January 8, 2018

January 8, 2018


340B, CHIP, DSH, Medicare Extenders All Unresolved as Government Shutdown Looms

Current government funding authority runs out January 19 and the GOP leadership will need Democratic support in the Senate to get a deal done to keep the government open beyond that date.  Congress may agree to another short-term fix, perhaps until sometime in March, because they need more time to work out a long-term deal.  The Children’s Health Insurance Program is funded into March, but more than a dozen Medicare programs (click here for the Medicare extenders list) have not been re-funded.  Meantime, hospitals are accelerating their efforts to get legislation passed that would stop a new CMS regulation that cuts 340B payments to providers.  The reg took effect January 1 and a hospital-led lawsuit to get an injunction against it failed last week.  Key issues:

  • 340B. Payment cut took effect January 1.  See more below.
  • DSH. Disproportionate Share Hospital payment cuts of $2 billion took effect October 1, but Congress is working to delay those cuts for two years.
  • CHIP.  Payments extended through March.  CBO says an extension will cost less.  See below.

Judge Nixes 340B Injunction; Legislative Efforts Struggle

A U.S. District Court Judge on December 29 ruled against hospitals’ request for an injunction again a CMS regulation that takes effect January 1, 2018 that cuts 340B drug payments under Medicare Part B (click here for the 16-page ruling). The payment cut is 28.5%. Basically, the judge said the hospitals didn’t have standing because the rule had not yet taken effect. The judge suggested that at a later time, once the ruling takes effect, that it could be brought to the court once again.  On the legislative front, a growing number of key congressional Republicans are now raising questions about any type of a 340B regulatory moratorium without the imposition of new transparency and reporting requirements. A new drug company-backed bill was introduced (click here) by Reps. Larry Bucshon (R-IN) and Scott Peters (D-CA) that would do just that. Click here for Rep. Bucshon’s statement.  Rep. McKinley’s (R-WV) bill that only imposes a one-year moratorium on all 340B regs from CMS gained nearly 20 new cosponsors in the past week (now 167). Click herefor the updated list.


CBO: CHIP Fix Costs 1/10th of Original Price Tag

The cost of the Senate bill that funds the Children’s Health Insurance Program for an additional five years has become a lot less expensive thanks to Congress repealing the ACA’s individual mandate, according to a new Congressional Budget Office analysis. The bipartisan legislation is now projected to increase the deficit by $800 million over the next decade as opposed to the earlier CBO estimate of $8.2 billion. While Congress has yet to pass a long-term solution, Lawmakers included a short-term funding patch in their most recent government spending bill that will keep CHIP running through March. The House has cleared its own long-term CHIP legislation, but most Democrats are opposed to the bill’s offsets. The Finance Committee approved a similar bill in October without proposing how to pay for it. Click here for the CBO estimate.
Report: Nation’s Cancer Death Rate Continues Decline

The nation’s overall cancer death rate declined 1.7 percent in 2015, the latest indication of steady, long-term progress against the disease, according to a new report by the American Cancer Society. Over nearly a quarter-century, the mortality rate has fallen 26 percent, resulting in almost 2.4 million fewer deaths than if peak rates had continued. But the report shows that Americans’ No. 2 killer remains a formidable, sometimes implacable, foe. An estimated 609,000 people are expected to die of the ailment this year, while 1.74 million will be diagnosed with it. Click here for the report.


Trump’s HHS Nominee, Alex Azar, to have Second Confirmation Hearing 

The Senate Finance Committee announced it will hold its confirmation for the Secretary of Health and Human Services Nominee, Alex Azar, on Tuesday.  Azar is a former deputy secretary for HHS and an executive at pharmaceutical giant Eli Lilly. He vowed to tackle drug prices during his first hearing in  November with the Senate Health, Education, Labor and Pensions Committee if confirmed. Ahead of the hearing this week, Azar has submitted a questionnaire as well as full copies of his tax returns to Committee Members to review. To view the hearing and read the witness statement (when available), click here.

  • More than 60 organizations representing patients, providers, workers and public health experts in a new letter urged the Senate to oppose Alex Azar’s nomination for HHS secretary, click here.

Health Care Still Driving New Jobs

The economy added 31,000 health care jobs in December alone, bringing total hiring in the sector to 300,000 for the entire year of 2017, according to the latest report from the Bureau of Labor Statistics. While that is a large number, it is actually a decrease from the previous year – 379,000 health care jobs were added in 2016. Almost all the jobs added in the last month of the year were in ambulatory services (15,000) or at hospitals (12,000). Click here for the report.


GAO: Drug Company Revenue Surging

A new GAO report says pharmaceutical companies’ revenue surged in the decade ending in 2015, a period during which they also posted higher profit margins than most other domestic industries. More than two-thirds of drug companies saw their average profit margins grow from 2006 to 2015, and revenues grew about 45 percent over the period studied, from $534 billion in 2006 to $775 billion in 2015, adjusting for inflation. Click here for the analysis.

  • Spark Therapeutics announced last week it will charge $850,000 for its blindness treatment, making the revolutionary gene therapy the costliest drug in the United States, click here for the announcement.
  • AbbVie’s anti-inflammatory drug Humira was never cheap, selling for about $19,000 a year in 2012. It’s gone up by 100 percent since then. Click here.
  • CVS and Walgreens are saying that drug pricing is easing. Click here for the WSJ report.
  • One of the largest patient assistance charities in the United States said it will not provide financial aid in 2018 after the government revoked its approval to do so because of concerns that drugmakers had improper influence over the charity. Click here.
  • Lawmakers are pushing for billions in new funding for biomedical research, but sparring over almost everything else related to the Affordable Care Act. Click here.
  • The FDA’s push to lower pharmaceutical prices by approving a record number of generic drugs in 2017 could strain a global drug supply chain that is already facing questions about quality and safety. Click here.
  • China’s drug development industry is booming and beginning to enter the world stage.  Click here.

As Promised, New Labor Department Regs Expand Association Health Plans

Late last week, the Department of Labor issued a proposed rule that would expand the availability of association health plans that allow small employers to join together in purchasing health insurance. The 83-page proposal would allow self-employed workers to join small business health plans and allow employers to join together for the singular purpose of buying insurance. The expansion of association health plans is part of a larger effort to encourage the rise of cheaper health coverage options that don’t have to comply with certain Affordable Care Act patient protections and benefit rules. Click here for the rule, and here for DOL’s press release. Click here for the NYTimes report.  Click here for an excellent analysis from Health Affairs.


CMS: There Are Now 561 Track 1 MSSPs

There are now 561 shared savings ACOs participating Medicare’s lowest-risk and most popular accountable care model, according to CMS.  In 2017, 124 groups of providers opted to join Medicare’s shared savings program or its Track 1+ model under three-year contracts. Another 65 are renewing. The ACOs will serve 10.5 million Medicare patients, an increase of 1.5 million over 2017.  Fifty-five providers have elected to participate in Medicare’s Track 1+ model, which allows groups of doctors and hospitals to take on more risk and qualify for MACRA’s 5 percent bonus as a qualifying alternative payment model. The Shared Savings ACO program allows groups of doctors and hospitals to earn a bonus from Medicare if they meet certain spending and quality targets, but unlike other ACO models, doesn’t penalize those providers if they exceed certain spending thresholds. Click here for more from CMS.
CMS Approves First 10-Year Section 1115 Program Waiver Extension

CMS has approved the first ever 10-year extension under the Medicaid program demonstration extension to provide further coverage of family planning services for the state of Mississippi. This will extend eligibility in the state for women and men ages 13 through 44, with income up to 194 percent of the federal poverty level that are not enrolled in Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) or other creditable health insurance coverage that includes family planning services. In accordance with the new section 1115 policy released on November 6, 2017, Mississippi’s program meets all elements required for a 10-year approval. For more on the Mississippi program from CMS, click here.


FCC Seeking Assistance on Rural Health Care Program

The Federal Communications Commission has released a notice of proposed rulemaking looking for assistance on how to expand its Rural Health Care Program with the goal of ensuring rural healthcare providers get the support they need while guarding against waste, fraud, and abuse. They are also considering a series of measures to ensure the program operates efficiently as well as considering the appropriate size of the funding cap. The program, which directs subsidies to rural health care providers for broadband upgrades, currently has a $400 million cap. That’s prevented the commission from funding all worthy applicants, and in December the FCC voted to raise the cap by shuffling unused funds from previous years into use. Click here for the notice in the Federal Register.

  • The CAH Coalition is actively working on behalf of Critical Access Hospitals to support this program.  Click herefor more information.

Another Rural Town Loses its Hospital After nearly 70 years of operation Scotland Neck, North Carolina’s critical access hospital closed its emergency room, inpatient beds and other acute care services at the end of December. The hospital had been losing money for eight years. Seventy percent of patients were on Medicaid and Medicare, and another 20 percent were self-pay, only about 6 to 8 percent were on private insurance. With shrinking margins and small patient populations, this makes the 83rd rural hospital to close since 2010. Click here for more from North Carolina Health News.  Click here to join the fight to support CAHs through stronger national laws and regulations.


Veterans Telemedicine Bill Passes the Senate

The Senate has passed the VETS Act of 2017 (S 925) introduced by Sen. Joni Ernst (R-IA) that would expand veterans’ access to telehealth services. The measure allows health care providers to operate across state lines to conduct telehealth services for veterans, including mental health treatment. Current rules require both the provider and the patient to be in the same state. A similar bill passed the House in November (HR 2123). Click here to view the bill and summary.


Low-Income Counties Show Longer-Term Use of Opioids

A study by the Health Care Cost Institute showed that working adults living in lower-income counties had much higher rates of long-term opioid use than those in higher-income counties. In 2015, 2.4 percent of employed adults with private health insurance were long-term opioid users, however in counties with median incomes under $30,000, the study found 4.9 percent of the employed population were long-term opioid users. In contrast, counties with median incomes above $100,000 had a quarter of the rate at 1.3 percent of employed adults were long-term opioid users. To read the study, click here.


Funding Available for Rural Health Network Development

The Health Resources and Services Administration will award up to 20 rural public and nonprofit entities forming a consortium of three or more organizations a total funding of $2 million to assist in the planning and development of an integrated health care network at the local level. The program creates a platform for medical care providers, social service providers, and community organizations to coalesce key elements of a rural health care delivery system for the purpose of improving local capacity and coordination of care by emphasizing the role of networks. Previous Network Planning grantees have focused on behavioral health, care coordination, infrastructure, health information technology, and health education. Click here for more on the funding opportunity.

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