Congress Clears Bill to Improve Metabolic Syndrome Support Programs

The House of Representatives and Senate have both approved S 920, the National Clinical Care Commission Act, clearing the measure for the President. The bill would establish a national clinical care commission to improve coordination of federal programs that support care for people with metabolic syndromes and related autoimmune disorders.

Committees Approve Bills to Boost Medicare Penalties, Revise Part B Policies, Extend CHIP Funding

The House Energy and Commerce Committee has approved by voice vote the following bipartisan bills addressing the Medicare Part B program:

  • HR 3245, which would significantly increase various Medicare civil and criminal penalties under sections 1128A and 1128B of the Social Security Act. Sponsors of the bill note these penalties have not been updated in 20 years. Maximum penalties would at least double under the bill. For instance, CMPs that are now $10,000 would be increased to $20,000, while criminal fines that are now a maximum of $25,000 would increase to $100,000. Maximum sentences also would be doubled, from five years to 10 years.
  • HR 1148, the Furthering Access to Stroke Telemedicine Act, to provide for Medicare reimbursement of neurological consults via telemedicine for beneficiaries presenting at hospitals or mobile stroke units.
  • HR 2465, the Steve Gleason Enduring Voices Act, to make permanent current coverage of speech generating devices under the “routinely purchased” durable medical equipment payment category.
  • HR 2557, the Prostate Cancer Misdiagnosis Elimination Act, to provide coverage of DNA Specimen Provenance Assay testing for prostate cancer.
  • HR 3120, to amend the Health Information Technology for Economic and Clinical Health (HITECH) Act to remove the mandate that meaningful use standards become more stringent over time.
  • HR 3263, to extend for two years the Medicare Independence at Home Medical Practice Demonstration Program.
  • HR 3271, to revise Medicare competitive bidding rules pertaining to diabetes test strips, including stronger enforcement of requirement that bidders cover at least 50 percent of the types of diabetes test strips on the market.

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Ways & Means Committee Advances IPAB Repeal Bill

The House Ways and Means Committee has approved by a 24-13 vote HR 849, Protecting Seniors’ Access to Medicare Act, to repeal the Independent Payment Advisory Board (IPAB). The IPAB was established by the ACA to submit Medicare spending plans to Congress if projected spending growth exceeds specified targets. Under the ACA, future IPAB’s proposals would go into effect automatically unless Congress enacts alternative legislation achieving required savings levels. IPAB members have not been appointed, and the spending threshold has not yet been crossed. President Trump called for repeal of IPAB in his FY 2018 budget proposal, but opponents cite the bill’s estimated $17.5 billion/10 year cost. The legislation has not yet been considered by the full House.

Senate Advances Emergency Medicine Access Legislation

On October 24, 2017, the Senate approved HR 304, the Protecting Patient Access to Emergency Medicines Act, which would clarify that emergency medical services professionals may administer controlled substances pursuant to standing or verbal orders in certain circumstances. While the House passed the legislation in January 2017, the House needs to consider the measure again due to amendments adopted in the Senate.

Congressional Health Policy Hearings

Recent Congressional hearings focusing on health policy issues include the following:

  • House Energy and Commerce Committee hearings on how covered entities use the 340B drug pricing program, ways to address the opioid crisis, FDA’s Expanded Access Program, and HHS’s public health preparedness for and response to the 2017 hurricane season.
  • Senate Health, Education, Labor, and Pensions (HELP) Committee hearings on the cost of prescription drugs (focusing on how the drug delivery system affects what patients pay), how healthy choices can improve health outcomes and reduce costs, and the federal response to the opioid crisis.

Coming up, on October 31, 2017, the HELP Committee is holding a hearing on “Implementation of the 21st Century Cures Act: Achieving the Promise of Health Information Technology.”

Trump Administration Plan to Cut Off CSR Payments Withstands First Court Review

A Department of Health and Human Services (HHS) decision to discontinue ACA cost-sharing reduction (CSR) payments to insurers offering policies through ACA exchanges has cleared its first legal hurdle, with a U.S. district court declining to block the Administration’s action on an emergency basis.

On October 12, 2017, the Trump Administration declared it was “immediately” ending CSR payments, which are paid directly to insurance companies to offset the reduced cost sharing plans must offer to some enrollees based on income. The Trump Administration asserts that the payments are not legal because it claims Congress did not appropriate funds for CSR payments (unlike ACA premium tax credits, for which funds are specifically appropriated). The Congressional Budget Office (CBO) previously forecast that discontinuing CSR payments would trigger increased premiums for “silver plans” (which enrollees generally must purchase to qualify for CSR subsidies), which in turn would increase both average per-capita subsidies and the number of individuals receiving subsidies. In fact, the CBO estimated that cutting off CSR payments would result in a net $194 billion increase in the federal deficit from 2017 through 2026.

The Trump decision was immediately challenged in federal district court by 18 Democratic state attorneys general, who sought an emergency ruling requiring continuation of the CSR payments while the suit was pending. In a decision filed on October 25, 2017, Judge Vince Chhabria of the U.S. District Court for the Northern District of California declined to provide emergency injunctive relief. Although the court determined that ACA “required the federal government to pay the insurance companies in advance for [the cost-sharing] reductions,” and that the ACA “authorized the costs-sharing reductions program and the CSR payments to the insurers,” the court noted that the ACA “did not explicitly make a permanent appropriation for the CSR payments to the insurance companies.” The Court observed that “[o]n the merits, it’s a close and complicated question,” but the Judge determined that “it appears initially that the Trump Administration has the stronger legal argument.” Continue Reading

Trump Executive Order Calls for “Healthcare Choice and Competition”

As legislative efforts to replace or reform the Affordable Care Act (ACA) sputter, President Trump has issued an executive order seeking to expand affordable health insurance choices, “to the extent consistent with law.” While the executive order itself does not modify current ACA statutory or regulatory requirements, it signals the Administration’s intent to:

  • Facilitate the purchase of insurance across state lines.
  • Promote access “in the near term” to association health plans and short-term, limited-duration insurance (both of which are exempt from certain ACA benefit mandates), and tax-advantaged health reimbursement arrangements.
  • Limit “excessive consolidation throughout the healthcare system.”
  • Improve consumer access to data regarding healthcare prices and outcomes “while minimizing reporting burdens on affected plans, providers, or payers.”

Interim Final Rules Expand Contraceptive Coverage Exemption Based on Religious/Moral Beliefs

The Trump Administration has issued interim final rules to make it easier for employers and health insurance plans to qualify for an exemption from ACA rules mandating coverage of contraceptive services without cost sharing on the basis of religious or moral objections. The extent to which group health plans must cover contraceptive services in cases in which there is a religious objection has been the subject of numerous previous regulations and litigation, with final rules adopted in 2015 that established a process for eligible organizations to provide notice of religious objection to contraceptive services coverage. The new HHS interim final rules would expand current exemptions to protect additional entities and individuals that object to coverage of contraceptive services based on (1) “sincerely held religious beliefs” or (2) “sincerely held moral convictions” that are not religious beliefs. The interim final rules are effective on October 6, 2017. Comments on the rules will be accepted until December 5, 2017.

Update: Now it’s Wright out, Hargan in at HHS

President Trump has named Eric Hargan to serve as Acting HHS Secretary, replacing Don Wright (who was just named to the post on September 29, 2017).  The HHS Secretary vacancy was created when Tom Price, MD resigned the post September 29.  Hargan, an attorney who served at HHS during the George W. Bush Administration, was confirmed as Deputy HHS Secretary by the Senate last week.  Wright remains Acting Assistant Secretary for Health, Deputy Assistant Secretary for Health, and Director of the Office of Disease Prevention and Health Promotion.

HRSA Delays Final 340B Penalty Rule until July 1, 2018; Additional Rulemaking in the Works

The Health Resources and Services Administration (HRSA) has adopted its proposal to delay the effective date of its final rule revising the calculation of the 340B “ceiling price” that may be charged to covered entities and related civil money penalties.  As previously reported, while implementation of the January 5, 2017 rule was already delayed until October 1, 2017, HRSA has now pushed back the effective date to July 1, 2018.  HRSA states that this delay “provides regulated entities sufficient time to implement the requirements of the rule, as well as allowing a more deliberate process of considering alternative and supplemental regulatory provisions, and to allow for sufficient time for additional rulemaking.”  In fact, this new rulemaking is already in the works; HRSA sent a new 340B drug pricing/CMP proposed rule to the White House Office of Management and Budget for regulatory review on October 6, 2017. 

Price Out, Wright In at HHS (for Now)

In the wake of the resignation of former Secretary Tom Price, MD over concerns about his travel expenses, President Trump has named Don Wright, MD, MPH, as Acting Secretary of the Department of Health and Human Services (HHS). Wright previously served as Acting Assistant Secretary for Health.  The Administration has not yet indicated who will be nominated as a permanent replacement to lead the Department.

Separately, on October 4, the Senate confirmed attorney Eric Hargan as Deputy HHS Secretary, and he was sworn in by a 57-38 vote on October 5. Hargan previously served in various high-level HHS positions in the George W. Bush Administration.

Trump Administration Shelves Additional Obama Medicare/Health Plan Proposals

The Trump Administration has formally withdrawn a number of pending Department of Health and Human Services (HHS) proposals that never reached the final rule stage. This includes:  a controversial Part Medicare B drug payment innovation model; a proposal to protect same sex marriages in certain Medicare and Medicaid facilities (predating a related Supreme Court decision); a proposal to impose more stringent Medicare requirements related to the provision of orthotics and prosthetics; and a proposed rule regarding certification of compliance for health plans.  Each of the rules is withdrawn as of October 4, 2017.  Specifically: Continue Reading

Drug Pricing, Drug Costs, and the Opioid Crisis are the Focus of Upcoming Congressional Hearings

The Energy and Commerce Subcommittee on Health has scheduled an October 11, 2017 hearing to discuss how covered entities use the 340B drug pricing program. A second Subcommittee hearing on October 11 will consider proposals from House members on ways to address the opioid crisis.

On October 17, the Senate Health, Education, Labor, and Pensions Committee is holding hearing to examine the cost of prescription drugs, focusing on how the drug delivery system affects what patients pay.

CMS Corrects Final FY 2018 IPPS, LTCH, and SNF Payment Rules

CMS has released corrections to two major fiscal year (FY) 2018 Medicare payment rules. First, CMS has made numerous technical corrections to the FY 2018 inpatient prospective payment systems (IPPS) and long term care hospital (LTCH) prospective payment system (PPS) final rule. CMS has corrected MS-DRG and MS-LTCH-DRG relative weights, budget neutrality adjustment factors, fixed-loss amounts, wage indexes, national operating standardized amounts, capital federal rate, LTCH PPS standard federal payment rate, uncompensated care payment calculations, and quality measures, among many other things.  Furthermore, CMS is updating various tables that accompanied the final rule, and it is making corrections to the logic for the ICD-10 MS-DRG Grouper Version 35 Software.

Second, CMS has corrected the FY 2018 skilled nursing facility (SNF) prospective payment system (PPS) final rule to address a number of technical issues.  Among other things, CMS is correcting wage indexes, the wage index budget neutrality factor, and SNF PPS rates.  The corresponding SNF wage index tables have been updated on the CMS website.

CMS Announces CY 2018 Amount in Controversy Thresholds for Medicare Appeals

CMS has released the calendar year (CY) 2018 amount in controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) hearings and judicial review under the Medicare appeals process. The CY 2018 AIC threshold amounts are $160 for ALJ hearings (the same as 2017) and $1,600 for judicial review (compared to $1,560 in 2017).  These amounts apply to requests for ALJ hearings and judicial review filed on or after January 1, 2018.

Chronic Care Legislation Approved by Senate

The U.S. Senate has unanimously approved S. 870, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 (as amended). The bill is intended to improve care for the chronically ill in fee-for-service Medicare, Medicare Advantage (MA) plans, and accountable care organizations (ACOs). In particular, the bill calls for increased use of telehealth by MA plans and ACOs, and for ESRD beneficiaries undergoing home dialysis. In addition, the legislation seeks to promote care coordination, including through a new ACO Beneficiary Incentive Program that permits certain incentive payments to beneficiaries to encourage the use of medically-necessary primary care services. Under the bill, the Affordable Care Act’s (ACA) Independence at Home program would be expanded and ACA Special Needs Plans would be permanently authorized (if certain conditions are met). Furthermore, the HHS Secretary would be required to establish a process to provide Part D prescription drug plans with Parts A and B claims data to promote the appropriate use of medications and improve health outcomes. The bill now moves to the House.

CMS Releases 2018 Open Payments/Sunshine Act Reporting Thresholds

CMS has announced inflation-adjusted de minimis reporting thresholds for 2018 under the Open Payments/Physician Payments Sunshine Act program.  Specifically, payments or transfers of value of less than $10.49 do not need to be reported in 2018, except when the total annual value of payments or other transfers of value to a covered recipient exceeds $104.90.  These amounts are up slightly from the 2017 thresholds of $10.32 and $103.22, respectively.

Recently Released Enhanced Regulatory Initiatives for Drug Compounders

On September 26, 2017, FDA Commissioner Scott Gottlieb, M.D. released a statement about FDA’s ramped up regulatory initiatives for drug compounders. These initiatives include: (1) publishing a report that provides a list of all the drugs that outsourcing facilities have compounded; (2) publishing a guide entitled “Outsourcing Facility Information,” which is a compilation of key regulatory information applicable to outsourcing facilities; and (3) conducting the sixth intergovernmental meeting on drug compounding allowing intergovernmental agencies to coordinate their regulatory efforts for all compounders. These efforts demonstrate that FDA is continuing to actively oversee the regulation of drug compounding and is looking to work closer with state boards of pharmacy to coordinate its various enforcement initiatives. Drug compounders should continue to closely monitor their compliance with all applicable state and federal regulation and guidance.

For more information on this important topic, please read the full client alert here.

Senate GOP Abandons Last-Ditch ACA Repeal/Replace Legislation in Face of Opposition

The latest Republican Congressional attempt to repeal and replace the Affordable Care Act (ACA) has foundered, as three Republican senators announced they will join Democratic senators in opposing the “Graham-Cassidy” repeal plan.

Very broadly, Graham-Cassidy would, among other things:

  • Eliminate the penalties and mandates that individuals buy insurance and certain employers offer insurance;
  • Replace insurance premium subsidies and funding for Medicaid expansion with block grants to the states (with greatly reduced federal contributions);
  • Give states wide latitude in determining the parameters of insurance coverage and premiums; and
  • Revise the tax treatment of certain medical expenses.

Senate GOP leaders intended to bring Graham-Cassidy to the floor for a vote this week – before special “budget reconciliation” rules that allow passage on a simple majority vote expire at the end of this month.  On September 25, 2017, the Congressional Budget Office released a preliminary estimate of the impact Graham-Cassidy would have on health insurance coverage and federal spending.  The CBO projects that the bill would cut Medicaid by $1 trillion and result in millions of individuals losing insurance coverage.  These projections prompted Senator Susan Collins (R-ME) to declare her opposition to the bill (joining Republican Senators John McCain and Rand Paul).  Congressional leaders have now shelved the vote in light of the dim prospects for passage.

Medicare Clinical Lab Fee Schedule Payments to Fall by $670 Million in 2018 Under Preliminary PAMA Rates

CMS has posted preliminary Medicare clinical laboratory fee schedule rates for 2018 – the first year rates will be based on private payer data under the Protecting Access to Medicare Act of 2014 (PAMA). CMS estimates that 2018 Medicare Part B payments will be reduced by about $670 million for calendar year 2018. In fact, for approximately 75 percent of the HCPCS codes on the CLFS, the 2018 rate based on the weighted median of private payor rates is a decrease from the CY 2017 CLFS national limitation amount. CMS will accept comments on preliminary rates until October 23, 2017.

CMS also posted preliminary determinations regarding the payment basis (crosswalk or gapfill) for new and existing laboratory HCPCS codes for which CMS received no applicable payment information. Comments on the preliminary determination also are due October 23, 2017.