The OIG has issued an “Early Alert” warning regarding the use of federal funding by state-based marketplaces under the Affordable Care Act (ACA). The OIG notes that the ACA clearly prohibits marketplaces from using grant funds to support ongoing operations after January 1, 2015. The OIG expresses its “concerns that, without more detailed guidance from CMS, state-based marketplaces (SBMs) might have used, and might continue to use, establishment grant funds for operating expenses after January 1, 2015, contrary to law.” The OIG recommends that CMS consider establishing clear guidance on what constitutes (1) operational costs and (2) design, development, and implementation costs to minimize the marketplaces' improper use of establishment grant funding for operational expenses after January 1, 2015. In developing this guidance, the OIG encourages CMS to review SBM plans for using establishment grant funds to ensure that the guidance addresses real-world examples (e.g., call centers, in-person assisters, bank fees, and printing and postage expenses). Finally, the OIG encourages CMS to monitor SBMs' use or potential use of establishment grant funds for operational costs and take appropriate action.
On May 5, 2015, the Senate approved the conference report to accompany S.Con.Res. 11, the concurrent resolution setting forth the federal budget for FY 2016 and establishing budgetary target levels for FYs 2017 through 2025, following earlier House approval. The conference agreement, which was approved on largely party-line votes, includes nonbinding language supporting Affordable Care Act (ACA) repeal (including specific reference to repeal of the Medicare Independent Payment Advisory Board and Medicare spending cuts contained in the ACA, as long as the measure is deficit-neutral). The agreement calls for $430 billion in unspecified Medicare savings, as the Senate had proposed, rather than structural reforms included in an earlier House version. While the conference report is intended to guide Congressional budget activities in the coming year and facilitates floor consideration in the Senate, the measure does not actually effect policy changes; any subsequent legislation to implement the instructions would be subject to future Congressional debate (and potential Presidential veto).
Action Continues on 21st Century Cures Act; Hearings on Medicare Competition, ACA Implementation, Opioid Abuse
Later today, the full House Energy and Commerce Committee is scheduled to begin markup of the 21st Century Cures Act, following Health Subcommittee approval on May 14. Votes are expected tomorrow (markup was subsequently delayed until May 21). Also today, the House Ways and Means Subcommittee on Health is holding a hearing on "Improving Competition in Medicare: Removing Moratoria and Expanding Access.”
Tomorrow the House Ways and Means Committee has scheduled a hearing on the use of administrative actions in Affordable Care Act implementation. On May 21, the Energy and Commerce Oversight Subcommittee will address state government efforts to combat opioid abuse.
Congressional committees have held a number of hearings recently on health policy issues, include the following
- A House Energy and Commerce Health Subcommittee hearing on “Medicare Post-Acute Care Delivery and Options to Improve It.”
- A Senate Commerce Committee hearing on “Advancing Telehealth Through Connectivity.”
- A Senate Finance Committee hearing on the impact of the ACA medical device tax on jobs, innovation, and patients.
- A House Ways and Means Committee hearing on ACA individual and employer mandates.
- A House Education and the Workforce Committee hearing on how the ACA is affecting America's workplaces.
- A Senate Homeland Security and Governmental Affairs Committee hearing on IRS challenges in implementing the ACA.
Looking ahead, the following hearings are scheduled next week:
- An April 28 Senate Health, Education, Labor and Pensions Committee hearing will focus on “Continuing America's Leadership: The Future of Medical Innovation for Patients.”
- Also on April 28, the Finance Committee will hold a hearing entitled “Creating a More Efficient and Level Playing Field: Audit and Appeals Issues in Medicare.”
- On April 30, the Energy and Commerce Health Subcommittee will hold a legislative hearing on the 21st Century Cures Act; the Subcommittee expects to release a discussion draft of the bill next week.
HRSA Moving Ahead on 340B Program Enforcement Rule, Including Manufacturer CMPs for Overcharges to 340B Entities
The Health Resources and Services Administration (HRSA) is seeking White House review of its proposed rule to implement new Affordable Care Act 340B drug discount program enforcement authorities and pricing policies. More than four years after soliciting comments on the planned rulemaking, the HRSA proposal will address its authority to impose civil monetary penalties (CMPs) on drug manufacturers that intentionally charge a covered entity a price above the ceiling price, and define standards and the methodology for the calculation of ceiling prices for purposes of the 340B Program. The text of the rule will be available when the Office of Management and Budget completes its review and the rule is sent to the Federal Register.
On March 25, 2015, the House of Representatives approved (with no Democratic votes) H.Con.Res. 27, a budget resolution providing instructions to Congressional committees on the federal spending framework for FY 2016. Among other things, the resolution calls for repealing the ACA “in its entirety,” transforming Medicare into a premium-support program, and replacing the ACA Medicaid expansion with “State Flexibility Funds” to support state Medicaid reforms. The Senate approved a separate budget resolution, S.Con.Res. 11, on March 26 (also with no Democratic support). The Senate version would also repeal the ACA, but would not make structural reforms to Medicare (Committees would be directed to achieve more than $400 billion in unspecified Medicare savings over 10 years, the same level included in the President’s proposed FY 2016 budget). While the budget resolutions are intended to guide Congressional budget activities in the coming year, they do not actually effect policy changes; any subsequent legislation in conformance with the resolution would be subject to future Congressional debate (and potentially Presidential veto).
The OIG has released its March 2015 “Compendium of Unimplemented Recommendations,” which highlights the OIG’s top 25 recommendations for cost savings and/or quality improvements in HHS programs, along with other significant unimplemented recommendations. High-priority recommendations address the following areas, among others:
- Payment Policies and Practices: Expand the DRG window to include additional days prior to the inpatient admission and other hospital ownership arrangements; establish a hospital transfer payment policy for early discharges to hospice care; and reduce hospital outpatient department payment rates for ambulatory surgical center-approved procedures.
- Billing and Payment: Develop oversight mechanisms for the home health face-to-face requirement; change the method for determining how much therapy is needed to ensure appropriate skilled nursing facility payments; detect and recoup improper Medicare payments made for services rendered to incarcerated beneficiaries; implement an automated system to recalculate outlier claims to facilitate reconciliations; and provide states with definitive guidance for calculating the federal upper payment limit (UPL), including using facility-specific UPLs that are based on actual cost report data.
- Contractor Oversight: Utilize and report Zone Program Integrity Contractors’ (ZPICs') workload statistics in ZPIC evaluations.
- Grants and Contracts: The National Institutes of Health (NIH) should promulgate regulations addressing institutional financial conflict of interest.
- Program and Financial Management: Reduce significant variation in states’ personal care services laws and regulations; and standardize administrative law judge level case files and make them electronic.
- Quality of Care and Safety: Broaden patient safety efforts to include all types of adverse events; require states to report on vision and hearing screening data; strengthen oversight of state access standards for Medicaid managed care; and expand regulatory authority and oversight of dietary supplements.
- Emergency Preparedness: Establish effective hospital emergency preparedness and response policies.
- Health Information Technology: Improve the Transformed Medicaid Statistical Information System; and address fraud vulnerabilities in EHRs.
- Program Integrity: Increase reviews of clinicians associated with high cumulative payments; and restrict certain beneficiaries to a limited number of pharmacies or prescribers.
- Affordable Care Act: Improve internal CMS controls related to determining applicants’ eligibility for enrollment in quality health plans and eligibility for insurance affordability programs.
While some of these recommendations could be achieved administratively, other policies would require legislative changes to implement.
The Departments of Labor, Health and Human Services, and Treasury published a final rule on March 18, 2015 that amends the definition of excepted benefits to allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to individuals who are purchasing individual health insurance in the private market, including through the Affordable Care Act (ACA) Health Insurance Marketplace. The rule establishes the following pilot programs for wraparound coverage: a pilot allowing wraparound benefits only for Multi-State Plans in the Marketplace, and a pilot allowing wraparound benefits for part-time workers or retirees who enroll in an individual market plan (or Basic Health Plan coverage). There are several significant conditions and limitations to this type of coverage. The wraparound coverage must provide meaningful benefits beyond coverage of cost sharing (e.g., coverage of services considered to be out-of-network by the primary plan, reimbursement for the full cost of primary care or non-formulary prescription drugs), and may not consist of an account-based reimbursement arrangement. This type of wraparound coverage could be offered as excepted benefits to coverage that is first offered no earlier than January 1, 2016 and no later than December 31, 2018 (a year later than initially proposed), and that ends on the later of: (1) the date that is three years after the date wraparound coverage is first offered; or (2) the date on which the last collective bargaining agreement relating to the plan terminates after the date wraparound coverage is first offered.
On March 10, 2015, CMS announced the Next Generation Accountable Care Organization (ACO) Model, its latest Affordable Care Act (ACA) innovation initiative intended to promote Medicare quality improvement and care coordination. The Next Generation ACO Model differs from the existing Medicare Shared Savings Program and Pioneer ACO models in several ways. For instance, the Next Generation ACO Model:
- Provides higher levels of risk and reward, using what CMS characterizes as more stable, predictable benchmarking methods that reward both attainment and improvement in cost containment and that move away from comparisons to an ACO’s historical expenditures;
- Offers a selection of payment mechanisms to shift from fee-for-service (FFS) reimbursement to capitation; and
- Includes “benefit enhancement” tools to improve engagement with beneficiaries, including (1) greater access to home visits, telehealth services, and skilled nursing facilities; (2) opportunities to receive a reward payment for receiving care from the ACO; (3) a process to allow beneficiaries to confirm their care relationship with ACO providers; and (4) CMS-ACO collaboration to improve communication with beneficiaries about the potential benefits of ACOs.
CMS plans two rounds of applications for the Next Generation ACO Model in 2015 and 2016, with participation expected to last up to five years. Letters of Intent for the 2015 cycle are due May 1, 2015, and applications are due June 1, 2015. CMS plans an “Open Door Forum” call to discuss the new model on March 17, 2015.
On March 10, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on “Continuing America’s Leadership in Medical Innovation for Patients,” featuring testimony from NIH Director Francis Collins, MD, PhD, and FDA Commissioner Margaret Hamburg, MD.
On March 17, the HELP Committee has scheduled a hearing on “America’s Health IT Transformation: Translating the Promise of Electronic Health Records into Better Care.” The Senate Finance Committee is holding a hearing on the “Affordable Care Act at Five Years” on March 19.
The Energy and Commerce has not yet rescheduled a previously-announced hearing on the 340B drug pricing program that was cancelled due to weather.
The Centers for Medicare & Medicaid Services (CMS) has finalized its Affordable Care Act (ACA) Marketplace health plan payment parameters and essential benefit standards for 2016. The rule addresses numerous policies, including: allocation of risk corridors collections for 2016; recalibration of risk adjustment factors; revisions to reinsurance and cost sharing parameters; user fees for federally-facilitated exchanges; standards for qualified health plans, including quality improvement strategy and provider directory requirements; Small Business Health Options Program requirements; conditions that trigger rate review; clarification that coverage satisfying the minimum value requirement must include substantial coverage of inpatient hospital and physician services; medical loss ratio program revisions; new policies and procedures for enrollee requests for prescription drugs not included on a plan’s formulary; and establishment of the 2016 annual open enrollment period as November 1, 2015 through January 31, 2016. The final rule will be published on February 27, 2015. A related CMS fact sheet is available here.
On February 24, 2015, the HHS Office of Inspector General (OIG) released its “Health Reform Oversight Plan” for FY 2015, which describes the OIG’s current and planned efforts to oversee the implementation and management of HHS programs under the ACA. The plan outlines the OIG’s key tactical considerations (e.g., assessing relative risks; monitoring emerging issues and trends, conducting reviews, and addressing allegations of fraud); identifies primary focus areas, both in the health insurance Marketplaces and in other ACA-related HHS programs; and sets forth target timeframes for issuing reports on reviews related to the Marketplaces. While the report focuses on audits and evaluations, the OIG notes that it is prepared for and engaged in law enforcement operations related to ACA programs.
On February 24, 2015, CMS published its final methodology and data sources for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS is using the same methodology in 2016 as was established in the final 2015 payment notice, with updated values for several factors.
The following Congressional panels have held hearings recently on various health policy issues:
- The House Science, Space, and Technology Committee held a hearing entitled, “Can Americans Trust the Privacy and Security of their Information on HealthCare.gov?”;
- The Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on the reemergence of vaccine-preventable diseases; and
- The Energy & Commerce Committee held hearings on ICD-10 implementation and federal mental health programs.
Earlier this month, the House of Representatives approved H.R. 596, a bill to repeal the Patient Protection and Affordable Care Act (PPACA) and health care-related provisions in the Health Care and Education Reconciliation Act of 2010 and restore the laws as if the health reform provisions had never been enacted. The bill also directs the House Committees on Education and the Workforce, Energy and Commerce, Judiciary, and Ways and Means to develop alternative legislation to, among other things, lower health care premiums, ensure access to affordable health coverage for people with pre-existing conditions, and reform. The President has promised to veto the bill if it reaches his desk.
Three health policy hearings are scheduled for February 26, 2015:
- The Energy and Commerce Committee is holding a hearing on the Obama Administration’s proposed FY 2016 budget for the Department of Health and Human Services (HHS);
- The Senate HELP Committee is holding a hearing entitled “Medical and Public Health Preparedness and Response: Are We Ready for Future Threats?”; and
- The House Oversight and Government Reform Committee is holding a hearing entitled “From Health Care Enrollment to Tax Filing: A PPACA (Patient Protection and Affordable Care Act) Update."
CMS warns requirement to report/return overpayments is in effect even without regulations
The Centers for Medicare & Medicaid Services (CMS) needs more time to finalize its February 16, 2012 proposed rule on reporting and returning of Medicare overpayments, according to a CMS notice to be published on February 17, 2015. The 2012 rule would provide details on implementation of an Affordable Care Act (ACA) provision requiring enrolled providers and suppliers (and certain other enrollees) receiving Medicare funds to report and return Medicare overpayments by the later of 60 days after the date on which the overpayment was identified or, if applicable, the date any corresponding cost report is due. Although the requirement to refund an overpayment already exists in federal law, the proposed rule would clarify what constitutes “identification” of an overpayment, the mechanics of when and how an overpayment must be returned, and the period of time subject to repayment. CMS had received a large number of comments from providers and suppliers and their industry associations that the proposed rule’s refund reporting policies and procedures would impose significant administrative burdens.
The Social Security Act requires public notice if an agency will take more than three years to finalize a proposed rule. CMS states that “the complexity of the rule and scope of comments warrants the extension of the timeline for publication” for an additional year (until February 16, 2016). Specifically, CMS has “determined that there are significant policy and operational issues that need to be resolved in order to address all of the issues raised by comments to the proposed rule and to ensure appropriate coordination with other government agencies.” The agency warns stakeholders, however, that “even without a final regulation they are subject to the statutory requirements found in section 1128J(d) of the Act and could face potential False Claims Act liability, Civil Monetary Penalties Law liability, and exclusion from Federal health care programs for failure to report and return an overpayment.”
The Government Accountability Office (GAO) has released its latest update to its “High-Risk Series” reports, which again lists Medicare as a high-risk program, in part because of the program’s substantial size and scope, and its wide-ranging effects on beneficiaries, the health care industry, and the U.S. economy. The latest report highlights five areas of particular concern to the GAO:
- Payments and provider incentives in original Medicare (specifically referencing physician feedback reports, physician self-referral policy, high-expenditure Part B drugs, end stage renal disease (ESRD) bundled payments, and low-volume payment adjustments for dialysis facilities);
- Medicare Advantage (MA) and other Medicare health plans (including concerns about MA plan payment adjustments and excess payments to Special Needs Plans);
- Program design effects on beneficiaries (addressing coordination for dual-eligible beneficiaries, dual-eligible special needs plans, and access to preventive services);
- Program management (including implementation of durable medical equipment competitive bidding and oversight of Centers for Medicare & Medicaid Services (CMS) contracts); and
- Oversight of patient care and safety (including the use of clinical data registries and oversight of vulnerable Medicare beneficiaries in nursing homes and long-term care hospitals (LTCHs)).
The GAO makes a series of recommendations to Congress and CMS to address program risks. Specifically, GAO recommends that Congress consider directing the HHS Secretary to require providers who self-refer intensity-modulated radiation therapy services to disclose to their patients that they have a financial interest in the service. The GAO also recommends that Congress better align Medicare beneficiary cost-sharing requirements with U.S. Preventive Task Force recommendations.
Specific recommendations for CMS include:
- Disseminating physician performance feedback reports more frequently;
- Improving the timeliness and efficacy of CMS’s monitoring of the accuracy of ESRD low volume payment adjustments;
- Improving the accuracy of the adjustment made for differences in diagnostic coding practices between MA and Medicare fee-for service (FFS) programs;
- Establishing specific plans for using MA encounter data to risk adjust payments or for other purposes;
- Evaluating the extent to which dual-eligible special needs plans have provided appropriate care to the population they serve; and
- Expanding validation surveys at LTCHs to assess accreditation organization identification of deficiencies.
In addition, the GAO lists the following recommendations for CMS to exercise Affordable Care Act authorities to reduce the risk of improper Medicare payments:
- Require a surety bond for certain types of at-risk providers and suppliers;
- Publish a proposed rule for increased disclosures of prior actions taken against providers and suppliers enrolling or revalidating enrollment in Medicare, such as whether the provider or supplier has been subject to a payment suspension from a federal health care program;
- Establish core elements of compliance programs for providers and suppliers;
- Improve automated edits that identify services billed in medically unlikely amounts;
- Develop performance measures for the Zone Program Integrity Contractors who explicitly link their work to the agency’s Medicare FFS program integrity performance measures and improper payment reduction goals;
- Reduce differences between contractor postpayment review requirements when possible;
- Monitor the database used to track Recovery Auditor activities to ensure that all postpayment review contractors are submitting required data and that the data the database contains are accurate and complete;
- Require Medicare administrative contractors to share information about the underlying policies and savings related to their most effective edits; and
- Efficiently identify and implement an information technology solution that addresses the removal of Social Security numbers from Medicare beneficiaries’ health insurance cards.
Next week, the House is expected to take up H.R. 596, a bill to repeal the Patient Protection and Affordable Care Act and health care-related provisions in the Health Care and Education Reconciliation Act of 2010 and restore the laws as if the health reform provisions had never been enacted. The bill also directs the House Committees on Education and the Workforce, Energy and Commerce, Judiciary, and Ways and Means to develop alternative legislation that meets various policy goals, including, among others: lowering health care premiums through increased competition and choice; preserving a patient's ability to keep his or her health plan if he or she likes it; providing people with pre-existing conditions access to affordable health coverage; reforming the medical liability system; increasing the number of insured Americans; expanding state flexibility to administer the Medicaid program; and expanding incentives to encourage personal responsibility for health care coverage and costs.
Although the Congressional Budget Office (CBO) typically releases a budget estimate for legislation scheduled for a floor vote, CBO announced today that it is unable to do so in this case. CBO explains that estimating the budget impact of this legislation would take weeks of CBO and Joint Committee on Taxation staff time “because there are hundreds of provisions in the laws that would be repealed and those provisions are in various stages of implementation.” The CBO did not point out that President Obama would undoubtedly veto the legislation if it were to reach his desk.
On January 27, 2015, the House Energy and Commerce Subcommittee on Health held a hearing on bipartisan public health legislation, including:
- Ensuring Patient Access to Effective Drug Enforcement Act (to improve enforcement efforts regarding prescription drug diversion and abuse);
- Improving Regulatory Transparency for New Medical Therapies Act (to amend the Controlled Substances Act to improve the efficiency, transparency, and consistency of the Drug Enforcement Agency’s process for scheduling new drugs);
- Veteran Emergency Medical Technician Support Act (to provide demonstration grants to states with a shortage of emergency medical technicians (EMTs) to streamline licensing requirements for military veteran EMTs);
- Trauma Systems and Regionalization of Emergency Care Reauthorization Act (to reauthorize grants supporting state and rural development of trauma systems and authorize new regionalized emergency care model pilot projects); a bill to reauthorize language from the Public Health Service Act to fund trauma care centers; and
- National All Schedules Prescription Electronic Reporting (NASPER) Reauthorization Act (to reauthorize programs to support state prescription drug monitoring programs).
On January 28, 2015, the Senate Finance Committee unanimously approved H.R. 22, the “Hire More Heroes Act," which is intended to allow businesses to hire veterans without them counting as a full-time employee under the Affordable Care Act (ACA) if the veteran already has medical coverage through the TRICARE program or the Veterans Administration. The House approved the legislation earlier this month.
Looking ahead, the following hearings are scheduled next week:
- A February 3 Energy and Commerce Oversight and Investigations Subcommittee hearing entitled “Examining the U.S. Public Health Response to Seasonal Influenza”; and
- A February 4 Senate Finance Committee hearing to consider the HHS budget request and review the Department’s operations, including ACA implementation. HHS Secretary Sylvia Burwell is scheduled to testify.