WEEKLY E-BULLETIN


340B Dispute Process Proposed by HRSA

The Health Resources and Services Administration issued a proposed rule last week to establish a binding administrative dispute resolution process when drug companies or health care organizations have disagreements over the 340B drug discount program. The process would help resolve claims by health care facilities that they are being overcharged by drug companies, as well as claims by the companies that a health care facility is violating the prohibition on diversion of 340b drugs to patients who are not being served by covered health facilities or duplicate discounts. Drug companies have to conduct an audit before initiating a dispute. Click here for more information from HRSA and here for the proposed regulations.

CMS Proposes Narrower Uncompensated Care Definition for Hospitals

CMS late last week released a proposed rule governing Medicaid disproportionate share hospital payments. The rule states that DSH payments are to be based only on uncompensated care costs for Medicaid-eligible patients who are not covered by another source. The proposal refers to an existing rule that determines DSH payments based on the total of uncompensated costs hospitals incur for treating patients who are Medicaid eligible and for whom hospitals have not received payments from Medicare or other third parties. CMS said in the proposed rule that some states and hospitals have been inflating their uncompensated care rates. To read the proposed rule, click here.

CMS Wants to Change Insurance Risk Adjustment Program

CMS has announced that it would modify the insurance risk adjustment program to better adjust for high-cost enrollees and their actuarial risk. This is in answer to not only complaints from small health plans that there is no way to reliably forecast under the program but, also the lawsuits filed by State CO-OPs. The agency will modify the program to absorb some of the cost for claims above a $2 million threshold; the costs would be funded by insurer payments. Click here for details.

Health Care Clinical Job Compensation Grows, But Declines for Executives: Analysis

While health care executive pay declined, compensation growth for nurse practitioners and physician assistants outpaced that of physicians from 2015 to 2016, new survey data shows. Increasing demands for clinical expertise make health care a job seekers’ market, with physician assistants and nurse practitioners in particularly high demand, according to Health eCareers’ 2016 Healthcare Salary Guide. Click here to compare.

Anthem, Cigna Merger Deal Decision Likely in January: Report

The federal judge who will decide whether health insurers Anthem and Cigna can move forward with their proposed merger told the companies she expects to rule by the end of January, according to news reports. That ruling would be later than the year-end ruling that Anthem had requested so that the companies could close a final deal before a self-imposed April 30 deadline. The judge indicated a trial would likely take place in November. Click here for the Reuters report.

Aetna, Humana Merger Deal Trial to Start in December

A trial to determine whether Aetna’s $37 billion acquisition of Humana can proceed will begin the first week of December and conclude before the end of the year, according to a scheduling order issued by the trial judge last week. The lawsuit brought by the DOJ is expected to take 13 days before U.S. District Judge John Bates. The timeline largely adheres to what the insurers asked for, arguing that the trial should be wrapped up in time to meet a Dec. 31 deadline to complete the deal. Click here.

CMS Makes Changes to Value-Based MA Plans

CMS’ Innovation Center has announced refinements to the design of the second year of the Medicare Advantage Value-Based Insurance Design (MA-VBID) model. The MA-VBID model is an opportunity for Medicare Advantage plans (MA plans), including Medicare Advantage plans offering Part D benefits, to offer clinically nuanced benefit packages aimed at improving quality of care while also reducing costs. In the second year of the model, beginning January 1, 2018, CMS will: open the model test to new applicants; conduct the model test in three new states – Alabama, Michigan, and Texas; add rheumatoid arthritis and dementia to the clinical categories for which participants may offer benefits; make adjustments to existing clinical categories; and change the minimum enrollment size for some MA and MA-PD plan participants. Click here for details.

CMS Proposes Rule on PACE Program

CMS has issued a proposed rule for the Programs of All-inclusive Care for the Elderly (PACE) in an attempt to make it more attractive to states. According to CMS, the proposed rule aims to strengthen protections and improve care for beneficiaries, while also providing administrative flexibility and regulatory relief for PACE organizations. New beneficiary protections include a clarification that PACE organizations that offer drug coverage must comply with Medicare Part D’s prescription drug program patient protection safeguards. Click here for the CMS Fact Sheet and here for the proposed rule.

CMS Updates Five Star Ratings for Nursing Homes

CMS has updated its Nursing Home Five-Star Quality Ratings on its Nursing Home Compare web tool to include new measures like successful discharges and re-hospitalizations. The agency’s goal is to give patients and their families more information about the quality of care at Medicaid- and Medicare-certified facilities. CMS said the new measures will likely change existing nursing home ratings. Click here for the CMS announcement and here for the Nursing Home Compare website.

Independence at Home Demo Saves $10 Million

The Independence at Home pilot, which provides primary care to chronically ill Medicare patients in their homes, saved an average of $1,010 per participating beneficiary leading to a total $10 million in savings. Every participating practice improved quality in at least two of six quality measures year-over-year. The demonstration began in 2012 and was originally authorized for three years and was subsequently extended for two additional years. For the CMS Fact Sheet, click here.

HHS to Transfer $81 Million to Zika Research; Public Health Emergency Declared

HHS says it will transfer $34 million from other NIH divisions to support Zika vaccine development, and $47 million from other HHS agencies, including CMS, to BARDA to support contracting with the private sector to develop Zika vaccines. NIH and BARDA estimates they will need an additional $196 million and $342 million respectively, in FY 2017, to continue their Zika work. Click here for details.

  • HHS declared a public health emergency in Puerto Rico because of the Zika virus. Click here.

CDC Proposes Stronger Quarantine Powers

In response to the largest recorded outbreak of Ebola virus in history, CDC has proposed a rule to strengthen its international and domestic quarantine powers with new policies to screen travelers for communicable diseases. The rule would require commercial passenger flights to report deaths and illnesses to the agency, and give CDC the authority to implement travel restrictions for individuals under federal quarantine, isolation or conditional release orders if state or local authorities request assistance. Click here to view the rule.

$16 Million Awarded for Rural Health Improvements

More than $16 million has been awarded by HRSA to improve access to quality health care in rural communities, including funds that will expand use of telehealth technology for veterans and other patients, assist providers with quality improvement activities, and support policy-oriented research to better understand the challenges faced by rural communities. Click here to see where the money will go.

8 States to Share in $10 Million to Fight Chronic Diseases

Eight states in the Delta region are receiving a total of $10 million in grant funding from HHS in FY16 to reduce chronic diseases that disproportionately affect the region. The funds will support collaborative efforts among health care providers to use an evidence-based model to address diabetes, cardiovascular disease, obesity, stroke and behavioral health. Click here to see how the funds will be distributed.

Better Health Linked to Medicaid Expansion

Research on low-income adults in Arkansas and Kentucky show that patients are beginning to report better health two years after Medicaid was expanded under the Affordable Care Act. The Harvard School of Public Health survey compared these two states to Texas, which is one of 19 states that have refused to expand Medicaid. To read more about the study, click here.

$32,500: Health IT Spend per Physician in Group Practice

New data from the Medical Group Management Association shows that physician-owned multispecialty practices in 2015 were spending more than $32,500 per full-time physician on the staff, equipment, maintenance, and supply expense necessary to implement healthcare information technology and services. While the largest increase in tech costs took place between 2010 and 2011, when the HITECH Act took effect, costs continue to rise at a slower pace. Click here for details.

Employers Project Health Care Costs to Increase

Two reports out last week show employers believe health care costs will go up in the next few years.

  • A Willis Towers Watson survey shows employers anticipate that health care costs for businesses and workers will rise 5 percent in both 2016 and 2017, up slightly from the 4 percent increase in 2015. Employers estimate that annual average employee costs will be $12,338 this year and nearly $13,000 in 2017. Managing the cost of prescription drugs was named the top priority for 88 percent of those surveyed. Click here for the survey results.
  • A National Business Group on Health survey says employers expect health care costs to increase by 6 percent in 2017. And, like the Watson survey, one of the biggest drivers of health care costs was specialty pharmaceuticals. Nearly one-third of employers cited those drugs as the highest driver of costs. Click here to view the survey.

Bike Riding Men Lead ED Visits

In 2013, bicycle riding was the most common reason for hospital stays and emergency department visits among males ages 18 to 64. It was also the most common reason for hospital stays among females ages 18 to 44 that year. Click here for the details from AHRQ.