New SNF Payment Model Increases Payments, Requires Care Enhancements

CMS late last week announced it will test whether a new payment model for nursing facilities and practitioners will further reduce avoidable hospitalizations, lower combined Medicare and Medicaid spending, and improve the quality of care received by nursing facility residents.  CMS would facilitate practitioner engagement when a nursing facility resident needs higher-intensity interventions due to an acute change in condition.   Medicare currently pays physicians less for a comprehensive assessment at a skilled nursing facility than for the same assessment at a hospital. This model would equalize the payments between the sites of care. Participating SNFs will be expected to enhance their staff training and purchase new equipment to improve their capacity to provide intravenous therapy and cardiac monitoring. Click here for detailed from CMS.

HIPAA Audits Resume

After years of anticipation, federal regulators last week launched a new round of audits to gauge compliance with patient privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA). The launch is starting off innocuously with emails to so-called covered entities — health care providers, insurance plans and clearinghouses — and to business associates that handle patient information on behalf of those entities. Click here for details.

Bill Introduced to Delay CJR Bundled Payment Program

Tom Price, a physician and the House Budget Committee Chairman (R-GA) and Rep. David Scott (D-GA) have introduced legislation to delay the start of the mandatory CMS model to bundle payments for hip and knee surgeries.  The model is set to start this Friday, after CMS gave providers an extra four months to get ready for the new payment system. The bill is not likely to pass this week, but it underscores concerns of the industry with the new CMS program.  H.R. 4848, the Healthy Inpatient Procedures (HIP) Act, would delay the finalized Comprehensive Care for Joint Replacement Model (CJR) until January 1, 2018. For more on the legislation from the sponsors, click here.

Hospital Mergers Almost Always Result in Higher Prices: Study

When hospitals merge, no matter their geographic location, higher prices almost always are the result, according to a study of cross-market hospital mergers across the United States.  The study examined 500 mergers that took place between 2000 and 2012 and was conducted by researchers at Columbia and Northwestern Universities. The conclusion: Mergers drove up hospital prices by 6 percent to 10 percent in fairly short order, even if the hospitals involved in the transaction were in completely different markets.  Click here for the study.

CMS Says Diabetes Prevention Program a Huge Success, Plans Nationwide Expansion

The CMS Office of the Actuary announced last week, that a three-year Medicare diabetes prevention pilot program run by the YMCA saved the government money and it endorsed a national expansion to all Medicare beneficiaries. According to the programs evaluation report, in the first year, the average participant lost around 5 percent of body weight, and Medicare saved $2,650 over a 15-month period per participant. Click here for the CMS fact sheet on the program.

House Leaders Target “Egg-Whip” Cuts

House Speaker Paul Ryan and five other leading Republicans are urging CMS to scrap planned cuts to Medicare Advantage’s retiree plans. Those plans, which served 3.1 million seniors last year, are facing an average cut of 2.5 percent under CMS’s payment proposal for 2017.  Referred to as ‘Egg-Whip’ – EGWPs are the target of CMS policy changes that could hurt retirees who would lose coverage that coordinates their care.  Click here for the letter.

Anthem Files Suit Against Express Scripts over Drug Pricing

Anthem has filed a lawsuit against Express Scripts, the largest pharmacy benefit management organization in the United States, in order to recover damages related to operational problems and for pharmacy pricing that’s higher than competitive benchmark pricing. Anthem officials estimate the issuer is overpaying by about $3 billion for the drugs. Despite the lawsuit, Anthem said it has not made a decision about ending its contract with Express Scripts. To read more on the suit from Anthem, click here.

Medicaid Expansion States Reduce Budgets, Increase Revenue

A new study by the Robert Wood Johnson Foundation examining the Medicaid expansion in 11 states, including Arkansas, Colorado, Kentucky and West Virginia, finds the expansions reduced state spending on the uninsured and increased state revenues. The study points to taxes on providers and existing insurers for the savings for the states. The Medicaid expansions also led to job growth, according to the report. To read the full report, click here.

  • By 2026, roughly 69 million people overall will be covered by Medicaid – including that 15 million eligible through Obamacare, and 54 million otherwise eligible. Medicaid and CHIP will cover one in four people under age 65.  Click here for the CBO report.


VA Gets $2 Billion Increase Under House Bill

A House Appropriations subcommittee approved the Military Construction-Veterans Affairs appropriations bill for fiscal year 2017. On a voice vote, the subcommittee backed the bill, which would provide $81.6 billion in total discretionary spending for fiscal 2017, a $1.8 billion increase from current levels, or a roughly 2.2 percent boost. A full committee vote on the bill is tentatively expected the week the House returns from recess. The Veterans Affairs Department would receive $73.5 billion in discretionary spending, an increase of $2.1 billion, or roughly 3 percent. Military construction spending would be shaved by $305 million to $7.9 billion. Click here for the bill, and here for a summary.

Provider Groups Urge Congress To Scrap Part B Payment Demo; AARP Endorses Demo

More than 300 groups are urging House and Senate leadership to press CMS to “permanently withdraw” the CMS Innovation Center proposed demonstration to overhaul payments for Part B drugs. Earlier this month, CMS published a proposed rule to test new models on how Medicare Part B pays for prescription drugs to test whether the alternative payment designs outlined will lead to a reduction in Medicare Part B drug expenditures. Click here for the letter, and here for the proposed rule. In contrast, AARP announced it’s support of the demo on March 23rd. Click here to read the announcement from the group.

CMS Announces Next Gen ACO Second Application Cycle

CMS has announced the second and final round of applications for the Next Generation Accountable Care Organization (ACO) Model. The Model will begin its second performance year on January 1st, 2017. All organizations interested in applying to the Next Generation Model must first submit a Letter of Intent (LOI) by May 2, 2016. The Next Generation ACO Model is an initiative for ACOs that are experienced in coordinating care for populations of patients. For more from CMS, click here.

House Passes Bill to Make Hospital Mergers Easier

The House last week passed the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act, H.R. 2745, by a vote of 235-171. The bill, introduced by Rep. Farenthold (R-TX), would standardize the merger review process between the two federal antitrust agencies: the Department of Justice’s Antitrust Division and the Federal Trade Commission. The bill would eliminate the FTC’s ability to challenge a transaction without going to court and require the agency to meet the same preliminary injunction standards as the DOJ. Click here for a good one-page summary from our policy team.

Flu Season has Peaked

According to new athenaResearch, data diagnoses of influenza-like-illnesses finally declined the third week of March after nine straight weeks of increases. Flu rates are higher than they were at the same point last year: 2.9% this year versus 1.5% last year for all visits and 5.4% versus 3.5% for visits to pediatricians. To read the report, click here.

FDA Wants More Abuse-Deterrent Opioids, Issues New Guidance

The FDA is laying out new guidelines to help generic drug companies make abuse-deterrent versions of brand name opioid drugs.  The draft guidance issued last week explains how the agency will evaluate generic copies of branded drugs that are formulated to make the pills harder to crush, dissolve or otherwise more difficult to abuse. But what that means for generic competition has been a big question, as the abuse-deterrent technology requires a substantial investment on the part of generic companies, which have not yet had any direction from the agency on how to get the drugs approved. Click here for the new draft guidance.

  • FDA will require its strongest level of safety warnings on immediate-release opioid labels to communicate the serious risks of misuse, abuse, addiction, overdose and death associated with the pain medications, the agency announced last week.  Click here for the FDA announcement.


Rate of Medicare Spending Down Because of ACA: HHS

Medicare spent $473.1 billion less on personal health expenditures from 2009 to 2014 than it would have spent if the average rate of growth in health care spending between 2000 and 2008 held steady, according to new data from HHS. The Health Care Spending Growth and Federal Policy report also stated that the 4.3 percent modest growth in health care spending in 2014 as a byproduct of the Affordable Care Act. Click here to read the report.

Affordable Care Act Will Cost Less:  CBO

The Affordable Care Act will cost the federal government less over the next decade than originally anticipated by the Congressional Budget Office according to a new report out from the group. CBO attributes the lower spending in part to the slowdown in health care spending and to lower-than-anticipated enrollment in the ACA’s health insurance marketplaces. From 2016-19, the ACA’s health insurance will cost $466 billion, a 25 percent reduction from the original estimated cost of $623 billion over that same time period. Click here for the full report.

FDA Proposes To Ban Powered Gloves

FDA has determined that a subset of surgeon and patient exam gloves that are powdered — and that represent a modest share of the market — present a substantial risk of illness that cannot be corrected by a change in labeling. These gloves are Powdered Natural Rubber Latex Surgeon’s Gloves, Powdered Synthetic Latex Surgeon’s Gloves, Powdered Natural Rubber Latex Patient Examination Gloves, Powdered Synthetic Patient Examination Gloves, and Absorbable Powder for Lubricating a Surgeon’s Glove. Consequently, FDA is proposing to ban them.  Click here for the FDA proposal.

Jackson, Mississippi Worst in Nation for Allergies

If you’ve got allergies, avoid Jackson, MS.  That’s according to the Asthma and Allergy Foundation of America, which named the city as its worst for allergy sufferers this spring. Rounding out the list of the top five worst cities: Memphis, Tenn.; Syracuse, N.Y.; Louisville, Ky. and McAllen, Texas.  Click here for the top 100.