare Advantage and Part D drug programs.

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As drug and device manufacturers continue to await final federal rules implementing the Affordable Care Act’s Physician Payment Sunshine Act (“Sunshine Act”) provisions, Massachusetts has relaxed its similar state law banning the provision by manufacturers of gifts to health care practitioners (HCPs) and requiring disclosure of payments and transfers of value to HCPs. The revisions are intended to loosen certain restrictions on providing meals and other expenses to HCPs, and relieve manufacturers of the duty to report to Massachusetts information that has been disclosed to federal agencies, such as data reported to CMS under the Sunshine Act. Massachusetts also will permit pharmaceutical manufacturers to offer drug coupons to Massachusetts residents if certain conditions are met. Additional information is available on Reed Smith’s Life Sciences Legal Update.

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The Medicaid and CHIP Payment and Access Commission (MACPAC) has released its June 2012 Report to the Congress on Medicaid and CHIP.  The report highlights the role of Medicaid and CHIP as purchasers of health care services and discusses the importance of access measures as a tool for monitoring and improving program performance for program beneficiaries.  The Report also includes the Medicaid and CHIP Program Statistics (MACStats) data supplement, which includes information on spending, enrollment, and other program characteristics.  

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On June 15, 2012, MedPAC released its June 2012 Report to the Congress on “Medicare and the Health Care Delivery System.”  Unlike most MedPAC reports that focus on provider payments, this report examines the role of beneficiaries and their impact on the Medicare program. In particular, MedPAC recommends reforms to Medicare’s benefit design/cost-sharing structure to protect beneficiaries against high out-of-pocket spending while creating incentives for beneficiaries to make better decisions about discretionary care. The report also assesses different care coordination models, such as bundling and ACOs, and ways to reward outcomes resulting from coordinated care (or penalize fragmented care). In addition, MedPAC examines programs designed to integrate care for Medicare/Medicaid dual-eligible beneficiaries, including the Program of All-Inclusive Care for the Elderly and dual-eligible special needs plan. MedPAC also includes separate chapters on care for beneficiaries in rural areas and options for reforming Medicare coverage of home infusion service, as requested by Congress.

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The Patient-Centered Outcomes Research Institute Board (PCORI), which was established by the ACA, has announced that it is seeking applicants for $120 million in funding for comparative effectiveness research projects involving: (1) Assessment of prevention, diagnosis, and treatment options; (2) improving healthcare systems; (3) communication and dissemination; and (4) addressing disparities.

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This post was written by Paul Pitts and Rachel M. Golick.

A new Medicare payment policy on readmissions may place more pressure on post-acute providers to coordinate care with the general acute-care hospitals in their community. The Centers for Medicare & Medicaid Services is in the process of adopting a new policy for reducing payments under the inpatient prospective payment system to those hospitals with high readmission rates for patients with certain conditions. As a result, hospitals paid under the IPPS may incur a payment penalty if a skilled nursing facility, long-term acute care hospital, inpatient rehabilitation facility or other post-acute care provider transfers a patient or resident back to the hospital for additional inpatient services. This policy change provides a powerful incentive to coordinate care and standardize procedures across providers. To read the full Alert, click here.

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