It’s Official:  January 1, 2019 is Effective Date for HRSA 340B Ceiling Price/CMP Rule

The Health Resources and Services Administration (HRSA) has announced that it will implement its January 5, 2017 340B drug pricing program rule on January 1, 2019.  The oft-delayed final rule addresses:  (i) the calculation of the 340B “ceiling price” that may be charged to covered entities; (ii) the substantive standards applicable to civil monetary penalties (CMPs); and (iii) the procedures applicable to the imposition of CMPs.  In the preamble, HRSA indicated that it will “assess the need for further rulemaking and guidance after the rule is in effect.” HRSA also stated that it plans to release the 340B ceiling pricing reporting system “shortly,” and the agency will ensure all impacted stakeholders receive education and training on the reporting system.  Separately, HRSA projects that it will publish 340B ceiling prices on April 1, 2019.

HHS Deputy Secretary Hargan Names Innovation/Investment Summit Participants; First Meeting Scheduled for December 18, 2018

Health and Human Services Deputy Secretary Eric Hargan has selected 15 health industry and investment professionals to participate in the Deputy Secretary’s Innovation and Investment Summit (DSIIS), which will hold its inaugural meeting on December 18, 2018.  As previously reported, this initiative is intended to provide a forum for private sector and government experts to discuss ways to facilitate more investment and accelerated innovation in health care; the group will not be recommending HHS health care investments.

CMS Finalizes 2019 Medicare Clinical Lab Payment Determinations

CMS has released its final 2019 Medicare clinical laboratory fee schedule (CLFS) payment determinations for new and reconsidered clinical lab test codes.  Specifically, CMS finalized the basis for establishing the payment rate (crosswalking or gapfilling), along with the agency’s rationale for the decision.

CMS Publishes Final CY 2019 Medicare Physician Fee Schedule Rates and Policies

The Centers for Medicare & Medicaid Services (CMS) has issued its final Medicare physician fee schedule (PFS) rule for calendar year (CY) 2019.  In addition to updating rates for physician services, the rule adopts changes to numerous other Medicare Part B policies.  Highlights of the final rule include the following:

  • The final 2019 conversion factor (CF) is $36.0391, up slightly from the 2018 CF of $35.9996.  This rate is based on a statutory update of 0.25%, offset by a -0.14% relative value unit (RVU) budget neutrality adjustment.
  • The rule reduces from 6% to 3% the “add-on” payment for new, separately-payable Part B drugs and biologicals that are paid based on wholesale acquisition cost when average sales price during first quarter of sales is unavailable.
  • The rule makes a number of changes to the Appropriate Use Criteria (AUC) program, which requires that physicians who order outpatient advanced diagnostic imaging (ADI) services (diagnostic magnetic resonance imaging, computed tomography, and positron emission tomography/nuclear medicine) for a Medicare beneficiary consult with AUC developed by provider-led organizations approved by CMS via a qualified clinical decision support mechanism (CDSM).  Specifically, the final rule:
    • Extends the requirements to independent diagnostic testing facilities (joining physician offices, hospital outpatient departments, and ambulatory surgical centers).
    • Clarifies that AUC consultation information must be reported on all applicable technical component and professional component claims (i.e., not just reported on claims by furnishing facilities).
    • Provides that when delegated by the ordering professional, clinical staff under the direction of the ordering professional may perform the AUC consultation with a qualified CDSM (a modification to the proposed rule, which would have specified that AUC consultations may be performed by auxiliary personnel under the direction of the ordering professional and incident to the ordering professional’s services).
    • Uses established coding methods (e.g., G-codes and modifiers) to report required information.
    • Revises the significant hardship exception criteria to include (1) insufficient internet access; (2) electronic health record or CDSM vendor issues; (3) extreme and uncontrollable circumstances; and (4) self-attestation of hardship status for ordering professionals.

For information regarding the AUC implementation schedule, see our previous post. Continue Reading

CMS Finalizes Medicare OPPS, ASC Rates and Policies for 2019

The Centers for Medicare & Medicaid Services (CMS) has finalized Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rates and policies for calendar year 2019.  Notably, CMS adopted some – but not all – of its proposed policies intended to promote more “site-neutral payments” for different types of providers.

Hospital Outpatient Provisions

CMS adopted a 1.35% update to Medicare OPPS rates for 2019, with the update reduced by 2.0% for hospitals that fail to meet quality reporting requirements.  Payment changes for individual procedures vary.

In the final rule, CMS reiterated its concern that “current payment incentives, rather than patient acuity or medical necessity, are affecting site-of-service decision-making.”  To that end, CMS adopted several policies intended to promote site neutrality, particularly with regard to off-campus hospital provider-based departments (PBD) that are “excepted” under section 603 of the Bipartisan Budget Act of 2015.  Section 603 provides that effective January 1, 2017 certain off-campus PBDs are generally paid under the physician fee schedule (PFS), rather than the typically higher-paying OPPS, unless an exception applies.  For 2019, CMS finalized policies to:

  • Reduce payment for clinic visit services (G0463, Hospital outpatient clinic visit for assessment and management of a patient) to a PFS-equivalent rate when provided at an “excepted” PBD. CMS notes that the clinic visit is the most common service billed under the OPPS, and by removing the “payment differential that may influence site-of-service decisionmaking, we anticipate an associated decrease in the volume of clinic visits provided in the excepted off-campus PBD setting.”  In response to comments, CMS is phasing in the payment reduction over two years, with the rate for HCPCS G0463 reduced by 30% for CY 2019 and reduced by 60% in 2020.  In other words, these excepted PBDs will be paid approximately 70% of the OPPS rate for clinic visit services in CY 2019, which CMS expects will results in CY 2019 savings of about $380 million (including $80 million in savings to Medicare beneficiaries).
  • Apply to excepted PBDs a current policy that reduces OPPS payment for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B drug discount program from average sales price (ASP) plus 6% to ASP minus 22.5% (with certain exceptions).

CMS did not adopt its proposal to revise payment when an excepted PBD expands into new lines of service, although CMS stated that it will monitor expansion of services in off-campus PBDs and, if appropriate, the agency may propose future rulemaking in this area.  More broadly, CMS repeats its interest in future rulemaking “to systematically control for unnecessary increases in the volume of other hospital outpatient department services,” while maintaining “beneficiary access to new innovations.”

Other policies adopted in the final rule include the following:  Continue Reading

Medicare ESRD PPS Payments to Rise by 1.6% in 2019

Medicare end-stage renal disease (ESRD) prospective payment system (PPS) payments are expected to increase by 1.6% — or about $210 million — in calendar year (CY) 2019 under the final rule published on November 14, 2018.  The Centers for Medicare & Medicaid Services (CMS) has adopted a CY 2019 ESRD PPS base rate of $235.27, up from $232.37 in 2018.  This rate is based on a 1.3% productivity-adjusted market basket increase and the application of a wage index budget-neutrality adjustment factor of 0.999506.  CMS also expects that outlier policy changes in the final rule will increase payments by 0.3%.

The final rule updates a number of other ESRD policies, including:  expanded Transitional Drug Add-on Payment Adjustment (TDAPA) eligibility and a revised payment basis for new renal dialysis drugs and biological products beginning January 1, 2020; revised low-volume payment adjustment regulations; an update to the acute kidney injury dialysis rate to $235.27 (the same as the CY 2019 ESRD PPS base rate); and modifications to ESRD Quality Incentive Program (QIP) reporting requirements and measures.

Furthermore, this rule included significant changes to Medicare reimbursement policies pertaining to durable medical equipment, prosthetics, orthotics and supplies; these policies are summarized in a separate post.

Trump Administration International Pricing Index Plan for Medicare Part B Drugs:  Key Issues and Implications

The Trump Administration is considering a controversial plan, the International Pricing Index (IPI) model, which would tie Medicare Part B prescription drug payment rates to amounts paid for such drugs in other developed countries.  The Centers for Medicare and Medicaid Services’ proposed IPI model also would replace the current “buy and bill” system for Part B drugs with a new drug distribution and billing model.  Comments on the proposal are due December 31, 2018.

Reed Smith has prepared a client alert analyzing the IPI model; the alert is available here.

Two-Year Break in Store for Medicare DMEPOS Competitive Bidding Program, But CMS Gears Up for 2021 Restart with Expanded Product Categories and New Rules

The Centers for Medicare & Medicaid Services has confirmed that it expects to have a “temporary gap” in the durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program (CBP) during calendar years 2010-2020.  As a result, beginning January 1, 2019, Medicare beneficiaries may receive DMEPOS items from any Medicare-enrolled supplier until such time as new CBP contracts go into effect.  When competitive bidding resumes, it will be under new program rules, as discussed below.  Furthermore, CMS has announced that it intends to include in the next round of the CBP the following new product categories:  ventilators, off-the-shelf back braces, and off-the-shelf knee braces.  CMS has posted the specific HCPCS codes it intends to subject to bidding within these new product categories, and the agency will accept comments on these codes through December 3, 2018. [Note — CMS subsequently extended the comment deadline until December 17, 2018.]

Future Competitive Bidding Program Rules.  In a final rule scheduled to be published on November 14, 2018, CMS adopted a number of “market-oriented reforms” and technical policy changes for future rounds of competitive bidding.  According to CMS, the new rules will simplify the bidding process, preserve beneficiary access to items and services, and make the DMEPOS CBP more sustainable.

Of particular note, CMS has finalized its proposed “lead item pricing” methodology.  Rather than bid on each item/HCPCS code in a product category for each competitive bidding area (CBA), suppliers will submit a single bid for the item in the product category designated by CMS to have the highest total nationwide Medicare allowed charges.  CMS will calculate a single payment amount (SPA) for that lead item in the CBA based on the highest amount bid within the winning bids, rather than the median of winning bids.  Thus under this methodology, suppliers in the winning range will be paid at least what they bid for the lead item, which CMS expects “will have a positive economic impact on bidding suppliers.”

Under the final rule, the SPAs for non-lead items will be based on the relative difference in the fee schedule amounts for the lead and non-lead items (prior to fee schedule adjustments based on CBP pricing).  CMS provides an example of a non-lead item such as a wheelchair battery with an average 2015 fee schedule amount of $107.25, and a lead item (Group 2, captains chair power wheelchair) with an average 2015 fee schedule amount of $578.51.  The ratio for these items would be computed by dividing $107.25 by $578.51 to get 0.18539. If the maximum winning bid/SPA for the power wheelchair (lead item) is $433.88, the SPA for the wheelchair battery (non-lead item) would be computed by multiplying $433.88 by 0.18539 to generate an SPA of $80.44.

Fee Schedule Updates.  In the Final Rule, CMS adopted without change its three proposed methodologies for updating the DMEPOS fee schedule, depending on the geographic area in which the items and services were furnished: Continue Reading

Medicare Home Health Payments to Rise by 2.2% in 2019, Broader Reforms Adopted for 2020

The Centers for Medicare & Medicaid Services’ (CMS) final calendar year 2019 Medicare home health prospective payment system (HH PPS) rule boosts rates by 2.2% next year and ushers in broader case-mix methodology reforms for 2020.

With regard to the 2019 update, the final rule increases HH PPS rates by 2.2% ($420 million) compared with 2018 levels.  The rate increase is based on a home health agency (HHA) market basket update of 3.0%, minus a 0.8 percentage point multifactor productivity adjustment, with a 0.1% increase tied to outlier payment spending and an offsetting 0.1% decrease stemming from a new statutory rural add-on classification policy.  The final 2019 national, standardized 60-day episode payment rate is $3,154.27, compared with the 2018 rate of $3,039.64; the rate for an HHA that does not submit required quality data is $3,092.55.

The final rule establishes a new temporary transitional payment for home infusion therapy services in 2019 and 2020, in advance of implementation of a new home infusion therapy benefit in 2021, as mandated by the 21st Century Cures Act.  This benefit covers professional services, including nursing services, patient training and education, and monitoring services associated with administering infusion drugs using an item of durable medical equipment in a patient’s home.  CMS defines “infusion drug administration calendar day” for purposes of the temporary transitional payment to mean the day on which home infusion therapy services are furnished by skilled professionals in the individual’s home on the day of infusion drug administration.  The skilled services provided on such day must be so inherently complex that they can only be safely and effectively performed by, or under the supervision of, professional or technical personnel.

CMS acknowledges stakeholder concerns regarding the scope of this definition, including criticism that the definition does not encompass professional services that may be provided outside of the home.  CMS intends to monitor the effects of the new definition on access to care; if warranted and within the limits of the agency’s statutory authority, CMS could engage in additional rulemaking or issue additional guidance regarding this definition.  CMS invites comments on its interpretation and its potential impact on access to care; comments will be accepted until December 31, 2018.  In a related policy, the final rule finalizes new safety and accreditation standards for home infusion therapy suppliers.

The final rule includes numerous other proposals impacting home health benefit and payment policies beginning in 2019.  For instance, the rule defines remote patient monitoring for the Medicare home health benefit and adds the cost of remote patient monitoring as an allowable HHA administrative cost.  The rule also eliminates the current requirement that the certifying physician must estimate how much longer skilled services will be needed when recertifying patient eligibility for home health care.  In addition, the final rule updates Home Health Quality Reporting Program policies, including removal of seven quality measures, and it modifies Home Health Value-Based Purchasing Model measures and the performance scoring methodology.

More sweeping changes to the HH PPS go into effect in 2020 under the final rule, as mandated by the Bipartisan Budget Act of 2018.  Specifically, the final rule implements a new “Patient-Driven Groupings Model” (PDGM) effective January 1, 2020, which is intended to base HHA reimbursement on patient clinical characteristics, rather than therapy service thresholds.  The model uses 30-day episodes of care, rather than the current 60-day episode, and will be implemented in a budget-neutral manner.  CMS intends to provide additional guidance and training to HHAs and other stakeholders, including through manual updates, articles, and provider calls, “to ensure a smooth transition between the current payment model and the PDGM.”

HRSA Changes Course on 340B Ceiling Price/CMP Rule Implementation, Proposes Accelerating Effective Date to January 1, 2019

After multiple implementation delays, the Health Resources and Services Administration (HRSA) now seeks to move up the effective date of its January 5, 2017 rule on 340B drug pricing program ceiling price calculation and civil monetary penalties (CMPs).  By way of background, HRSA most recently delayed implementation of the 2017 rule because the Trump Administration was “developing new comprehensive policies to address the rising costs of prescription drugs.”  However, in a proposed rule scheduled to be published on November 2, 2018, HRSA states that it has “determined that the finalization of the 340B ceiling price and civil monetary penalty rule will not interfere with the Department’s development of these comprehensive policies.”  Thus HRSA now proposes to “cease any further delay” and change the effective date from July 1, 2019, to January 1, 2019.

HRSA is providing a comment period of only 21 days, which HRSA deems “sufficient to provide affected parties the opportunity to provide their views as this rule is uncomplicated and simply proposes to change an effective date,” and because “affected parties have had multiple opportunities to provide comments on the appropriate effective date of the January 5, 2017 final [rule].”  Note that the extended implementation delay has also been the subject of a lawsuit by hospital associations and other stakeholders.

President Trump Signs Bipartisan Opioid Legislation into Law; Includes Open Payments Reporting Expansion

President Trump has just signed into law HR 6, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act.  The bipartisan legislation includes almost 200 provisions intended to strengthen opioid prevention and treatment efforts and bolster law enforcement tools.

Among many other things, the new law: 

  • Seeks to encourage non-opioid treatment options and the development of non-addictive pain products to treat and manage pain through a variety of Medicare and Medicaid reforms and through an examination of related Food and Drug Administration (FDA) policies.
  • Modifies Medicare Part D drug policies with regard to e-prescribing for controlled substances and drug management programs for at-risk beneficiaries.
  • Provides Medicare coverage of opioid use disorder treatment services furnished by an opioid treatment program.
  • Requires the Centers for Medicare & Medicaid Services (CMS) to develop guidance for hospitals on pain management and opioid use disorder prevention and to review Medicare quality measures related to opioids and opioid use disorders.
  • Establishes a demonstration program to test pain management protocols to limit the use of opioids in hospital emergency departments.
  • Expands Medicaid drug review and utilization requirements to address opioid safety.
  • Directs CMS to issue guidance to states on options for providing Medicaid substance use disorder services via telehealth; such services could include assessment, medication-assisted treatment, counseling, medication management, and medication adherence with prescribed medication regimes.
  • Directs the Secretary of Health and Human Services to report on innovative state initiatives for providing housing-related services to support Medicaid enrollees experiencing or at risk of homelessness.
  • Provides $10 million annually in FYs 2019-2023 for grants to establish Comprehensive Opioid Recovery Centers.
  • Establishes mechanisms and promotes the use and development of technology to detect the entry of narcotics into the US through postal shipments.

In addition, HR 6 makes it illegal to knowingly and willfully pay or receive remuneration in return for referring an individual to a recovery home, clinical treatment facility, or laboratory, with respect to services covered by a health care benefit program in or affecting interstate or foreign commerce.  The provision includes certain exceptions intended to protect “legitimate referrals,” and it does not apply to conduct that is prohibited under 42 U.S.C. 1320a–7b (the Federal Anti-Kickback Statute).  Penalties for violations include fines of up to $200,000 and/or 10 years in prison for each occurrence.

Also notably, HR 6 expands the Open Payments program to require manufacturers to report certain payments or transfers of value to the following additional types of practitioners:  physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives. This provision applies to reports submitted beginning January 1, 2022.

Trump Administration Highlights Regulatory and Deregulatory Priorities for HHS

As part of the Trump Administration’s fall regulatory agenda, the Department of Health and Human Services (HHS) emphasizes its commitment to “reducing and streamlining its regulations and improving the transparency, flexibility, and accountability of its regulatory processes.”  One of the specific deregulatory initiatives noted is a future proposed rule to remove outdated Medicare and Medicaid conditions of participation for long-term care providers.

Other top regulatory priorities in the HHS Statement of Regulatory Priorities for Fiscal Year 2019 include: combatting the opioid crisis; increasing oversight of individual health insurance markets; lowering prescription drug costs; and moving to a value-based healthcare system (which could include “Stark” physician self-referral and HIPAA policy changes).

The agenda also includes the anticipated timing of almost 200 pending and future HHS regulatory actions, the majority of which are Food and Drug Administration and Centers for Medicare & Medicaid Services regulations.

CMS Takes Steps to Bring Clarity to the Archaic Medicare Local Coverage Process; Additional Changes to Promote Coverage of Innovative Technologies in the Works

In an effort to “modernize the Medicare program and bring the latest technologies and innovations to Medicare beneficiaries,” CMS has announced revisions to the local coverage determination (LCD) process.  Specifically, under authority provided in the 21st Century Cures Act and taking into account stakeholder feedback, CMS has issued Program Integrity Manual (PIM) changes intended to promote transparency, clarity, and consistency in the development of LCDs.  As provided in the 21st Century Cures Act, CMS is requiring Medicare administrative contractors (MACs) to post information about LCDs under development on their websites at least 45 days before the effective date of such a determination.  The information must include (1) the determination in its entirety, (2) when and where the proposed LCD was first made public, (3) hyperlinks to the proposed LCD and a response to public comments, (4) a summary of evidence that was considered in the development of the LCD, and (5) an explanation of the rationale that supports the determination. Beyond this statutory mandate, the PIM changes include numerous other policies intended to help “ensure that companies can get therapies and devices to patients more efficiently.”  For instance, CMS is:

  • Establishing a “New LCD Request Process” to allow interested parties within a contractor’s jurisdiction to request a new LCD.
  • Allowing interested parties to request an informal meeting with the MAC to discuss potential LCD requests.
  • Directing MACs to consider clinical guidelines, consensus documents, and consultation by experts, medical associations or other health care professionals, when available, in developing LCDs. CMS notes, however that “[a]cceptance by individual health care providers, or even a limited group of health care providers, does not indicate general acceptance of the item or service by the medical community.”
  • Requiring Contractor Advisory Committee (CAC) meetings to be open to the public and broadening CAC membership to include beneficiary representation and healthcare professionals beyond physicians.
  • Conforming the LCD reconsideration process to the National Coverage Determination reconsideration process.

The implementation date for the new provisions is January 8, 2019.  CMS invites interested stakeholders to submit feedback on their experiences with the revised LCD process to; the agency will consider making additional revisions based on the feedback it receives.

Looking ahead, the Trump Administration’s fall 2018 regulatory agenda indicates that the CMS intends to issue a proposed rule early in 2019 on Medicare coverage of innovative technologies.  Specifically, the proposed rule would modify the Medicare coverage process in order “to streamline coverage of breakthrough technologies [that] have the potential to improve patient health outcomes and quality of care.”  CMS currently anticipates releasing the rule in March 2019.

CMS Names 1,299 BPCI Advanced Bundled Payment Model Participants

The Centers for Medicare & Medicaid Services (CMS) has announced that 1,299 entities have signed agreements to participate in the Administration’s new Bundled Payments for Care Improvement (BPCI) Advanced episode payment model, which runs from October 1, 2018 through December 31, 2023.  According to CMS, BPCI Advanced participants include 1,547 Medicare providers and suppliers (832 acute hospitals and 715 physician groups) in 49 states plus Washington, DC and Puerto Rico.

BPCI Advanced will test whether bundled payments for 29 inpatient and 3 outpatient clinical episodes will lead to reduced Medicare expenditures while improving quality of care for Medicare beneficiaries.  As previously reported, BPCI Advanced builds on the original BPCI initiative, with a number of key differences.  For instance, while both versions of the model seek to incentivize providers to furnish services more efficiently during an episode of care while maintaining quality, BPCI Advanced participants must assume downside financial risk from the outset of the model performance period.  BPCI Advanced also includes different clinical episodes than BPCI (including new outpatient episodes), and it qualifies as an Advanced Alternative Payment Model under the physician Quality Payment Program.

CMS has posted the names of the BPCI Advanced participants and an extensive collection of educational and background materials about the new model on its BPCI Advanced web page.

CMS Proposes Tweaks to Medicare Appeals Rules to Reduce Administrative Burdens

The Centers for Medicare & Medicaid Services (CMS) has proposed revising its rules governing the process Medicare beneficiaries, providers, and suppliers use to appeal adverse determinations regarding claims for Medicare Part A and Part B benefits or determinations for Part D prescription drug coverage.  According to CMS, the revisions “would help streamline the appeals process and reduce administrative burden on providers, suppliers, beneficiaries, and appeal adjudicators.”

Among other things, the proposed rule would:

  • Allow appellants in Medicare Parts A and B claim and Part D coverage determination appeals to submit appeal requests without a signature.
  • Revise the timeframe for vacating a dismissal from 6 months to 180 days for a Medicare Part A or B claim or Medicare Part D coverage determination.
  • Provide that the date of receipt of the Administrative Law Judge (ALJ) or attorney adjudicator’s decision or dismissal is presumed to be 5 calendar days after the date of the notice of the decision or dismissal, unless there is evidence to the contrary.
  • Make a number of changes to the CMS January 17, 2017 final rule streamlining Medicare appeals procedures in order to revise “several provisions that, upon further review, pose unanticipated challenges with implementation.”
  • Make various technical corrections to address incorrect cross-references, inconsistent definitions, and confusing terminology.

Comments on the proposed rule will be accepted through December 3, 2018.

FY 2020 IPPS New Technology Add-On Payment Applications to be Weighed at December 4, 2018 CMS Town Hall Meeting

The Centers for Medicare & Medicaid Services (CMS) is holding a Town Hall Meeting on December 4, 2018 to discuss fiscal year (FY) 2020 applications for add-on payments for new medical services and technologies under the Medicare inpatient prospective payment system (IPPS).  Interested parties will have an opportunity to present recommendations and data regarding whether pending applications meet the substantial clinical improvement criterion.

The deadline to submit agenda items and register to present at the Town Hall Meeting is November 19, 2018; individuals not presenting may register to attend until November 26, 2018.  Written comments after the Town Hall Meeting will be accepted until December 14, 2018.  Information about registration is available here.

CMS Sheds Light on CY 2019 Hospital Price Transparency Rules

The Centers for Medicare & Medicaid Services (CMS) has provided additional guidance on a hospital price transparency policy that goes into effect January 1, 2019.  By that date, hospitals must make available a list of their current standard charges via the internet in a machine readable format and update this information at least annually, or more often as appropriate.  This could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.

CMS recently posted an FAQ document with more information about this requirement, including confirmation that the requirements apply to all items and services provided by the hospital.  Furthermore, CMS stresses that no hospitals in the United States are exempt from this federal mandate, even if the hospital participates in a state online price transparency initiative.  While the format used is the hospital’s choice as long as the information represents the hospital’s current standard charges as reflected in its chargemaster, the information must be in a machine readable format, which excludes a PDF document.

Federal Health Fraud Penalties Are Rising Once Again

The Department of Health and Human Services (HHS) has just announced annual inflation-related increases to civil monetary penalties (CMPs) in its regulations, including those promulgated by the Office of Inspector General, the Centers for Medicare & Medicaid Services, and the Food and Drug Administration.  Specifically, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, HHS is applying a 1.02041 inflation “multiplier” (i.e., a 2.041% increase) to CMPs assessed on or after October 11, 2018, if the violation occurred on or after November 2, 2015.  If the violation occurred prior to November 2, 2015, or a penalty was assessed prior to September 6, 2016, the pre-adjustment CMP amounts in effect prior to September 6, 2016 will apply.

Note that many of the 2018 maximum CMP amounts have been increased significantly more than 2.041% as a result of the Bipartisan Budget Act of 2018, which was signed into law on February 9, 2018.  For instance, the maximum CMP has increased from $55,262 to $100,000 for:  (1) knowingly making or causing to be made a false statement, omission or misrepresentation of a material fact in any application, bid, or contract to participate or enroll as a provider or supplier (42 CFR 1003.210(a)(6)), and (2) making or using a false record or statement that is material to a false or fraudulent claim (42 CFR 1003.210(a)(7)).  Earlier this year, the Department of Justice (DOJ) announced the inflation adjustments to CMPs assessed or enforced by DOJ components, including False Claims Act violations under 31 U.S.C. 3729(a).

Congress Approves Bills to Bar Restrictions on Pharmacies Sharing Certain Drug Pricing Information with Consumers

The House of Representatives approved two “gag clause” bills on September 25, 2018 that would prevent insurers from restricting pharmacies from informing consumers about lower cost, out-of-pocket prices for their prescriptions.  The bills were approved by the Senate earlier this month, and are now cleared for the President’s signature.

Specifically, S 2553, the Know the Lowest Price Act of 2018, would prohibit a Medicare Part D or Medicare Advantage prescription drug plan from restricting a pharmacy from informing (or penalize for informing) an enrollee of any differential between the negotiated price of, or copayment or coinsurance for, a drug or biological under the plan and a lower price that would be paid without using health insurance coverage.  S 2554, the Patient Right to Know Drug Prices Act, would extend a similar prohibition on sharing drug pricing information to group health plans and health insurance issuers offering group or individual health insurance coverage, along with entities that provide pharmacy benefits management services for such plans/issuers.  Furthermore, S 2554 would extend current requirements for generic and brand pharmaceutical companies to submit patent settlement agreements to the Federal Trade Commission and the Justice Department to extend to settlement agreements between manufacturers of biologics and biosimilar biological products.

President Trump has indicated his support for the legislation.

Healthcare Investors, Innovators Wanted for HHS Summit – Nominations Due October 3, 2018

HHS Deputy Secretary Hargan has announced the creation of the “Deputy Secretary’s Innovation and Investment Summit” (DSIIS), which will provide a forum “to discuss the innovation and investment landscape within the healthcare sector, emerging opportunities, and the government’s role in facilitating more investment and accelerated innovation.”  The DSIIS will involve quarterly meetings between healthcare innovation and investment professionals and HHS personnel focusing on “emerging innovation opportunities and whether government policies are accelerating or delaying these innovations.”  A more comprehensive “Industry Day” forum will follow the fourth session.

HHS is seeking nominations for DSIIS participants with experience, knowledge, and leadership related to innovation and investment in the healthcare sector.  Specific selection criteria include:  areas of educational focus; executive or other organizational leadership experience; and healthcare sector private equity, venture capital, and lending experience.  Nominations will be accepted until October 3, 2018.