WEEKLY E-BULLETIN


New Bill Would Boost Allowable Costs for Critical Access Hospitals

Concerned about the number of Critical Access Hospitals facing serious financial problems and threatening the nation’s rural health infrastructure, The Critical Access and Rural Equity (CARE) Act of 2016 (H.R. 4553) was introduced Friday by Representatives Harper (R-MS) and Loebsack (D-IA). They were joined by Representatives Peterson (D-MN), Palazzo (R-MS), Trent Kelly (R-MS), Bennie Thompson (D-MS), and McKinley (R-WV) as original cosponsors. The bipartisan bill will clarify the acceptable patient- and physician-centered costs that should be considered “allowable,” under CAH reimbursement policy. Click here for a copy of the new bill. Supporters are urged to contact their House members immediately and encourage their support for the bill by cosponsoring.

Obama FY17 Budget Wants $376 Billion in Health Care Cuts

The Obama Administration’s FY17 budget arrived on the Hill last week. The House Budget Committee plans to release it’s own version by the end of the month. The overall budget generally sticks with the discretionary spending limits set by last year’s budget deal. The HHS budget is a mix of new and perennial policy ideas which always have a substantial impact on policy discussions. However, only a handful of these ideas are translated into legislative or executive changes in any given year. A 178-page summary of the health care budget is here. Start on page 63 for changes proposed for Medicare payments, which impact all providers.

  •  Strategic perspective: although the President’s budget in its entirety is dead-on-arrival in Congress, the GOP is likely to use some of the proposed health care cuts to fund other health care initiatives. For example, Republicans want to modify the recent restrictions imposed on payments to off-campus hospital outpatient departments and could use cuts to other health programs to pay for a relaxation of those HOPD restrictions.

CMS Gives Providers Some Relief on Medicare Overpayments

CMS will require providers to report and return overpayments they identified or should have known about, according to a rule finalized last week — though providers will only be responsible for looking back six years for overpayments, rather than 10 years as CMS had proposed. Also, compared to the proposed rule, the standard for when a provider has “identified” an overpayment is less strict in the final rule, and it takes into account providers’ varying compliance programs. The rule also allows providers to take up to six month to investigate possible errors in some cases, a more specific time frame than provided in the proposed rule. To read the CMS fact sheet, click here. To read the regulations, click here.

Medicare Actually Pays 340B Hospitals Less for Drugs: Study

A new study says that a comparison contained in a July GAO report that found that Medicare Part B spends more on drugs for patients in 340B hospitals actually ignores more than half of all Part B spending which goes to physician’s offices, not hospitals. Compared to all other providers in Part B, 340B hospitals were actually paid 13 percent less for drugs per patient, averaging about $112 compared with $129, the report finds. Click here for the report.

More Than 10 Million Seniors Have Received Rx Discounts Under ACA: CMS

Nearly 10.7 million Medicare beneficiaries have received discounts over $20.8 billion on prescription drugs – an average of $1,945 per beneficiary – since the enactment of the Affordable Care Act, according to a report released last week by CMS. In 2015 alone, nearly 5.2 million seniors and people with disabilities received discounts of over $5.4 billion, for an average of $1,054 per beneficiary. This is an increase in savings compared to 2014, when 5.1 million Medicare beneficiaries received discounts of $4.8 billion, for an average of $941 per beneficiary. Click here for details.

Hundreds of Health Care Organizations Comment on Chronic Care Initiative

327 health care organizations have submitted comments to the Senate Finance Committee’s proposal released in December to tackle chronic conditions. The committee noted that traditional fee-for-service Medicare still struggles to properly align incentives to providers who engage in labor and time intensive patient care coordination. This underscores the inherent limitations of traditional Medicare’s fee-for-service payment system – one that rewards providers for delivering increased volume of services, but doesn’t incentivize them to coordinate medical care. Click here for the links to all the comments, by organization. Click here for the committee’s original report.

America Is Running Out of Nurses

America’s 3 million nurses make up the largest segment of the health-care workforce in the U.S., and nursing is currently one of the fastest-growing occupations in the country. Despite that growth, demand is outpacing supply. According to the Bureau of Labor Statistics, 1.2 million vacancies will emerge for registered nurses between 2014 and 2022. By 2025, the shortfall is expected to be more than twice as large as any nurse shortage experienced since the introduction of Medicare and Medicaid in the mid-1960s. Click here for the report.

National Waiting List Grows for Opioid Treatment

HHS is expected to soon propose a change to the federal rule that limits the number of patients each doctor can treat with buprenorphine, which reduces drug cravings and is used in fighting opioid addiction. The proposed change would likely increase the number of patients a doctor can treat, possibly with the addition of new licensing requirements. But many who work in the field of addiction question whether allowing licensed doctors to treat more patients will do much to alleviate the shortage. In most states, very few doctors come anywhere close to maxing out on the number of patients they are allowed to have. Click here for details.

Largest Health Insurers Continue To Post Profits

Despite complaints that many of them are losing money on the federal health exchanges, the 7 largest health insurance companies continue to post significant profits, according to a new analysis. Aetna generated over $43 billion in revenue and reported a net income of $2.1 billion through the nine months ended September 30, 2015. Aetna’s profit margin was 4.8%, an increase from 4.4% in third quarter 2014. UnitedHealthcare earned $5.8 billion on revenues of $98.5 billion for the nine months ended September 30, 2015. The company’s operating margin remained consistent at 5.89% year-over-year. Kaiser Permanente’s third quarter 2015 operating margin was 4.22%, down from 7.26% in the third quarter of 2014. Anthem reported net income of nearly $2.4 billion on total revenues of $59 billion for 3Q15, with a profit margin of 4.03%, up from 3.76% in 3Q14. Click here for the full report.

  • Aetna President Karen Lynch last week made a YouTube appeal for its proposed merger with Humana. Click here for the brief video.

CMS Expected to Pay Out $7.7 Billion in Reinsurance to Health Plans

CMS is expecting to pay out $7.7 billion to 2015 health plans under the ACA’s reinsurance program, which provides a financial safety net to companies that attracted expensive customers. The payments will be funded by $5.5 billion collected from health plans last year, $1 billion CMS expects to collect this year, and part of the $1.7 billion left over from 2014. The leftover funds, expected to be $500 million, will be used for administrative costs or returned to the federal treasury. The reinsurance program subsidizes health plans that attract customers with extremely expensive medical bills. It’s one of three programs established under the ACA to protect insurers entering the new marketplaces from big losses. To read the CMS guidance, click here.

CBO: Private Insurance Premiums To Go Up 5% Per Year

According to a new CBO report, private insurance premiums will rise an average five percent each year over the next 10 years. The Congressional Budget Office states that premiums are rising for a number of reasons, but that the Affordable Care Act is playing a role; the law’s provisions like guaranteed issue, guaranteed renewability, and modified community rating “tend to raise average premiums” by encouraging higher cost patients to enroll and then distributing their added expenses across the system. To read the full report, click here.

GAO Recommends Changing State Medicaid Payment Formula

The GAO last week recommended that Congress change the way it allocates federal Medicaid funds to states, a change likely to cause a great deal of controversy and not likely to be adopted any time soon. To ensure that federal funding efficiently and effectively responds to Medicaid’s countercyclical nature, GAO recommended that Congress could consider enacting a formula that targets variable state Medicaid needs and provides automatic, timely, and temporary assistance in response to national economic downturns. Click here for the 1-page GAO summary.

  • State Medicaid budgets could be “blown up” if all states were obligated to provide Hep C treatments to all eligible Medicaid patients, according to a new report. Click here.

House Passes Bill to Weaken ACA Menu Labeling Requirements

The House last week passed H.R. 2017, the Common Sense Nutrition Disclosure Act of 2015, introduced by Rep. Cathy McMorris Rodgers (R-WA), that would weaken menu-labeling requirements that were put in place by the Affordable Care Act. Specifically, it targets the mandate that menus of establishments with 20 or more locations must list calorie counts of the food that they serve. The FDA, which is tasked with enforcing the rule, has extended the deadline to be in compliance from the end of 2015 until the end of this year. To read the bill, click here.

Senate Committee Moves Health IT Reform Bill

The Senate Health Committee held the first of the three meetings last week to move legislation in response to the House-passed “21st Century Cures” Initiative — a medical innovation package that aims to enhance research at the NIH and speed up the FDA’s approval of new drugs and devices. The Senate’s version won’t be an exact match and contain’s its own priorities, including improving federal electronic health record programs. The health IT reform bill approved last week has provisions to decrease regulatory and administrative burden, make information on health IT certification more publicly available, define interoperability as the exchange of health data and the use of such data without special effort, and direct the GAO to look into patient matching. Click here to review the legislation.

Number of Uninsured Kids Drop, A Few Trouble Spots Remain

The number of children without health insurance in the US fell dramatically from 5.9 million kids in 2013 to 4.9 million in 2014. The drop was particularly sharp among Hispanic children; their uninsured rate fell nearly 2 percentage points in 2014. But that encouraging finding comes with another sobering statistic: in Alaska, Texas, and Arizona, more than 10 percent of kids are without insurance. All this is according to a new Robert Wood Johnson study. Click here.

Life Expectancy Gaps Are Growing: Study

The gap in life expectancy is growing between rich and poor, according to a new paper by researchers at the Brookings Institute. A woman born in 1920 with income in the top 10 percent of earners could expect to live four years longer than her counterparts in the bottom 10 percent and for women born in 1950, that gap increases to 10 years. Men are slightly worse, those born in 1920 with incomes in the top 10 percent could expect to live five years longer than the poorest Americans and for men born in 1950, the life expectancy gap grows to 12 years. To read the report, click here.

Worldwide Zika Data Initiative Launched

Zika virus research data will be shared publicly by research institutions worldwide in a push to develop vaccines and treatments against the virus, a group of 30 funders, research institutions and journals said. Institutions that pledged to share data include the CDC, the UK’s Academy of Medical Sciences, the World Health Organization, France’s Institut Pasteur and the Wellcome Trust. Click here for more.

FDA Warns Companies on Medical Marijuana Products

The agency sent warning letters to eight companies for illegally selling products containing cannabidiol oil products online. The companies are marketing their products as dietary supplements, but FDA says cannabidiol oil qualifies as a drug and must undergo clinical testing and receive FDA approval before it can be marketed. The FDA objects to many of the claims the companies are making about the products, including that they can be used to treat cancer, schizophrenia and post-traumatic stress disorder, among other ailments – many come with colorful names like “Entourage Occam’s Razor Hemp Liquid” and “Tasty Vape Just Peachy.” To read the warning letters, click here.